EXHIBIT 4
EXECUTION COPY
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GS MORTGAGE SECURITIES CORP.,
Depositor,
OPTION ONE MORTGAGE CORPORATION,
Servicer and Responsible Party,
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer,
ACCREDITED HOME LENDERS, INC.,
Servicer and Responsible Party,
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2003
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GSAMP TRUST 2003-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2003-HE2
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.............
Section 2.03 Representations, Warranties and Covenants of each
Responsible Party and each Servicer........................
Section 2.04 Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages......................
Section 2.05 Execution and Delivery of Certificates......................
Section 2.06 REMIC Matters...............................................
Section 2.07 Representations and Warranties of the Depositor.............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans.........................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers...............................................
Section 3.03 Successor Subservicers......................................
Section 3.04 Liability of the Servicers..................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee....................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee....................................................
Section 3.07 Collection of Certain Mortgage Loan Payments................
Section 3.08 Subservicing Accounts.......................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts............................................
Section 3.10 Collection Accounts.........................................
Section 3.11 Withdrawals from the Collection Accounts....................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account.......................................
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions and
Fidelity Coverage..........................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements...
Section 3.15 Realization upon Defaulted Mortgage Loans...................
Section 3.16 Release of Mortgage Files...................................
Section 3.17 Title, Conservation and Disposition of REO Property.........
Section 3.18 Notification of Adjustments.................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans.........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee.......................
Section 3.21 Servicing Compensation......................................
Section 3.22 Annual Statement as to Compliance...........................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements............................
Section 3.24 Trustee to Act as Servicer..................................
Section 3.25 Compensating Interest.......................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act....................
Section 3.27 Excess Reserve Fund Account; Distribution Account...........
Section 3.28 Optional Purchase of Delinquent Mortgage Loans..............
Section 3.29 PMI Policy; Claims Under Each PMI Policy....................
Section 3.30 Transfer of Servicing for the Accredited Mortgage Loans.....
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances....................................................
Section 4.02 Priorities of Distribution..................................
Section 4.03 Monthly Statements to Certificateholders....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR......
Section 4.05 Allocation of Applied Realized Loss Amounts.................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates...................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........
Section 5.04 Persons Deemed Owners.......................................
Section 5.05 Access to List of Certificateholders' Names and Addresses...
Section 5.06 Maintenance of Office or Agency.............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers....
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.......
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others.................................................
Section 6.04 Limitation on Resignation of a Servicer.....................
Section 6.05 Additional Indemnification by the Servicers; Third Party
Claims.....................................................
Section 6.06 Servicing Rights Pledge.....................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default...........................................
Section 7.02 Trustee to Act; Appointment of Successor....................
Section 7.03 Notification to Certificateholders..........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.......................................
Section 8.02 Certain Matters Affecting the Trustee.......................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......
Section 8.04 Trustee May Own Certificates................................
Section 8.05 Trustee's Fees and Expenses.................................
Section 8.06 Eligibility Requirements for the Trustee....................
Section 8.07 Resignation and Removal of the Trustee......................
Section 8.08 Successor Trustee...........................................
Section 8.09 Merger or Consolidation of the Trustee......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............
Section 8.11 Tax Matters.................................................
Section 8.12 Periodic Filings............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account and
the Cap Agreements.........................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans......................................................
Section 9.02 Final Distribution on the Certificates......................
Section 9.03 Additional Termination Requirements.........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment...................................................
Section 10.02 Recordation of Agreement; Counterparts......................
Section 10.03 Governing Law...............................................
Section 10.04 Intention of Parties........................................
Section 10.05 Notices.....................................................
Section 10.06 Severability of Provisions..................................
Section 10.07 Assignment; Sales; Advance Facilities.......................
Section 10.08 Limitation on Rights of Certificateholders..................
Section 10.09 Inspection and Audit Rights.................................
Section 10.10 Certificates Nonassessable and Fully Paid...................
Section 10.11 Waiver of Jury Trial........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Chase Manhattan Mortgage
Corporation, as Servicer
Schedule III Representations and Warranties of Option One, as Servicer and
Responsible Party
Schedule IV Representations and Warranties of Accredited, as Servicer and
Responsible Party
Schedule V Representations and Warranties of Option One as to the Option One
Mortgage Loans
Schedule VI Representations and Warranties of Accredited as to the Accredited
Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Servicer Reporting Requirements
Exhibit M Form of Certification to be provided with Form 10-K
Exhibit N Form of Trustee Certification to be provided to Depositor
Exhibit O Form of Servicer Certification to be provided to Depositor
Exhibit P Option One Purchase Agreements
Exhibit Q Accredited Purchase Agreements
Exhibit R PMI Mortgage Loan Schedule
Exhibit S MGIC PMI Policy
Exhibit T Radian PMI Policy
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2003,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), OPTION ONE MORTGAGE CORPORATION, a California corporation, as
servicer and responsible party ("Option One"), ACCREDITED HOME LENDERS, INC., a
California corporation, as servicer and responsible party ("Accredited"), CHASE
MANHATTAN MORTGAGE CORPORATION, a New Jersey corporation, as servicer ("Chase"),
and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as trustee (the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising two REMICs
(each, a "Trust REMIC" or, in the alternative, the Lower Tier REMIC and the
Upper Tier REMIC, respectively). The Class X Certificates and each Class of
LIBOR Certificates (other than the right of each Class of LIBOR Certificates to
receive Basis Risk Carry Forward Amounts and the right of the Class X
Certificates to receive payments from the Cap Agreements) 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 each of the Lower Tier REMIC and the Upper Tier REMIC for
purposes of the REMIC Provisions. The Start-up 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 2.06. The Upper Tier REMIC
shall hold as assets the several classes of uncertificated Lower Tier Regular
Interests, set out below. Each such Lower Tier Regular Interest is hereby
designated as a regular interest in the Lower Tier REMIC. The Class LT-A-1A,
Class LT-A-1B, Class LT-A-2, Class LT-A-3A, Class LT-A-3B, Class LT-A-3C, Class
LT-M1, Class LT-M2, Class LT-M-3, Class LT-M-4, Class LT-B-1 and Class LT-B-2
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 LIBOR Certificate represents a
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 Upper Tier REMIC and
the Excess Reserve Fund Account and the Cap Agreements, which portions of the
Trust Fund shall be treated as a grantor trust.
Corresponding
Lower Tier Lower Tier Initial Lower Tier Upper Tier
Class Designation Interest Rate Principal Amount REMIC Class
----------------- ------------- ---------------- -----------
Class LT-A-1A (1) 1/2 initial Corresponding A-1A
Upper Tier REMIC initial
principal balance
Class LT-A-1B (1) 1/2 initial Corresponding A-1B
Upper Tier REMIC initial
principal balance
Class LT-A-2 (1) 1/2 initial Corresponding A-2
Upper Tier REMIC initial
principal balance
Class LT-A-3A (1) 1/2 initial Corresponding A-3A
Upper Tier REMIC initial
principal balance
Class LT-A-3B (1) 1/2 initial Corresponding A-3B
Upper Tier REMIC initial
principal balance
Class LT-A-3C (1) 1/2 initial Corresponding A-3C
Upper Tier REMIC initial
principal balance
Class LT-M-1 (1) 1/2 initial Corresponding M-1
Upper Tier REMIC initial
principal balance
Class LT-M-2 (1) 1/2 initial Corresponding M-2
Upper Tier REMIC initial
principal balance
Class LT-M-3 (1) 1/2 initial Corresponding M-3
Upper Tier REMIC initial
principal balance
Class LT-M-4 (1) 1/2 initial Corresponding M-4
Upper Tier REMIC initial
principal balance
Class LT-B-1 (1) 1/2 initial Corresponding B-1
Upper Tier REMIC initial
principal balance
Class LT-B-2 (1) 1/2 initial Corresponding B-2
Upper Tier REMIC initial
principal balance
Class LT-Accrual (1) 1/2 Pool Stated Principal
Balance plus 1/2
Overcollateralized Amount,
less $2,000
Class LT-Group I (2) $346.43 (5)
Class LT-Group II (3) $1,133.76 (5)
Class LT-Group III (4) $519.81 (5)
Class LT-R (6) (6)
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group II
Cap.
(4) The interest rate with respect to any Distribution Date for the Class
LT-Group III Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group III
Cap.
(5) On the Closing Date, the Initial Lower Tier Principal Amount of the Class
LT-Group I Interest shall be $346.43389690, the Initial Lower Tier
Principal Amount of the Class LT-Group II Interest shall be
$1,133.76027072 and the Initial Lower Tier Principal Amount of the Class
LT-Group III Interest shall be $519.80583239. For all future Distribution
Dates, the principal balances of these Lower Tier Regular Interests shall
be rounded to eight decimal places.
(6) The Class LT-R Interest is the sole Class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Premiums, the Cap Agreements, the Excess
Reserve Fund Account, and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances 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 principal balance of its Corresponding
Class) and will be accrued and added to the principal balance of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the principal
balance 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, the
Class LT-Group I Interest, the Class LT-Group II Interest and the Class LT-Group
III Interest (and further allocated among these Lower Tier Regular Interests in
the manner described below), 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 principal balance
of each of the LT-Accretion Directed Classes is equal to 50% of the principal
balance of their Corresponding Class, and (ii) the Class LT-Accrual Interest,
the Class LT-Group I Interest, the Class LT-Group II Interest and the Class
LT-Group III Interest (and further allocated among these Lower Tier Regular
Interests in the manner described below) is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralized
Amount. As among the Class LT-Accrual Interest, the Class LT-Group I Interest
the Class LT-Group II Interest and the Class LT-Group III Interest, all payments
of scheduled principal and prepayments of principal generated by the Mortgage
Loans, and all Realized Losses, allocable to such Lower Tier Regular Interests
shall be allocated (i) to the Class LT-Accrual Interest in the same proportion
that the then outstanding principal balance of such Lower Tier Regular Interest
bears to the then outstanding aggregate principal balance of the Class
LT-Accrual Interest, the Class LT-Group I Interest, the Class LT-Group II
Interest and the Class LT-Group III Interest and (ii) the remainder to each of
the Class LT-Group I Interest, the Class LT-Group II Interest and the Class
LT-Group III Interest in the same proportion that the then outstanding aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan Group bears
to the then outstanding aggregate Stated Principal Balance of the Mortgage
Loans.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier
Interest Rate Initial Upper Tier
and Principal Amount
Corresponding and Corresponding Corresponding
Upper Tier Class Pass-Through Class Certificate Class of
Class Designation Rate Balance Certificates
----------------- ------------------ ------------------ ------------
Class A-1A (1) $ 99,982,000 Class A-1A(10)
Class A-1B (2) $ 10,000,000 Class A-1B(10)
Class A-2 (3) $ 359,936,000 Class A-2(10)
Class A-3A (4) $ 44,410,000 Class A-3A(10)
Class A-3B (5) $ 86,436,000 Class A-3B(10)
Class A-3C (6) $ 34,179,000 Class A-3C(10)
Class M-1 (7) $ 36,916,000 Class M-1(10)
Class M-2 (7) $ 19,196,000 Class M-2(10)
Class M-3 (7) $ 8,490,000 Class M-3(10)
Class M-4 (7) $ 14,766,000 Class M-4(10)
Class B-1 (7) $ 7,383,000 Class B-1(10)
Class B-2 (7) $ 7,753,000 Class B-2(10)
Class X (8) 0(8) Class X(8)
Class UT-R (9) 0 Class R
(1) The Class A-1-A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.30%, (ii) the Loan Group I
Cap and (iii) the WAC Cap or (b) after the Optional Termination Date, the
least of (i) LIBOR plus 0.60%, (ii) the Loan Group I Cap and (iii) the WAC
Cap.
(2) The Class A-1-B Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.45%, (ii) the Loan Group I
Cap and (iii) the WAC Cap or (b) after the Optional Termination Date, the
least of (i) LIBOR plus 0.90%, (ii) the Loan Group I Cap and (iii) the WAC
Cap.
(3) The Class A-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.32%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.64%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-3A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.32%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.64%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(5) The Class A-3B Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.19%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.38%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(6) The Class A-3C Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.52%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 1.04%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(7) The Class M-1, Class M-2, Class M-3, Class M-4, Class B-1 and Class B-2
Interests will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional Termination Date, the
least of (i) LIBOR plus 0.65%, 1.20%, 1.60%, 2.95%, 3.75%, and 4.00%,
respectively, and (ii) the WAC Cap or (b) after the Optional Termination
Date, the lesser of (i) LIBOR plus 0.975%, 1.80%, 2.40%, 4.425%, 5.625%,
and 6.000%, respectively, and (ii) the WAC Cap.
(8) The Class X Interest has an initial notional principal balance of
$8,859,682.37, but it 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 Pass-Through Rate of the
Lower Tier REMIC Interests, where the interest rate on each of the Class
LT-Accrual Interest, Class LT-Group I Interest, Class LT-Group II Interest
and Class LT-Group III 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 Date. Such deferred
interest shall not itself bear interest. The Class X Certificates will
represent beneficial ownership of the Class X Interest, the Cap Agreements
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, the Trustee
will treat a Class X Certificateholder's 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 LIBOR Certificates. Such rights of the Class X
Certificateholders and LIBOR 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.
(9) The Class UT-R Interest is the sole Class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(10) 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 an LIBOR
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. Such rights of the LIBOR 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.
The minimum denomination for each Class of the LIBOR Certificates
will be $50,000, 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) each of the Class P and Class R Certificates will be a 100%
Percentage Interest in such Class and (b) the Class X Certificates will be a 10%
Percentage Interest in such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class A-1A, Class X-0X, Xxxxx X-0, Class A-3A,
Class A-3B and Class A-3C Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class R Certificates, Class P Certificates and
Class X Certificates; any certificate with a
rating below the lowest applicable permitted
rating under the Underwriters' Exemption.
Non-Delay Certificates....... Class A, Class X and Subordinated Certificates.
LIBOR Certificates........... The Class A Certificates and the Subordinated
Certificates.
Offered Certificates......... All Classes of Certificates other than the Private
Certificates.
Physical Certificates........ Class X, Class P and Class R Certificates.
Private Certificates......... Class A-1A, Class X, Class P and Class R
Certificates.
Rating Agencies.............. Fitch, Moody's and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the Class P
and Class R Certificates.
Residual Certificates........ Class R Certificates.
Subordinated Certificates.... Class M-1, Class M-2, Class M-3, Class M-4, Class
B-1 and Class B-2 Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: (a) With respect to any Option
One Mortgage Loan, those mortgage servicing practices set forth in Section 3.01
of this Agreement; and (b) with respect to any Accredited Mortgage Loan, the
servicing and administration of such Mortgage Loan (i) in the same manner in
which, and with the same care, skill, prudence and diligence with which, Chase
generally services and administers similar mortgage loans with similar
mortgagors (A) for other third parties, giving due consideration to customary
and usual standards of practice of prudent institutional residential mortgage
lenders servicing their own mortgage loans or (B) held in Chase's own portfolio,
whichever standard is higher, and (ii) in accordance with applicable local,
state and federal laws, rules and regulations.
Account: Any of the Collection Account, the Distribution
Account, any Escrow Account or the Excess Reserve Fund Account. Each Account
shall be an Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California
corporation, and its successors in interest.
Accredited Mortgage Loan: Each Mortgage Loan purchased by the
Purchaser pursuant to the Accredited Purchase Agreement identified as an
"Accredited Mortgage Loan" on the Mortgage Loan Schedule.
Accredited Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2003, by and between Accredited and
the Purchaser, solely insofar as the Accredited Purchase Agreement relates to
the Accredited Mortgage Loans.
Accredited Servicing Transfer Date: September 1, 2003.
Accrued Certificate Interest Distribution Amount: With respect
to any Distribution Date for each Class of the LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan purchased pursuant to the Purchase Agreements.
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.
Adjustment Date: As to any Mortgage Loan, the first Due Date
on which the related Mortgage Interest Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described
in Section 10.07.
Advancing Person: The Person to whom either Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
have been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount held in each Collection Account at
the close of business on the related Remittance Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the LIBOR Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: (a) With respect to any Accredited Mortgage
Loan, the value of the related Mortgaged Property based upon the appraisal made
for the originator at the time of origination of such Mortgage Loan or the sales
price of such Mortgaged Property at such time of origination, whichever is less;
provided, however, that in the case of a refinanced Mortgage Loan, such value is
based solely upon the appraisal made at the time of origination of such
refinanced Mortgage Loan. (b) With respect to any Mortgaged Property related to
an Option One Mortgage Loan, the lesser of (i) the lesser of (a) the value
thereof as determined by an appraisal made for the originator of such Mortgage
Loan at the time of origination of such Mortgage Loan by an appraiser who met
the minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac and (b) the value thereof
as determined by a review appraisal conducted by Option One in the event any
such review appraisal determines an appraised value more than ten percent lower
than the value thereof (as determined by the appraisal referred to in clause
(i)(a) above), in the case of a Mortgage Loan with an LTV less than or equal to
80%, or more than five percent lower than the value thereof (as determined by
the appraisal referred to in clause (i)(a) above), in the case of a Mortgage
Loan with an LTV greater than 80%, (as determined by the appraisal referred to
in clause (i)(a)), and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of such Mortgage Loan, provided,
however, (A) in the case of a refinanced Mortgage Loan (which is a Mortgage Loan
the proceeds of which were not used to purchase the related Mortgaged Property)
or a Mortgage Loan originated in connection with a "lease option purchase" if
the "lease option purchase price" was set 12 months or more prior to
origination, such value of the Mortgaged Property is based solely upon clause
(i) above.
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees other than
the Credit Risk Manager Fee) 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 P&I Advances in respect thereof; (ii) all
Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds during the
related Prepayment Period (in each case, net of unreimbursed expenses incurred
in connection with a liquidation or foreclosure and unreimbursed Advances, if
any); (iii) all partial or full prepayments on the Mortgage Loans received
during the related Prepayment Period together with all Compensating Interest
thereon; and (iv) amounts received with respect to such Distribution Date as the
Substitution Adjustment Amount or purchase price in respect of a Deleted
Mortgage Loan or a Mortgage Loan repurchased by the applicable Responsible Party
or the Depositor as of such Distribution Date; reduced by (y) amounts in
reimbursement for P&I Advances and Servicing Advances previously made with
respect to the Mortgage Loans, other amounts as to which the Servicers, the
Depositor or the Trustee (or co-trustee) are entitled to be paid or reimbursed
pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Overcollateralized Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates at (a) with respect to the Class A-1 Certificates, the lesser of
(y) the Loan Group I Cap or (z) the WAC Cap, (b) with respect to the Class A-2
Certificates, the lesser of (y) the Loan Group II Cap or (z) the WAC Cap, (c)
with respect to the Class A-3 Certificates, the lesser of (y) the Loan Group III
Cap or (z) the WAC Cap and (d) with respect to each other Class of LIBOR
Certificates, the WAC Cap, as applicable, and (B) the Basis Risk Carry Forward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal
to the aggregate of the Basis Risk Carry Forward Amounts for such Distribution
Date; provided, however, that with respect to any Distribution Date, the Basis
Risk Payment shall not exceed the Class X Distributable Amount.
Best's: Best's Key Rating Guide, as the same shall be amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
BPO: A broker's price opinion.
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, New Jersey, Florida, Pennsylvania, Maryland, Arizona, Minnesota and
California, (b) the State in which a 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.
Cap Agreements: The Group I Cap Agreement, and the Group III
Cap Agreement.
Cap Provider: Xxxxxxx Sachs Capital Markets L.P., a Delaware
limited partnership, and its successors in interest.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of
Certificates, other than the Class X, Class P or Class R 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. The Class X,
Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
Certification: As defined in Section 8.12(b).
Chase: Chase Manhattan Mortgage Corporation, a New Jersey
corporation, and its successors in interest.
Class: All Certificates bearing the same Class designation as
set forth in the Preliminary Statement.
Class A Certificate Group: Either the Class A-1 Certificates,
the Class A-2 Certificates, or the Class A-3 Certificates, as applicable.
Class A Certificates: The Class A-1A, Class X-0X, Xxxxx X-0,
Class A-3A, Class A-3B and Class A-3C Certificates.
Class A Principal Allocation Percentage: For any Distribution
Date is the percentage equivalent of a fraction, determined as follows: (A) with
respect to the Class A-1 Certificates, the numerator of which is the portion of
the Principal Remittance Amount for that Distribution Date that is attributable
to the principal received or advanced on the Group I Mortgage Loans and the
denominator of which is the Principal Remittance Amount for that Distribution
Date; (B) with respect to the Class A-2 Certificates, the numerator of which is
the portion of the Principal Remittance Amount for that Distribution Date that
is attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is the Principal Remittance Amount for that
Distribution Date; and (C) with respect to the Class A-3 Certificates, the
numerator of which is the portion of the Principal Remittance Amount for that
Distribution Date that is attributable to the principal received or advanced on
the Group III Mortgage Loans and the denominator of which is the Principal
Remittance Amount for that Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 72.00% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class A-1 Certificates: The Class A-1A Certificates and the
Class A-1B Certificates, collectively.
Class A-1A Certificates: All Certificates bearing the Class
designation of "Class A-1A Certificates."
Class A-1B Certificates: All Certificates bearing the Class
designation of "Class A-1B Certificates."
Class A-2 Certificates: All Certificates bearing the Class
designation of "Class A-2 Certificates."
Class A-3 Certificates: The Class A-3A Certificates, the Class
A-3B Certificates and the Class A-3C Certificates, collectively
Class A-3A Certificates: All Certificates bearing the Class
designation of "Class A-3A Certificates."
Class A-3B Certificates: All Certificates bearing the Class
designation of "Class A-3B Certificates."
Class A-3C Certificates: All Certificates bearing the Class
designation of "Class A-3C Certificates."
Class B-1 Certificates: All Certificates bearing the Class
designation of "Class B-1 Certificates."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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 for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), and (F) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 95.50% (rounded to two decimal
places) of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the Class
designation of "Class B-2 Certificates."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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) 97.60% (rounded to two decimal
places) of the aggregate Stated Principal Balances 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 LT-R Interest: The residual interest in the Lower-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class M-1 Certificates: All Certificates bearing the Class
designation of "Class M-1 Certificates."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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) 82.00%
(rounded to two decimal places) of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the Class
designation of "Class M-2 Certificates."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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) 87.20% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the Class
designation of "Class M-3 Certificates."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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 for such Distribution Date), and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 89.50% (rounded to two decimal
places) of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the Class
designation of "Class M-4 Certificates."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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 for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 93.50% (rounded to two decimal places) of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the Class
designation of "Class P Certificates."
Class R Certificates: All Certificates bearing the Class
designation of "Class R Certificates."
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the Class
designation of "Class X Certificates."
Class X Distributable Amount: On any Distribution Date, (i) as
a distribution in respect to 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 (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 represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Closing Date: August 25, 2003.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Accounts: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to
any Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a)
sum of (i) the original principal balance of the Second Lien Mortgage Loan as of
the Cut-off Date and (ii) the original principal balance as of the Cut-off Date
of any mortgage loan or mortgage loans that are senior or equal in priority to
the Second Lien Mortgage Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Compensating Interest: For any Distribution Date, the lesser
of (a) the Prepayment Interest Shortfall, if any, for such Distribution Date,
with respect to voluntary Principal Prepayments in full by the Mortgagor
(excluding any payments made upon liquidation of the Mortgage Loan), and (b) the
amount of the Servicing Fee payable to the applicable Servicer for such
Distribution Date.
Condemnation Proceeds: All awards, compensation and/or
settlements in respect of a Mortgaged Property, whether permanent or temporary,
partial or entire, by exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee
at which at any particular time its corporate trust business with respect to
this Agreement is administered, which office at the date of the execution of
this Agreement is located at (i) for certificate transfer purposes, Xxxxx Xxxxxx
xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust
Services- GSAMP 2003-HE2 and (ii) for all other purposes, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000 Attn: Client Manager-GSAMP 2003-HE2, facsimile
no. (000) 000-0000 and which is the address to which notices to and
correspondence with the Trustee should be directed.
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
Class Designation Regular Interest Class of Certificates
----------------- ---------------- ---------------------
Class LT-A-1A Class A-1A Class A-1A
Class LT-A-1B Class X-0X Xxxxx X-0X
Xxxxx XX-X-0 Class A-2 Class A-2
Class LT-A-3A Class A-3A Class A-3A
Class LT-A-3B Class A-3B Class A-3B
Class LT-A-3C Class A-3C Class A-3C
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
N/A Class X Class X
Credit Risk Management Agreement: (a) With respect to Chase,
the Credit Risk Management Agreement, dated as of August 25, 2003, by and among
the Credit Risk Manager, Chase and the Trustee; and (b) with respect to Option
One, the Credit Risk Management Agreement, dated as of August 25, 2003, by and
among the Credit Risk Manager, Option One and the Trustee.
Credit Risk Manager: The Murrayhill Company, a Colorado
corporation, and its successors in interest.
Credit Risk Manager Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to one month's interest at the Credit Risk
Manager Fee Rate on the Stated Principal Balance of such Mortgage Loan as of the
first day of the calendar month preceding the month in which such Distribution
Date occurs.
Credit Risk Manager Fee Rate: With respect to each Mortgage
Loan, the per annum rate specified in the letter agreement, dated August 25,
2003, between the Depositor and the Credit Risk Manager.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: August 1, 2003.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on that date).
Data Tape Information: The information provided by each
Responsible Party as of the Cut-off Date to the Depositor setting forth the
following information with respect to each Mortgage Loan: (1) the related
Responsible Party'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 Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate as of the
Cut-off Date; (9) the date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the amount of the
Scheduled Payment as of the Cut-off Date; (12) the last payment date on which a
Scheduled Payment was actually applied to pay interest and the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (15) with respect to Adjustable Rate Mortgage Loans,
the 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 Mortgage Interest Rate Cap under
the terms of the Mortgage Note; (20) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien); (21) a code indicating the purpose of the
loan (i.e., purchase, rate and term refinance, equity take-out refinance); (22)
a code indicating the documentation style (i.e., full documentation, limited
documentation or stated income); (23) the loan credit classification (as
described in the Underwriting Guidelines); (24) whether such Mortgage Loan
provides for a Prepayment Premium; (25) the Prepayment Premium period of such
Mortgage Loan, if applicable; (26) a description of the Prepayment Premium, if
applicable; (27) the Mortgage Interest Rate as of origination; (28) the credit
risk score (FICO score) at origination; (29) the date of origination; (30) the
Mortgage Interest Rate adjustment period; (31) the Mortgage Interest Rate floor;
(32) the Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest, other); (33) a code indicating whether the Mortgage Loan is a High
Cost Mortgage Loan; (34) a code indicating whether the Mortgage Loan has been
modified; (35) the current Loan-to-Value Ratio; (36) the one year payment
history; (37) the Due Date for the first Scheduled Payment; (38) the original
Scheduled Payment due; (39) with respect to the related Mortgagor, the
debt-to-income ratio; (40) the Appraised Value of the Mortgaged Property; (41)
the sales price of the Mortgaged Property if the Mortgage Loan was originated in
connection with the purchase of the Mortgaged Property; (42) the MERS
identification number; and (43) a code indicating if a Mortgage Loan is or has
had a 30 Day Delinquency. With respect to the Mortgage Loans in the aggregate:
(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.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except for such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(e).
Delinquency Trigger: With respect to any Distribution Date, a
Delinquency Trigger exists if (i) the quotient (expressed as a percentage) of
(1) the rolling three-month average of the aggregate unpaid principal balance of
60+ Day Delinquent Mortgage Loans serviced by Option One, divided by (2) the
aggregate unpaid principal balance of the Option One Mortgage Loans as of the
last day of the related Due Period, equals or exceeds 18.00%.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's, F1 by Fitch 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:
(a) the 18th of the calendar month in which such Distribution Date occurs or, if
such day is not a Business Day, the immediately preceding Business Day, in the
case of the Accredited Mortgage Loans; or (b) the 15th of the calendar month in
which such Distribution Date occurs or, if such day is not a Business Day, the
immediately preceding Business Day, in the case of the Option One Mortgage
Loans.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.27(b) in the name of the
Trustee for the benefit of the Certificateholders and designated "Xxxxx Fargo
Bank Minnesota, National Association in trust for registered holders of GSAMP
Trust 2003-HE2 Mortgage Pass-Through Certificates, Series 2003-HE2." Funds in
the Distribution Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement and may be invested in
Permitted Investments.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such day is not a Business Day,
the next succeeding Business Day, commencing in September 2003.
Document Certification and Exception Report: The report
attached to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
the Distribution Date occurs and ending on the first day of the calendar month
in which the Distribution Date occurs.
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 (and 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.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this
Agreement.
Event of Default: As defined in Section 7.01.
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 Sections 3.27(a) in the name
of the Trustee for the benefit of the Regular Certificateholders and designated
"Xxxxx Fargo Bank Minnesota, National Association in trust for registered
holders of GSAMP Trust 2003-HE2, Mortgage Pass-Through Certificates, Series
2003-HE2." Funds in the Excess Reserve Fund Account shall be held in trust for
the Regular Certificateholders for the uses and purposes set forth in this
Agreement. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate, the Credit Risk Manager Fee Rate,
the Trustee Fee Rate and the PMI Insurer Fee Rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing Fee, the Credit Risk Manager Fee, the Trustee Fee and the PMI Insurer
Fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution
Date, the lesser of (x) the related Total Monthly Excess Spread for such
Distribution Date and (y) the related Overcollateralization Deficiency for such
Distribution Date.
Xxxxxx Xxx: The Federal National Mortgage Association and its
successors in interest.
Xxxxxx Mae Guides: The Xxxxxx Xxx Seller's Guide and the
Xxxxxx Mae Servicer's Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Responsible Party as contemplated by this Agreement), a
determination made by the Servicer that all Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
each of the following months:
Month of
Final Scheduled
Distribution Date
-----------------
Class A-1A Certificates................................... August 2033
Class A-1B Certificates................................... August 2033
Class A-2 Certificates.................................... August 2033
Class A-3A Certificates................................... August 2033
Class A-3B Certificates................................... August 2033
Class A-3C Certificates................................... August 2033
Class M-1 Certificates.................................... August 2033
Class M-2 Certificates.................................... August 2033
Class M-3 Certificates.................................... August 2033
Class M-4 Certificates.................................... August 2033
Class B-1 Certificates.................................... August 2033
Class B-2 Certificates.................................... August 2033
Class X Certificates...................................... August 2033
Class P Certificates...................................... August 2033
Class R Certificates...................................... August 2033
Fitch: Fitch Ratings, or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - GSAMP
Trust 2003-HE2, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan purchased
pursuant to the Purchase Agreements.
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.
Xxxxxxx Mac Guides: The Xxxxxxx Mac Seller's & Servicer's
Guide and all amendments or additions thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note to be
added to the applicable Index to determine the Mortgage Interest Rate.
Group I Cap Agreement: The interest rate cap agreement, dated
as of July 30, 2003, between the Purchaser and the Cap Provider.
Group III Cap Agreement: The interest rate cap agreement,
dated as of August 1, 2003, between the Purchaser and the Cap Provider.
Group III Class A Sequential Certificates: The Class A-3B and
Class A-3C Certificates.
Group I Interest Rate Cap Payment: Beginning on the first
Distribution Date and continuing through the immediately succeeding 38
Distribution Dates thereafter, the amount, if any, equal to the product of (a)
the amount by which one-month LIBOR (determined in accordance with the Group I
Cap Agreement) as of the reset date under the Group I Cap Agreement exceeds
6.00% for the first 22 Distribution Dates or 7.40% for the immediately
succeeding 17 Distribution Dates, and (b) the product of the interest rate
notional amount amortization schedule attached to the Group I Cap Agreement for
that date, calculated on an "actual/360" basis.
Group III Interest Rate Cap Payment: Beginning on the first
Distribution Date and continuing through the immediately succeeding 59
Distribution Dates thereafter, the amount, if any, equal to the product of (a)
the amount by which one-month LIBOR (determined in accordance with the Group III
Cap Agreement) as of the reset date under the Group III Cap Agreement exceeds
6.50%, and (b) the product of the interest rate notional amount amortization
schedule attached to the Group III Cap Agreement for that date, calculated on an
"actual/360" basis.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Group III Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group III Mortgage Loans.
High Cost Mortgage Loan: A Mortgage Loan classified as (a) a
"high cost" loan under the Home Ownership and Equity Protection Act of 1994 or
(b) a "high cost," "threshold," "covered" or "predatory" loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
Index: As to each Adjustable Rate Mortgage Loan, the index
from time to time in effect for the adjustment of the Mortgage Interest Rate set
forth as such on the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies, including, without limitation, in the case of the PMI
Mortgage Loans, the applicable PMI Policy.
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 each Class of
Non-Delay Certificates and each Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Cap Payment: The Group I Interest Rate Cap
Payments and the Group III Interest Rate Cap Payments.
Investment Account: As defined in Section 3.12(a).
Investor Side Letter: The side letter, dated as of August 25,
2003, between the Depositor and the initial investor in the Class A-1A
Certificates.
Late Collections: With respect to any Mortgage Loan and any
Due Period, all amounts received after the Remittance Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will 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 loan to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
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.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Servicer has certified (in accordance with this Agreement)
that it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
Liquidation Event: With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from coverage under this Agreement by reason of its being
purchased, sold or replaced pursuant to or as contemplated by this Agreement.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from coverage under this Agreement by reason of its being
purchased pursuant to this Agreement.
Liquidation Proceeds: The amounts, other than Insurance
Proceeds, Condemnation Proceeds or those received following the acquisition of
REO Property, 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.
Loan Group: The Group I Mortgage Loans, the Group II Mortgage
Loans and the Group III Mortgage Loans, as applicable.
Loan Group Cap: The Loan Group I Cap, the Loan Group II Cap or
the Loan Group III Cap, as applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans
as of any Distribution Date, the product of (i) the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group I Mortgage Loans, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans
as of any Distribution Date, the product of (i) the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group II Mortgage Loans, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Loan Group III Cap: With respect to the Group III Mortgage
Loans as of any Distribution Date, the product of (i) the weighted average of
the Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group III Mortgage Loans, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the ratio (expressed as a percentage) of the original outstanding principal
amount of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated),
to either (a) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the least of (i) the purchase price of the Mortgaged
Property, (ii) the Appraisal Value of the Mortgaged Property at origination, or
(iii) in the case of an Accredited Mortgage Loan, the Review Appraisal Value of
the Mortgaged Property; or (b) if the Mortgage Loan was a refinancing or
modification, the Appraisal Value of the Mortgaged Property at the time of the
refinancing or modification.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower Tier Regular Interest: Each of the Class LT-A-1A, Class
LT-A-1B, Class LT-A-2, Class LT-A-3A, Class LT-A-3B, Class LT-A-3C, Class
LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-B-1, Class LT-B-2,
Class LT-Group I, Class LT-Group II, Class LT-Group III and Class LT-Accrual
Interests 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: As defined in Section 2.01.
MERS Designated Mortgage Loan: Mortgage Loans for which (a)
either Responsible Party has designated or will designate MERS as, and has taken
or will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Responsible Party, in accordance with MERS Procedure
Manual and (b) either Responsible Party has designated or will designate the
Trust as the Investor on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may
be amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more particularly described in the MERS Procedures Manual.
MGIC: Mortgage Guaranty Insurance Corporation, a Wisconsin
corporation, and its successors in interest.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(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 Servicers.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes, without limitation, the Mortgage File, the Custodial File, the
Servicing File, the Scheduled Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds,
Prepayment Premiums 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 mortgage loan documents
pertaining to each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan as of the Cut-off Date: (1) the related
Responsible Party'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 Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate as of the
Cut-off Date; (9) the date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the amount of the
Scheduled Payment as of the Cut-off Date; (12) the last payment date on which a
Scheduled Payment was actually applied to pay interest and the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (15) with respect to Adjustable Rate Mortgage Loans,
the 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 Mortgage Interest Rate Cap under
the terms of the Mortgage Note; (20) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien); (21) a code indicating the purpose of the
loan (i.e., purchase, rate and term refinance, equity take-out refinance); (22)
a code indicating the documentation style (i.e., full documentation, limited
documentation or stated income); (23) the loan credit classification (as
described in the Underwriting Guidelines); (24) whether such Mortgage Loan
provides for a Prepayment Premium; (25) the Prepayment Premium period of such
Mortgage Loan, if applicable; (26) a description of the Prepayment Premium, if
applicable; (27) the Mortgage Interest Rate as of origination; (28) the credit
risk score (FICO score) at origination; (29) the date of origination; (30) the
Mortgage Interest Rate adjustment period; (31) the Mortgage Interest Rate floor;
(32) the Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest, other); (33) a code indicating whether the Mortgage Loan is a High
Cost Mortgage Loan; (34) a code indicating whether the Mortgage Loan has been
modified; (35) the current Loan-to-Value Ratio; (36) the one year payment
history; (37) the Due Date for the first Scheduled Payment; (38) the original
Scheduled Payment due; (39) with respect to the related Mortgagor, the
debt-to-income ratio; (40) the Appraised Value of the Mortgaged Property; (41)
the sales price of the Mortgaged Property if the Mortgage Loan was originated in
connection with the purchase of the Mortgaged Property; (42) the MERS
identification number; (43) a code indicating whether the Mortgage Loan is a
Group I Mortgage Loan or a Group II Mortgage Loan; (44) a code indicating
whether the Mortgage Loan is an Option One Mortgage Loan or an Accredited
Mortgage Loan; (45) a code indicating if a Mortgage Loan is or has had a 30 Day
Delinquency; (46) a code indicating whether such Mortgage Loan is a PMI Mortgage
Loan; and (47) for each PMI Mortgage Loan, the coverage percentage under the PMI
Policy. With respect to the Mortgage Loans in the aggregate: (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 under a Mortgage Loan.
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(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant to subsection 4.02(a)(iii) (before
giving effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the amount by which the sum of the Prepayment Interest Shortfalls exceeds the
sum of the Compensating Interest payments made on such Distribution Date.
NIM Trust: GSAMP NIM Trust 2003-HE2-N, a Delaware statutory
trust.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, three 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.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in the good faith business judgment of the applicable Servicer,
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 an officer of
the Servicer with responsibility for the servicing of the Mortgage Loans
required to be serviced by such Servicer and listed on a list delivered to the
Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee; provided, that any Opinion of Counsel relating to (a) qualification of
either Trust REMIC as a 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 such Servicer of the Mortgage Loans, (ii) does
not have any material direct or indirect financial interest in such Servicer of
the Mortgage Loans or in an affiliate of either and (iii) is not connected with
such Servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Option One: Option One Mortgage Corporation, a California
corporation, and its successors in interest.
Option One Mortgage Loan: Each Mortgage Loan purchased by the
Purchaser pursuant to the Option One Purchase Agreement identified as an "Option
One Mortgage Loan" on the Mortgage Loan Schedule.
Option One Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2003, by and among Option One, Option
One Owner Trust 2001-1A, Option One Owner Trust 2001-1B, Option One Owner Trust
2001-2, Option One Owner Trust 2002-3 and the Purchaser, solely insofar as the
Option One Purchase Agreement relates to the Option One Mortgage Loans.
Optional Termination Date: The date determined as follows:
(i) The Majority Class X Certificateholder (as evidenced on
the records of the Registrar) may cause the Optional Termination Date
to occur on the Distribution Date when 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 (provided, that if the Depositor or an Affiliate of the
Depositor is one of the Holders constituting such majority, then there
must be at least one other unaffiliated Holder constituting such
majority and the Class X Certificates held by such Holder (or
unaffiliated Holders in the aggregate) must represent at least a 10%
Percentage Interest in the Class X Certificates); and
(ii) Each Servicer individually, or the Servicers acting
together, may cause the Optional Termination Date to occur on 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 5.00% or less of the Cut-off Date Pool Principal Balance.
In the event that a Servicer or both of the Servicers, as
applicable, and the Majority Class X Certificateholder (or the Majority Class X
Certificateholder and another Class X Certificateholder) have the call rights
described above, at such time as those rights may be exercised, the first Person
to provide notice to exercise the call right will have the right to purchase the
Mortgage Loans.
Original Sale Date: With respect to the Option One Mortgage
Loans, June 30, 2003, and with respect to the Accredited Mortgage Loans, June
27, 2003.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the LIBOR 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 Total Monthly Excess Spread.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by the applicable Servicer in respect of any Remittance Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Remittance Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1A Certificates, 0.30%; Class
A-1B Certificates, 0.45%; Class A-2 Certificates, 0.32%; Class A-3A
Certificates, 0.32%; Class A-3B Certificates, 0.19%; Class A-3C Certificates,
0.52%; Class M-1 Certificates, 0.65%; Class M-2 Certificates, 1.20%; Class M-3
Certificates, 1.60%; Class M-4 Certificates, 2.95%; Class B-1 Certificates,
3.75%; and Class B-2 Certificates, 4.00%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall increase to: Class
A-1A Certificates, 0.60%; Class A-1B Certificates, 0.90%; Class A-2
Certificates, 0.64%; Class A-3A Certificates, 0.64%; Class A-3B Certificates,
0.38%; Class A-3C Certificates, 1.04%; Class M-1 Certificates, 0.975%; Class M-2
Certificates, 1.80%; Class M-3 Certificates, 2.40%; Class M-4 Certificates,
4.425%; Class B-1 Certificates, 5.625%; and Class B-2 Certificates, 6.00%.
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.
Periodic Mortgage Interest Rate Cap: With respect to each
Adjustable Rate Mortgage Loan, the provision of each Mortgage Note which
provides for an absolute maximum amount by which the Mortgage Interest Rate
therein may increase or decrease on an Adjustment Date above or below the
Mortgage Interest Rate previously in effect. The Periodic Mortgage Interest Rate
Cap for each Adjustable Rate Mortgage Loan is the rate set forth on the Mortgage
Loan Schedule.
Periodic Mortgage Interest Rate Floor: With respect to each
Adjustable Rate Mortgage Loan, the provision of each Mortgage Note which
provides for an absolute minimum amount by which the Mortgage Interest Rate
therein may increase or decrease on an Adjustment Date above or below the
Mortgage Interest Rate previously in effect. The Periodic Mortgage Interest Rate
Floor for each Adjustable Rate Mortgage Loan is the rate set forth on the
Mortgage Loan Schedule.
Permitted Investments: (1) With respect to each of Chase,
Accredited and the Trustee, 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 a Servicer, the Trustee or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall
in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars and issued by any Depository Institution and rated F1+ by
Fitch, P-1 by Xxxxx'x 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 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or the Trustee or an Affiliate thereof, that
have been rated "Aaa" by Xxxxx'x, "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,
and
(2) with respect to Option One, any one or more of the obligations and
securities listed below:
(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, or Xxxxxxx Mac
senior debt obligations, but excluding any of such securities whose
terms do not provide for payment of a fixed dollar amount upon maturity
or call for redemption;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company or its ultimate parent has a short-term uninsured debt
rating in one of the two highest available rating categories of
Standard & Poor's and the highest available rating category of Xxxxx'x
and provided that each such investment has an original maturity of no
more than three hundred sixty-five (365) days; and provided further
that, if the only Rating Agency is Standard & Poor's and if the
depository or trust company is a principal subsidiary of a bank holding
company and the debt obligations of such subsidiary are not separately
rated, the applicable rating shall be that of the bank holding company;
and, provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository institution or
trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of Standard & Poor's if Standard
& Poor's is the Rating Agency; and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC.
(B) any other demand or time deposit or deposit which is fully
insured by the FDIC; and
(C) Xxxxxxx Mac participation certificates and other Xxxxxxx
Mac guaranteed mortgage-backed securities and senior debt obligations.
(iii) repurchase obligations with a term not to exceed thirty
(30) days with respect to any security described in clause (i) above
and entered into with a depository institution or trust company (acting
as principal) rated "A-1+," "P-1," "F-1" or greater from two of
Standard & Poor's, Xxxxx'x and Fitch, respectively, at the time of such
investment;, provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (i)
above and must (A) be valued daily at current market prices plus
accrued interest or (B) pursuant to such valuation, be equal, at all
times, to one hundred five percent (105%) of the cash transferred by
the Trustee in exchange for such collateral and (C), be delivered to
the Trustee or, if the Trustee is supplying the collateral, an agent
for the Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certificated
securities;
(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 a Rating
Agency 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 with a short term unsecured debt
rating "A-1+," "P-1," "F-1" or greater from two of Standard & Poor's,
Xxxxx'x and Fitch, respectively, at the time of such investment; and
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Trustee or an affiliate thereof having a rating by Standard &
Poor's of AAA-G, AAA-m, or AA-m, by Fitch of AAA (if rated by Fitch)
and if rated by Xxxxx'x, rated Aaa, Aa1 or Aa2;
provided, however, that no such investment shall be an Permitted Investment if
such investment evidences either (a) the right to receive interest-only payments
with respect to the obligations underlying such investments or (b) both
principal and interest payments derived from obligations underlying such
investment where the principal and interest payments with respect to such
investment provide a yield to maturity exceeding one hundred twenty percent
(120%) of the yield to maturity at par of such underlying obligation.
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 either 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.
PMI Insurer: Each of MGIC and Radian. When the term "PMI
Insurer" is used in this Agreement, "PMI Insurer" shall mean (i) MGIC with
respect to the Option One Mortgage Loans and (ii) Radian with respect to the
Accredited Mortgage Loans.
PMI Insurer Fee: The amount payable to each PMI Insurer on
each Distribution Date, which amount shall be calculated for each Distribution
Date by (A) calculating, for each PMI Mortgage Loan, one-twelfth of the product
of (i) the applicable PMI Insurer Fee Rate, and (ii) the Stated Principal
Balance of the applicable PMI Mortgage Loan or the related REO Property as of
the first day of the related Due Period, (B) summing the results of the
calculation in clause (A), and (C) adding the amount of any West Virginia and
Kentucky state taxes associated with such PMI Insurer Fees.
PMI Insurer's Fee Rate: With respect to each PMI Mortgage
Loan, the per annum fee rate set forth in the pricing letter of the applicable
PMI Insurer. The related Servicer with respect to each PMI Mortgage Loan hereby
acknowledges receipt of the applicable pricing letter specified in the foregoing
sentence.
PMI Mortgage Loans: The list of Mortgage Loans insured by each
PMI Insurer attached hereto as Exhibit R.
PMI Policy: (i) The Primary Mortgage Insurer Policy No.
22400-4-25-99, dated the Closing Date, with respect to the PMI Mortgage Loans
insured by MGIC, including the letter, dated August 19, 2003, from MGIC to the
Depositor, issued by MGIC, copies of which are attached hereto as Exhibit S and
all endorsements thereto; and (ii) the Primary Mortgage Insurer Policy No.
67522, dated the Closing Date, with respect to the PMI Mortgage Loans insured by
Radian, including the letter, dated August 25, 2003, from Radian to the
Purchaser, issued by Radian, copies of which are attached hereto as Exhibit T
and all endorsements thereto.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Shortfall: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was, during the related Prepayment
Period (or, in the case of an Option One Mortgage Loan, during the period
commencing on the first day of the related Prepayment Period and ending on the
last day of the calendar month in which such Prepayment Period begins), the
subject of a Principal Prepayment that was applied by the applicable Servicer to
reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
the product of (a) the Mortgage Interest Rate net of the Servicing Fee Rate for
such Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the date on which such
Principal Prepayment was applied and ending on the last day of the related
Prepayment Period (or, in the case of an Option One Mortgage Loan, on the last
day of the calendar month in which such Prepayment Period begins).
Prepayment Period: With respect to any Remittance Date, the
calendar month preceding the calendar month in which such Remittance Date
occurs, in the case of the Accredited Mortgage Loans, or the period from and
including the 16th day of the month preceding the month in which such Remittance
Date occurs and to and including the 15th day of the month in which such
Remittance Date occurs, in the case of the Option One Mortgage Loans.
Prepayment Premium: Any prepayment premium, penalty or charge
collected by the applicable Servicer with respect to a Mortgage Loan from a
Mortgagor in connection with any voluntary Principal Prepayment in Full pursuant
to the terms of the related Mortgage Note.
Principal Distribution Amount: For any Distribution Date, the
sum of (i) the Basic Principal Distribution Amount for such Distribution Date
and (ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date, excluding
any Prepayment 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 Remittance Amount: With respect to any Distribution
Date, the amount equal to the sum of the following amounts (without duplication)
with respect to the related Due Period: (i) each scheduled payment of principal
on a Mortgage Loan due during such Due Period and received by the Servicers on
or prior to the Determination Date or advanced by the applicable Servicer prior
to the related Remittance Date (including the portion of Insurance Proceeds or
Condemnation Proceeds allocable to principal), and all Principal Prepayments
received during the related Prepayment Period, (ii) the Liquidation Proceeds on
the Mortgage Loans allocable to principal actually collected by the Servicers
during the related Prepayment Period, (iii) the portion of the purchase price
allocable to principal with respect to each Deleted Mortgage Loan, the
repurchase obligation for which arose during the related Prepayment Period, that
was repurchased during the period from the prior Distribution Date through the
Remittance Date for the current Distribution Date, (iv) the principal portion of
all Substitution Adjustment Amounts with respect to the substitutions of
Mortgage Loans that occur during the calendar month in which such Distribution
Date occurs, and (v) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund (to the extent such proceeds relate to
principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated August
20, 2003, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreements: Each of the Option One Purchase Agreement
and the Accredited Purchase Agreement.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, as purchaser of the Mortgage Loans under the Purchase Agreements,
and its successors in interest.
Radian: Radian Guaranty Inc., a Pennsylvania corporation, and
its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. 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 Servicers.
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 Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last day of the month
immediately preceding the related Distribution Date (or if such day is not a
Business Day, on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
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 Soldiers' and Sailors' Civil Relief Act of
1940, as amended, or any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no
later than 12:00 PM, Central Time on the Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the applicable Servicer of
any REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the Mortgage Interest Rate net of the
Servicing Fee Rate that would have been applicable to the related Mortgage Loan
had it been outstanding) on the unpaid principal balance of the Mortgage Loan as
of the date of acquisition thereof (as such balance is reduced pursuant to
Section 3.15 by any income from the REO Property treated as a recovery of
principal).
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.
Reporting Date: The 20th day of each calendar month or the
immediately following Business Day if the 20th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount
equal to the sum of (i) the unpaid principal balance of such Mortgage Loan as of
the date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Interest Rate from the last date through which
interest has been paid and distributed to the Trustee to the date of repurchase,
(iii) all unreimbursed Servicing Advances and (iv) all expenses incurred by the
applicable Servicer, the Trust or the Trustee, as the case may be, in respect of
a breach or defect, including, without limitation, (a) expenses arising out of
the Servicer's or Trustee's, as the case may be, enforcement of the applicable
Responsible Party's repurchase obligation, to the extent not included in clause
(iii), and (b) any costs and damages incurred by the Trust in connection with
any violation by such Mortgage Loan of any predatory lending law or abusive
lending law.
Request for Release: The Request for Release submitted by a
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
any vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any associate or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers who at such time shall be officers to whom, with respect to
a particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Party: Each of Accredited and Option One. When the
term "Responsible Party" is used in this Agreement with respect to any Mortgage
Loan, Mortgaged Property, REO Property or Mortgage File, "Responsible Party"
shall mean (i) Accredited with respect to the Accredited Mortgage Loans and (ii)
Option One with respect to the Option One Mortgage Loans.
Review Appraisal Value: As defined in the Underwriting
Guidelines.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balance of the Subordinated Certificates and (ii)
the Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 28.00%.
Servicer: Each of Accredited, Chase and Option One, and if a
successor servicer is appointed hereunder, such successor servicer. When the
term "Servicer" is used in this Agreement in connection with the administration
of servicing obligations with respect to any Mortgage Loan, Mortgaged Property,
REO Property or Mortgage File, "Servicer" shall mean (i) with respect to the
Accredited Mortgage Loans, prior to the Accredited Servicing Transfer Date,
Accredited, and thereafter Chase (ii) with respect to the Option One Mortgage
Loans, Option One.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property, and (iv) the performance of its obligations under Sections
3.01, 3.09, 3.13 and 3.15. Servicing Advances also include any reasonable
"out-of-pocket" costs and expenses (including legal fees) incurred by the
applicable Servicer in connection with executing and recording instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage in connection
with any satisfaction or foreclosures in respect of any Mortgage Loan to the
extent not recovered from the Mortgagor or otherwise payable under this
Agreement. Neither Servicer shall be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Servicer, each Mortgage
Loan serviced by such Servicer and any Distribution Date, an amount equal to one
month's interest at the Servicing Fee Rate on the applicable Stated Principal
Balance of such Mortgage Loan as of the first day of the calendar month
preceding the month in which such Distribution Date occurs. Such fee shall be
payable monthly, and shall be pro rated for any portion of a month during which
the Mortgage Loan is serviced by such Servicer under this Agreement. The
Servicing Fee is payable solely from the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds and proceeds received with respect to REO Properties, to
the extent permitted by Section 3.11) of such Scheduled Payment collected by
such Servicer or as otherwise provided under Section 3.11.
Servicing Fee Rate: (a) With respect to each Mortgage Loan
serviced by Option One, 0.30% per annum for the first 10 Distribution Dates,
0.40% per annum for the next 20 Distribution Dates, 0.65% per annum for the next
18 Distribution Dates, and 0.80% per annum thereafter, (b) with respect to each
Mortgage Loan serviced by Chase, 0.50% per annum and (c) with respect to each
Mortgage Loan serviced by Accredited, 0.50% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Trustee in the
Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any officer of either Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Rights: With respect to Option One, 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 Servicer for servicing the Mortgage Loans;
(c) any ancillary income with respect to the Mortgage Loans; (d) all agreements
or documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Servicer
thereunder; (e) any and all rights to and in the Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Servicer 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. With respect to Chase, any and all
of the following: (a) all rights and obligations to service the Mortgage Loans;
(b) any compensation for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans (other than
prepayment penalties); (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights; (e) any interest on Escrow Accounts allowed by law or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
with respect thereto; (f) all accounts and other rights to payment related to
any of the property described in this paragraph; (g) the right to possess and
use any and all servicing files, servicing records, data tapes, computer
records, or other information pertaining to the Mortgage Loans to the extent
relating to the past, present or prospective servicing of the Mortgage Loans;
and (h) all rights, powers and privileges incident to ant of the foregoing.
Servicing Transfer Costs: All reasonable out-of-pocket costs
and expenses (including all extraordinary expenses) incurred by the Trustee in
connection with the transfer of servicing from a terminated Servicer, including,
without limitation, any such costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Trustee (or any
successor Servicer appointed pursuant to Section 7.02) to service the Mortgage
Loans properly and effectively.
Similar Law: As defined in Section 5.02(b).
Six-Month LIBOR Index: With respect to each applicable
Adjustable Rate Mortgage Loan, the rate as determined on the basis of rates at
which six-month U.S. dollar deposits are offered to prime banks in the London
interbank market on such date as provided in the related Mortgage Note.
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more past due (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.
Specified Overcollateralized Amount: Prior to the Stepdown
Date, an amount equal to 1.20% of the Cut-off Date Pool Principal Balance. On
and after the Stepdown Date, an amount equal to 2.40% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date, subject,
until the Class Certificate Balance of each Class of LIBOR Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance of
the Mortgage Loans until the Distribution Date on which a Trigger Event is no
longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(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 - GSAMP Trust 2003-HE2, or such other address as
Standard & Poor's may hereafter furnish to the Depositor and the Servicers.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of
any date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the related
Servicer on or prior to the related Determination Date or advanced by the
related Servicer for the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Prepayment Period.
Stepdown Date: The earlier to occur of (a) the date on which
the aggregate Class Certificate Balances of the Class A Certificates have been
reduced to zero, and (b) the later to occur of (i) the Distribution Date in
September 2006, and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by
either Responsible Party for a Deleted Mortgage Loan which must, on the date of
such substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit J, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (v) comply with each representation and warranty set
forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(g).
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated
on the Bridge Telerate Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
30 Day Delinquency: The failure of the Mortgagor to make any
Scheduled Payment due under the Mortgage Note on or prior to the date which is
30 days after such payment's Due Date.
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest collected on the Mortgage
Loans received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date (net of Expense Fees)
over (ii) the sum of the interest payable to the Classes of Certificates on such
Distribution Date pursuant to Section 4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a
Trigger Event exists if (i) the quotient (expressed as a percentage) of (1) the
rolling three month average of the aggregate unpaid principal balance of 60+ Day
Delinquent Mortgage Loans, divided by (2) the aggregate unpaid principal balance
of the Mortgage Loans as of the last day of the related Due Period, equals or
exceeds 55.00% of the Senior Enhancement Percentage as of the last day of the
prior Due Period or (ii) the quotient (expressed as a percentage) of (x) the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related 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
--------------------------------------------------------------------------
September 2006 through August 2007 2.0000% for the first month, plus
an additional 1/12th of 1.2500% for
each month thereafter (e.g.,
approximately 2.1042% in
October 2006)
--------------------------------------------------------------------------
September 2007 through August 2008 3.2500% for the first month, plus
an additional 1/12th of 0.5000% for
each month thereafter (e.g.,
approximately 3.2917% in
October 2007)
--------------------------------------------------------------------------
September 2008 through August 2009 3.7500% for the first month, plus
an additional 1/12th of 0.2500% for
each month thereafter (e.g.,
approximately 3.7708% in
October 2008)
--------------------------------------------------------------------------
September 2009 and thereafter 4.0000%
--------------------------------------------------------------------------
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 Collection Account, Excess Reserve Fund Account, the Distribution Account,
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Cap Agreements;
and (v) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trust REMIC: Either of the Lower Tier REMIC and the Upper Tier
REMIC.
Trustee: Xxxxx Fargo Bank Minnesota, National Association, and
its successors in interest and, if a successor trustee is appointed hereunder,
such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the related Trustee Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the first day of the
calendar month preceding the month in which such Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum rate specified in the letter agreement, dated August 25, 2003, between the
Depositor and the Trustee.
Trustee Float Period: With respect to the Distribution Date
and the related amounts in the Distribution Account, the period commencing on
the Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
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.
Underwriters' Exemption: Any exemption listed in footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached
to each of the Purchase Agreements.
Unpaid Interest Amounts: As of any Distribution Date and any
Class of Certificates, the sum of (a) the portion of the Accrued Certificate
Interest Distribution Amount from prior Distribution Dates remaining unpaid and
(b) interest on such unpaid amount at the applicable Pass-Through Rate (to the
extent permitted by applicable law).
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
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, 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, the product of (i) 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 (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
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, together with all rights of the Depositor
under the Cap Agreements, and the Trustee, on behalf of the Trust, hereby
accepts 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 Trustee for
the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note (except for up to 0.03% of the
Mortgage Notes for which there is a lost note affidavit and the copy of
the Mortgage Note) bearing all intervening endorsements showing a complete
chain of endorsement from the originator to the last endorsee, endorsed
"Pay to the order of _____________, without recourse" and signed in the
name of 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
Trustee is so advised by the Depositor that state law so allows;
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(iii) (A) with respect to each Option One Mortgage Loan, the
original Mortgage with evidence of recording thereon or a certified true
copy of such Mortgage submitted for recording. If in connection with any
Mortgage Loan, a Responsible Party cannot deliver or cause to be delivered
the original Mortgage with evidence of recording thereon on or prior to
the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, such Responsible Party (to the extent that it
has not previously delivered the same to the Purchaser or the Trustee)
shall deliver or cause to be delivered to the Trustee, a photocopy of such
Mortgage, together with (A) in the case of a delay caused by the public
recording office, an Officer's Certificate of such Responsible Party (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 Trustee upon receipt thereof by such Responsible Party;
or (B) 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; and
(B) with respect to each Accredited Mortgage Loan, the original
Mortgage with evidence of recording thereon or a certified true copy of such
Mortgage submitted for recording. If in connection with any Mortgage Loan, a
Responsible Party cannot deliver or cause to be delivered the original Mortgage
with evidence of recording thereon on or prior to the Closing Date because of a
delay caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, such Responsible
Party (to the extent that it has not previously delivered the same to the
Purchaser or the Trustee) shall deliver or cause to be delivered to the Trustee,
(1) a photocopy of such Mortgage, certified by such Responsible Party (or
certified by the title company, escrow agent, or closing attorney) to be a true
and complete copy of such Mortgage dispatched to the appropriate public
recording office for recordation; and (2) upon receipt thereof by such
Responsible Party, the orginal recorded Mortgage, or, 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;
(iv) the originals of all assumption, modification, consolidation or
extension agreements (if provided), with evidence of recording thereon or
a certified true copy of such agreement submitted for recording;
(v) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan endorsed in blank
and in recordable form;
(vi) (A) with respect to each Option One Mortgage Loan, the
originals of all intervening Assignments of Mortgage (if any) evidencing a
complete chain of assignment from the applicable originator (or MERS with
respect to each MERS Designated Mortgage Loan) 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 applicable Responsible Party (to the extent that it has
not previously delivered the same to the Purchaser or the Trustee) shall
deliver or cause to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (A) in the case of a delay caused by
the public recording office, an Officer's Certificate of the applicable
Responsible Party (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 Trustee upon receipt thereof by the applicable
Responsible Party, or (B) 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; and
(B) with respect to each Accredited Mortgage Loan, the originals of
all intervening Assignments of Mortgage (if any) evidencing a complete chain of
assignment from the applicable originator (or MERS with respect to each MERS
Designated Mortgage Loan) 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 applicable
Responsible Party (to the extent that it has not previously delivered the same
to the Purchaser or the Trustee) shall deliver or cause to be delivered to the
Trustee, (1) a photocopy of such intervening assignment, certified by the
applicable Responsible Party (or certified by the title company, escrow agent,
or closing attorney) to be a complete copy of such intervening Assignment of
Mortgage dispatched to the appropriate public recording office for recordation
upon receipt thereof by the applicable Responsible Party, and (2) 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;
(vii) the original or duplicate lender's title policy and any riders
thereto or, any one of an original title binder, an original or copy of
the preliminary title report or an original or copy of the title
commitment, and if, copies then certified by the title company;
(viii) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage (if provided); and
(ix) original powers of attorney, if applicable, with evidence of
recording thereon, if required.
Each Mortgage Loan for which a Mortgage Note is missing shall be
evidenced by a lost note affidavit as of the Closing Date. In the event, for
purposes of the Closing Date, one or more lost note affidavits are provided to
cover multiple missing Mortgage Notes, the applicable Responsible Party shall
deliver to the Trustee the applicable individual lost note affidavits within ten
(10) Business Days of the Closing Date. If a Responsible Party fails to deliver
the required individual lost note affidavits within the specified period of
time, the Trustee shall notify such Responsible Party to take such remedial
actions, including, without limitation, the repurchase by such Responsible Party
of such Mortgage Loan within 30 days of the Closing Date.
Each Responsible Party shall deliver to the Trustee the applicable
recorded document promptly upon receipt from the respective recording office but
in no event later than 150 days from the Closing Date.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the applicable Servicer shall take all reasonable actions as are necessary at
the expense of the Depositor to cause the Trust to be shown as the owner of the
related Mortgage Loan on the records of MERS for the purpose of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS.
From time to time, each Responsible Party shall forward with respect
to the Mortgage Loans, to the Trustee additional original documents, additional
documents evidencing an assumption, modification, consolidation or extension of
a Mortgage Loan approved by the related Responsible Party in accordance with the
terms of this Agreement. All such mortgage documents held by the Trustee as to
each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the applicable Responsible Party
shall deliver to the Trustee Assignments of Mortgages, in blank, for each
applicable Mortgage Loan (except with respect to each MERS Designated Mortgage
Loan). The applicable Responsible Party shall cause the Assignments of Mortgage
with completed recording information to be provided to the related Servicer in a
reasonably acceptable manner. No later than thirty (30) Business Days following
the later of the Closing Date and the date of receipt by the related Servicer of
the fully completed Assignments of Mortgages in recordable form, the related
Servicer shall promptly submit or cause to be submitted for recording, at the
expense of the applicable Responsible Party at no expense to the Trust Fund, the
Trustee or the Depositor in the appropriate public office for real property
records, each Assignment of Mortgage referred to in Section 2.01(b)(v).
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be completed and submitted for recording with
respect to any Mortgage Loan if the Trustee and each Rating Agency has received
an opinion of counsel, satisfactory in form and substance to the Trustee and
each Rating Agency, to the effect that the recordation of such Assignments of
Mortgage in any specific jurisdiction is not necessary to protect the Trustee's
interest in the related Mortgage Note. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned by the applicable Responsible Party at
such Responsible Party's expense to "Xxxxx Fargo Bank Minnesota, National
Association as trustee under the Pooling and Servicing Agreement dated as of
August 1, 2003, GSAMP Trust 2003-HE2." In the event that any such assignment is
lost or returned unrecorded because of a defect therein, the applicable
Responsible Party shall promptly prepare a substitute assignment to cure such
defect and thereafter cause each such assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and each Servicer a copy of the Data Tape Information in electronic,
machine readable medium in a form mutually acceptable to the Depositor, each
Servicer and the Trustee. Within ten (10) Business Days of the Closing Date, the
Depositor shall deliver a copy of the complete Mortgage Loan Schedule to the
Trustee and each Servicer.
In the event, with respect to any Mortgage Loans, that such original
or copy of any document submitted for recordation to the appropriate public
recording office is not so delivered to the Trustee within 150 days following
the Closing Date, and in the event that the applicable Responsible Party does
not cure such failure within 30 days of discovery of receipt of written
notification of such failure from the Depositor, the related Mortgage Loan
shall, upon the request of the Depositor, be repurchased by the applicable
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase remedy shall not apply in the event that the applicable
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 applicable Responsible Party shall instead
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of an officer of such
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 applicable Responsible Party shall be deemed to have been satisfied upon
delivery by such Responsible Party to the Trustee 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 "GSAMP Trust 2003-HE2" and
Xxxxx Fargo Bank Minnesota, National Association is hereby appointed as Trustee
in accordance with the provisions of this Agreement.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Cap Agreements and the Mortgage Loans)
pursuant to Section 2.01(a).
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee acknowledges receipt of the documents identified in the Initial
Certification 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. The Trustee acknowledges that it will
maintain possession of the related Mortgage Notes in any of the States of
Minnesota, California or Utah, unless otherwise permitted by the Rating
Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Servicer 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 for each Mortgage Loan with any
exceptions thereon. The Trustee shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
On the Closing Date, the Trustee shall ascertain that all documents
required to be reviewed by it are in its possession, and shall deliver to the
Depositor and the Servicer an Initial Certification, in the form annexed hereto
as Exhibit E, and shall deliver to the Depositor and the Servicer a Document
Certification and Exception Report, in the form annexed hereto as Exhibit F,
within 90 days after the Closing Date to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents required to
be reviewed by 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 (1), (2) and (13) of the Mortgage Loan Schedule and items
(1), (2) and (13) of the Data Tape Information respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. Each Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of such Servicer
from time to time.
Each Responsible Party shall deliver to the related Servicer copies
of all trailing documents required to be included in the Custodial File at the
same time the original or certified copies thereof are delivered to the Trustee,
including but not limited to such documents as the title insurance policy and
any other Mortgage Loan documents upon return from the public recording office.
The documents shall be delivered by the applicable Responsible Party at the
applicable Responsible Party's expense to the related Servicer and in no event
shall the related Servicer be responsible for such expense.
Section 2.03 Representations, Warranties and Covenants of each
Responsible Party and each Servicer. (a) Chase hereby makes the representations
and warranties set forth in Schedule II hereto to the Depositor and the Trustee
as of the Closing Date. Option One hereby makes the representations and
warranties set forth in Schedule III hereto to the Depositor and the Trustee as
of the Closing Date. Accredited hereby makes the representations and warranties
set forth in Schedule IV hereto to the Depositor, Chase and the Trustee as of
the Closing Date.
(b) Option One hereby makes the representations and warranties set
forth in Schedule V hereto to the Depositor and the Trustee as of the Closing
Date.
(c) Accredited hereby makes the representations and warranties set
forth in Schedule VI hereto to the Depositor and the Trustee as of the Closing
Date.
(d) It is understood and agreed that the representations and
warranties set forth in this Section 2.03 shall survive the transfer of the
Mortgage Loans by the Depositor to the Trustee, and shall inure to the benefit
of the Depositor and the Trustee 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 any of either
Responsible Party, the Depositor, the Trustee or either Servicer of a breach of
any of the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other; provided that a Servicer
need not give notice to the other Servicer.
(e) Within 30 days of the earlier of either discovery by or notice
to the related Responsible Party that any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial File
or within 60 days of the earlier of either discovery by or notice to the related
Responsible Party of any breach of a representation or warranty set forth in
Section 2.03(b) or 2.03(c), as applicable, that materially and adversely affects
the value of any Mortgage Loan or the interest of the Trustee or the
Certificateholders therein, such Responsible Party shall use its best efforts to
cause to be remedied a material defect in a document constituting part of a
Mortgage File or promptly to cure such breach in all material respects and, if
such defect or breach cannot be remedied, such Responsible Party shall, (i) if
such 30 or 60 day period, as applicable, expires prior to the second anniversary
of the Closing Date, remove such related Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Substitute Mortgage
Loan, in the manner and subject to the conditions set forth in this Section
2.03, or (ii) repurchase such Mortgage Loan at the Repurchase Price (at the
Depositor's option in the case of an Option One Mortgage Loan); provided,
however, that any such substitution pursuant to clause (i) above shall not be
effected prior to the delivery to the Trustee of the Opinion of Counsel required
by Section 2.04, if any, and a Request for Release substantially in the form of
Exhibit J, and the Mortgage File for any such Substitute Mortgage Loan;
provided, further, that with respect to any representations and warranties which
are made to the best of the applicable Responsible Party's knowledge, if it is
discovered by the applicable Responsible Party, the applicable Servicer, the
Depositor or the Trustee that the substance of such representation and warranty
is inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loans or materially and adversely affects the interests of
the Trustee or the Certificateholders therein or such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or materially and
adversely affects the interests of the Trustee or the Certificateholders therein
in the case of a representation and warranty relating to a particular Mortgage
Loan, notwithstanding such Responsible Party's lack of knowledge with respect to
the substance of such representation and warranty, such inaccuracy shall be
deemed a breach of the applicable representation and warranty (except for a
breach of the representation and warranty set forth in clause (11)(b) of
Schedule V). In the event that a breach which materially and adversely affects
the value of the related Mortgage Loan or Mortgage Loans, as the case may be, or
the interests of the Trustee or the Certificateholders therein, shall involve
any representation or warranty set forth in Schedule V or VI, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the applicable Responsible Party of such breach, all of the applicable
Responsible Party Mortgage Loans shall, at the Depositor's option, be
repurchased by the applicable Responsible Party at the Repurchase Price.
Notwithstanding the foregoing, a breach (x) which causes a Mortgage Loan not to
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, (y) by Option One of any of the representations and warranties set
forth in clauses (45), (46), (47), (49), (55) or (56) of Schedule V or (z) by
Accredited of any of the representations and warranties set forth in clauses
(45), (46), (47), (49), (57) or (58) of Schedule VI, in each case, will be
deemed automatically to materially and adversely affect the value of such
Mortgage Loan and the interests of the Trustee and Certificateholders in such
Mortgage Loan. In the event that the Trustee receives notice of a breach by
Option One of any of the representations and warranties set forth in clauses
(45), (46), (47), (49), (55) or (56) of Schedule V or by Accredited of any of
the representations and warranties set forth in clauses (45), (46), (47), (49),
(57) or (58) of Schedule VI, the Trustee shall give notice of such breach to the
applicable Responsible Party and request the Responsible Party to repurchase the
Mortgage Loan at the Repurchase Price within sixty (60) days of such Responsible
Party's receipt of such notice. Such Responsible Party shall repurchase each
such Deleted Mortgage Loan within 60 days of the earlier of discovery or receipt
of notice with respect to each such Deleted Mortgage Loan.
(f) With respect to any Substitute Mortgage Loan or Loans, the
applicable Responsible Party shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the applicable Responsible Party on
the next succeeding Distribution Date. For the Due Period of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for such Due Period and thereafter the applicable
Responsible Party shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan.
(g) In connection with any repurchase or substitution of a Mortgage
Loan pursuant to this Section 2.03 or Section 2.08, the Servicer shall, based on
information provided by the applicable Responsible Party, amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect the removal
of such Deleted Mortgage Loan and the substitution of the Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended Mortgage Loan Schedule
to the Trustee. Upon such substitution, the Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
applicable Responsible Party shall be deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 2.03(b) with respect to
such Mortgage Loan. Upon any such substitution and the deposit to the Collection
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
the Mortgage File held for the benefit of the Certificateholders relating to
such Deleted Mortgage Loan to the applicable Responsible Party and shall execute
and deliver at the direction of such Responsible Party such instruments of
transfer or assignment prepared by such Responsible Party in each case without
recourse, as shall be necessary to vest title in such Responsible Party or its
designee, the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
(h) For any month in which a Responsible Party substitutes one or
more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
related Servicer will determine the amount (if any) by which the aggregate
unpaid principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the Scheduled Payments due in the Due Period of substitution). The amount of
such shortage (the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be remitted by the applicable Responsible Party to the applicable
Servicer for deposit into the related Collection Account on or before the next
Remittance Date.
(i) In addition to such repurchase or substitution obligations, each
Responsible Party shall indemnify the Depositor, any of its Affiliates, each
Servicer, and the Trustee and hold such parties 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 by such Responsible Party of any of its representations and warranties
contained in this Agreement.
(j) In the event that a Mortgage Loan shall have been repurchased
pursuant to this Agreement, the proceeds from such repurchase shall be deposited
in the related Collection Account by the applicable Servicer pursuant to Section
3.10 on or before the next Remittance Date and upon such deposit of the
Repurchase Price, the delivery of the Opinion of Counsel required by Section
2.04, if applicable, and receipt of a Request for Release in the form of Exhibit
J hereto, the Trustee shall release the related Custodial File held for the
benefit of the Certificateholders to such Person as directed by the applicable
Servicer, and the Trustee shall execute and deliver at such Person's direction
such instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. It
is understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing, together with any related indemnification
obligations, shall constitute the sole remedy against such Persons respecting
such breach available to Certificateholders, the Depositor, the applicable
Servicer or the Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04 Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages. (a) Notwithstanding any contrary
provision of this Agreement, no substitution pursuant to Section 2.03 shall be
made more than 90 days after the Closing Date unless the Responsible Party
delivers to the Trustee an Opinion of Counsel, which Opinion of Counsel shall
not be at the expense of either the Trustee or the Trust Fund, addressed to the
Trustee, to the effect that such substitution will not (i) result in the
imposition of the tax on "prohibited transactions" on either Trust REMIC or
contributions after the Start-up Day, as defined in Sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause either Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, either Responsible Party,
either Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within five (5)
Business Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the applicable Responsible Party
to repurchase the affected Mortgage Loan within 30 days of the earlier of
discovery or receipt of notice in the same manner as it would a Mortgage Loan
for a breach of representation or warranty made pursuant to Section 2.03. The
Trustee shall reconvey to the applicable Responsible Party the Mortgage Loan to
be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.05 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Start-up Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date in August
2033, which is the Distribution Date following the latest Mortgage Loan maturity
date.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, each
Servicer and each Responsible Party 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
each Servicer, each Responsible Party and the Trustee, constitutes or will
constitute the legal, valid and binding agreement of the Depositor, enforceable
against the Depositor in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder;
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated by this Agreement is sufficient
either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 10.04;
(i) None of the Group I Mortgage Loans or Group II Mortgage Loans
has a prepayment penalty period in excess of three years;
(j) With respect to each Option One Mortgage Loan, all payments
required to be made up to the Closing Date under the terms of the related
Mortgage Note, other than payments not yet 30 days delinquent as of the Closing
Date, have been made. No payment required under such Mortgage Loan is 30 days or
more delinquent nor has any payment under such Mortgage Loan been 30 days or
more delinquent at any time since the origination of such Mortgage Loan. The
first Monthly Payment has been made or shall be made with respect to such
Mortgage Loan on its Due Date or within the grace period, all in accordance with
the terms of the related Mortgage Note;
(k) With respect to each Option One Mortgage Loan, 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
related Mortgage or the related Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would permit
acceleration, and neither the Depositor nor any of its Affiliates have waived
any default, breach, violation or event which would permit acceleration; and
(l) The representations and warranties of the Depositor set forth in
the Investor Side Letter are true and correct.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
Within 30 days of the earlier of either discovery by or notice to
the Depositor of a breach of the representations and warranties set forth in
clause (h) through (k) 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 either (i) if such 30-day period expires prior to the second
anniversary of the Closing Date, remove such Deleted Mortgage Loan from the
Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in Section 2.03, or (ii) repurchase such
Mortgage Loan at the Repurchase Price. Notwithstanding the foregoing, a breach
by the Depositor of the representations and warranties set forth in clause (l)
above shall be deemed automatically to materially and adversely affect the value
of the applicable Mortgage Loan and the interests of the Trustee and
Certificateholders in such Mortgage Loan. In the event that the Trustee receives
notice of a breach by the Depositor of the representations and warranties set
forth in clause (l) above, the Trustee shall give notice of such breach to the
Depositor and request the Depositor to repurchase the Mortgage Loan at the
Repurchase Price within thirty (30) days of the Depositor receipt of such
notice. The Depositor shall repurchase each such Mortgage Loan within thirty
(30) days of the earlier of discovery or receipt of notice of such breach. Any
such substitution or repurchase shall be conducted in the same manner as set
forth in Section 2.03. The obligations of the Depositor to cure such breach or
to substitute or 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.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans, to the extent consistent with such terms, in compliance with all
applicable federal, state and local laws, and in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the related Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Mortgage Loans,
each Servicer shall have full power and authority, acting alone or through
Subservicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
related Servicer in its own name or in the name of a Subservicer is hereby
authorized and empowered by the Trustee when each Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above (with respect to Option One) or in accordance with Accepted
Servicing Practices (with respect to Chase), to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the related
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the related Mortgage Loans in accordance with applicable state and federal law
and shall provide to the Mortgagors any reports required to be provided to them
thereby. Each Servicer shall also comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any standard
hazard insurance policy. Subject to Section 3.16, the Trustee shall execute, at
the written request of either Servicer, and furnish to the applicable Servicer
and any Subservicer such documents as are necessary or appropriate to enable the
applicable Servicer or any Subservicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to each Servicer,
and this Agreement shall constitute, a power of attorney to carry out such
duties including a power of attorney to take title to Mortgaged Properties after
foreclosure on behalf of the Trustee. The Trustee shall execute any power of
attorney furnished to it by the related Servicer in favor of each Servicer for
the purposes described herein to the extent necessary or desirable to enable
each Servicer to perform its duties hereunder. The Trustee shall not be liable
for the actions of either Servicer or any Subservicers under such powers of
attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by each Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, each
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and each Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for (A) a reduction of interest payments resulting
from the application of the Soldiers' and Sailors' Relief Act of 1940, as
amended, or any similar state statutes or (B) as provided in Section 3.07, if
the Mortgagor is in default with respect to the Mortgage Loan or such default
is, in the judgment of the applicable Servicer, reasonably foreseeable) or (ii)
permit any modification, waiver or amendment of any term of any Mortgage Loan
that would both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause either Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the start-up day" under the REMIC Provisions, or (iii)
except as provided in Section 3.07(a), waive any Prepayment Premiums.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the related Mortgage Loans ("Subservicing Agreements").
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. Each Servicer and the
respective Subservicers may enter into and make amendments to the Subservicing
Agreements or enter into different forms of Subservicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon such Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. Each Servicer shall be entitled
to terminate any Subservicing Agreement to which such Servicer is a party and
the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
party to the related Subservicing Agreement without any act or deed on the part
of such Subservicer or the Servicer, and the Servicer either shall service
directly the related Mortgage Loans or shall enter into a Subservicing Agreement
with a successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer which is a party to the related Subservicing Agreement shall, for any
reason, no longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any successor to such Servicer)
shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such related Servicer's
compensation pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event a Servicer at any time shall for any reason no longer be a
Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor Servicer is
not the Trustee, shall thereupon assume all of the rights and obligations of
such Servicer under each Subservicing Agreement that such Servicer may have
entered into, with copies thereof provided to the Trustee prior to the Trustee
assuming such rights and obligations, unless the Trustee elects to terminate any
Subservicing Agreement in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of such
Servicer's interest therein and to have replaced such Servicer as a party to
each Subservicing Agreement to the same extent as if each Subservicing Agreement
had been assigned to the assuming party, except that (i) such Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be a Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to such Servicer shall
be deemed to have assumed any liability or obligation of such Servicer that
arose before it ceased to be a Servicer.
Such Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced by it and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) Each
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans and the related PMI Policy, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable Insurance Policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing and Accepted Servicing Practices, each Servicer may (i) waive any
late payment charge or, if applicable, any penalty interest, or (ii) extend the
due dates for the Scheduled Payments due on a Mortgage Note for a period of not
greater than 180 days, in each case with Radian's prior written consent in the
case of Chase; provided, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, each Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which each Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or is a 60+ Day Delinquent Mortgage
Loan, the applicable Servicer, consistent with the standards set forth in
Section 3.01 with Radian's prior written consent in the case of Chase, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest, extend the final maturity date of such Mortgage Loan or waive, in
whole or in part, a Prepayment Premium), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"); provided, however, that a Servicer's approval of a modification
of a Due Date shall not be considered a modification for purposes of this
sentence; provided, further, that the final maturity date of any Mortgage Loan
may not be extended beyond the Final Scheduled Distribution Date for the LIBOR
Certificates. The applicable Servicer's analysis supporting any forbearance and
the conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the applicable Servicing File. In addition,
notwithstanding the foregoing, each Servicer may also waive, in whole or in
part, a Prepayment Premium if such Prepayment Premium is (i) not permitted to be
collected by applicable law, or (ii) the enforceability thereof is limited (1)
by bankruptcy, insolvency, moratorium, receivership or other similar laws
relating to creditor's rights or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If a Prepayment Premium is waived
other than as permitted above, then the applicable Servicer is required to pay
the amount of such waived Prepayment Premium, for the benefit of the Holders of
the Class P Certificates, by depositing such amount into the related Collection
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the related Collection Account;
provided, however, that the applicable Servicer shall not have an obligation to
pay the amount of any uncollected Prepayment Premium if the failure to collect
such amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time.
(b) Each Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account within a reasonable period of time prior to any change
thereof.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the related Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account of the related Servicer or remit such
proceeds to the related Servicer for deposit in the Collection Account of the
related Servicer not later than two Business Days after the deposit of such
amounts in the Subservicing Account. For purposes of this Agreement, such
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall ensure that each of the related
Mortgage Loans shall be covered by a paid-in-full, life-of-the-loan tax service
contract in effect with respect to each related Mortgage Loan (each, a "Tax
Service Contract"). Each Tax Service Contract shall be assigned to the Trustee,
or its designee, at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the applicable Servicer undertakes to perform such
functions. To the extent the related Mortgage Loan provides for Escrow Payments,
the applicable Servicer shall establish and maintain, or cause to be established
and maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. Each Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
such Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the applicable Servicer (or a
Subservicer to the extent provided in the related Subservicing Agreement) out of
related collections for any advances made pursuant to Section 3.01 (with respect
to taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
apply to the restoration or repair of the Mortgaged Property in accordance with
the Section 3.13; (v) 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; (vi) pay interest to the Servicers
and, if required and as described below, to Mortgagors on balances in the Escrow
Account; (vii) clear and terminate the Escrow Account at the termination of the
applicable Servicer's obligations and responsibilities in respect of the related
Mortgage Loans under this Agreement; or (viii) recover amounts deposited in
error. As part of its servicing duties, each Servicer or Subservicers shall pay
to the Mortgagors interest on funds in Escrow Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Escrow Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the applicable Servicer shall use commercially reasonable
efforts consistent with Accepted Servicing Practices to determine whether any
such payments are made by the Mortgagor in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure as a
result of a tax lien. Each Servicer assumes full responsibility for the payment
of all such bills within such time and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments; provided, however, that such advances are deemed to be
Servicing Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee, each
Servicer shall establish and maintain, or cause to be established and
maintained, one or more Eligible Accounts (each such account or accounts, a
"Collection Account"), held in trust for the benefit of the Trustee. On behalf
of the Trustee, each Servicer shall deposit or cause to be deposited in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the related Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds (to the
extent such Insurance Proceeds and Condemnation Proceeds are not to be
applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with the express requirements of
law or in accordance with prudent and customary servicing practices) and
all Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement;
(vii) all Prepayment Premiums collected by such Servicer; and (viii)
without duplication, all payments of claims under the related PMI policy.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee and the Depositor of the location of
the related Collection Account maintained by it when established and prior to
any change thereof.
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to the Remittance Date, to remit to the Trustee (A)
the Trustee Fee with respect to such Distribution Date and (B) all
Available Funds in respect of the related Distribution Date together with
all amounts representing Prepayment Premiums from the Mortgage Loans
received during the related Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay such Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may be collected by such Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to such Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in its Collection Account;
(v) to pay to the applicable Responsible Party, with respect to each
Mortgage Loan that has previously been repurchased or replaced pursuant to
this Agreement all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse such Servicer for (A) any P&I Advance or Servicing
Advance previously made which such Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees to the extent not recoverable from Liquidation Proceeds,
Insurance Proceeds or other amounts received with respect to the related
Mortgage Loan under Section 3.11(a)(iii);
(vii) to pay, or to reimburse such Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse such Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to such Servicer, the Depositor or
the Trustee, as the case may be, pursuant to Section 6.03, Section 7.02 or
Section 8.05;
(ix) to reimburse such Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation under Section 2.03 of this Agreement
that were included in the Repurchase Price of the Mortgage Loan, including
any expenses arising out of the enforcement of the repurchase obligation,
to the extent not otherwise paid pursuant to the terms hereof;
(x) to pay each PMI Insurer the applicable PMI Insurer Fee;
(xi) to withdraw any amounts deposited in the related Collection
Account in error;
(xii) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Trustee on the Remittance Date
occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for xxxxxxxxxxxx X&X
Advances; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement.
To the extent that a Servicer does not timely make the remittance
referred to in clause (i) above, such Servicer shall pay the Trustee for the
account of the Trustee interest on any amount not timely remitted at the prime
rate, from and including the applicable Remittance Date to but excluding the
date such remittance is actually made.
(b) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from its Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (iv), (v), (vi), (vii), (viii), (ix)
and (x) above. Each Servicer shall provide written notification to the
Depositor, on or prior to the next succeeding Remittance Date, upon making any
withdrawals from the related Collection Account pursuant to subclause (a)(vi)
above.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) Each Servicer may invest the funds in the related
Collection Account and the Trustee may invest funds in the Distribution Account
during the Trustee Float Period, and shall (except during the Trustee Float
Period), invest such funds in the Distribution Account at the direction of the
Depositor (for purposes of this Section 3.12, such Accounts are referred to as
an "Investment Account"), in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand no later than the
Business Day on which such funds are required to be withdrawn from such account
pursuant to this Agreement. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee. The Trustee shall be entitled
to sole possession (except with respect to investment direction of funds held in
the related Account and any income and gain realized thereon in any Account
other than the Distribution Account during the Trustee Float Period) 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 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 related Collection Account and Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Any
other benefit derived from the related Collection Account and Escrow Account
associated with the receipt, disbursement and accumulation of principal,
interest, taxes, hazard insurance, mortgage blanket insurance, and like sources,
shall accrue to the benefit of the related Servicer, except that no Servicer
shall realize any economic benefit from any forced charging of services. Such
Servicer shall deposit in the related Collection Account and Escrow Account the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Depositor (except for any income or gain realized from the
investment of funds on deposit in the Distribution Account during the Trustee
Float Period, which shall be for the benefit of the Trustee). The Depositor
shall deposit in the Distribution Account (except with respect to the Trustee
Float Period, in which case the Trustee shall deposit) the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts immediately upon realization of such loss.
(d) 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.
(e) 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.
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage. (a) Each Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis, (iii) the maximum insurable value of the
improvements which are a part of such Mortgaged Property, and (iv) the amount
determined by applicable federal or state law, in each case in an amount not
less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. Each
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Interest Rate and related Servicing Advances. Each Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by any
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that such
Servicer would follow in servicing loans held for its own account, subject to
the terms and conditions of the related Mortgage and Mortgage Note) shall be
deposited in the related Collection Account, subject to withdrawal pursuant to
Section 3.11. If the Mortgagor fails to provide Mortgage Loan hazard insurance
coverage after thirty (30) days of Servicer's written notification, the Servicer
shall put in place such hazard insurance coverage on the Mortgagor's behalf. Any
out-of-pocket expense or advance made by the Servicer on such force placed
hazard insurance coverage shall be deemed a Servicing Advance. Any cost incurred
by any Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the applicable Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount 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 principal balance of the related Mortgage
Loan 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, either Servicer determines in accordance with
applicable law and pursuant to the Federal Emergency Management Agency 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
applicable Servicer shall notify the related Mortgagor to 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
applicable Servicer shall immediately force place the required flood insurance
on the Mortgagor's behalf. Any out-of-pocket expense or advance made by the
applicable Servicer on such force placed flood insurance coverage shall be
deemed a Servicing Advance.
In the event that any Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:12 or better in
Best's (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case such Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the related Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, each Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Mae or
Xxxxxxx Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, a Servicer believes it is not in the best interests of the Trust Fund
and shall not exercise any such rights if prohibited by law from doing so. If a
Servicer reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause or if any of the other conditions set forth in the proviso
to the preceding sentence apply, such Servicer will enter into an assumption and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note, such Servicer has the prior consent of the
primary mortgage guaranty insurer, if any, and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
the Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Interest Rate and the amount of the Scheduled Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. Each Servicer shall notify the Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Trustee, taking into
account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which a Mortgaged
Property shall have suffered damage from an uninsured cause, a Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its sole discretion (i) that such restoration will
increase the net proceeds of liquidation of the related Mortgage Loan to the
Trustee, after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable by such Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. Each Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 3.11.
The proceeds of any Liquidation Event or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the applicable Servicer or any Subservicer for any related
unreimbursed Servicing Advances, pursuant to Section 3.11 or 3.17; second, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Interest Rate, to the date of the liquidation or REO Disposition, or to
the Due Date prior to the Remittance Date on which such amounts are to be
distributed if not in connection with a Liquidation Event or REO Disposition;
third, to reimburse any Servicer for any related xxxxxxxxxxxx X&X Advances,
pursuant to Section 3.11; and fourth, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than a full
recovery thereof, that amount will be allocated as follows: first, to unpaid
Servicing Fees; and second, as interest at the Mortgage Interest Rate (net of
the Servicing Fee Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the applicable Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Interest Rate (net of the Servicing Fee Rate) and to
principal of the Mortgage Loan shall be applied as follows: first, to reimburse
the applicable Servicer or any Subservicer for any related unreimbursed
Servicing Advances in accordance with Section 3.11 or 3.17, and second, to the
Trustee in accordance with the provisions of Section 4.02, subject to the last
paragraph of Section 3.17 with respect to certain excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee, the Credit Risk Manager and the
Depositor with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the applicable Servicer shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Depositor directs such Servicer to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, such Servicer shall
be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the Collection
Account pursuant to Section 3.11. In the event the Depositor directs a Servicer
not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure,
such Servicer shall be reimbursed from general collections for all Servicing
Advances made with respect to the related Mortgaged Property from the Collection
Account pursuant to Section 3.11. The Trustee shall not be responsible for any
direction given by the Depositor to the Servicer pursuant to this paragraph.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by a Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, such
Servicer will, within five (5) Business Days of the payment in full, notify the
Trustee by a certification (which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the related Collection Account
pursuant to Section 3.10 have been or will be so deposited) of a Servicing
Officer and shall request delivery to it of the Custodial File by completing a
Request for Release. Upon receipt of such certification and Request for Release,
the Trustee shall promptly release the related Custodial File to such Servicer
within three (3) Business Days. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
related Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of such Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to such Servicer, and the Trustee shall, at
the direction of such Servicer, execute such documents provided to it as shall
be necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the applicable Servicer to return each and every
document previously requested from the Custodial File to the Trustee when the
need therefor by such Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the related Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and such Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the related Collection Account have been so
deposited, or that such Mortgage Loan has become an REO Property, a copy of the
Request for Release shall be released by the Trustee to the applicable Servicer
or its designee. Upon receipt of a Request for Release under this Section 3.16,
the Trustee shall deliver the related Custodial File to the requesting Servicer
by regular mail, unless such Servicer requests that the Trustee deliver such
Custodial File to such Servicer by overnight courier (in which case such
delivery shall be at the Servicer's expense); provided, however, that in the
event such Servicer has not previously received copies of the relevant Mortgage
Loan Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the applicable Responsible Party shall reimburse
such Servicer for any overnight courier charges incurred for the requested
Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to any Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to such Servicer a power of attorney
sufficient to authorize such Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders, or the Trustee's
nominee.
(b) Each Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. Each Servicer, either itself or through an agent selected by such
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. Each Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
such Servicer deems to be in the best interest of the Trustee.
(c) Option One shall use commercially reasonable efforts, and Chase
shall use Accepted Servicing Practices, to dispose of the REO Property as soon
as possible and shall sell such REO Property in any event within three years
after title has been taken to such REO Property, unless such Servicer
determines, and gives an appropriate notice to the Trustee to such effect, that
a longer period is necessary for the orderly liquidation of such REO Property.
If a period longer than three years is permitted under the foregoing sentence
and is necessary to sell any REO Property, such Servicer shall report monthly to
the Credit Risk Manager as to the progress being made in selling such REO
Property. The Trustee has no obligation with respect to REO Dispositions.
(d) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(e) Each Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, on a daily basis in the
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(f) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the applicable Servicer as additional servicing compensation.
(h) Option One shall use its commercially reasonable efforts, and
Chase shall use Accepted Servicing Practices, to sell, or cause the Subservicer
to sell, any REO Property as soon as possible, but in no event later than the
conclusion of the third calendar year beginning after the year of its
acquisition by the REMIC unless (i) such Servicer applies for an extension of
such period from the Internal Revenue Service pursuant to the REMIC Provisions
and Code Section 856(e)(3), in which event such REO Property shall be sold
within the applicable extension period, or (ii) such Servicer obtains for the
Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and such
Servicer, to the effect that the holding by the Lower Tier REMIC of such REO
Property subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause either
Trust REMIC to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of relevant state laws at any time. Each Servicer shall
manage, conserve, protect and operate each REO Property for the Trustee solely
for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by the Lower Tier REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, each Servicer shall either itself or through
an agent selected by such Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as such Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Mortgage Loan, such Servicer shall adjust the Mortgage Interest Rate on the
related Adjustment Date and shall adjust the Scheduled Payment on the related
mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. Each
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 and Scheduled Payment adjustments. Each Servicer
shall promptly, upon written request therefor, deliver to the Trustee such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments. Upon the discovery
by a Servicer or the receipt of notice from the Trustee that a Servicer has
failed to adjust a Mortgage Interest Rate or Scheduled Payment in accordance
with the terms of the related Mortgage Note, such Servicer shall deposit in the
related Collection Account from its own funds the amount of any interest loss
caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
the Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC
and the examiners and supervisory agents thereof access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. With respect to Option One, such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of Option One, the Depositor, the
Trustee or any Subservicer. With respect to Chase, such access shall be afforded
without charge, but only upon 15 days' (or , if an Event of Default has occurred
and is continuing, 2 days') prior written request and during normal business
hours at the offices of Option One, the Depositor, the Trustee or any
Subservicer. Nothing in this Section shall derogate from the obligation of any
such party to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of any such party to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Trustee for any funds received by such Servicer or which otherwise are collected
by such Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds collected
or held by, or under the control of, a Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including, but not limited to, any funds on deposit in its
Collection Account, shall be held by such Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. Each Servicer also
agrees that it shall not create, incur or subject any Mortgage File or any funds
that are deposited in the Collection Accounts, the Distribution Account or any
Escrow Account, or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of setoff against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that such Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to such
Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan,
be entitled to retain from deposits to its Collection Account and from
Liquidation Proceeds, Insurance Proceeds, and Condemnation Proceeds related to
such Mortgage Loan, the Servicing Fee with respect to each Mortgage Loan (less
any portion of such amounts retained by any Subservicer). In addition, each
Servicer shall be entitled to recover unpaid Servicing Fees out of related late
collections and as otherwise permitted in Section 3.11. Except as provided in
Section 6.06, the right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the applicable
Servicer's responsibilities and obligations under this Agreement; provided,
however, that each Servicer may pay from the Servicing Fee any amounts due to a
Subservicer pursuant to a Subservicing Agreement entered into under Section
3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Premiums) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Sections 3.09(b)(vi) and
3.11(a)(iv) to withdraw from the related Collection Account, as additional
servicing compensation, interest or other income earned on deposits therein.
(c) Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies and the
Trustee on or before March 15th of each calendar year, commencing in 2004, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of such Servicer during the preceding calendar year and of
performance under this Agreement or a similar agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, such Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. Promptly after receipt of such
Officer's Certificate, the Depositor shall review such Officer's Certificate
and, if applicable, consult with the applicable Servicer as to the nature of any
defaults by such Servicer in the fulfillment of any of such Servicer's
obligations.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2004, each Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Rating Agencies, the Credit Risk Manager and the Trustee a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of such Servicer which includes an assertion that
such Servicer has complied with certain minimum residential mortgage loan
servicing standards, identified in the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year of the Servicer (or such other 12-month period as
agreed to by the Depositor and the applicable Servicer) and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those Subservicers. Promptly after receipt of such report, the Depositor
shall review such report and, if applicable, consult with the applicable
Servicer as to the nature of any defaults by such Servicer in the fulfillment of
any of such Servicer's obligations.
Section 3.24 Trustee to Act as Servicer. (a) In the event that
either Servicer shall for any reason no longer be a Servicer hereunder
(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
such Servicer hereunder arising thereafter (except that the Trustee shall not be
(i) liable for losses of such predecessor Servicer pursuant to Section 3.10 or
any acts or omissions of such predecessor Servicer hereunder, (ii) obligated to
make Advances if it is prohibited from doing so by applicable law, (iii)
obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including but not limited to repurchases or substitutions pursuant to
Section 2.03, (iv) responsible for expenses of such Servicer pursuant to Section
2.03 or (v) deemed to have made any representations and warranties of such
Servicer hereunder). Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If either Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The applicable Servicer shall, upon request of the Trustee, but
at the expense of the Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement (if any) and the Mortgage Loans
then being serviced thereunder and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to
Compensating Interest payable by such Servicer for such Remittance Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, each Servicer shall fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on the related
Mortgagor credit files to Equifax, Experian, and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.27 Excess Reserve Fund Account; Distribution Account. (a)
The Trustee shall establish and maintain the Excess Reserve Fund Account, on
behalf of the Class X Certificateholders, to receive any Basis Risk Payment and
any Interest Rate Cap Payments and to pay to the LIBOR Certificateholders any
Basis Risk Carry Forward Amounts. On each Distribution Date, the Trustee shall
deposit the amount of any Interest Rate Cap Payments 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 of LIBOR Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(G), the lesser of the Class X
Distributable Amount (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(F)) and the aggregate Basis Risk Carry Forward
Amount and (2) withdraw from the Excess Reserve Fund Account amounts necessary
to pay to such Class or Classes of Certificates the applicable Basis Risk Carry
Forward Amounts. 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 Sections 4.02(a)(iii)(H)-(I). In the event
that the Certificate Balance of any Class of Certificates is permanently reduced
because of Applied Realized Loss Amounts, the applicable Certificateholders will
not be entitled to receive Basis Risk Carry Forward Amounts on the written down
amounts on such Distribution Date or any future Distribution Dates, even if
funds are otherwise available for distribution.
The Trustee shall account for the Excess Reserve Fund Account as an
outside reserve fund within the meaning of Treasury Regulations Section
1.860G-2(h) and not as an asset of either 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 by the Upper Tier REMIC to the Excess Reserve Fund Account shall be
treated as first distributed by the Trustee to the Class X Certificateholders in
respect of the Class X Interest, and then contributed by the Class X
Certificateholders to the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts paid by the Trustee to the
LIBOR Certificateholders shall be accounted for by the Trustee as amounts paid
first to the Holders of the Class X Certificates and then to the respective
Class or Classes of LIBOR Certificates. In addition, the Trustee shall account
for the rights of Holders of each Class of LIBOR Certificates to receive
payments of Basis Risk Carry Forward Amounts as rights in a separate limited
recourse interest rate cap contract written by the Class X Certificateholders in
favor of Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve Fund
Account except as expressly set forth in this Section 3.27(a).
(b) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt on the Business Day received, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that either Servicer shall remit any amount not
required to be remitted, such Servicer may at any time direct the Trustee in
writing to withdraw such amount from the Distribution Account, any provision
herein to the contrary notwithstanding. Such direction may be accomplished by
delivering notice to the Trustee which describes the amounts deposited in error
in the Distribution Account. All funds deposited in the Distribution Account
shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section 4.02.
Section 3.28 Optional Purchase of Delinquent Mortgage Loans. The
Depositor, in its sole discretion, shall have the option, but shall not be
obligated, to purchase any 90+ Delinquent Mortgage Loans from the Trust Fund.
The purchase price for any such Mortgage Loan shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued and unpaid interest on the
related Mortgage Loan at the applicable Mortgage Interest Rate, plus the amount
of any unreimbursed Servicing Advances made by the applicable Servicer. Upon
receipt of such purchase price, the applicable Servicer shall provide to the
Trustee a Request for Release and the Trustee shall promptly release to the
Depositor, the Mortgage File relating to the Mortgage Loan being repurchased.
Section 3.29 PMI Policy; Claims Under Each PMI Policy.
Notwithstanding anything to the contrary elsewhere in this Agreement, neither
Servicer shall agree to any modification or assumption of a PMI Mortgage Loan or
take any other action with respect to a PMI Mortgage Loan that could result in a
limitation, qualification or denial of coverage under the related PMI Policy
with respect to any PMI Mortgage Loan. Chase shall not agree to any modification
of a PMI Mortgage Loan without Radian's prior written consent. Chase covenants
and agrees to exercise its best reasonable efforts to maintain and keep the
applicable PMI Policy in full force and effect throughout the term of this
Agreement. In the performance of its duties hereunder, Chase shall comply with
the terms of the applicable PMI Policy. Each Servicer shall notify the
applicable PMI Insurer that the Trustee, on behalf of the Certificateholders, is
the "Insured", as that term is defined in the PMI Policy, of each PMI Mortgage
Loan. Each Servicer shall, on behalf of the Trustee, prepare and file on a
timely basis with the applicable PMI Insurer, with a copy to the Trustee and the
Credit Risk Manager, all claims which may be made under the related PMI Policy
with respect to the related PMI Mortgage Loans. Consistent with all rights and
obligations hereunder, each Servicer shall take all actions required under the
related PMI Policy as a condition to the payment of any such claim. Any amount
received from the applicable PMI Insurer with respect to any such PMI Mortgage
Loan shall be deposited by the applicable Servicer, no later than two Business
Days following receipt thereof, into the related Collection Account. On each
Distribution Date, prior to distributions being made on the Certificates in
accordance with the priorities set forth in Section 4.02, Chase shall withdraw
from the Collection Account and remit to Radian (i) on or prior to 12:00 PM
(EST), the applicable PMI Insurer Fee due on such Distribution Date and (ii)
promptly when due, any other amount owed to Radian under the applicable PMI
Policy or this Agreement.
With respect to any PMI Mortgage Loan insured by MGIC, Option One on
behalf of the Trustee shall terminate the MGIC PMI Policy upon the earlier to
occur of (i) the date upon which the LTV of such PMI Mortgage Loan is less than
or equal to 55.00% or (ii) the date upon which termination is permitted pursuant
to the terms of the MGIC PMI Policy. With respect to any PMI Mortgage Loan
insured by Radian, coverage with respect thereto shall be terminated in
accordance with the Radian PMI Policy on the first date upon which termination
is permitted pursuant to the terms of the Radian PMI Policy.
Section 3.30 Transfer of Servicing for the Accredited Mortgage
Loans. Prior to the Accredited Servicing Transfer Date, Accredited shall have
complied with each of the servicing transfer requirements in accordance with
customary industry procedures.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
each Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date, plus (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of the
Scheduled Payments (with REO Imputed Interest) that would have been due on the
related Due Date in respect of the related Mortgage Loan, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On the Remittance Date, each Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
related Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of the related Collection Account that Amounts Held for Future
Distribution have been, as permitted by this Section 4.01, used by such Servicer
in discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by such
Servicer with respect to the Mortgage Loans and REO Properties. Any Amounts Held
for Future Distribution and so used shall be appropriately reflected in such
Servicer's records and replaced by such Servicer by deposit in the related
Collection Account on or before any future Remittance Date to the extent
required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by either Servicer
if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by either Servicer that it has made a Nonrecoverable P&I Advance
or a Nonrecoverable Servicing Advance or that any proposed P&I Advance or
Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for 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 4.02 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) to the holders of each Class of LIBOR Certificates in the
following order of priority:
(A) to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for such Distribution Date, allocated in accordance with
clauses (iv), (v) and (vi) of this Section 4.02(a);
(B) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(C) to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(D) to the Class M-3 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(E) to the Class M-4 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(F) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date; and
(G) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (a) before the Stepdown Date or
(b) with respect to which a Trigger Event is in effect, to the holders of the
related Class or Classes of LIBOR Certificates then entitled to distributions of
principal as set forth below, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i) above, an
amount equal to the Principal Distribution Amount in the following order of
priority:
(a) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(b) sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class B-1 and Class B-2 Certificates, in that order, until the
respective Class Certificate Balances are reduced to zero;
(B) on each Distribution Date (a) on and after the Stepdown Date and
(b) as long as a Trigger Event is not in effect, to the holders of the related
Class or Classes of LIBOR Certificates then entitled to distribution of
principal, from amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, an amount equal to, the
Principal Distribution Amount in the following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount to the Class A
Certificates, allocated as described in Section 4.02(c), until the
respective Class Certificate Balances thereof are reduced to zero;
(b) 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)(a) above and (y) the Class M-1
Principal Distribution Amount to the Class M-1 Certificates, until
the Class Certificate Balance thereof has been reduced to zero;
(c) 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)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above and (y) the Class M-2
Principal Distribution Amount to the Class M-2 Certificates, until
the Class Certificate Balance thereof has been reduced to zero;
(d) 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)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above and to the Class M-2
Certificates in clause (ii)(B)(c) above, and (y) the Class M-3
Principal Distribution Amount to the Class M-3 Certificates, until
the Class Certificate Balance thereof has been reduced to zero;
(e) 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)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above, to the Class M-2
Certificates in clause (ii)(B)(c) above and to the Class M-3
Certificates in clause (ii)(B)(d) above, and (y) the Class M-4
Principal Distribution Amount to the Class M-4 Certificates, until
the Class Certificate Balance thereof has been reduced to zero;
(f) 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)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above, to the Class M-2
Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above and to the Class M-4
Certificates in clause (ii)(B)(e) above, and (y) the Class B-1
Principal Distribution Amount to the Class B-1 Certificates, until
the Class Certificate Balance thereof has been reduced to zero; and
(g) 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)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above, to the Class M-2
Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above and to the Class B-1
Certificates in clause (ii)(B)(f) above and (y) the Class B-2
Principal Distribution Amount to the Class B-2 Certificates, until
the Class Certificate Balance thereof has been reduced to zero.
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(B) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amounts for such Class;
(C) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amounts for such Class;
(D) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amounts for such Class;
(E) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(F) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(G) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(H) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in such
account), an amount equal to any Basis Risk Carry Forward Amount
with respect to any LIBOR Certificate for such Distribution Date to
the LIBOR Certificates in the same order and priority in which
Accrued Certificate Interest Distribution Amount is allocated among
those Classes of Certificates with the allocation to the Class A-1,
Class A-2 and Class A-3 Certificates being pro rata based on their
respective Basis Risk Carry Forward Amounts;
(I) (1) from any Group I Interest Rate Cap Payments on deposit
in the Excess Reserve Fund Account with respect to that Distribution
Date, on a pro rata basis, based on their respective remaining Basis
Risk Carry Forward Amounts, to the Class A-1A and Class A-1B
Certificates up to their respective unpaid remaining Basis Risk
Carry Forward Amounts, and (2) from any Group III Interest Rate Cap
Payments on deposit in the Excess Reserve Fund Account with respect
to that Distribution Date, on a pro rata basis, based on their
respective remaining Basis Risk Carry Forward Amounts, to the Class
A-3A, Class A-3B and Class A-3C Certificates up to their respective
unpaid remaining Basis Risk Carry Forward Amounts, then (C) from any
remaining Group I Interest Rate Cap Payments and Group III Interest
Rate Cap Payments (1) sequentially to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class B-1 and Class B-2 Certificates, in each
case, up to their respective unpaid remaining Basis Risk Carry
Forward Amounts, and then (2) to the extent remaining, to the Class
X Certificates;
(J) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount and any remaining Group I and
Group III Interest Rate Cap Payments not distributed pursuant to
Sections 4.02(a)(iii)(A)-(I); and
(K) to the holders of the Class R Certificates, any remaining
amount.
(iv) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
I Mortgage Loans will be allocated:
(a) first, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A) to the Class A-1A
and A-1B Certificates), to the Class A-1A and Class A-1B
Certificates, the Accrued Certificate Interest Distribution Amount
and any Unpaid Interest Amounts for each such Class; and
(b) second, pro rata, to the Class A-2 and the Class A-3
Certificates (based on the accrued and unpaid interest distributable
pursuant to Section 4.02(a)(i)(A) to the Class A-3A, Class A-3B and
Class A-3C Certificates), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for each such
Class, to the extent not otherwise previously paid from the interest
component of Available Funds attributable to the Group II and Group
III Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
II Mortgage Loans will be allocated:
(a) first, to the Class A-2 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-2 Certificates;
(b) second, pro rata, to the Class A-1 Certificates (based on
the accrued and unpaid interest distributable pursuant to Section
4.02(a)(i)(A) to the Class A-1A and Class A-1B Certificates) and the
Class A-3 Certificates (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A) to the Class A-3A,
Class A-3B and Class A-3C Certificates), the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts for
each such Class, to the extent not otherwise previously paid from
the interest component of Available Funds attributable to the Group
I and Group III Mortgage Loans; and
(vi) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
III Mortgage Loans will be allocated:
(a) first, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A) to the Class A-3A,
Class A-3B and Class A-3C Certificates) to the Class A-3A, Class
A-3B and Class A-3C Certificates, the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for each such
Class; and
(b) second, pro rata, to the Class A-1 Certificates (based on
the accrued and unpaid interest distributable pursuant to Section
4.02(a)(i)(A) to the Class A-1A and Class A-1B Certificates) and the
Class A-2 Certificates, the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for each such
Class, to the extent not otherwise previously paid from the interest
component of Available Funds attributable to the Group I and Group
II Mortgage Loans.
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 Amounts,
if any, then that unpaid amount will be recoverable by the holders of those
Classes, with interest thereon, on future Distribution Dates, as Unpaid Interest
Amounts, subject to the priorities described above. In the event the Class
Certificate Balance of any Class of 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.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
shall be distributed to the holders of the Class P Certificates.
(c) All principal distributions to the Class A Certificates on any
Distribution Date shall be allocated among the Class A-1 Certificates, the Class
A-2 Certificates and the Class A-3 Certificates based on the Class A Principal
Allocation Percentage for the Class A-1 Certificates, the Class A-2 Certificates
or the Class A-3 Certificates, as applicable; provided, however, that if the
Class Certificate Balance of the Class A Certificates in any Class A Certificate
Group is reduced to zero, then the remaining amount of principal distributions
distributable to the Class A Certificates on such Distribution Date, and the
amount of principal distributions distributable on all subsequent Distribution
Dates, will be distributed pro rata to the holders of the Class A Certificates
of the other Class A Certificate Groups remaining outstanding, in accordance
with the principal distribution allocations set forth in this Section 4.02(c),
until their respective Class Certificate Balances have been reduced to zero. Any
payments of principal to the Class A-1 Certificates shall be made first from
Available Funds relating to the Group I Mortgage Loans. Any payments of
principal to the Class A-2 Certificates shall be made first from Available Funds
relating to the Group II Mortgage Loans. Any payments of principal to the Class
A-3 Certificates shall be made first from Available Funds relating to the Group
III Mortgage Loans. Any principal distributions allocated to the Class A-1A and
Class A-1B Certificates are required to be distributed pro rata to the Class
A-1A and Class A-1B Certificates, based upon their respective Class Certificate
Balances, until their Class Certificate Balances have been reduced to zero. Any
principal distributions allocated to the Class A-3 Certificates shall be
allocated pro rata to the Class A-3A Certificates, based upon their Class
Certificate Balance, until their Class Certificate Balance has been reduced to
zero, and the Class of Group III Class A Sequential Certificates then entitled
to distributions of principal, based upon the aggregate Class Certificate
Balances of the Group III Class A Sequential Certificates. Principal
distributions allocated to the Group III Class A Sequential Certificates shall
be distributed sequentially to the Class A-3B Certificates, until their Class
Certificate Balance has been reduced to zero, and then to the Class A-3C
Certificates, until their Class Certificate Balance has been reduced to zero.
However, from and after the Distribution Date on which the aggregate Class
Certificate Balances of the Class M-1, Class M-2, Class M-3, Class M-4, Class
B-1 and Class B-2 Certificates 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.
(d) On any Distribution Date, any Relief Act Interest Shortfalls and
Net Prepayment Interest Shortfalls for such Distribution Date will be allocated
pro rata, as a reduction of the Accrued Certificate Interest for the Class A,
Class M and Class B Certificates, based on the amount of interest to which such
Classes would otherwise be entitled on such Distribution Date.
(e) On each Distribution Date, prior to making the disbursements and
transfers specified in Sections 4.02(a) through 4.02(d), the Trustee shall
disburse the Credit Risk Manager Fee for such Distribution Date to the Credit
Risk Manager from amounts then on deposit in the Distribution Account (other
than Prepayment Premiums).
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, each Servicer, the Credit Risk Manager, the Depositor and
each Rating Agency a statement 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
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account 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
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date; (vi) the amount of the Servicing Fees paid to or retained by the
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
(vii) the amount of the PMI Insurer's Fee paid to each PMI Insurer;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(ix) the amount of P&I Advances included in the distribution on such
Distribution Date and the aggregate amount of P&I Advances reported by the
Servicer as outstanding as of the close of business on the Determination
Date immediately preceding such Distribution Date;
(x) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (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) For each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xii) with respect to all Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such Mortgage
Loans and the aggregate Stated Principal Balance of such Mortgage Loans as
of the close of business on the Determination Date preceding such
Distribution Date and the date of acquisition thereof;
(xiii) 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;
(xiv) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(xv) the amount on deposit in the Excess Reserve Fund Account (after
giving effect to distributions on such Distribution Date);
(xvi) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
(xvii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xviii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xix) Prepayment Premiums collected by each Servicer;
(xx) the Interest Rate Cap Payment, if any, for such Distribution
Date;
(xxi) the amount of Credit Risk Manager Fees due to the Credit Risk
Manager with respect to such Distribution Date; and
(xxii) the amount distributed on the Class X Certificates.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, each Servicer, each Responsible
Party, the Credit Risk Manager and the Depositor is limited to the availability,
timeliness and accuracy of the information derived from the applicable Servicer.
The Trustee will provide the above statement via the Trustee's internet website.
The Trustee's website will initially be located at https:\\xxx.xxxxxxx.xxx and
assistance in using the website can be obtained by calling the Trustee's
customer service desk at (000) 000-0000. Parties that are unable to use the
above distribution method are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Trustee shall have the right to change the manner in which the above statement
is distributed in order to make such distribution more convenient and/or more
accessible, and the Trustee shall provide timely and adequate notification to
the Certificateholders and the parties hereto regarding any such changes.
The Trustee shall also be entitled to rely on, but shall not be
responsible for the content or accuracy of, any information provided by a
Servicer for purposes of preparing the above statement and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
As a condition to access the Trustee's internet website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee will
not be liable for the dissemination of information in accordance with this
Agreement.
Upon written request from any Certificateholder, the Trustee shall
provide the information provided for in Sections 4.03(d) to such
Certificateholder, at the expense of the requesting Certificateholder. The
Trustee's responsibility for providing the information provided for in Sections
4.03(d) to the Certificateholders is limited to the availability and timeliness
of the information provided by the Servicer. The Trustee shall provide the
information provided for in Sections 4.03(d) in the same format as received from
the applicable Servicer upon request by the Certificateholders. The Trustee
shall have no duty or obligation to monitor, review or take any action regarding
such information received pursuant to Section 4.03(d) other than forwarding
copies to Certificateholders. The Trustee shall have no liability for the
accuracy, completeness or otherwise for such information.
(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) and (a)(ii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Reporting Date, each Servicer shall furnish
to the Trustee and the Credit Risk Manager a monthly remittance advice statement
(in a format mutually agreed upon by such Servicer and the Trustee) containing
such information as shall be reasonably requested by the Trustee to provide the
reports required by Section 4.03(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 (the "Servicer Remittance Report").
Each Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the Reporting
Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Premiums, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to such Servicer during
the prior distribution period pursuant to Section 3.11;
(vi) 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;
(vii) each Mortgage Loan which has been altered, modified or varied
during such month, and the reason for such modification (i.e., extension
of maturity date, Mortgage Interest Rate);
(viii) with respect to each Mortgage Loan, the amount of any
Realized Losses for such Mortgage Loan; and
(ix) any other information reasonably required by the Trustee to
enable it to prepare the monthly statement referred to in Section 4.03(a).
Section 4.04 Certain Matters Relating to the Determination 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 as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinate Certificates then outstanding in reduction of the Class Certificate
Balance thereof. If there is no Class of Subordinate Certificates then
outstanding, Applied Realized Loss Amounts attributable to the Group I Mortgage
Loans will be allocated to the Class A-1B Certificates. In the event Applied
Realized Loss Amounts are allocated to any Class of Certificates, their Class
Principal Balances shall be permanently reduced by the amount so allocated, and
no funds will be distributable with respect to the written down amounts
(including without limitation Basis Risk Carry Forward Amounts) or with respect
to interest on the written down amounts on that Distribution Date or any future
Distribution Dates, even if funds are otherwise available for distribution.
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 which must be in excess of the applicable minimum denomination)
and aggregate denominations per Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
Certificates and the 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 Certificates and
the Class P Certificates as follows: "Xxxxx Fargo Bank Minnesota, National
Association, as Indenture Trustee on behalf of the Noteholders of the GSAMP NIM
Trust 2003-HE2-N," and to deliver such Class X Certificates and Class P
Certificates to Xxxxx Fargo Bank Minnesota, National Association, as indenture
trustee.
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 countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature 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 countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing. 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 the initial transfer of the Class X and Class P Certificates to
the NIM Trust, 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) in the case of the Class X
Certificates, there shall be delivered to the Trustee at the expense of the
transferor an Opinion of Counsel that such transfer may be made without
registration under the Securities Act. In the event that a transfer of a Private
Certificate which is a Book-Entry Certificate is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer will be deemed to have made as of the transfer date each of the
certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Letter in respect of
such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and each Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Depositor and each Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIM Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("Similar Law") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, (ii) in the case of an ERISA-Restricted
Certificate other than a Residual Certificate or a Class P Certificate that has
been the subject of an ERISA-Qualifying Underwriting and the purchaser is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) in the case of any such ERISA-Restricted Certificate other than a
Residual Certificate or Class P Certificate presented for registration in the
name of an employee benefit plan subject to Title I of ERISA, a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and each Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, either Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code or similar violation of Similar Law and will not subject the Trustee or
either Servicer to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Private Certificate or
a Residual Certificate, in the event the representation letter referred to in
the preceding sentence is not furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquirer's) acceptance of the ERISA-Restricted Certificates. In the event that
such representation is violated, or any attempt 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.
Neither the Class R Certificate nor the Class P Certificate may be
sold to any employee benefit plan subject to Title I of ERISA, any plan subject
to Section 4975 of the Code, or any plan subject to any Similar Law or any
person investing on behalf of or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact 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, the Trustee, either
Responsible Party or either Servicer, to the effect that the elimination of such
restrictions will not cause either 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 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 at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. None of the Servicers, the Depositor or the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee and the
Certificate Registrar, 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 Certificate Registrar 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 or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicers and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign 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 Servicers, the Trustee, the
Depositor and any agent of a Servicer, the Depositor or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the Servicers, the
Trustee, the Depositor or any agent of a Servicer, the Depositor or the Trustee
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in Minneapolis, Minnesota where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates its
offices located at Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 for such purposes. The Trustee will give prompt
written notice to the Certificateholders of any change in such location of any
such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each of the Servicers will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or such Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to such Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Mae or
Xxxxxxx Mac, and provided, further, that such merger, consolidation or
succession does not adversely affect the then current rating or ratings on the
LIBOR Certificates.
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others. Neither the Depositor, the Servicers nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor and each 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 Depositor, each
Servicer and any director, officer, employee or agent of the Depositor and each
Servicer 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 or any other unanticipated
or extraordinary expense, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence (or gross negligence in
the case of the Depositor) in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the Depositor
nor either Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that each of the Depositor and each Servicer may in its
discretion undertake any such action (or direct the Trustee to undertake such
actions pursuant to Section 2.03 for the benefit of the Certificateholders) that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, and the applicable Servicer
shall be entitled to be reimbursed therefor out of the related Collection
Account.
Section 6.04 Limitation on Resignation of a Servicer. Neither
Servicer shall assign this Agreement or resign from the obligations and duties
hereby imposed on it except (i) by mutual consent of such Servicer, the
Depositor and the Trustee or (ii) upon the determination that its duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by such Servicer. Any such determination permitting the
resignation of a Servicer under clause (ii) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Depositor and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor and the Trustee. No such resignation shall become effective until a
successor shall have assumed such Servicer's responsibilities and obligations
hereunder.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims. Each Servicer shall indemnify the related Responsible Party, the
Depositor and the Trustee and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to any breach by such Servicer of (i)
any of its representations and warranties referred to in Section 2.03(a), (ii)
any error in any tax or information return prepared by such Servicer, or (iii)
the failure of such Servicer to perform its duties and service the Mortgage
Loans in compliance with the terms of this Agreement. The applicable Servicer
immediately shall notify the Depositor and the Trustee if such claim is made by
a third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the Depositor and the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or either Responsible Party, the Depositor or
the Trustee in respect of such claim.
Section 6.06 Servicing Rights Pledge. Notwithstanding Sections 6.04,
7.02 and 10.07, the Servicer shall have the right, subject to the succeeding
sentence, to pledge and assign all of the Servicer's right, title and interest
in, to and under this Agreement to one or more lenders by the Servicer, in order
to finance the Servicer's Servicing Rights hereunder. If, as a result of a
default by the Servicer under any such financing arrangement, the lenders
acquire such Servicing Rights and appoint a successor Servicer under this
Agreement, any such successor Servicer must meet all requirements for successor
Servicers under Section 7.02. If, pursuant to any provision hereof, the duties
of the Servicer are transferred to a successor Servicer, the entire amount of
the Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by a Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor, or by the Trustee, or to the Servicers, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights; or
(b) the failure on the part of a Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement, including, without limitation, such
Servicer's failure to comply with the provisions set forth in Section 3.29
hereof, which continues unremedied for a period of thirty days after the earlier
of (i) the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to such Servicer by the Depositor or by the
Trustee, or to the Servicers, the Depositor and the Trustee by
Certificateholders of Certificates entitled to at least 25% of the Voting Rights
and (ii) actual knowledge of such failure by a Servicing Officer of the
Servicer; provided, however, that in the case of a failure or breach that cannot
be cured within 30 days after notice or actual knowledge by such Servicer, the
cure period may be extended for an additional 30 days upon delivery by such
Servicer to the Trustee of a certificate to the effect that such Servicer
believes in good faith that the failure or breach can be cured within such
additional time period and such Servicer is diligently pursuing remedial action;
or
(c) the failure by a Servicer in any month to deliver the Servicer
Remittance Report to the Trustee, and such failure continues uncured for more
than 30 days after the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to such Servicer by the
Depositor, or by the Trustee, or to the Servicers, the Depositor and the Trustee
by Certificateholders entitled to at least 25% of the Voting Rights; or
(d) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(e) a Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(f) a 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
(g) any failure of a Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(h) with respect to Option One only, if a Delinquency Trigger
occurs; or
(i) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee or by the Depositor, or to the Servicers, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(j) (1) with respect to Chase only, any reduction, withdrawal or
qualification of the servicing credit of Chase by any Rating Agency which
results in the inability of Chase to act as a primary or special servicer for or
any mortgage-backed or asset-backed transaction rated or to be rated by any
Rating Agency, or (2) with respect to Option One only, Fitch reduces its
servicer rating of Option One to "RSS4" or "RPS4" or lower, Xxxxx'x reduces its
servicer rating of Option One to "SQ4" or lower, or Standard & Poor's reduces
its servicer rating of Option One to "below average" or lower; or
(k) Option One fails to maintain a tangible net worth (as determined
in accordance with generally accepted accounting principles) equal to or in
excess of $25,000,000.
If an Event of Default described in clauses (a) through (k) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of Certificateholders entitled to a majority of the Voting Rights the
Trustee shall, by notice in writing to the applicable Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of such
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder; provided,
however, that the Trustee shall not be required to give written notice to such
Servicer of the occurrence of an Event of Default described in clauses (b)
through (h) and (j) and (k) of this Section 7.01 unless and until a Responsible
Officer of the Trustee has actual knowledge of the occurrence of such an Event
of Default. In the event that a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an event of default described in clause (a) of
this Section 7.01, the Trustee shall give written notice to the applicable
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided that failure to give such notice shall not constitute a
waiver of such Event of Default. On and after the receipt by such Servicer of
such written notice, all authority and power of such Servicer hereunder, 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 such Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of such Servicer to pay amounts owed pursuant to Article VIII. Such Servicer
agrees to cooperate with the Trustee in effecting the termination of such
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the related Collection Account of such predecessor Servicer, or
thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid portion of the Servicing Fees to which the Servicer would have been
entitled and reimbursement for all outstanding P&I Advances and Servicing
Advances, including Servicing Advances incurred prior to but not invoiced until
after the date of termination, in accordance with the terms of this Agreement.
In addition, the Servicer shall continue to be entitled to the benefits of
Section 6.03, notwithstanding any termination hereunder, with respect to events
occurring prior to such termination.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time a Servicer receives a notice of termination pursuant to Section 7.01,
the Trustee shall, subject to and to the extent provided in Section 3.06, and
subject to the rights of the Depositor to appoint a successor Servicer pursuant
to this Section 7.02, be the successor to such Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall immediately assume all of the obligations of such Servicer to
make P&I Advances and Servicing Advances and shall assume and be subject to all
the other responsibilities, duties and liabilities relating thereto placed on
such Servicer by the terms and provisions hereof and applicable law as soon as
practicable but in no event later than 90 days after the receipt by such
Servicer of the notice of termination pursuant to Section 7.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that such Servicer would have been entitled to charge to its Collection
Account if such Servicer had continued to act hereunder including, if such
Servicer was receiving the Servicing Fee, the Servicing Fee and the income on
investments or gain related to its Collection Account (in addition to income on
investments or gain related to the Distribution Account for the benefit of the
Trustee). Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with this Section 7.02, the Trustee may, if it
shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making P&I Advances and Servicing Advances pursuant to Section 4.01 or if
it is otherwise unable to so act, or, at the written request of
Certificateholders entitled to a majority of the Voting Rights, appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution the appointment of which does not adversely affect
the then current rating of the Certificates by each Rating Agency, as the
successor to such Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer hereunder. Any
successor to such Servicer shall be an institution which is a Xxxxxx Mae- and
Xxxxxxx Mac-approved seller/servicer in good standing, which has a net worth of
at least $30,000,000, 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 such
Servicer (other than liabilities of the Servicer under Section 6.03 incurred
prior to termination of such Servicer under Section 7.01), with like effect as
if originally named as a party to this Agreement; provided, that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced, as a
result of such assignment and delegation. Pending appointment of a successor to
a Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from
so acting, shall, subject to Section 3.05, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it, the Depositor and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Servicing Fee Rate
and amounts paid to such Servicer from investments. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
successor Servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of a
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
In the event that a Servicer is terminated pursuant to Section 7.01,
such terminated Servicer shall provide notices to the Mortgagors, transfer the
Servicing Files to a successor Servicer and pay all of its own out-of-pocket
costs and expenses related to such obligations. In addition, all Servicing
Transfer Costs incurred by parties other than the terminated Servicer shall be
paid by the terminated Servicer promptly upon presentation of reasonable
documentation of such costs and if such predecessor Servicer defaults in its
obligations to pay such costs, such costs shall be paid by the successor
Servicer or the Trustee (in which case the successor Servicer or the Trustee, as
the case may be, shall be entitled to reimbursement therefor from the Trust
Fund). If the Trustee is the predecessor Servicer (except in the case where the
Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to the
Mortgagors of such change of Servicer, in accordance with applicable federal and
state law, and shall, during the term of its service as Servicer, maintain in
force the policy or policies that each Servicer is required to maintain pursuant
to Section 3.13.
Any such successor Servicer shall be required to satisfy the
requirements of a successor Servicer under this Section 7.02 and the
requirements of the applicable PMI Policy relating to appointment of a successor
to a Servicer.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Within 60 days 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
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
The Trustee is hereby directed to execute and deliver the Credit
Risk Management Agreements in its capacity as Trustee. The Trustee shall have no
obligations under the Credit Risk Management Agreements.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own bad faith or willful misfeasance.
Unless an Event of Default known to the Trustee has occurred and is
continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than 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) 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 except as otherwise provided in Section 7.01; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and,
during the Trustee Float Period, any interest or investment income earned on
funds deposited in the Distribution Account. The Trustee and any director,
officer, employee, or agent of the Trustee shall be indemnified by the Trust
Fund and held harmless against any loss, liability, or expense (including
reasonable attorney's fees) 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 Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of a Responsible Party's obligations in
connection with this Agreement for which the applicable Responsible Party has
performed its obligation to indemnify the Trustee pursuant to Section 2.03(h),
or (iii) incurred because of willful misfeasance, bad faith, or negligence in
the performance of any of the Trustee's duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the resignation or
removal of the Trustee under this Agreement. Without limiting the foregoing,
except as otherwise agreed upon in writing by the Depositor and the Trustee, and
except for any expense, disbursement, or advance arising from the Trustee's
negligence, bad faith, or willful misfeasance, the Trust Fund shall pay or
reimburse the Trustee, for all reasonable expenses, disbursements, and advances
incurred or made by the Trustee in accordance with this Agreement with respect
to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the Certificates;
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement; and
(C) printing and engraving expenses in connection with preparing any
Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicers and their affiliates;
provided, however, that such entity cannot be an affiliate of the Depositor or
the Servicers other than the Trustee in its role as successor to a Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicers and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to each Servicer 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 triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicers 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, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If either Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of a 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 a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC 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
described in the Preliminary Statement containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the Upper
Tier 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 either Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on either Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;
(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 either Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of either 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 Interest Rate Cap Payments (subject to the obligation to pay Basis Risk
Carry Forward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk Carry Forward Amounts as the beneficial ownership of interests in a
grantor trust and not as an obligations of either Trust REMIC created hereunder,
for federal income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, 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 either 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 either Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on either Trust REMIC pursuant to
Sections 23153 and 24874 of the California Revenue and Taxation Code, if not
paid as otherwise provided for herein, the tax shall be paid by (i) the Trustee
if such tax arises out of or results from negligence of the Trustee in the
performance of any of its obligations under this Agreement, (ii) the applicable
Servicer, in the case of any such minimum tax, and otherwise if such tax arises
out of or results from a breach by such Servicer of any of its obligations under
this Agreement, (iii) the applicable Responsible Party if such tax arises out of
or results from such Responsible Party's obligation to repurchase a Mortgage
Loan pursuant to Section 2.03, or (iv) in all other cases, or if the Trustee,
the applicable Servicer or the applicable 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 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and each Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Trustee shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission thereunder, and the Trustee shall sign and
file (via the Securities and Exchange Commission's Electronic Data Gathering and
Retrieval System) such Forms on behalf of the Depositor, if an officer of the
Depositor signs the Certification pursuant to paragraph (b) of this Section
8.12, or otherwise on behalf of the Trust. In the event the Trustee is signing
on behalf of the Depositor pursuant to the preceding sentence, the Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of either (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding the foregoing, the Trustee shall
prepare such Form 10-K to be signed by the Depositor and the Depositor shall
sign such form unless the Securities and Exchange Commission has indicated that
it will accept a Certification signed by the Depositor where the related Form
10-K is signed by the Trustee on behalf of the Depositor.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. On or prior
to March 30th of each year (or such earlier date as may be required by the
Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission), the Trustee shall file a Form 10-K, in substance as required by
applicable law or applicable Securities and Exchange Commission staff's
interpretations. Such Form 10-K shall include as exhibits each Servicer's annual
statement of compliance described under Section 3.22 and the accountant's report
described under Section 3.23, in each case to the extent they have been timely
delivered to the Trustee. If they are not so timely delivered, the Trustee shall
file an amended Form 10-K including such documents as exhibits reasonably
promptly after they are delivered to the Trustee. The Trustee shall have no
liability with respect to any failure to properly prepare or file such periodic
reports resulting from or relating to the Trustee's inability or failure to
obtain any information not resulting from its own negligence, willful misconduct
or bad faith. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit M (the "Certification"), which shall, except as
described below, be signed by the senior officer of the Depositor in charge of
securitization. Notwithstanding the foregoing, if it is determined by the
Depositor that the Certification may be executed by multiple persons, the
Depositor shall sign the Certification in respect of items 1 through 3 thereof
and the applicable Servicer shall cause the senior officer in charge of
servicing at such Servicer to sign the Certification in respect of items 4 and 5
thereof, and the Depositor may rely on the Certification signed by such Servicer
to the same extent as provided in subsection (c) below.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit N) for the benefit of the Depositor and its officers,
directors and Affiliates in respect of items 1 through 3 of the Certification
(provided, however, that the Trustee shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K), and each Servicer
shall sign a certification (in the form attached hereto as Exhibit O) for the
benefit of the Depositor, the Trustee and their officers, directors and
Affiliates in respect of items 4 and 5 of the Certification. Each such
certification shall be delivered by March 25th to the Depositor and the Trustee
by March 20th of each year (or if not a Business Day, the immediately preceding
Business Day). The Certification attached hereto as Exhibit M shall be delivered
to the Trustee for filing on or prior to March 30th of each year (or if not a
Business Day, the immediately preceding Business Day). In addition, (i) the
Trustee shall indemnify and hold harmless the Depositor and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Trustee's obligations under this Section 8.12(c) or the Trustee's negligence,
bad faith or willful misconduct in connection therewith, and (ii) each Servicer,
severally and not jointly, shall indemnify and hold harmless the Depositor, the
Trustee and their respective officers, directors and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach of such Servicer's obligations under this Section
8.12(c) or such Servicer's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified party, then (i) the Trustee
agrees in connection with a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) each
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor and/or the Trustee as a result of the losses, claims, damages or
liabilities of the Depositor and/or the Trustee in such proportion as is
appropriate to reflect the relative fault of the Depositor or the Trustee, as
the case may be, on the one hand and such Servicer on the other in connection
with a breach of the Servicers' obligations under this Section 8.12(c) or such
Servicer's negligence, bad faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
Section 8.13 Tax Classification of the Excess Reserve Fund Account
and the Cap Agreements. For federal income tax purposes, the Trustee shall treat
the Excess Reserve Fund Account and the Cap Agreements as beneficially owned by
the holders 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 LIBOR 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 such Class
and beneficially owned by each such Class through the grantor trust.
Accordingly, each Class of LIBOR Certificates will be comprised of two
components - an Upper Tier Regular Interest and an interest in an interest rate
cap contract, and the Class X Certificates will be comprised of three components
- an Upper-Tier Regular Interest, ownership of the Cap Agreements and ownership
of the Excess Reserve Fund Account, subject to an obligation to pay Basis Risk
Carry Forward Amounts. The Trustee shall allocate the issue price for a Class of
Certificates among the respective components for purposes of determining the
issue price of the Upper Tier Regular Interest component based on information
received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicers 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, by the Majority Class X Certificateholder or either
Servicer, individually, or both Servicers together, of all Mortgage Loans (and
REO Properties) at the price equal to the sum of (i) 100% of the unpaid
principal balance of each Mortgage Loan (other than in respect of REO Property)
plus accrued and unpaid interest thereon at the applicable Mortgage Interest
Rate and (ii) the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Person seeking to purchase such Mortgage Loans, at
the expense of such Person, plus accrued and unpaid interest on the related
Mortgage Loan at the applicable Mortgage Interest Rates and (y) the unpaid
principal balance of each Mortgage Loan related to any REO Property, in each
case plus accrued and unpaid interest thereon at the applicable Mortgage
Interest Rate ("Termination Price") and (b) the later of (i) the maturity or
other Liquidation Event (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the expiration of 21 years from the death
of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicers shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder. If the Majority Class X
Certificateholder or either Servicer individually elects to terminate the Trust
Fund pursuant to clause (a) of Section 9.01, such Servicer shall notify the
other Servicer of such election at least 30 days prior to the date of the Notice
of Final Distribution and such other Servicer shall have 5 days to elect to
purchase the Mortgage Loans it services. If either Servicer or both Servicers so
elect to terminate, at least 20 days prior to the date the Notice of Final
Distribution is to be mailed to the affected Certificateholders, the Depositor
shall notify such Servicer or Servicers and the Trustee of the date the
Depositor intends to terminate the Trust Fund and of the applicable repurchase
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 such Notice of Final Distribution is given, each
Servicer shall cause all funds in its Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Depositor 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 to the Servicers, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, 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 4.02, (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after 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
Majority Class X Certificateholder or the applicable Servicer or both Servicers
exercise their purchase option with respect to 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 either Trust REMIC as
defined in Section 860F of the Code, or (ii) cause either 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 Depositor, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Trust REMICs; and
(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 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 Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, each Responsible Party, each Servicer and the Trustee
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or to supplement any
provision herein which may be inconsistent with any other provision herein,
(iii) to add to the duties of the Depositor or a Servicer, (iv) to add any other
provisions with respect to matters or questions arising hereunder or (v) to
modify, alter, amend, add to or rescind any of the terms or provisions contained
in this Agreement; provided, that any action pursuant to clause (iv) or (v)
above shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund), adversely affect in
any material respect the interests of any Certificateholder; provided, further,
that the amendment shall not be deemed to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating. The Trustee, the Depositor, each Responsible
Party and each Servicer also may at any time and from time to time amend this
Agreement, but without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of each Trust REMIC under the REMIC
Provisions, (ii) avoid or minimize the risk of the imposition of any tax on
either 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, each Servicer, each Responsible Party and the Trustee with the
consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 662/3% 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 662/3%, or (iii) reduce the aforesaid percentages of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding.
Each Responsible Party shall be obligated to execute any amendment
to this Agreement, unless such amendment would adversely affect in any material
respect the rights or obligations of such Responsible Party.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either Trust REMIC or the Certificateholders
or cause either Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such notice
to the Trustee) 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 a Servicer, any Certificate beneficially owned by the Depositor
or any of its Affiliates or by a Responsible Party shall be deemed not to be
outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee 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 or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by either Servicer at the expense of the Trust, but only upon receipt
of an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of a Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.03, 2.07 or 3.28; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly make available on its
internet website to each Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03.
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 GS Mortgage Securities Corp. or 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 (and, in the case of
the Officer's Certificate delivered pursuant to Section 3.22, to
PricewaterhouseCoopers LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx), or such other address as may be
hereafter furnished to the Trustee and the Servicer by the Depositor in writing;
(b) in the case of Chase, Chase Manhattan Mortgage Corporation, 00000 Xxxxxx
Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Dunks (with a copy to
000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel), or
such other address as may be hereafter furnished to the Depositor and the
Trustee by Chase in writing; (c) in the case of Option One to Option One
Mortgage Corporation, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Contracts Department, Mail Stop: DC-LGL or such other address as may
be hereafter furnished to the Depositor and Trustee by Option One in writing;
(d) in the case of Accredited to Accredited Home Lenders, Inc, 00000 Xxxxxx xx
Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Director of
Operations or such other address as may be hereafter furnished to the Depositor
and Trustee by Accredited in writing; (e) in the case of the Trustee to the
Corporate Trust Office and Xxxxx Fargo Bank Minnesota, N.A., X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services- GSAMP 2003-HE2,
or such other address as the Trustee may hereafter furnish to the Depositor,
Option One or Chase; (f) in the case of Radian, Radian Guaranty Inc., 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: X. Xxxxxxxxx Xxxxx,
Jr., or such other address as Radian may hereafter furnish to the Depositor, the
Trustee or Chase; in the case of the MGIC, Mortgage Guaranty Insurance
Corporation, X.X. Xxx 000, Xxxxxxxxx, Xxxxxxxxx 00000; (g) in the case of each
of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency and (h) in the case of the
Credit Risk Manager, The Murrayhill Company, 0000 Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, Attention Xxxxx X. Xxxxxxx. 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 Assignment; Sales; Advance Facilities. (a)
Notwithstanding anything to the contrary contained herein, except as provided in
Section 6.02, this Agreement may be assigned by either Servicer with the prior
written consent of the Depositor and the Trustee. In addition, for so long as a
Servicer is acting as a Servicer hereunder (i) such Servicer is hereby
authorized to enter into an advance facility ("Advance Facility") under which
(A) such Servicer sells, assigns or pledges to an Advancing Person such
Servicer's rights under this Agreement to be reimbursed for any P&I Advances or
Servicing Advances and/or (B) an Advancing Person agrees to fund some or all P&I
Advances or Servicing Advances required to be made by such Servicer pursuant to
this Agreement and (ii) such Servicer is hereby authorized to assign its rights
to the Servicing Fee; it being understood neither the Trust Fund nor any party
hereto shall have a right or claim (including without limitation any right of
offset) to the portion of the Servicing Fee so assigned; it being further
understood that upon the resignation or termination of the such Servicer, such
Advance Facility (in the case of clause (i)) and such assignment (in the case of
clause (ii)) shall be terminated. No consent of the Trustee, Certificateholders
or any other party is required before a Servicer may enter into an Advance
Facility. Notwithstanding the existence of any Advance Facility under which an
Advancing Person agrees to fund P&I Advances and/or Servicing Advances on a
Servicer's behalf, such Servicer shall remain obligated pursuant to this
Agreement to make P&I Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.
(b) Reimbursement amounts shall consist solely of amounts in respect
of P&I Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s).
(c) The applicable Servicer shall maintain and provide to any
successor Servicer a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
(d) An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
(e) The documentation establishing any Advance Facility shall
require that such reimbursement amounts distributed with respect to each
Mortgage Loan be allocated to outstanding xxxxxxxxxxxx X&X Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. Such documentation shall also require the
Servicer to provide to the related Advancing Person or its designee loan-by-loan
information with respect to each such reimbursement amount distributed to such
Advancing Person or Advance Facility trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility trustee to make the FIFO
allocation of each such reimbursement amount with respect to each Mortgage Loan.
The Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility trustee for all P&I Advances and Servicing Advances funded by
the Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
(f) Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor and each Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
provided, that the Trustee has been provided an Opinion of Counsel that such
amendment has no material adverse effect on the Certificateholders 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; 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 (instead of obtaining an Opinion of
Counsel) 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 rating 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. Prior to entering into an Advance Facility, the applicable Servicer
shall notify the lender under such facility in writing that: (a) the Advances
financed by and/or pledged to the lender are obligations owed to the Servicer on
a non-recourse basis payable only from the cash flows and proceeds received
under this Agreement for reimbursement of Advances only to the extent provided
herein, and the Trustee and the Trust are not otherwise obligated or liable to
repay any Advances financed by the lender; (b) the applicable Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have any
responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. Option One agrees that on
reasonable prior notice, and Chase agrees that on 15 day's prior notice, it will
permit any representative of the Depositor or the Trustee during such Person's
normal business hours, to examine all the books of account, records, reports and
other papers of such Person relating to the applicable Mortgage Loans, to make
copies and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor or the Trustee and to
discuss its affairs, finances and accounts relating to such Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision each Servicer hereby authorizes said accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any reasonable out-of-pocket
expense of a Servicer incident to the exercise by the Depositor or the Trustee
of any right under this Section 10.09 shall be borne by such Servicer.
Section 10.10 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 10.11 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
* * * * * * *
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicers and
the Responsible Party 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.,
as Depositor
By: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
solely as Trustee and not in its
individual capacity
By: /s/ Xxx Xxxxx
--------------------------------------
Name: Xxx Xxxxx
Title: Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
as Servicer
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
OPTION ONE MORTGAGE CORPORATION,
as Servicer and Responsible Party
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ACCREDITED HOME LENDERS, INC.,
as Servicer and Responsible Party
By: /s/ Xxx X. XxXxxxx
--------------------------------------
Name: Xxx X. XxXxxxx
Title: Executive Vice President
SCHEDULE I
Mortgage Loan Schedule
(As delivered to Trustee on Closing Date)
SCHEDULE II
GSAMP Mortgage Loan Trust 2003-HE2,
Mortgage Pass-Through Certificates
Representations and Warranties of
Chase Manhattan Mortgage Corporation,
as Servicer
Chase Manhattan Mortgage Corporation ("Chase") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
II shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) Chase is a New Jersey corporation duly organized, validly
existing and in good standing under the laws of the state of New Jersey
and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Chase in any state in which a Mortgaged Property securing an Accredited
Mortgage Loan is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with the
doing business laws of any such State, to the extent necessary to ensure
its ability to enforce each Accredited Mortgage Loan and to service the
Accredited Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement;
(2) Chase has the full power and authority to service each
Accredited Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary action on
the part of Chase the execution, delivery and performance of this Pooling
and Servicing Agreement; and this Pooling and Servicing Agreement,
assuming the due authorization, execution and delivery thereof by the
Depositor, each Responsible Party and the Trustee, constitutes a legal,
valid and binding obligation of Chase, enforceable against Chase in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Chase, the servicing of the Accredited Mortgage Loans by
Chase hereunder, the consummation by Chase of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of Chase and
will not (A) result in a breach of any term or provision of the
organizational documents of Chase or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which Chase is a
party or by which it may be bound, or any statute, order or regulation
applicable to Chase of any court, regulatory body, administrative agency
or governmental body having jurisdiction over Chase; and Chase is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it, which materially and
adversely affects or, to Chase's knowledge, would in the future materially
and adversely affect, (x) the ability of Chase to perform its obligations
under this Pooling and Servicing Agreement or (y) the business,
operations, financial condition, properties or assets of Chase taken as a
whole;
(4) Chase is an approved seller/servicer for Xxxxxx Xxx, an approved
servicer for Xxxxxxx Mac in good standing and is a HUD approved
non-supervised mortgagee;
(5) No litigation is pending against Chase that would materially and
adversely affect the execution, delivery or enforceability of this Pooling
and Servicing Agreement or the ability of Chase to service the Accredited
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Chase of, or compliance by Chase with, this Pooling and
Servicing Agreement or the consummation by Chase of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(7) Chase has the facilities, procedures and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as
the Accredited Mortgage Loans.
SCHEDULE III
GSAMP Mortgage Loan Trust 2003-HE2,
Mortgage Pass-Through Certificates
Representations and Warranties of Option One Mortgage Corporation, as
Servicer and Responsible Party
Option One Mortgage Corporation ("Option One") hereby makes the
representations and warranties set forth in this Schedule III to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
III shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) Option One is a California corporation duly organized, validly
existing and in good standing under the laws of the state of California
and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Option One in any state in which a Mortgaged Property securing an Option
One Mortgage Loan is located or is otherwise not required under applicable
law to effect such qualification and, in any event, is in compliance with
the doing business laws of any such State, to the extent necessary to
ensure its ability to enforce each Option One Mortgage Loan and to service
the Option One Mortgage Loans in accordance with the terms of this Pooling
and Servicing Agreement;
(2) Option One has the full power and authority to service each
Option One Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary action on
the part of Option One the execution, delivery and performance of this
Pooling and Servicing Agreement; and this Pooling and Servicing Agreement,
assuming the due authorization, execution and delivery thereof by the
Depositor, Chase, Accredited and the Trustee, constitutes a legal, valid
and binding obligation of Option One, enforceable against Option One in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Option One, the servicing of the Option One Mortgage Loans by
Option One hereunder, the consummation by Option One of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of Option One
and will not (A) result in a breach of any term or provision of the
organizational documents of Option One or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which Option One is
a party or by which it may be bound, or any statute, order or regulation
applicable to Option One of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Option One; and
Option One is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to Option One's knowledge,
would in the future materially and adversely affect, (x) the ability of
Option One to perform its obligations under this Pooling and Servicing
Agreement or (y) the business, operations, financial condition, properties
or assets of Option One taken as a whole;
(4) Option One is an approved seller/servicer for Xxxxxx Xxx and an
approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against Option One that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or the ability of Option One to
service the Option One Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Option One of, or compliance by Option One with, this
Pooling and Servicing Agreement or the consummation by Option One of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(7) Option One covenants that its computer and other systems used in
servicing the Mortgage Loans operate in a manner such that Option One can
service the Option One Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement;
(8) With respect to each Option One Mortgage Loan, Option One has
fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; and
(9) Option One 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.
SCHEDULE IV
GSAMP Mortgage Loan Trust 2003-HE2,
Mortgage Pass-Through Certificates
Representations and Warranties of Accredited Home Lenders, Inc., as Servicer
and Responsible Party
Accredited Home Lenders, Inc., ("Accredited") hereby makes the
representations and warranties set forth in this Schedule IV to the Depositor,
Chase and the Trustee, as of the Closing Date, or if so specified herein, as of
the Cut-off Date. Capitalized terms used but not otherwise defined in this
Schedule IV shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) Accredited is a California corporation duly organized, validly
existing and in good standing under the laws of the state of California
and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Accredited in any state in which a Mortgaged Property securing an
Accredited Mortgage Loan is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the extent
necessary to ensure its ability to enforce each Accredited Mortgage Loan
and to service the Accredited Mortgage Loans in accordance with the terms
of this Pooling and Servicing Agreement;
(2) Accredited has the full power and authority to service each
Accredited Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary action on
the part of Accredited the execution, delivery and performance of this
Pooling and Servicing Agreement; and this Pooling and Servicing Agreement,
assuming the due authorization, execution and delivery thereof by the
Depositor, Chase, Option One and the Trustee, constitutes a legal, valid
and binding obligation of Accredited, enforceable against Accredited in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Accredited, the servicing of the Accredited Mortgage Loans by
Accredited hereunder, the consummation by Accredited of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of Accredited
and will not (A) result in a breach of any term or provision of the
organizational documents of Accredited or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which Accredited is
a party or by which it may be bound, or any statute, order or regulation
applicable to Accredited of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Accredited; and
Accredited is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to Accredited's knowledge,
would in the future materially and adversely affect, (x) the ability of
Accredited to perform its obligations under this Pooling and Servicing
Agreement or (y) the business, operations, financial condition, properties
or assets of Accredited taken as a whole;
(4) No litigation is pending against Accredited that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or, except as disclosed in 2003
filings with the Securities and Exchange Commission by Accredited's
parent, Accredited Home Lenders Holding Co., the ability of Accredited to
service the Accredited Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Accredited of, or compliance by Accredited with, this
Pooling and Servicing Agreement or the consummation by Accredited of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(6) Accredited covenants that its computer and other systems used in
servicing the Accredited Mortgage Loans operate in a manner such that
Accredited can service the Accredited Mortgage Loans in accordance with
the terms of this Pooling and Servicing Agreement;
(7) With respect to each Accredited Mortgage Loan, Accredited has
fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; and
(8) Accredited 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.
SCHEDULE V
Representations and Warranties of Option One
as to the Option One Mortgage Loans
Option One hereby makes the representations and warranties set forth
in this Schedule V as to the Option One Mortgage Loans only to the Depositor and
the Trustee, as of the Original Sale Date (or such other date as may be
expressly set forth below):
(1) Mortgage Loans as Described. The information set forth in the
Data Tape Information as it relates to Option One Mortgage Loans is
complete, true and correct;
(2) Payments Current. All payments required to be made up to the
Closing Date under the terms of the Mortgage Note, other than payments not
yet 30 days delinquent as of the Closing Date, have been made. No payment
required under the Mortgage Loan is 30 days or more delinquent nor has any
payment under the Mortgage Loan been 30 days or more delinquent at any
time since the origination of the Mortgage Loan. The first Monthly Payment
has been made or 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;
(3) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage (other than a delinquency of less than 30 days)
and to the best of Option One's knowledge as of the Closing Date, 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.
Option One 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 date which precedes by one month the Due Date of the first
installment of principal and interest;
(4) 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 Trustee and the terms of which are
reflected in the Mortgage Loan Schedule. No Mortgage Loan has been
modified so as to restructure the payment obligations or re-age the
Mortgage Loan. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement, approved by the title insurer, to
the extent required by the policy, and which assumption agreement is part
of the Mortgage Loan File delivered to the Trustee and the terms of which
are reflected in the Mortgage Loan Schedule;
(5) 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 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;
(6) 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 as well as all additional requirements set forth in Section 3.13
of the Pooling and 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 as well as all additional requirements set forth in Section
3.13 of the Pooling and Servicing Agreement. All individual insurance
policies contain a standard mortgagee clause naming Option One 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 Trustee
upon the consummation of the transactions contemplated by this Agreement.
Option One has not engaged in, and has no knowledge of any Mortgagor or
any servicer having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either, including, without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained
or realized by any attorney, firm or other person or entity, and no such
unlawful items have been received, retained or realized by Option One;
(7) 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 and abusive lending laws, equal credit opportunity
and disclosure laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to Prepayment Penalties, have been
complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and Option
One shall maintain in its possession, available for the Purchaser's or the
Trustee's inspection, and shall deliver to the Purchaser upon demand, any
evidence of compliance with all such requirements;
(8) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, cancelled, subordinated or rescinded, in whole or in part, and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
Option One 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 Option One waived any default resulting
from any action or inaction by the Mortgagor;
(9) 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 the Mortgaged Property
may consist of a manufactured dwelling provided that it is in conformity
with Option One's requirements, as set forth in the Underwriting
Guidelines, regarding such dwellings and that there are no repossessed
units, no second lien manufactured housing mortgage loans, no modified
loans (including extensions, loan assumptions, transfers of equity), no
land-in-lieu (no cash downpayment) and no low-side overrides (loans that
had been originally rejected). No Mortgage Loan is secured by a single
parcel of real property with a cooperative housing corporation, a log home
or, a mobile home (other than a manufactured home as described above)
erected thereon or by a mixed use property or a property in excess of 10
acres. As of the date of origination, no portion of the Mortgaged Property
was 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 Option One as mortgagee and (iii) each related contract is secured
by a "single family residence" within the meaning of Section 25(e)(10) of
the Code. The fair market value of the related manufactured housing unit
securing each contract was at least equal to 80% of the adjusted issue
price of the contract at either (i) the time the contract was originated
(determined pursuant to the REMIC provisions of the Code) or (ii) the time
the contract is transferred to the Purchaser. Each related contract is a
"qualified mortgage" under Section 860G(a)(3) of the Code.
(10) Valid First and Second Lien. Each Mortgage is a valid,
subsisting enforceable and perfected first lien or second lien of record
on a single parcel of real estate constituting the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time, with respect to
the foregoing. In no event shall any Mortgage Loan be in a lien position
more junior than a second lien. The lien of the Mortgage is subject only
to:
s (1) with respect to Second Lien Mortgage Loans, the lien of
the first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes
and creates 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 the applicable Seller and the Company have
full right to sell and assign the same to the Purchaser. The Mortgaged
Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the
Mortgage;
(11) Validity of Mortgage Documents. (a) 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 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. (b) No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of Option One, or to the best of Option One's knowledge,
the Mortgagor, the appraiser, any builder or any developer, or any other
party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the Option One Purchase Agreement, Option One was the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note. The Mortgage Loan was not assigned or pledged, and Option
One had good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority
subject to no interest or participation of, or agreement with, any other
party, to sell and assign each Mortgage Loan pursuant to the Option One
Purchase Agreement and following the sale of each Mortgage Loan, the
Purchaser owned such Mortgage Loan free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, subject, however, to the Option One's retained servicing
interest;
(14) Doing Business. To the best of Option One's knowledge, 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;
(15) LTV; CLTV. No Mortgage Loan has an LTV or CLTV greater than
100%;
(16) 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 and each such title insurance policy is issued by a
title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring Option One, its successors and
assigns, as to the first priority lien (with respect to First Lien Loans)
or second priority lien (with respect to Second Lien Loans) of the
Mortgage in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (i), (ii), (iii) and (iv) of
representation 10 of this Schedule V, 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 Scheduled
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. Option One, its
successors and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including Option One, 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 Option One;
(17) 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
Option One 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 and (iii) no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the prior mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under
the Second Lien Mortgage Loan to receive notice of, and affords such
mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(18) 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;
(19) 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. There are no improvements located on
or part of the Mortgaged Property that are in violation of any applicable
zoning law or regulation;
(20) 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: Option One
meets the requirements set forth in clause (a), and (i) such Mortgage Loan
was underwritten in accordance with standards established by Option One,
using application forms and related credit documents approved by Option
One, (ii) Option One approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until Option One agreed to fund such Mortgage Loan,
(iii) the closing documents for such Mortgage Loan were prepared on forms
approved by Option One, and (iv) such Mortgage Loan was actually funded by
Option One and was purchased by Option One at closing or soon thereafter.
To the best of Option One's knowledge, after reasonable inquiry, 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. Principal payments
on the Mortgage Loan commenced no more than two months after funds were
disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate, Lifetime Rate Cap and Periodic Mortgage Interest Rate Cap are as set
forth on the Mortgage Loan Schedule hereto (including in the case of
Adjustable Rate Mortgage Loans, the interest rate and payment limitations
set forth on Mortgage Loan Schedule hereto). All Mortgage Loans have Due
Dates on the first day of each month except as specified on the Mortgage
Loan Schedule. Each Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Adjustment Date, with
interest calculated and payable in arrears, except with respect to Balloon
Loans, is 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. None of the Mortgage Loans allows for the
conversion of the interest rate thereon from an adjustable rate to a fixed
rate or from a fixed rate to an adjustable rate;
(21) 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;
(22) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines. The Mortgage
Note and Mortgage are on forms acceptable to secondary mortgage market and
Option One has correctly described to each Mortgagor, in accordance with
applicable federal, state and local law, the terms of the mortgage
instruments used;
(23) Occupancy of the Mortgaged Property. As of the time of
origination the Mortgaged Property was 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;
(24) 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 (10) above;
(25) 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;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located. The transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by
Option One is not subject to the bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction;
(28) Due-On-Sale. 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 Option One's knowledge, such provision is enforceable
(subject to limitations imposed by applicable law and rights as to
assumption referred to in (30) below);
(29) No Buydown Provisions No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by Option One, 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;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
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;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first or second, as
applicable, lien priority by a title insurance policy, an endorsement to
the policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the
Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings. On
the Closing Date, there is no proceeding pending or, to the best of Option
One's knowledge, 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, 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 Option
One has no knowledge of any such proceedings in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Option One with respect to the Mortgage Loans have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect
to escrow deposits and Escrow Payments that relate to the Mortgage Loans
(other than with respect to Second Lien Mortgage Loans for which the
mortgagee under the prior mortgage lien is collecting Escrow Payments),
all such payments are in the possession of, or under the control of,
Option One and there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made.
With respect to those Mortgage Loans that by their terms require escrows,
all Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the respective Mortgage Notes and
Mortgages. 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 to the
lender have been capitalized under any of the Mortgages or the Mortgage
Notes. All Mortgage Interest Rate adjustments on the Mortgage Loans have
been made in strict compliance with state and federal law and the terms of
the respective Mortgages and Mortgage Notes on the applicable Interest
Rate Adjustment Dates. If, pursuant to the terms of any of the Mortgage
Notes, another index was selected for determining the Mortgage Interest
Rate, the same index was used with respect to all Mortgage Notes which
required a new index to be selected as a result of the same occurrence,
and such selection did not conflict with the terms of any of the Mortgage
Notes. Option One executed and delivered any and all notices required
under applicable law and the terms of any of the Mortgage Notes and
Mortgages regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest on the Mortgage Loans that was required to be
paid pursuant to state, federal and local law has been properly paid and
credited;
(34) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a convertible Mortgage Loan;
(35) 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 and to the best of Option One's knowledge there is no pending
action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue and
as of the date of origination; there was (and to the best of Option One's
knowledge as of the Closing Date there is) no violation of any
environmental law, rule or regulation with respect to the Mortgaged
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;
(36) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified Option One, and Option One has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940 as amended, or similar state statute;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
Option One, 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. The appraisal and appraiser both satisfy the requirements
of the Xxxxxx Mae and Xxxxxxx Mac, and 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;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor received all disclosure materials required
by, and Option One has complied with all applicable law with respect to
the making of the Mortgage Loans;
(39) 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;
(40) No Defense to Insurance Coverage. Option One 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 Closing Date (whether or not known to Option One on or prior to
such date) which has resulted or will result in an exclusion from, denial
of, or defense to coverage under any applicable hazard insurance policy or
bankruptcy bond (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 Option One, 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;
(41) Escrow Analysis. With respect to each Mortgage which requires
escrows, Option One 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;
(42) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices
and Option One has reported the Mortgagor credit files to each of the
three primary credit repositories monthly in a timely manner;
(43) 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 Option One to the Purchaser, that Option One has
full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. Option One shall hold the Purchaser harmless
from any and all damages, losses, costs and expenses (including attorneys'
fees) arising from disclosure of credit information in connection with the
Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(44) 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;
(45) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless
otherwise indicated on the Mortgage Loan Schedule. No Mortgage Loan has a
Prepayment Penalty period in excess of five (5) years from the date of
origination and no Mortgage Loan originated on or after October 1, 2002
has a Prepayment Penalty period in excess of three (3) years from the date
of origination.
(46) Predatory Lending Regulations. None of the Mortgage Loans is
(i) covered by the Home Ownership and Equity Protection Act of 1994 or
(ii) in violation of, or classified as "high cost", "threshold," "covered"
or "predatory" loans under, any other applicable state, federal or local
law. No Mortgage Loan is classified as a "predatory" loan under any
applicable state, federal or local law;
(47) 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 a single-premium credit life insurance policy;
(48) 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;
(49) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(50) 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 the Xxxxxx
Mae Guides for such trusts;
(51) Recordation. Each original Mortgage was recorded, or has been
sent for recordation, and, except for those Mortgage Loans subject to the
MERS identification system, all subsequent assignments of the original
Mortgage (other than the assignment to the Purchaser) have been recorded
in the appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof as against creditors of Option One, or is in the
process of being recorded;
(52) Compliance with Anti-Money Laundering Laws. Option One has
complied and will comply with all applicable anti-money laundering laws
and regulations, including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"); Option One 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;
(53) Acceptable Investment. To the best of Option One's knowledge
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 mortgage loans similar to the
Mortgage Loan 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 Option One generally;
(54) 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 Mortgage Property meets the guidelines set forth in Option One's
underwriting guidelines;
(55) Georgia Loans. No Mortgage Loan which is secured by property
located in the state of Georgia was originated before March 7, 2003. There
is no Mortgage Loan that was funded after March 7, 2003, which is a
"high-cost home loan" as defined under the Georgia Fair Lending Act; and
(56) Mortgaged Premises Located in New York State. No Mortgage Loan
(a) is secured by property located in the state of New York; (b) had an
original principal balance of $300,000 or less; and (c) has an application
date on or after April 1, 2003, the terms of which Mortgage Loan equal or
exceed either the APR or the points and fees threshold for "high-cost home
loans," as defined in Section 6-L of the New York State Banking Law.
SCHEDULE VI
Representations and Warranties of Accredited
as to the Accredited Mortgage Loans
Accredited hereby makes the representations and warranties set forth
in this Schedule VI as to the Accredited Mortgage Loans only to the Depositor
and the Trustee, as of the Closing Date (or such other date as may be expressly
set forth below):
(1) Mortgage Loans as Described. The information set forth on the
Data Tape Information as it relates to Accredited Mortgage Loans is true
and correct as of the Cut-off Date;
(2) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No payment required under a Mortgage Loan is 30 days or more
delinquent nor has any payment under a Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan;
(3) No Outstanding Charges. Except for payment defaults of less than
30 days, 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. Accredited 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 date which precedes by one month the Due Date
of the first installment of principal and interest;
(4) 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 Trustee and the terms of which are
reflected in the Data Tape Information. No Mortgage Loan has been modified
so as to restructure the payment obligations or re-age the Mortgage Loan.
The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the Data Tape Information. No
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement, approved by the title insurer, to the extent
required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Trustee and the terms of which are
reflected in the Data Tape Information;
(5) 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, or
subsequent to, the time the Mortgage Loan was funded;
(6) 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 acceptable under the Xxxxxx Xxx Guides
against loss by fire, hazards of extended coverage and such other hazards
as are provided for in the Xxxxxx Mae Guides or by Xxxxxxx Mac, in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Mortgage Loan and (ii) the greater
of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect
which policy conforms to Xxxxxx Mae and Xxxxxxx Mac, with a generally
acceptable insurance carrier acceptable under the Xxxxxx Mae Guides in an
amount representing coverage not less than the lesser of (i) the aggregate
unpaid principal balance of the Mortgage Loan, (ii) maximum amount of
insurance which is available under the National Flood Insurance Act of
1968, as amended (regardless of whether the area in which such Mortgaged
Property is located is participating in such program), and (iii) the full
replacement value of the improvements which are part of such Mortgaged
Property. All individual insurance policies contain a standard mortgagee
clause naming Accredited and its successors and assigns as mortgagee, and
all premiums thereon have been paid and such policies may not be reduced,
terminated or cancelled without 30 days' prior written notice to the
mortgagee. 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 Trustee
on the Closing Date. None of Accredited, the Mortgagor or any servicer
have 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, 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 Accredited;
(7) 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 and abusive lending, equal credit opportunity and
disclosure laws or unfair and deceptive practices laws applicable to the
Mortgage Loan, including, without limitation, any provisions relating to
Prepayment Penalties, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and Accredited shall maintain in its possession,
available for the Purchaser's or the Trustee's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(8) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, cancelled, subordinated (except to a senior mortgage in the
case of a Second Lien Mortgage Loan) 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.
Accredited 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 Accredited waived any default resulting
from any action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Data Tape
Information 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 Mortgaged Property may be a
leasehold estate and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual residential condominium unit in a condominium
project, or an individual unit in a planned unit development or a
manufactured home and no residence or dwelling is a mobile home, provided,
however, that any condominium unit or planned unit development shall
conform with the Underwriting Guidelines. In the case of any Mortgaged
Properties that are manufactured homes (a "Manufactured Home Mortgage
Loans"), (i) such Manufactured Home Mortgage Loan conforms with the
applicable Xxxxxx Mae or Xxxxxxx Mac requirements regarding mortgage loans
related to manufactured dwellings, (ii) the related manufactured dwelling
is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in
the appropriate public recording office and naming Seller as mortgagee,
(iv) the applicable laws of the jurisdiction in which the related
Mortgaged Property is located will deem the manufactured dwelling located
on such Mortgaged Property to be a part of the real property on which such
dwelling is located, and (v) such Manufactured Home Mortgage Loan is (x) a
qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code
of 1986, as amended and (y) secured by manufactured housing treated as a
single family residence under Section 25(e)(10) of the Code. As of the
date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination through the
Original Sale Date and, to Accredited's knowledge, subsequent thereto, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that a Mortgaged Property which contains 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; notwithstanding
the forgoing, the Mortgaged Property is not characterized as mixed-use
under which the Mortgaged Property falls into two or more land use
classifications.
(10) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable (subject to bankruptcy, insolvency, and similar
laws affecting the rights of creditors generally and to general principles
of equity) 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:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) 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;
(iii) 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
(iv) 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 (subject to bankruptcy,
insolvency and similar laws affecting the rights of creditors and general
principles of equity) 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 Accredited has full right to sell and assign the same to
Purchaser.
(11) 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 relating to
Prepayment Penalties), except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such enforcement
is considered a proceeding in equity or a law). 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. 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 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, or any other
party involved in the origination or servicing of the Mortgage Loan.
Accredited 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;
(12) Full Disbursement of Proceeds. Except to the extent the
Mortgage Loan is subject to completion escrows which have been disclosed
to and acknowledged by the Purchaser and which meet the requirements of
the Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form
442 has been delivered to the Purchaser as of the Closing Date, the
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have
been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site
or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the Mortgage were
paid, and the Mortgagor is not entitled to any refund of any amounts paid
or due under the Mortgage Note or Mortgage;
(13) Ownership. Immediately prior to the Original Sale Date,
Accredited was the sole owner and holder of the Mortgage Loan, the
Mortgage Loan had neither been assigned nor pledged, and Accredited had
good and marketable title thereto, and had full right to transfer and sell
the Mortgage Loan and the related Servicing Rights to the Purchaser free
and clear of any encumbrance, equity, lien, pledge, chare, claim or
security interest and had full right and authority subject to no interest
or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan and the related Servicing Rights to the
Purchaser pursuant to the terms of the Accredited Purchase Agreement.
(14) 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, or exempt from such qualification, 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;
(15) CLTV, LTV. No Mortgage Loan that is a Second Lien Mortgage Loan
has a CLTV in excess of 100%. No Mortgage Loan has an LTV greater than
100%;
(16) 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 Accredited, its successors and
assigns, as to the first priority lien (with respect to first lien
Mortgage Loans) or second priority lien (with respect to Second Lien
Mortgage Loans) of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (i),
(ii), (iii) and (iv) of representation 10 of this Schedule VI, 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
Scheduled 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 exception or to replace the standard survey exception with
a specific survey reading. Accredited, its successors and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect and
will be in force and effect on the Closing Date. No claims have been made
under such lender's title insurance policy, and no prior holder of the
related Mortgage, including Accredited, 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 Accredited;
(17) 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
Accredited 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 and (iii) no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the prior mortgage contains a
provision which allows or (B) applicable law or applicable Mortgage
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;
(18) No Mechanics' Liens. Except as insured against by the related
title insurance, 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;
(19) 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. As of the Original Sale Date and, to
Accredited's knowledge, subsequent thereto, no improvements on adjoining
properties encroach upon the Mortgaged Property. There are no improvements
located on or part of the Mortgaged Property that are in violation of any
applicable zoning law or regulation;
(20) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority. No Mortgage Loan contains terms
or provisions which would result in negative amortization. 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, Lifetime Rate Cap and Periodic Mortgage Interest Rate Cap
are as set forth on the Data Tape Information. Each Mortgage Note is
payable in equal monthly installments of principal and interest, except
for those Mortgage Loans identified on the Data Tape Information subject
to a balloon payment, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Adjustment Date, with
interest calculated, 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. Unless otherwise specified on the Data
Tape Information, each Mortgage Loan is payable on the first day of each
month. None of the Mortgage Loans allows for conversion of the interest
rate thereon from an adjustable rate to a fixed rate;
(21) Customary Provisions. The Mortgage contains customary and
enforceable (subject to bankruptcy, insolvency, and similar laws affecting
the rights of creditors generally and to general principles of equity)
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;
(22) Occupancy of the Mortgaged Property. As of the Original Sale
Date and, to Accredited's knowledge, subsequent thereto, the Mortgaged
Property is not unlawfully 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, have been made or obtained from the appropriate authorities;
(23) 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 (10) above;
(24) 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;
(25) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser or its designee;
(26) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or
its designee), with respect to each Mortgage Loan is in recordable form
and is acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located. The transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by Accredited is not
subject to the bulk transfer or similar statutory provisions in effect in
any applicable jurisdiction;
(27) 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, subject to applicable
law, such provision is enforceable;
(28) No Buydown Provisions No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by Accredited, 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;
(29) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(30) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first or second lien
priority by a title insurance policy, an endorsement to the policy
insuring the mortgagee's consolidated interest or by other title evidence
acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal
amount does not exceed the original principal amount of the Mortgage Loan;
(31) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. As of the Original Sale Date and,
to Accredited's knowledge, subsequent thereto, the Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair;
(32) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Accredited or the current 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 control of the current servicer 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. To the extent there
exists an escrow of funds, such 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 to Accredited 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 Adjustment Date. Accredited
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 Scheduled Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been
properly paid and credited;
(33) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a convertible Mortgage Loan;
(34) No Violation of Environmental Laws. As of the Original Sale
Date and, to Accredited's knowledge, subsequent thereto, 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. As of the Original Sale Date and, to
Accredited's knowledge, subsequent thereto, there is no violation of any
environmental law, rule or regulation with respect to the Mortgaged
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;
(35) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified Accredited of any relief requested or allowed to the Mortgagor
under the Soldiers' and Sailors' Civil Relief Act of 1940 or any similar
state or local law;
(36) 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 who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both
satisfied the requirements of Xxxxxx Mae 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;
(37) Disclosure Materials. The Mortgagor received all disclosure
materials required by, and Accredited has complied with all applicable law
with respect to the making of the Mortgage Loans;
(38) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made to finance the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(39) Value of Mortgaged Property. Accredited has no knowledge of any
circumstances existing that could be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or
to cause the Mortgage Loans to prepay during any period materially faster
or slower than similar mortgage loans held by Accredited generally secured
by properties in the same geographic area as the related Mortgaged
Property;
(40) No Defense to Insurance Coverage. Accredited has caused 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
Original Sale Date or, to Accredited's knowledge, subsequent thereto,
which has resulted or will result in an exclusion from, denial of, or
defense to coverage under any applicable special hazard insurance policy
or bankruptcy bond (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 Accredited, 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;
(41) Escrow Analysis. With respect to each Mortgage for which taxes
and insurance are being escrowed, the current 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;
(42) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices
and the related servicer has reported the Mortgagor credit files monthly
to each of the three credit repositories in a timely manner on a monthly
basis;
(43) 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 Accredited to the Purchaser, that Accredited has
full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage Loan;
(44) Leaseholds. If a 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 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;
(45) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty unless otherwise set forth on the Data Tape Information
hereof, enforceable under the terms of the related Mortgage Note and
originated in compliance with all applicable federal, state, and local
laws. No Mortgage Loan has a Prepayment Penalty period in excess of five
years;
(46) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or
(ii) in violation of, or classified as "high cost", "threshold," "covered"
or "predatory" loans under, any other applicable state, federal or local
law;
(47) 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 a single-premium credit life insurance policy;
(48) 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;
(49) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(50) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or an Illinois land trust or a "living trust" and such "living
trust" is in compliance with the Xxxxxx Mae Guides for such trusts;
(51) Recordation. Each original Mortgage was recorded and except for
those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of Accredited, or is in the process of being recorded;
(52) FICO Scores. Except as permitted by the Underwriting
Guidelines, each Mortgagor has a non-zero FICO score;
(53) Compliance with Anti-Money Laundering Laws. Accredited has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001;
(54) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines. The Mortgage
Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and
Accredited has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(55) Acceptable Investment. To Accredited's knowledge, 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 (other than the status of the Mortgage Loan as a subprime
mortgage loan) that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely
affect the value or marketability of the Mortgage Loan, or cause the
Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by Accredited generally;
(56) 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 is acceptable to Accredited and underwritten in
accordance with the Underwriting Guidelines;
(57) Georgia Loans. There is no Mortgage Loan that was funded prior
to March 7, 2003 and is secured by property located in the State of
Georgia. There is no Mortgage Loan that was funded after March 7, 2003,
which is a "high-cost home loan" as defined under the Georgia Fair Lending
Act;
(58) Mortgaged Premises Located in New York State. No Mortgage Loan
(a) is secured by property located in the state of New York; (b) had an
original principal balance of $300,000 or less; and (c) has an application
date on or after April 1, 2003, the terms of which Mortgage Loan equal or
exceed either the APR or the points and fees threshold for "high-cost home
loans," as defined in Section 6-L of the New York State Banking Law; and
(59) Litigation. No Mortgage Loan is subject to any outstanding
litigation for fraud, origination, predatory lending, servicing or closing
practices.
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[To be added to the Class A-1A Certificate while it remains a Private
Certificate. [IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "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.
IF THIS CERTIFICATE IS A BOOK ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.]
In the event that a transfer of a Private Certificate which is a Book Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. :
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Initial Certificate Balance
of this Certificate
("Denomination") :
Initial Certificate
Balances of all
Certificates of this Class : Class Principal Amount
Class A-1A $99,982,000
Class A-1B $10,000,000
Class A-2 $359,936,000
Class A-3A $44,410,000
Class A-3B $86,436,000
Class A-3C $34,179,000
Class M-1 $36,916,000
Class M-2 $19,196,000
Class M-3 $ 8,490,000
Class M-4 $14,766,000
Class B-1 $ 7,383,000
Class B-2 $ 7,753,000
CUSIP : Class CUSIP No.
Class A-1A 36228F VQ 6
Class A-1B 36228F VR 4
Class A-2 36228F VS 2
Class A-3A 36228F VT 0
Class A-3B 36228F WD 4
Class A-3C US36228F WE 2
Class M-1 36228F VU 7
Class M-2 36228F VV 5
Class M-3 36228F VW 3
Class M-4 36228F VX 1
Class B-1 36228F VY 9
Class B-2 36228F VZ 6
ISIN : Class A-1A US36228FVQ61
Class A-1B US36228FVR45
Class A-2 US36228FVS28
Class A-3A US36228FVT01
Class A-3B US36228FWD40
Class A-3C US36228FWE23
Class M-1 US36228FVU73
Class M-2 US36228FVV56
Class M-3 US36228FVW30
Class M-4 US36228FVX13
Class B-1 US36228FVY95
Class B-2 US36228FVZ60
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates, Series 2003-HE2
[Class A-] [Class M-] [Class B-]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Responsible Party, the Servicer or the Trustee referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of August
1, 2003 (the "Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Chase Manhattan Mortgage Corporation, as servicer ("Chase"),
Option One Mortgage Corporation, as servicer and responsible party ("Option
One"), Accredited Home Lenders, Inc., as servicer and responsible party
("Accredited"), and Xxxxx Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By:_________________________________________________
Authorized Signatory of
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, Chase, Option One, Accredited and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, Chase, Option One, Accredited and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:______
----------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER 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 A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP :
ISIN :
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates, Series 2003-HE2
Class P
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Responsible
Party, the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of August 1, 2003 (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Chase Manhattan Mortgage
Corporation, as servicer ("Chase"), Option One Mortgage Corporation, as servicer
and responsible party ("Option One"), Accredited Home Lenders, Inc., as servicer
and responsible party ("Accredited"), and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, 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 Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By _________________________________________________
Authorized Signatory of
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, Chase, Option One, Accredited and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, Chase, Option One, Accredited and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:______
----------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number ______________, or, if mailed by check, to____________________.
Applicable statements should be mailed to____________________________________,
_____________________________________________________________________________.
This information is provided by__________________________________,
the assignee named above, or_________________________________________________,
as its agent.
EXHIBIT C
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. In the event that such
representation is violated, or any attempt IS MADE to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code OR A PLAN SUBJECT TO SIMILAR LAW, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP :
ISIN :
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates, Series 2003-HE2
Class R
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Responsible Party 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 Certificates pursuant to a Pooling and Servicing Agreement dated as
of August 1, 2003 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Chase Manhattan Mortgage Corporation, as servicer
("Chase"), Option One Mortgage Corporation, as servicer and responsible party
("Option One"), Accredited Home Lenders, Inc., as servicer and responsible party
("Accredited"), and Xxxxx Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By: _________________________________________________
Authorized Signatory of
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, Chase, Option One, Accredited and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, Chase, Option One, Accredited and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:______
----------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number ______________, or, if mailed by check, to____________________.
Applicable statements should be mailed to____________________________________,
_____________________________________________________________________________.
This information is provided by__________________________________,
the assignee named above, or_________________________________________________,
as its agent.
EXHIBIT D
FORM OF CLASS X CERTIFICATE
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.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER 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, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF TITLE I OF ERISA AND THE CODE OR SIMILAR VIOLATION OF SIMILAR LAW
AND WILL NOT SUBJECT THE TRUSTEE OR THE SERVICER 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.
Certificate No. :
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP :
ISIN: :
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates, Series 2003-HE2
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Responsible Party 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 Pooling and Servicing
Agreement dated as of August 1, 2003 (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Chase Manhattan Mortgage
Corporation, as servicer ("Chase"), Option One Mortgage Corporation, as servicer
and responsible party ("Option One"), Accredited Home Lenders, Inc., as servicer
and responsible party ("Accredited"), and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate will be entitled to distributions only to the
extent set forth in the Agreement. In addition, any distribution of the proceeds
of any remaining assets of the Trust will be made only upon presentment and
surrender of this Certificate at the offices designated by the Trustee for such
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 Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received 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, 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, a representation letter that
it is purchasing such Certificates with the assets of its general account and
that the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, or (iii) in the case of a 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 and the Servicers, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicers or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such Certificate will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee or the Servicer 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 countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By: ________________________________________________
Authorized Signatory of
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, Chase, Option One, Accredited and the Trustee with the consent
of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, Chase, Option One, Accredited and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:
----------------------------
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_______________________________________________,
_____________________________________________________________________________,
for the account of___________________________________________________________,
account number ______________, or, if mailed by check, to____________________.
Applicable statements should be mailed to____________________________________,
_____________________________________________________________________________.
This information is provided by__________________________________,
the assignee named above, or_________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
_____________________
_____________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities Corp.,
as Depositor, Chase Manhattan Mortgage Corporation, as Servicer,
Option One Mortgage Corporation, as Servicer and Responsible Party,
Accredited Home Lenders, Inc., as Servicer and Responsible Party and
Xxxxx Fargo Bank Minnesota, National Association, as Trustee, GSAMP
Trust, 2003-HE2 ______________
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, for each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan listed in the attached schedule of exceptions), it has
received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed Assignment of Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability, 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.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Responsible Party]
_____________________
_____________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities Corp.,
as Depositor, Chase Manhattan Mortgage Corporation, as Servicer,
Option One Mortgage Corporation, as Servicer and Responsible Party,
Accredited Home Lenders, Inc., as Servicer and Responsible Party and
Xxxxx Fargo Bank Minnesota, National Association, as Trustee, GSAMP
Trust, 2003-HE2
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed Assignment of Mortgage in the form provided in
Section 2.01 of the Pooling and Servicing Agreement; or, if the
Responsible Party has certified or the Trustee otherwise knows that the
related Mortgage has not been returned from the applicable recording
office, a copy of the Assignment of Mortgage (excluding information to be
provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2) and (13) of
the Mortgage Loan Schedule and the Data Tape Information accurately reflects
information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee 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 Trustee has made
no determination and makes no representations as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2003-HE2,
Mortgage Pass-Through Certificates
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 Residual Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement dated as
of August 1, 2003 (the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Chase Manhattan Mortgage Corporation, as servicer
("Chase"), Option One Mortgage Corporation, as servicer and responsible party
("Option One"), Accredited Home Lenders, Inc., as servicer and responsible party
("Accredited"), and Xxxxx Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"). Capitalized terms used, but not defined herein or in Exhibit 1
hereto, 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.)
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;
(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.
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__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee,
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: GSAMP Trust, 2003-HE2, Mortgage Pass-Through Certificates, 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
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee,
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: GSAMP Trust 2003-HE2, Mortgage Pass-Through Certificates, 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 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 nor using the assets of any such plan or arrangement to effect such
acquisition, or, with respect to a Class X Certificate, the purchaser is an
insurance company that is purchasing this certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein: 1. As
indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the Buyer. 2. In connection
with purchases by the Buyer, the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as amended
("Rule 144A"), because (i) the Buyer owned and/or invested on a discretionary
basis $_____1 in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
-----------------------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
Date:__________________________________
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
IF AN ADVISER:
______________________________________
Print Name of Buyer
Date:_________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: Xxxxx Fargo Bank Minnesota, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000-0000
Attn: Inventory Control
Re: Pooling Agreement dated as of __________, among
__________________. and Xxxxx Fargo Bank Minnesota, N.A., as
trustee
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders pursuant to the
above-captioned Pooling Agreement, we request the release, and acknowledge
receipt, of the Trustee's Mortgage File for the Mortgage Loan described below,
for the reason indicated.
Mortgage Loan Number:
Mortgagor's Name, Address & Zip Code:
Reason for Requesting Documents (check one)
____ 1. Mortgage Paid in Full.
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation (Repurchases, etc.)
____ 5. Nonliquidation Reason:
Address to which Trustee should
Deliver the Trustee's Mortgage File:
____________________________________
____________________________________
____________________________________
By:____________________________________
(authorized signer)
Issuer:________________________________
Address:_______________________________
Date:__________________________________
Trustee
Xxxxx Fargo Bank Minnesota, N.A.
Please acknowledge the execution of the above request by your signature and date
below:
_____________________________________ ____________________________
Signature Date
Documents returned to Trustee:
_____________________________________ ____________________________
Trustee Date
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The original Mortgage Note bearing all intervening
endorsements, showing a complete chain of endorsement from the
originator to the last endorsee endorsed "Pay to the order of
_________________, without recourse" and signed (which may be
by facsimile signature) in the name of 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
Trustee is so advised by the Responsible Party that state law
so allows.
(b) The original of any guaranty executed in connection with the
Mortgage Note.
(c) (A) with respect to each Option One Mortgage Loan, the
original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording.
If in connection with any Mortgage Loan, a Responsible Party
cannot deliver or cause to be delivered the original Mortgage
with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, such
Responsible Party (to the extent that it has not previously
delivered the same to the Purchaser or the Trustee) shall
deliver or cause to be delivered to the Trustee, a photocopy
of such Mortgage, together with (A) in the case of a delay
caused by the public recording office, an Officer's
Certificate of such Responsible Party (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
Trustee upon receipt thereof by such Responsible Party; or (B)
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; and
(B) with respect to each Accredited Mortgage Loan, the
original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording.
If in connection with any Mortgage Loan, a Responsible Party
cannot deliver or cause to be delivered the original Mortgage
with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, such
Responsible Party (to the extent that it has not previously
delivered the same to the Purchaser or the Trustee) shall
deliver or cause to be delivered to the Trustee, (1) a
photocopy of such Mortgage, certified by such Responsible
Party (or certified by the title company, escrow agent, or
closing attorney) to be a true and complete copy of such
Mortgage dispatched to the appropriate public recording office
for recordation; and (2) upon receipt thereof by such
Responsible Party, the orginal recorded Mortgage, or, 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, with evidence of recording thereon or
a certified true copy of such agreement submitted for
recording.
(e) Except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan
endorsed in blank.
(f) (A) with respect to each Option One Mortgage Loan, the
originals of all intervening Assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated
Mortgage Loan) 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 applicable Responsible
Party (to the extent that it has not previously delivered the
same to the Purchaser or the Trustee) shall deliver or cause
to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (A) in the case of a
delay caused by the public recording office, an Officer's
Certificate of the applicable Responsible Party (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 Trustee upon receipt thereof by the
applicable Responsible Party, or (B) 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;
and
(B) with respect to each Accredited Mortgage Loan, the
originals of all intervening Assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated
Mortgage Loan) 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 applicable Responsible
Party (to the extent that it has not previously delivered the
same to the Purchaser or the Trustee) shall deliver or cause
to be delivered to the Trustee, (1) a photocopy of such
intervening assignment, certified by the applicable
Responsible Party (or certified by the title company, escrow
agent, or closing attorney) to be a complete copy of such
intervening Assignment of Mortgage dispatched to the
appropriate public recording office for recordation upon
receipt thereof by the applicable Responsible Party, and (2)
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 title insurance policy or attorney's
opinion of title and abstract of title or, in the event such
original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to
be true and complete by the title insurance company.
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage
(if provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of
down payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) 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.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(t) Sales contract, if applicable.
(u) Original powers of attorney, if applicable, with evidence of
recording thereon, if required.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
[RESERVED]
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K
Re: GSAMP Trust 2003-HE2 (the "Trust") Mortgage Pass-Through
Certificates, Series 2003-HE2, issued pursuant to the Pooling
and Servicing Agreement, dated as of August 1, 2003 (the
"Pooling and Servicing Agreement"), among GS Mortgage
Securities Corp., as depositor, Chase Manhattan Mortgage
Corporation, as servicer ("Chase"), Option One Mortgage
Corporation, as servicer and responsible party ("Option One"),
Accredited Home Lenders, Inc., as servicer and responsible
party ("Accredited") and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee")
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K ("Annual Report"), and all
reports on Form 8-K containing distribution reports (collectively with
this Annual Report, the "Reports") filed in respect of periods included in
the year covered by this Annual Report, of the Trust;
2. Based on my knowledge, the information in the Reports, 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 light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this Annual Report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Servicer under the Pooling and
Servicing Agreement for inclusion in the Reports is included in the
Reports;
4. Based on my knowledge and upon the annual compliance statement included in
this Annual Report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and
except as disclosed in the Reports, the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Pooling and
Servicing Agreement, that is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee, Chase and
Option One.
Date: _________________________
_______________________________
[Signature] [Title]
EXHIBIT N
FORM OF TRUSTEE CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2003-HE2 (the "Trust") Mortgage Pass-Through,
Certificates Series 2003-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Chase Manhattan Mortgage Corporation,
as servicer ("Chase"), Option One Mortgage Corporation, as servicer
and responsible party ("Option One"), Accredited Home Lenders, Inc.,
as servicer and responsible party ("Accredited") and Xxxxx Fargo
Bank Minnesota, National Association, as trustee (the "Trustee")
I, [identify the certifying individual], a [title] of Xxxxx Fargo
Bank Minnesota, N.A. certify to the Depositor and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K (the "Annual Report") for
the fiscal year [___], and all reports on Form 8-K containing distribution
reports filed in respect of periods included in the year covered by the
Annual Report (collectively with the Annual Report, the "Reports"), of the
Trust;
2. Based on my knowledge, the information in the Reports, 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 light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by the Annual Report; and
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Servicer under the Pooling and
Servicing Agreement for inclusion in the Reports is included in the
Reports.
Date: _________________________
XXXXX FARGO BANK MINNESOTA, N.A.
By: _______________________________
Name: _______________________________
Title:_______________________________
EXHIBIT O
FORM OF SERVICER CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2003-HE2 (the "Trust") Mortgage Pass-Through
Certificates, Series 2003-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Chase Manhattan Mortgage Corporation,
as servicer ("Chase"), Option One Mortgage Corporation, as servicer
and responsible party ("Option One"), Accredited Home Lenders, Inc.,
as servicer and responsible party ("Accredited") and Xxxxx Fargo
Bank Minnesota, National Association, as trustee (the "Trustee")
[Chase][Option One], certifies to the Depositor and the Trustee, and their
officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:
1. Based on our knowledge, the information prepared by [Chase][Option
One] and relating to the mortgage loans serviced by [Chase][Option
One] pursuant to the Pooling And Servicing Agreement and provided by
[Chase][Option One] to the Trustee in its reports to the Trustee is
accurate and complete in all material respects as of the last day of
the period covered by such report;
2. Based on our knowledge, the servicing information required to be
provided to the Trustee by [Chase][Option One] pursuant to the
Pooling and Servicing Agreement has been provided to the Trustee;
3. Based upon the review required under the Pooling and Servicing
Agreement, and except as disclosed in its annual compliance
statement required to be delivered pursuant to the Pooling and
Servicing Agreement, [Chase][Option One] as of the last day of the
period covered by such annual compliance statement has fulfilled its
obligations under the Pooling and Servicing Agreement; and
4. [Chase][Option One] has disclosed to its independent auditor, who
issues the independent auditor's report on the Uniform Single
Attestation Program for Mortgage Bankers for [Chase][Option One],
any significant deficiencies relating to [Chase][Option One]'s
compliance with minimum servicing standards.
[CHASE MANHATTAN MORTGAGE CORPORATION][OPTION ONE MORTGAGE CORPORATION]
Date: _________________________
_______________________________
[Signature] [Title]
EXHIBIT P
===============================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
OPTION ONE MORTGAGE CORPORATION,
Company and Seller
OPTION ONE OWNER TRUST 2001-1A,
Seller
OPTION ONE OWNER TRUST 2001-1B,
Seller
OPTION ONE OWNER TRUST 2001-2,
Seller
OPTION ONE OWNER TRUST 2002-3,
Seller
----------
Dated as of June 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
TABLE OF CONTENTS
SECTION 1. Definitions...................................................
SECTION 2. Agreement to Purchase.........................................
SECTION 3. Mortgage Schedules............................................
SECTION 4. Purchase Price................................................
SECTION 5. Examination of Mortgage Files.................................
SECTION 6. Conveyance from Sellers to Purchaser..........................
Subsection 6.01 Conveyance of Mortgage Loans; Possession
of Servicing Files....................................
Subsection 6.02 Books and Records.....................................
Subsection 6.03 Delivery of Mortgage Loan Documents...................
Subsection 6.04 Quality Control Procedures............................
SECTION 7. Servicing of the Mortgage Loans...............................
SECTION 8. Representations, Warranties and Covenants
of the Company and the Sellers; Remedies for Breach...........
Subsection 8.01 Representations and Warranties Regarding
the Company and the Sellers...........................
Subsection 8.02 Representations and Warranties Regarding
Individual Mortgage Loans.............................
Subsection 8.03 Remedies for Breach of Representations
and Warranties........................................
Subsection 8.04 Repurchase of Mortgage Loans with First
Payment Defaults......................................
SECTION 9. Closing.......................................................
SECTION 10. Closing Documents.............................................
SECTION 11. Costs.........................................................
SECTION 12. Cooperation of Sellers with a Reconstitution..................
SECTION 13. The Company...................................................
Subsection 13.01 Additional Indemnification by the Sellers;
Third Party Claims....................................
Subsection 13.02 Merger or Consolidation of the Company................
SECTION 14. Financial Statements..........................................
SECTION 15. Mandatory Delivery; Grant of Security Interest................
SECTION 16. Notices.......................................................
SECTION 17. Severability Clause...........................................
SECTION 18. Counterparts..................................................
SECTION 19. Governing Law.................................................
SECTION 20. Intention of the Parties......................................
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.....................................................
SECTION 22. Waivers.......................................................
SECTION 23. Exhibits......................................................
SECTION 24. General Interpretive Principles...............................
SECTION 25. Reproduction of Documents.....................................
SECTION 26. Further Agreements............................................
SECTION 27. No Solicitation...............................................
SECTION 28. Waiver of Trial by Jury.......................................
SECTION 29. Submission to Jurisdiction; Waivers...........................
SECTION 30. No Recourse to Owner Trustee..................................
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B FORM OF SERVICING AGREEMENT
EXHIBIT C FORM OF SELLERS' OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLERS
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H FORM OF CUSTODIAL AGREEMENT
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J UNDERWRITING GUIDELINES
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of June 1, 2003, by and among Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), Option One Mortgage Corporation, a
California corporation, having an office at 3 Ada, Xxxxxx, Xxxxxxxxxx 00000 (the
"Company" and a "Seller"), and Option One Owner Trust 2001-1A, Option One Owner
Trust 2001-1B, Option One Owner Trust 2001-2 and Option One Owner Trust 2002-3,
as sellers (each a "Seller" and together with the Company, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Sellers, certain conventional adjustable
and fixed rate B/C, residential, first and second lien mortgage loans (the
"Mortgage Loans") on a servicing retained basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Sellers, 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 each
of the Sellers agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Servicing Agreement attached as Exhibit B hereto.
Accepted Servicing Practices: With respect to any Mortgage Loan or
REO Property, each of (a) those mortgage servicing practices (including
collection procedures) of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located and in compliance with all applicable
federal, state and local laws and (b) with respect to any actions taken pursuant
to Section 2.02 of the Servicing Agreement, those servicing, collection,
resolution or disposition practices that are undertaken to maximize the value of
the Mortgage Loan or REO Property.
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 Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All income derived from the Mortgage Loans other
than payments of principal, interest and Escrow Payments (excluding 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, optional insurance administrative
fees and all other incidental fees and charges, 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.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the lesser of (a) the value thereof as determined by an appraisal made
for the originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx and
Xxxxxxx Mac and (b) the value thereof as determined by a review appraisal
conducted by the Company in the event any such review appraisal determines an
appraised value more than ten percent lower than the value thereof (as
determined by the appraisal referred to in clause (i)(a) above), in the case of
a Mortgage Loan with an LTV less than or equal to 80%, or more than five percent
lower than the value thereof (as determined by the appraisal referred to in
clause (i)(a) above), in the case of a Mortgage Loan with an LTV greater than
80%, (as determined by the appraisal referred to in clause (i)(a)), and (ii) the
purchase price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan, provided, however, (A) in the case of a
refinanced mortgage loan (which is a Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property) or a Mortgage Loan
originated in connection with a "lease option purchase" if the "lease option
purchase price" was set 12 months or more prior to origination, such value of
the Mortgaged Property is based solely upon clause (i) above.
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.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the States of New
York or New Jersey, Florida or Pennsylvania, (b) the state in which the
Servicer's servicing operations are located or (c) the state in which the
Custodian's operations are located, are authorized or obligated by law or
executive order to be closed.
Closing Date: June 30, 2003 or such other date as is mutually agreed
upon by the parties.
CLTV: As of the date of origination and as to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan and (ii) the outstanding principal
balance as of such date of any mortgage loan or mortgage loans that are senior
or equal in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value of the Mortgaged Property.
Code: Internal Revenue Code of 1986, as amended.
Company: Option One Mortgage Corporation and its successors in
interest.
Condemnation Proceeds: All awards, compensation and/or settlements
in respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
H.
Custodian: The custodian of the Mortgage Loan Documents as specified
under the related Custodial Agreement.
Cut-off Date: June 25, 2003.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Sellers in accordance with the terms of this Agreement.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
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 each Remittance Date and any Mortgage
Loan, the period commencing on the second day of the month preceding the month
of the Remittance Date and ending on the first day of the month of the
Remittance Date.
Early Payment Default Rate: As defined in Section 8.04.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Servicing Agreement (with respect to each Mortgage Loan,
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments and additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA 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.
First Lien Loan: Any Mortgage Loan secured by a first lien on the
related Mortgage Property.
Fitch: Fitch Ratings, or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
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, the index
set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: As defined in Section 1813(c)(2) of
Title 12 of the United States Code, as amended from time to time.
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 Period: The period between the Closing Date and the
Reconstitution.
Interim Servicing Fee Rate: 40 basis points (0.40%) per annum during
the Interim Period.
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.
Liquidation Proceeds: The amounts, other than Insurance Proceeds,
Condemnation Proceeds or those received following the acquisition of REO
Property, 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.
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 date of origination (unless otherwise indicated), to the
Appraised Value of the Mortgaged Property at origination.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, 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 lien, in the case of a First Lien Loan or a second lien, in the case of a
Second Lien Loan, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Prepayment Charges, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit 9, setting forth the following information with respect to
each Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (7)
the Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate as of the
Cut-off Date; (9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (10) the stated maturity date; (11) the amount of the Monthly
Payment as of the Cut-off Date; (12) the last payment date on which a Monthly
Payment was actually applied to pay interest and the outstanding principal
balance; (13) the original principal amount of the Mortgage Loan; (14) the
principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (15) with respect to Adjustable Rate Mortgage Loans,
the Interest Rate Adjustment Date; (16) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (17) with respect to Adjustable Rate Mortgage Loans,
the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with respect to
Adjustable Rate Mortgage Loans, a code indicating the type of Index; (19) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap under the terms
of the Mortgage Note; (20) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien); (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 HOEPA 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; and (43) the sales
price of the Mortgaged Property if the Mortgage Loan was originated in
connection with the purchase of the Mortgaged Property. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Opinion of Counsel: A written opinion of counsel, who may be counsel
employed by the Company, 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 an opinion of counsel who (i) is in fact independent of the
Sellers and any servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the Sellers or any servicer of the
Mortgage Loans or in an Affiliate of either and (iii) is not connected with the
Sellers or any servicer of the Mortgage Loans as an officer, employee, director
or person performing similar functions.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase on an Interest
Rate Adjustment Date above the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Charge: 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.
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 charge or premium thereon, and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Sellers in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price Percentage: As defined in the Purchase Price and
Terms Agreement.
Purchase Price and Terms Letter: That certain letter agreement
setting forth the general terms and conditions of the transaction contemplated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Company and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, or its successor in
interest or assigns, or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, approved by the Company, 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 Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Sellers for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Sellers in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 2% 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 Mortgage Interest Rate Caps and
lien priority); (v) with respect to Adjustable Rate Mortgage Loans, have the
same Index as the Deleted Mortgage Loan; and (vi) comply with each
representation and warranty (respecting individual Mortgage Loans) set forth in
Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Sellers 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 Transfer 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 Transfer.
Reconstitution Date: As defined in Section 12.
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 Servicing Agreement for
the remittance of funds by the Servicer to the Purchaser.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (a) the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus (b) 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 (c) all costs and expenses reasonably incurred by the Purchaser
arising out of or based upon such breach, including without limitation costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder, plus (e) any costs and damages incurred by the Purchaser in
connection with any violation of any predatory or abusive lending law by such
Mortgage Loan.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Each of the Company, Option One Owner Trust 2001-1A, Option
One Owner Trust 2001-1B, Option One Owner Trust 2001-2 and Option One Owner
Trust 2002-3 their respective successors in interest.
Servicing Agreement: The agreement, in the form attached as Exhibit
B hereto, to be entered into by the Purchaser and the Company, providing for the
Company to service the Mortgage Loans.
Servicing Fee: With respect to each Mortgage Loan, and for any
calendar month, an amount equal to one (1) month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full or in
part made by the Mortgagor during such calendar month, interest for the number
of days covered by such payment of interest) at the applicable Servicing Fee
Rate on the same principal amount on which interest on such Mortgage Loan
accrues for such calendar month.
Servicing Fee Rate: The servicing fee rate set forth in the related
Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Company 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 Section 2 of the Custodial Agreement.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Underwriting Guidelines: The underwriting guidelines of the Company,
a copy of which is attached hereto as Exhibit J.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Sellers agree to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Sellers.
SECTION 3. Mortgage Schedules.
The Company shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (the "Preliminary Mortgage Schedule").
The Company shall deliver the Final Mortgage Loan Schedule for the
Mortgage Loans to be purchased on the Closing Date to the Purchaser at least two
(2) Business Days prior to the Closing Date. The Final Mortgage Loan Schedule
shall set forth the Mortgage Loans which shall be purchased by the Purchaser
from the Sellers on the Closing Date (the "Final Mortgage Loan Schedule").
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate actual principal balance of
the Mortgage Loans as of the Cut-off Date, after application of payments
actually received on the Mortgage Loans on or before the Cut-off Date. The
initial principal amount of the Mortgage Loans shall be the aggregate principal
balance of the Mortgage Loans, so computed as of the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Sellers, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans from the paid through
date through the day prior to the Closing Date net of the Interim Servicing Fee
Rate. The Purchase Price plus accrued interest as set forth in the preceding
sentence shall be paid to the Sellers by wire transfer of immediately available
funds to an account designated by the Company in writing.
The Purchaser shall be entitled to (l) all principal collected on or
after the Cut-off Date and (2) all accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans from the Cut-off Date
through the day prior to the Closing Date net of the Interim Servicing Fee Rate.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the Closing Date, the
Sellers shall (a) deliver to the Custodian in escrow, for examination with
respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage Loan
or (b) make the related Mortgage File available to the Purchaser for examination
at such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the Closing Date.
The Sellers will provide information and otherwise cooperate with
the Purchaser, its designees and rating agency due diligence reviews. The
Purchaser shall conduct a due diligence sample review of approximately 25-30% of
the Mortgage Loans' legal, credit and servicing files for the purpose of
ensuring conformity with the Underwriting Guidelines, the terms of the Purchase
Price and Terms Agreement, the Agreement and applicable law (including
anti-predatory lending laws). In addition, the Purchaser shall conduct an
appraisal review and reserves the right to reject any Mortgage Loan from this
purchase transaction whose updated valuation determined by the Purchaser is
greater than or equal to negative 15% variance compared to the original
appraisal value at the time of origination as provided to the Purchaser.
Notwithstanding the above, the Purchaser shall have the right to conduct
additional due diligence reviews in the event that the Purchaser suspects
systemic issues in its initial review. The Sellers shall make the legal files
and the credit files, together with any payment histories, collection histories,
bankruptcy histories, broker's price opinions, to the extent available, and any
other information contained in the loan file with respect to the Mortgage Loans
requested by the Purchaser, available at the Sellers' offices for review by the
Purchaser or its agents during normal business hours before the Closing Date.
The Purchaser shall have the right to order additional broker's price opinions
in its sole discretion.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the documentation to be delivered pursuant to Section 6.03 is missing
or defective in whole or in part, (b) for which the related broker's price
opinion is more than 15% below the appraisal provided in connection with the
origination of the related Mortgage Loan, (c) for which the loan-to-value ratio
calculated based upon the broker's price opinion is greater than 100%, (d) which
does not conform to the Underwriting Guidelines, (e) which does not conform to
the terms of this Agreement or is in breach of the representations and
warranties set forth in this Agreement, (f) that, as of the Closing Date, is not
securitizable in the reasonable opinion of the Purchaser or (g) which does not
conform to the terms of any applicable federal, state, or local law or
regulation. The Purchaser shall use it best efforts to notify the Sellers of any
such rejected Mortgage Loan immediately upon discovery.
Notwithstanding the foregoing, the Purchaser may purchase all or
part of the Mortgage Loans without conducting any partial or complete due
diligence examination. The fact that the Purchaser or its designees have
conducted or failed to conduct any partial or complete examination of the files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase or other relief for breach of representations and warranties, missing
or defective documents or as otherwise provided in the Purchase Agreement or the
Servicing Agreement.
SECTION 6. Conveyance from Sellers to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
Each Seller, shall with the execution and delivery of this
Agreement, 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 such Seller in and to the Mortgage Loans and the
Mortgage Files and all rights and obligations arising under the documents
contained therein. The Company shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Company shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement or the Servicing Agreement.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Company, applicable Seller, an Affiliate of the applicable Seller,
the Custodian, the Purchaser or one or more designees of the Purchaser.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
held 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 Sellers after the Cut-off Date on or in
connection with a Mortgage Loan shall be vested in the Purchaser or one or more
designees of the Purchaser; all funds received by the Sellers on or in
connection with a Mortgage Loan shall be received and held by the Sellers 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 applicable
Seller's balance sheet and other financial statements as a sale of assets by the
applicable Seller.
The Company shall be responsible for maintaining, and shall
maintain, a complete set of origination and servicing records for each Mortgage
Loan which shall be marked clearly to reflect the ownership of each Mortgage
Loan by the Purchaser. In particular, the Company 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, 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 applicable law. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds, documents maintained by the Company may be in
the form of microfilm or microfiche or other such means of reproducing documents
including but not limited to optical imagery techniques to the extent
permissible by law and so long as the Company complies with the requirements of
Xxxxxx Mae and Xxxxxxx Mac.
Subsection 6.03 Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Company shall use its best
efforts to deliver and release to the Custodian, on or prior to the date which
is five (5) Business Days prior to the Closing Date, but in no event later than
three (3) Business Days prior to the Closing Date, those Mortgage Loan Documents
as required by the Custodial Agreement with respect to each Mortgage Loan, a
list of which is set forth in the Custodial Agreement. The Custodian shall hold
the Mortgage Loan Documents as bailee for the Sellers until the Closing Date and
until the transaction comtemplated by this Agreement has closed.
The Custodian's receipt of all such Mortgage Loan Documents may be
evidenced by the Initial Certification of the Custodian in the form annexed to
the Custodial Agreement. The Company shall comply with the terms of the
Custodial Agreement and the Purchaser shall pay all fees and expenses of the
Custodian, provided that, in the event the Purchaser utilizes the same review
criteria as the applicable Seller under the applicable Seller's existing
warehouse financing arrangement with the Custodian, then the Company shall pay
the costs of Initial Certification.
The Company shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing any
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks after its
execution; provided, however, that in lieu thereof the Company may 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 as soon as practicable after receipt from the recording office.
In the event that the related Seller cannot deliver such original or
copy of any document submitted for recordation to the appropriate public
recording office within 270 days of the Closing Date due to a delay caused by
the recording office in the applicable jurisdiction, (i) the related Seller
shall deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
related Seller, confirming that such documents have been accepted for recording
(upon request of the Purchaser and delivery by the Purchaser to the related
Seller of a schedule of the related Mortgage Loans, the related Seller shall
reissue and deliver to the Purchaser or its designee said officer's certificate
relating to the related Mortgage Loans), and (ii) the related Seller shall use
its best efforts to deliver such document within 270 days of the Closing Date
but in no event later than the date which is 365 days after the Closing Date. In
the event any document is not so delivered to the Custodian, or to such other
Person as the Purchaser shall designate in writing, within 365 days (or such
other time period as may be required by any rating agency rating a
securitization of the Mortgage Loans) following the Closing Date (other than
with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Company 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 Company at the price and in the manner specified in
Subsection 8.03.
Notwithstanding any provisions to the contrary in this Agreement,
the Company shall not be required to record the Assignments of Mortgage on
behalf of the Purchaser unless the Rating Agencies providing ratings related to
a Securitization Transfer shall require recordation in the appropriate offices
for real property records in order to receive the ratings on the pass-through
certificates at the time of their initial issuance or the occurrence of certain
events set forth in the related Securitization Transfer document shall require
recordation (it being understood that the Purchaser shall not be required to
deliver any opinions of counsel to satisfy such Rating Agency requirements).
The Company shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Company for the costs associated therewith pursuant to the
preceding sentence, it being understood that the Company shall be responsible
for the fees and costs of only one recordation with respect to each Mortgage
Loan.
Subsection 6.04 Quality Control Procedures.
The Company shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Company's
loan production and the servicing activities of the Company. 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 have been sold by the Sellers to the Purchaser on
a servicing retained basis and the Purchaser shall retain the Company as
servicer.
The Purchaser shall retain the Company as independent contract
servicer of the Mortgage Loans pursuant to and in accordance with the terms and
conditions contained in the Servicing Agreement. The Company shall execute the
Servicing Agreement on the Closing Date in the form attached hereto as Exhibit
B.
Pursuant to the Servicing Agreement, the Company shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled to
the applicable servicing fee and any Ancillary Income with respect to such
Mortgage Loans from the Closing Date until the termination of the Servicing
Agreement with respect to any of the Mortgage Loans as set forth in the
Servicing Agreement. The Company shall service the Mortgage Loans in accordance
with the terms of the Servicing Agreement.
SECTION 8. Representations, Warranties and Covenants of the Company
and the Sellers; Remedies for Breach.
Subsection 8.01 Representations and Warranties Regarding the Company
and the Sellers.
(a) The Company represents, warrants and covenants to the Purchaser
that as of the date hereof and as of the Closing Date:
(i) Due Organization and Authority. The Company 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 Company, and in any event the Company is in
compliance with the laws of any such state to the extent necessary to
ensure the enforceability of the related Mortgage Loan and the servicing
of such Mortgage Loan in accordance with the terms of this Agreement and
the Servicing Agreement; the Company has the full corporate power,
authority and legal right to hold, transfer and convey the Mortgage Loans
being sold by it 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 Company 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 Company, 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 Company to make this Agreement and all
agreements contemplated hereby valid and binding upon the Company in
accordance with their terms;
(ii) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Company, and the transfer, assignment and conveyance of
the Mortgage Notes and the Mortgages being sold by the Company pursuant to
this Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the
Company, 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 or the
Servicing Agreement, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Company's charter or by-laws or
any legal restriction or any agreement or instrument to which the Company
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
Company 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;
(iv) Ability to Service. The Company has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage
loans of the same type as the Mortgage Loans. The Company is duly
qualified, licensed, registered and otherwise authorized under all
applicable federal, state and local laws, and regulations, if applicable,
and is in good standing to enforce, originate, sell mortgage loans to, and
service mortgage loans in the jurisdiction wherein the Mortgaged
Properties are located;
(v) Reasonable Servicing Fee. The Company acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing
the services contemplated by the Servicing Agreement and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax
purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement and the Servicing Agreement;
(vi) Ability to Perform; Solvency. The Company 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 and the Servicing
Agreement. The Company is solvent and the sale of the Mortgage Loans being
sold by the Company will not cause the Company to become insolvent. The
sale of the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud any of the Company's creditors;
(vii) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Company's knowledge,
threatened against the Company, before any court, administrative agency or
other tribunal asserting the invalidity of this Agreement or the Servicing
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Servicing 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 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 this Agreement or the
Servicing Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Company contemplated
herein, or which would be likely to impair materially the ability of the
Company to perform under the terms of this Agreement or the Servicing
Agreement;
(viii) 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 is required for the execution, delivery and
performance by the Company of or compliance by the Company with this
Agreement or the Servicing 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 Closing Date;
(ix) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Sellers'
portfolio at the Closing Date as to which the representations and
warranties set forth in Subsection 8.02 could be made and such selection
was not made in a manner so as to affect adversely the interests of the
Purchaser;
(x) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool
characteristics for the Mortgage Loans delivered pursuant to Section 11 on
the Closing Date in the form attached as Exhibit I hereto;
(xi) Financial Statements. The Company 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
Company 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. In
addition, the Company has delivered information as to its loan gain and
loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case
with respect to mortgage loans owned by it and mortgage loans serviced for
others during such period, and all such information so delivered shall be
true and correct in all material respects. There has been no change in the
business, operations, financial condition, properties or assets of the
Company since the date of the Company's financial statements that would
have a material adverse effect on its ability to perform its obligations
under this Agreement.
(xii) No Brokers. The Company 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;
(xiii) Sale Treatment. The Company intends to reflect the transfer
of the Mortgage Loans sold by it as a sale on the books and records of the
Company and the Company has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded sale treatment
for tax and accounting purposes;
(xiv) 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 Transfer or Whole Loan
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;
(xv) Owner of Record. With respect to the Mortgage Loans sold by the
Company, the Company 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
Company will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans
to the Purchaser, the Company will retain the Mortgage Files with respect
thereto in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan;
(xvi) Fair Consideration. The consideration received by the Company
upon the sale of the Mortgage Loans sold by the Company under this
Agreement constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans; and
(xvii) Company's Origination. The Company's decision to originate
any Mortgage Loan or to deny any mortgage loan application is an
independent decision based upon the 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.
(b) Each Seller (each, however, only as to itself and not as to the
other Sellers), other than the Company, represents and warrants to the Purchaser
that as of the date hereof and as of the Closing Date:
(i) Organization. Such Seller (other the Company) is a business
trust duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in such state where a Mortgaged Property securing a Mortgage Loan
owned by it is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by such
Seller, and in any event such Seller is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan; such Seller has the full power and authority to
execute and deliver this Agreement and to perform in accordance herewith;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by
such Seller and the consummation of the transactions contemplated hereby
have been duly and validly authorized; this Agreement evidences the valid,
binding and enforceable obligation of such Seller; and all requisite
corporate action has been taken by such Seller to make this Agreement
valid and binding upon such Seller in accordance with its terms;
(ii) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of such Seller. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by such Seller pursuant to this Agreement
are not subject to the bulk transfer or any similar statutory provisions
in effect in any applicable jurisdiction;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans by such Seller, the sale
of the Mortgage Loans to the Purchaser or 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 such Seller trust agreement or any
legal restriction or any agreement or instrument to which such Seller or
the Company 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 such Seller or any of its property is subject, or impair the
ability of the Purchaser to realize on the Mortgage Loans being sold by
it, or impair the value of such Mortgage Loans;
(iv) Ability to Perform. Such Seller does not believe, nor does such
Seller have any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement. Such Seller is solvent and
the sale of the Mortgage Loans is not undertaken to hinder, delay or
defraud any of such Seller's creditors;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to such Seller's knowledge, as the case may be,
threatened against such Seller, 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 such Seller, or
in any material impairment of the right or ability of such Seller to carry
on its business substantially as now conducted, or in any material
liability on the part of such Seller, or which would draw into question
the validity of this Agreement or the Mortgage Loans being sold by such
Seller or of any action taken or to be taken in connection with the
obligations of such Seller contemplated herein, or which would be likely
to impair materially the ability of such Seller to perform under the terms
of this Agreement;
(vi) 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 such Seller of or compliance by
such Seller with this Agreement or the sale of the Mortgage Loans by it 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;
(vii) Sale Treatment. Such Seller and the Company have determined
that the disposition of the Mortgage Loans pursuant to this Agreement will
be afforded sale treatment for accounting and tax purposes;
(viii) No Broker's Fee. Such Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to any
commission or compensation in connection with the sale of the Mortgage
Loans; and
(ix) 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 Transfer or Whole Loan
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;
(x) Owner of Record. With respect to the Mortgage Loans sold by the
Seller, 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, and upon the sale of the Mortgage Loans
to the Purchaser, the Seller will retain the Mortgage Files with respect
thereto in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan; and
(xi) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans sold by the Seller under this
Agreement constitutes fair consideration and reasonably equivalent value
for the Mortgage Loans.
Subsection 8.02 Representations and Warranties Regarding Individual
Mortgage Loans.
With respect to each Mortgage Loan, or Mortgage Loans in the
aggregate, as applicable, the relevant Seller and the Company each hereby
represent and warrant to the Purchaser that, as to each Mortgage Loan, as of the
Closing Date:
(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
Closing Date under the terms of the Mortgage Note, other than payments not yet
30 days delinquent, have been made. No payment required under the Mortgage Loan
is 30 days or more delinquent nor has any payment under the Mortgage Loan been
30 days or more delinquent at any time since the origination of the Mortgage
Loan. The first Monthly Payment has been made or 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 (other than a delinquency of less than 30 days) and to
the best of the Company's knowledge on the Closing Date, 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. No Seller has advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to
the day which precedes by one month the Due Date of the first installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgage Loan has been modified so as to restructure the payment obligations or
re-age the Mortgage Loan. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, 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 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 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
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, 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
Company 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. Neither the Company nor the Sellers have engaged
in, nor have any knowledge of any Mortgagor or any servicer having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Sellers or the Company;
(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 and abusive lending laws, equal credit opportunity and disclosure laws
applicable to the Mortgage Loan have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such laws
or regulations, and the Company 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.
(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. Neither the Sellers nor the
Company have 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 have the Sellers or the Company 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 the Mortgage Property may consist of a manufactured
dwelling provided that it is in comformity with the Company's requirements, as
set forth in the Underwriting Guidelines, regarding such dwellings and that
there are no repossessed units, no second lien manufactured housing mortgage
loans, no modified loans (including extensions, loan assumptions, transfers of
equity), no land-in-lieu (no cash downpayment) and no low-side overrides (loans
that had been originally rejected). No Mortgage Loan is secured by a single
parcel of real property with a cooperative housing corporation, a log home or a
mobile home (other than a manufactured home as described above) erected thereon
or by a mixed-use property, or a property in excess of 10 acres. As of the date
of origination, no portion of the Mortgaged Property was 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, and (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
applicable Seller or the Company as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid,
subsisting enforceable and perfected first lien, with respect to First Lien
Loans, or second lien, with respect to Second Lien Loans, of record on a single
parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time, with respect to the foregoing. In no event shall any Mortgage
Loan be in a lien position more junior than a second lien. The lien of the
Mortgage is subject only to:
(1) with respect to Second Lien Loans, the lien of the first
mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected (A) first lien and first
priority security interest with respect to each First Lien Loan, or (B) second
lien and second priority security interest with respect to each Second Lien
Loan, in either case, on the property described therein and the applicable
Seller and the Company have full right to sell and assign the same to the
Purchaser. The Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage;
(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. 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 the Company, the Servicer, or to the best of
the Company's knowledge the Mortgagor, the appraiser, any builder, or any
developer, or any other party involved in the origination of the Mortgage Loan
or in the application of any insurance in relation to such Mortgage Loan;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The applicable Seller is the sole beneficial owner of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Company will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and each applicable 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, subject, however, to the Seller's retained servicing
interest. The Sellers intend to relinquish all rights to possess and control the
Mortgage Loans. After the Closing Date, neither the Sellers nor the Company will
have any right to modify or alter the terms of the sale of the Mortgage Loan and
the Sellers will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement and, in
the case of the Company, the Servicing Agreement;
(n) Doing Business. To the best of Company's knowledge, 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, (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) LTV; CLTV. No Mortgage Loan has an LTV or CLTV greater than
100%.
(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 and
each such title insurance policy is issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the applicable Seller (or the Company), its successors and assigns, as to the
first priority lien (with respect to First Lien Loans) or second priority lien
(with respect to Second Lien Loans) of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in clauses
(1) and (2) of paragraph (j) of this Subsection 8.02, 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 Seller (or the Company), its respective successors and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, have 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 Company 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 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 and (iii) no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Loan to receive notice of, and
affords such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of HUD 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 Company meets the requirements set forth in clause (a), and
(i) such Mortgage Loan was underwritten in accordance with standards established
by the Company, using application forms and related credit documents approved by
the Company, (ii) the Company approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until the Company agreed to fund such Mortgage Loan, (iii)
the closing documents for such Mortgage Loan were prepared on forms approved by
the Company, and (iv) such Mortgage Loan was actually funded by the Company and
was purchased by the Company at closing or soon thereafter. To the best of the
Company's knowledge, after reasonable inquiry, 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. Principal payments on the Mortgage Loan commenced no more than
two months 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 Exhibit I hereto. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, except with respect to balloon
Mortgage Loans 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. 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;
(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;
(v) Conformance with 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 secondary mortgage market and the Company has correctly described
to each Mortgagor, in accodance with applicable federal, state and local law,
the terms of the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the time of
origination, the Mortgaged Property was 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. To the best of Company's knowledge 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 mortgage loans similar to the Mortgage Loan 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 Company generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Company 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 unit in 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 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 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 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 Company's knowledge, such provision
is enforceable (subject to limitations imposed by applicable law and rights as
to assumption refered to in (ee) below);
(ee) Assumability. With respect to each 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 Company, 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 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, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to the best of the Company's knowledge,
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, 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 neither the Company nor any other Seller has knowledge of any such
proceedings in the future;
(ii) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(jj) 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
and to the best of the knowledge of the Company there is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue and as of the date of
origination; there was (and to the best of the Company's and Seller's knowledge
as of the Closing Date, 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;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Company, and neither the Seller nor the Company has any knowledge
of any relief requested or allowed to the Mortgagor under the Soldiers' and
Sailors' Civil Relief Act of 1940 as amended, or similar state statute;
(ll) 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, acceptable to the Company, 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. The appraisal and appraiser both satisfy the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, and the requirements of
Xxxxxx Xxx and Xxxxxxx Mac, all as in effect on the date the Mortgage Loan was
originated;
(mm) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Company has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Company shall maintain such statement in the Mortgage
File;
(nn) 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;
(oo) No Defense to Insurance Coverage. The Sellers have 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 Closing Date (whether or not known to
the Sellers on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy or bankruptcy bond (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 Sellers, 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;
(pp) Escrow Analysis. With respect to each Mortgage Loan which
requires escrows, the Company has within the last twelve months (unless such
Mortgage was originated within such twelve month period) analyzed the required
Escrow Payments for the 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;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer will report the Mortgagor credit files to each of the three credit
repositories monthly in a timely manner;
(rr) 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 Company to the Purchaser, the Company has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The
Company shall hold the Purchaser harmless from any and all damages, losses,
costs and expenses (including attorneys' fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(ss) 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;
(tt) Prepayment Charge. Each Mortgage Loan is subject to a
Prepayment Charge as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule attached hereto. With respect to
Mortgage Loans originated prior to October 1, 2002, no such Mortgage Loan has a
Prepayment Charge period in excess of five years. With respect to Mortgage Loans
originated on or after October 1, 2002, no Mortgage Loan has a Prepayment Charge
period in excess of three years;
(uu) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," "covered" or
"predatory" loans under, any other applicable state, federal or local law. No
Mortgage Loan is classified as a "predatory" loan under any applicable state,
federal or local law.
(vv) 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 a single-premium credit life insurance policy;
(ww) Compliance with Anti-Money Laundering Laws. The Company has
complied and will comply 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 Company 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.
(xx) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code.
(yy) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Company or Seller as applicable with respect to the Mortgage Loans have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments that relate to the Mortgage Loans (other
than with respect to Second Lien Loans for which the mortgagee under the prior
mortgage lien is collecting Escrow Payments), all such payments are in the
possession of, or under the control of, the Company and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. With respect to those Mortgage Loans that
by their terms require escrows, all Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the respective
Mortgage Notes and Mortgages. 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 to the lender have
been capitalized under any of the Mortgages or the Mortgage Notes. All Mortgage
Interest Rate adjustments on the Mortgage Loans have been made in strict
compliance with state and federal law and the terms of the respective Mortgages
and Mortgage Notes on the applicable Interest Rate Adjustment Dates. If,
pursuant to the terms of any of the Mortgage Notes, another index was selected
for determining the Mortgage Interest Rate, the same index was used with respect
to all Mortgage Notes which required a new index to be selected as a result of
the same occurance, and such selection did not conflict with the terms of any of
the Mortgage Notes. The Company executed and delivered any and all notices
required under applicable law and the terms of any of the Mortgage Notes and
Mortgages regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest on the Mortgage Loans that was required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(zz) Georgia Mortgage Loans. No Mortgage Loan which is secured by
property located in the state of Georgia was originated before March 7, 2003;
(aaa) Mortgaged Premises Located in New York State. No Mortgage Loan
(a) is secured by property located in the state of New York; (b) had an original
principal balance of $300,000 or less; and (c) has an application date on or
after April 1, 2003, the terms of which Mortgage Loan equal or exceed either the
APR or the points and fees threshold for "high-cost home loans," as defined in
Section 6-L of the New York State Banking Law;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
(ccc) Recordation. Each original Mortgage was recorded, or has been
sent for recordation, and, except for those Mortgage Loans subject to the MERS
identification system, all subsequent assignments of the original Mortgage
(other than the assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or the Company as Sellers
predecessor in interest, or is in the process of being recorded; and
(ddd) 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.
Subsection 8.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 8.01 and 8.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Company or the Purchaser of a breach of any
of the foregoing representations and warranties which affects the value of the
Mortgage Loans or the interest of the Purchaser (or which affects the interests
of the Purchaser in the related Mortgage Loan in the case of a representation
and warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Company of any breach of a representation or warranty, the Company and the
relevant Seller shall use their best efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Company or the
relevant Seller shall, at the Purchaser's request, repurchase such Mortgage Loan
at the Repurchase Price together with all expenses incurred by the Purchaser in
connection with such breach and such repurchase within 15 Business Days of such
request. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Company of any breach of the
representations or warranties set forth in clauses (g), (k) (in the case of
fraud only), (tt), (uu), (vv), (xx), (zz) or (aaa) of Subsection 8.02, the
Company shall repurchase such Mortgage Loan at the Repurchase Price at the
Purchaser's request, together with all expenses incurred by the Purchaser as a
result of such breach and such repurchase. In the event that a breach shall
involve any representation or warranty set forth in Subsection 8.01, and such
breach cannot be cured within 60 days of the earlier of either discovery by or
notice to the Company of such breach, all of the Mortgage Loans shall, at the
Purchaser's request, be repurchased by the Company at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 8.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Company discovers or receives notice of any such breach within 120 days of the
Closing Date, at the Purchaser's request, the Company or relevant Seller may, if
the Company or a Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the Closing Date. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Subsection 8.03 shall
be accomplished by either (a) if the Servicing Agreement has been entered into
and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to the Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution or (b) if the Servicing Agreement has not been entered
into or is no longer in effect, by direct remittance of the Repurchase Price to
the Purchaser or its designee in accordance with the Purchaser's instructions.
The Company or Seller shall cure, repurchase or substitute in
accordance with the preceding paragraph with respect to any Mortgage Loan for
which such breach of a representation or warranty exists notwithstanding the
fact that such representation and warranty may have contained a statement
qualified as being made to the Company's knowledge or to the best of the
Company's knowledge.
At the time of repurchase or substitution, the Purchaser and the
Company shall arrange for the reassignment of the Deleted Mortgage Loan to the
Company or the relevant Seller and the delivery to the Company (for itself or
for the Seller) of any documents held by the Custodian relating to the Deleted
Mortgage Loan. In the event of a repurchase or substitution, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase or substitution has taken place, amend the Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the Mortgage Loan Schedule to reflect the addition of
such Qualified Substitute Mortgage Loan to this Agreement. In connection with
any such substitution, the Company and if applicable, the relevant 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 Company or 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 and the Custodial Agreement, with the
Mortgage Note endorsed as required by Subsection 6.03 and the Custodial
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. The Company shall remit directly to the
Purchaser, or its designee in accordance with the Purchaser's instructions the
Monthly Payment less the Servicing Fee due, if any, 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
applicable Seller shall thereafter be entitled to retain all amounts
subsequently received by the Company in respect of such Deleted Mortgage Loan.
For any month in which the Company or a Seller substitutes a
Qualified Substitute Mortgage Loan for a Deleted Mortgage Loan, the Company
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 Company 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,
notwithstanding anything to the contrary in this Agreement, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs (including legal fees and costs relating to the enforcement of this
indemnification obligation), 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 Sellers' or the Company's representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Subsection 8.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser as provided in this Subsection 8.03 constitute
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties.
With respect to those representations and warranties which are made
to the best of the Seller's knowledge, if it is discovered by the Company,
Seller or the Purchaser that the substance of such representation and warranty
is inaccurate, notwithstanding the Company's or Seller's lack of knowledge with
respect to the substance of such representation and warranty, such inaccuracy
shall be deemed a breach of the applicable representation and warranty (except
with respect to fraud in clause (k) of Subsection 8.02). Any cause of action
against the Sellers or the Company relating to or arising out of the breach of
any representations and warranties made in Subsections 8.01 and 8.02 shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failure by the
Company and Sellers to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Sellers or the Company by the
Purchaser for compliance with this Agreement.
Subsection 8.04 Repurchase of Mortgage Loans with First Payment
Defaults.
In the event that the related Mortgagor fails to make the first
scheduled Monthly Payment due after the Closing Date with respect to any
Mortgage Loan prior to the date which is 45 days after the related Due Date (the
"Early Payment Default Date"), the Company shall repurchase such Mortgage Loan
within ten (10) Business Days of the Purchaser's request at a price equal to the
Repurchase Price.
SECTION 9. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Sellers shall deliver to the Purchaser a magnetic diskette, or transmit
electronically, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans delivered
on the Closing Date (including accrued interest), and prepare a Mortgage
Loan Schedule;
(ii) all of the representations and warranties of the Sellers and
the Company under this Agreement and under the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein) shall be true and
correct as of the Closing Date and no event shall have occurred which,
with notice or the passage of time, would constitute a default under this
Agreement or an Event of Default under the Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Company 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
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Sellers on the Closing Date their respective shares of the Purchase Price for or
have it all paid to the Company distribution among the Sellers 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
Company.
SECTION 10. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, dated as of the Cut-off Date, in the
form of Exhibit B hereto;
3. the Custodial Agreement, dated as of the Cut-off Date, in the
form attached as Exhibit H hereto;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required under the Servicing
Agreement;
7. an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, as required under the Servicing
Agreement;
8. an Officer's Certificate, in the form of Exhibit C hereto with
respect to each Seller, including all attachments hereto;
9. an Opinion of Counsel of the Company (who may be an employee
of the Company) and an Opinion of Counsel of each other
Seller, in the form of, or collectively to the same effect as,
Exhibit D-1 hereto ("Opinion of Counsel of the Company") and
Exhibit D-2, respectively;
10. 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;
11. 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;
12. 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 applicable
Seller by merger or acquired or originated by the applicable
Seller while conducting business under a name other than its
present name, if applicable;
13. the Underwriting Guidelines to be attached hereto as Exhibit
J; and
14. Exhibit I to this Agreement.
The Company shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 11. Costs.
The Purchaser shall pay its due diligence fees and the fees and
expenses of its counsel. All servicing fees incurred prior to the Closing Date,
and all costs and expenses incurred in connection with the initial transfer of
the Mortgage Loans, fees with respect to the initial transfer of files and to
prepare the initial assignments and/or endorsements, all initial recording fees,
if any, for the assignments of mortgage for all Mortgage Loans not recorded in
the name of MERS, all fees, if any, for transferring record ownership on the
MERS system of Mortgage Loans recorded in the name of MERS, custodial fees,
including the costs associated with clearing exceptions, (including costs to
record intervening assignments and any existing assumption and modification
agreements), together with the fees and expenses of Sellers' counsel, shall be
paid by the Sellers.
SECTION 12. Cooperation of Sellers with a Reconstitution.
The Sellers acknowledge that with respect to some or all of the
Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (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 Transfers.
The Sellers agree to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Company among the Purchaser, the Company, 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 Company, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Company (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements").
With respect to each Agency Transfer, Whole Loan Transfer and each
Securitization Transfer entered into by the Purchaser, each Seller and the
Company agrees (1) to reasonably 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, provided that the same are reasonably acceptable to
the Company and do not include obligations on the part of Sellers, or any of
them, that are more burdensome than this Agreement and the Servicing Agreement;
(3) to restate the representations and warranties set forth in this Agreement
(except for clause (m) of Section 8.02) and the Servicing Agreement as of the
Reconstitution Date that occurs within three (3) months following the Closing
Date, with such modifications as are necessary to reflect events occurring
between the Closing Date and the applicable Reconstitution Date, and make such
additional representations and warranties reasonably required by any rating
agency, if only to the extent that the same are, then true, in connection with
such Reconstitution. In addition, in connection with a Securitization Transfer
entered into by the Purchaser, the Sellers hereby agree that in the event any
Mortgage Loan is to be held by a REMIC, and it is discovered by the Sellers, the
Purchaser or any prospective purchaser that such Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code resulting from the breach of any representation and warranty within
Subsection 8.01 or 8.02, the Company or a Seller shall repurchase each such
Deleted Mortgage Loan within 30 days of the earlier of discovery or receipt of
notice with respect to each such Deleted Mortgage Loan. The Company shall use
its reasonable best efforts to provide to such master servicer or issuer, as the
case may be, and any other participants in such Reconstitution any and all
information and appropriate verification of information which may be reasonably
available to the Company or its affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request. The Company 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 the Company
regarding the Company, the Company'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.
In the event the Purchaser has elected to have the Sellers hold
record title to any of the Mortgages, prior to the Reconstitution Date, the
Sellers shall prepare an assignment of mortgage in blank or to the prospective
purchaser or trustee, as applicable, from the applicable Seller or the Company,
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 applicable Seller or the Company, as applicable, shall
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 Sellers' receipt thereof.
Additionally, the Company shall prepare and execute, at the direction of the
Purchaser, any note endorsement in connection with any and all seller/servicer
agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the Mortgage Loans, shall
continue to be serviced in accordance with the terms of this Agreement and the
Servicing Agreement and with respect thereto this Agreement shall remain in full
force and effect.
SECTION 13. The Company.
Subsection 13.01 Additional Indemnification by the Sellers; Third
Party Claims.
The Company and each of the Sellers shall indemnify jointly and
severally with the applicable Seller (but each only with respect to those of the
Mortgage Loans sold by it) the Purchaser and any successor servicer and hold
each harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs (including
any legal fees and cost relating to the enforcement of this indemnification
provision), judgments, and any other costs, fees and expenses that the Purchaser
may sustain in any way related to the failure of the Company or the Sellers to
perform their respective duties and to service the Mortgage Loans in strict
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 12. The Company immediately shall notify the
Purchaser if a claim is made by a third party with respect to the performance of
duties or servicing under 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 Company for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Sellers' indemnification pursuant to Section 9, or is in
any way related to the failure of the Company to service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement and the
Servicing Agreement or any Reconstitution Agreement.
Subsection 13.02 Merger or Consolidation of the Company.
The Company will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder and under the Servicing
Agreement, 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 14. Financial Statements.
The Sellers understand that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited Statements of Operations of the Sellers for the
most recently completed three fiscal years respecting which such statements are
available, as well as itself and Statements of Condition of the Sellers at the
end of the last two fiscal years covered by such Statement of Operations. The
Sellers shall also make available any comparable interim statements to the
extent any such statements have been prepared by the Sellers (and are available
upon request to members or stockholders of the Sellers or the public at large).
The Sellers, if they have not already done so, agree to furnish promptly to the
Purchaser copies of the statements specified above. The Company shall also make
available information on its servicing performance with respect to loans
serviced for others, including delinquency ratios.
The Sellers also agree 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 Sellers or
the financial statements of the Sellers.
SECTION 15. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the 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 Sellers' 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 Closing Date. The Sellers hereby grant 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 Sellers of their obligations under the Purchase Price and Terms Agreement,
and the Sellers agree that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (i) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Sellers or any of them (other than Company):
Option One Seller Trust 2001-1A
Option One Seller Trust 2001-1B
Option One Seller Trust 2001-2
Option One Seller Trust 2002-3
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
with a copy to:
Option One Mortgage Corporation
0 Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing
and the Sellers are selling, the Mortgage Loans and not that the Sellers are
issuing a debt instrument of the Sellers or other security. Accordingly, each
party intends to treat the transaction for federal income tax purposes and
accounting purposes as a sale by the Sellers, and a purchase by the Purchaser,
of the Mortgage Loans and to account for the transaction consistent with the
classification of such arrangement as a grantor trust or such other arrangement
satisfactory to the Purchaser, in the event it is not found to represent direct
ownership of the related Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Files to determine the
characteristics of the Mortgage Loans which will affect the federal income tax
consequences of owning the Mortgage Loans. The Sellers shall cooperate with all
reasonable requests made by the Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Sellers and the Purchaser and the respective permitted
successors and assigns of the Sellers and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Sellers to a third party without the consent of the Purchaser. This Agreement
may be assigned, pledged or hypothecated by the Purchaser without the consent of
the Sellers. 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 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Sellers and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. No Solicitation.
From and after the Closing Date, the Sellers agree that they will
not take any action or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Sellers' 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 the
prior written consent of the Purchaser provided, that the Sellers may solicit
any Mortgagor for whom the Sellers have received a request for demand for payoff
or a borrower or obligor initiated written communication indicating a desire to
prepay the related Mortgage Loan; provided, further, it is understood and agreed
that (i) promotions undertaken by the Sellers or any of their Affiliates which
are directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section,
nor are the Sellers prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor and (ii) all rights and
benefits relating to the solicitation of any mortgagors to refinance any
Mortgage Loans and the attendant rights, title and interest in and to the list
of such mortgagors and data relating to their mortgages (including insurance
renewal dates) shall be transferred to the Purchaser pursuant to the Purchase
Agreement on the Closing Date and the Sellers shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Sellers or any affiliate of the Sellers
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio, internet (other than targeted e-mail) and television
advertisements shall not constitute solicitation under this Section 27.
SECTION 28. Waiver of Trial by Jury.
THE SELLERS 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 29. Submission to Jurisdiction; Waivers.
Each 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 30. No Recourse to Owner Trustee.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Owner Trustee of Option One Owner Trust
2001-1A, of Option One Owner Trust 2001-1B, of Option One Owner Trust 2001-2 and
Option One Owner Trust 2002-3 (collectively, the "Seller Trusts"), in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Seller Trusts is made and intended not as personal representations, undertakings
and agreements by Wilmington Trust Company but is made and intended for the
purpose for binding only the Seller Trusts, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressed waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
not circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Seller Trusts or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Seller Trusts under this Agreement or any other
related documents.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX XXXXX MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By: XXXXXXX SACHS REAL ESTATE FUNDING
CORP., a New York corporation, its
General Partner
By: ____________________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION
(Seller and Company)
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2001-1A
(Seller)
By: Wilmington Trust Company, not in its
capacity, but solely as Owner
Trustee
By: ____________________________________
Name:
Title:
[Signature Page Continues on Following Page]
OPTION ONE OWNER TRUST 2001-1B
(Seller)
By: Wilmington Trust Company, not in its
capacity, but solely as Owner
Trustee
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2001-2
(Seller)
By: Wilmington Trust Company, not in its
capacity, but solely as Owner
Trustee
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2002-3
(Seller)
By: Wilmington Trust Company, not in its
capacity, but solely as Owner
Trustee
By: ____________________________________
Name:
Title:
EXHIBIT Q
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
XXXXXXX XXXXX MORTGAGE COMPANY,
Purchaser
ACCREDITED HOME LENDERS, INC.,
Seller
----------
Dated as of June 1, 2003
Conventional,
Adjustable and Fixed Rate Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions......................................................
SECTION 2. Agreement to Purchase............................................
SECTION 3. Mortgage Schedules...............................................
SECTION 4. Purchase Price...................................................
SECTION 5. Examination of Mortgage Files....................................
SECTION 6. Conveyance from Seller to Purchaser..............................
Subsection 6.01 Conveyance of Mortgage Loans...............................
Subsection 6.02 Books and Records..........................................
Subsection 6.03 Delivery of Mortgage Loan Documents........................
Subsection 6.04 Quality Control Procedures.................................
SECTION 7. Servicing of the Mortgage Loans..................................
SECTION 8. Representations, Warranties and Covenants of the Seller;
Remedies for Breach..............................................
Subsection 8.01 Representations and Warranties Regarding the
Seller..................................................1
Subsection 8.02 Representations and Warranties Regarding
Individual Mortgage Loans...............................1
Subsection 8.03 Remedies for Breach of Representations and
Warranties..............................................1
Subsection 8.04 Repurchase of Mortgage Loans With Early Payment
Defaults................................................1
Subsection 8.05 Purchaser's Right to Review................................
SECTION 9. Closing..........................................................
SECTION 10. Closing Documents................................................
SECTION 11. Costs............................................................
SECTION 12. Cooperation of Seller with a Reconstitution......................
SECTION 13. The Seller.......................................................
Subsection 13.01 Additional Indemnification by the Seller...................
Subsection 13.02 Merger or Consolidation of the Seller......................
SECTION 14. Financial Statements.............................................
SECTION 15. Mandatory Delivery; Grant of Security Interest...................
SECTION 16. Notices..........................................................
SECTION 17. Severability Clause..............................................
SECTION 18. Counterparts.....................................................
SECTION 19. Governing Law....................................................
SECTION 20. Intention of the Parties.........................................
SECTION 21. Successors and Assigns; Assignment of Purchase Agreement.........
SECTION 22. Waivers..........................................................
SECTION 23. Exhibits.........................................................
SECTION 24. General Interpretive Principles..................................
SECTION 25. Reproduction of Documents........................................
SECTION 26. Further Agreements...............................................
SECTION 27. Recordation of Assignments of Mortgage...........................
SECTION 28. No Solicitation..................................................
SECTION 29. Confidentiality..................................................
SECTION 30. Waiver of Trial by Jury..........................................
SECTION 31. Submission To Jurisdiction; Waivers..............................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT F FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT G INTENTIONALLY OMITTED
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT I UNDERWRITING GUIDELINES
EXHIBIT J INTENTIONALLY OMITTED
EXHIBIT K SERVICER ACKNOWLEDGMENT
EXHIBIT L SELLER LITIGATION
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
June 1, 2003 ("Agreement"), 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 Accredited Home Lenders, Inc., a California
corporation, having an office at 00000 Xxxxxx xx Xxxxxxx, #000, Xxx Xxxxx, XX
00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain first and second lien,
adjustable and fixed rate residential mortgage loans (the "Mortgage Loans") on a
servicing released basis as described herein, and which shall be delivered as a
pool of whole loans on the date as provided herein (the "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien, as applicable, on
a residential dwelling located in the jurisdiction indicated on the Mortgage
Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell 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: A Mortgage Loan purchased pursuant to
this Agreement the Mortgage Interest Rate of which is adjusted from time to time
in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: The value of the related Mortgaged Property based
upon the appraisal made for the originator at the time of origination of the
Mortgage Loan or the sales price of the Mortgaged Property if purchased at or
within twelve months prior to such time of origination, whichever is less.
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.
Authorized Signatory: Any of (i) Managing Director, (ii) Manager,
Funded Asset Management or (iii) Supervisor, Collateral Management.
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: June 27, 2003 or such other date as is mutually agreed
upon by the parties.
CLTV: As of the date of origination and as to any Second Lien
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
outstanding principal balance of the Second Lien Mortgage Loan as of the date of
origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Mortgage Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
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 Servicing Agreement.
Custodial Agreement: That certain Custodial Agreement, by and
between the Purchaser and the Custodian, dated as of the date hereof, governing
the retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Xxxxx Fargo Entity, or any successor thereto under the
Custodial Agreement.
Cut-off Date: June 1, 2003.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 15th calendar day (or if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day) of
each 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.
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.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch Ratings, or any successor thereto.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note 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.
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.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on the Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the term of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the 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 related origination date (unless otherwise indicated),
to the Appraised Value of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest.
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 Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, a copy of
which will be attached hereto as Exhibit D setting forth the information
attached hereto as Exhibit C.
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 an
employee of the Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller and the Purchaser.
Purchaser: Xxxxxxx Sachs 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.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreement: As defined in Section 12.
Reconstitution Date: As defined in Section 12.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (a) the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus (b) 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 (c) the amount of any outstanding advances owed to and
reasonably incurred by any servicer, and plus (d) all costs and expenses
reasonably incurred by the Purchaser or any servicer arising out of or based
upon such breach, including without limitation costs and expenses incurred in
the enforcement of the Seller's repurchase obligation hereunder.
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.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Accredited Home Lenders, Inc., a California corporation and
its successors in interest.
Servicing Agreement: The Interim Servicing Agreement of even date
herewith between the Purchaser and the Seller, providing for the Seller to
service the Mortgage Loans, as specified therein.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights and all rights of the Seller thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Seller with respect thereto; (f) all accounts and other rights
to payment related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information pertaining
to the Mortgage Loans or pertaining to the past, present or prospective
servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Group, 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 Cut-off Date after giving effect
to scheduled payments of principal due on or before such date, whether or not
collected, 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.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 8.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 13.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on September 1, 2003.
Underwriting Guidelines: The underwriting guidelines of the Seller a
copy of which is attached hereto as Exhibit I.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the aggregate
scheduled principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date or such later date on which the
Purchaser has identified to the Seller the final list of Mortgage Loans the
Purchaser desires to purchase. The Mortgage Loan Schedule shall be attached
hereto as Exhibit D.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate scheduled principal balance,
as of the Cut-off Date, of the Mortgage Loans listed on the related Closing
Schedule, after application of scheduled payments of principal due on or before
the Cut-off Date whether or not collected.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued but unpaid interest on the
principal balance of the Mortgage Loans as of the Cut-off Date at a rate equal
to the weighted average Mortgage Interest Rate minus the Servicing Fee Rate (as
defined in the Servicing Agreement), from the Cut-off Date through the day prior
to the 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 or accounts designated by the Seller
in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected after
the Cut-off Date (provided, however, that all scheduled payments of principal
due on or before the Cut-off Date shall belong to the Seller), (3) all payments
of interest on the Mortgage Loans (minus that portion of any such payment which
is allocable to the period prior to the Cut-off Date) and (4) all other
recoveries of late charges, assumption fees, prepayment penalties or other
charges collected after the Cut-off Date. The principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date whether or not collected. Therefore,
payments of scheduled principal and interest prepaid for a due date beyond the
Cut-off Date shall not be applied to the principal balance as of the 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.
At least five (5) Business Days prior to the Closing Date, the
Seller shall either (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage (except with
respect to each MERS Designated Mortgage Loan ), pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at such other location as shall otherwise be acceptable to the
Purchaser. Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the Closing Date. 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 impair in any way the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other remedy as
provided in this Agreement; provided that Purchaser may not demand repurchase or
other relief or remedy on the basis that a Mortgage Loan examined by Purchaser
or its designee prior to purchase does not comply with the Underwriting
Guidelines. Notwithstanding the preceding qualification, it is understood and
agreed that the Purchaser maintains its rights pursuant to Section 8.03 to
demand repurchase of any loan in breach of the Seller's representations and
warranties contained in Section 8.02, excluding Section 8.02(v).
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, 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 and the
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 Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser, MERS or one or
more designees of the Purchaser. Notwithstanding the foregoing, beneficial title
of 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.
Except as expressly set forth in this Agreement, all rights arising out of the
Mortgage Loans including, but not limited to, all funds received by the Seller
after the Cut-off Date on or in connection with a Mortgage Loan shall be vested
in the Purchaser or one or more designees of the Purchaser; provided, however,
that all funds received on or in connection with a Mortgage Loan shall be
received and held by the Seller in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as the owner of the
Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
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 within five (5) business days to
the Purchaser upon demand, evidence of compliance prior to the Transfer Date
with all federal, state and local laws, rules and regulations, including but not
limited to flood certifications, documentation evidencing insurance coverage and
periodic inspection reports. To the extent that, prior to the Transfer Date,
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, microfiche or electronic imaging so long as the Seller
complies with the requirements of the Xxxxxx Xxx Guides.
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 Closing Date the documents and instruments
in the Mortgage File for each Mortgage Loan.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Purchaser shall
pay all fees and expenses of the Custodian from and after the Closing Date.
The Seller shall 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 the original of any copy of any document submitted for
recordation to the appropriate public recording office, is not delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing,
within 180 days following the Closing Date, the related Mortgage Loan shall,
upon the request of the Purchaser, be repurchased by the Seller at the price and
in the manner specified in Subsection 8.03. The foregoing repurchase obligation
shall not apply in the event that the Seller 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 (i) the Seller
shall deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Seller, confirming that such documents have been accepted for recording (upon
request of the Purchaser and delivery by the Purchaser to the Seller of a
schedule of the related Mortgage Loans, the Seller shall reissue and deliver to
the Purchaser or its designee said officer's certificate relating to the related
Mortgage Loans), and (ii) such document is delivered within 270 days of the
Closing Date.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs for a one-time transfer of
all original documents to the Custodian or, upon written request of the
Purchaser, to the Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's designee shall be responsible for recording any Assignments of
Mortgage and shall be reimbursed by the Seller for the costs associated
therewith pursuant to the preceding sentence.
Subsection 6.04. Quality Control Procedures.
The Seller shall maintain an internal quality control program that
verifies in a manner consistent with accepted industry procedures, on a regular
basis, the existence and accuracy of the legal documents, credit documents,
property appraisals, and underwriting decisions. The program shall include
evaluating and monitoring the overall quality of the Seller's loan production
and the servicing activities of the Seller. The program ensures that the
Mortgage Loans are originated and serviced in accordance with Accepted Servicing
Practices 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 have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement, the Seller hereby sells, transfers, assigns, conveys and delivers to
the Purchaser the Servicing Rights. The Seller shall take any actions necessary
to cause any current servicer to terminate servicing the Mortgage Loans on
behalf of the Seller. The Seller shall be responsible for all servicing fees
with respect to the Mortgage Loans accruing through the Closing Date. On and
after the Transfer Date, the Purchaser shall have the right to assign the
servicing rights to a Successor Servicer in its sole discretion.
SECTION 8. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 8.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser and
the Successor Servicer that as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation 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, subject
to bankruptcy, insolvency, and similar laws affecting the rights of creditors
generally and to general principles of equity; 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, by-laws
or other organizational documents 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;
(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 (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) except as disclosed in writing by the
Seller to the Purchaser on Exhibit L hereto, which, either in any one instance
or in the aggregate, is likely to 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, or (iv) except as disclosed in writing by the
Seller to the Purchaser on Exhibit L hereto, the Seller is not subject to any
outstanding litigation for fraud, origination, predatory lending, servicing or
closing practices. The Mortgage Loans are not subject to any outstanding
litigation for fraud, origination, predatory lending, servicing or closing
practices. Notwithstanding the Seller's disclosure of ongoing litigation
pursuant to Exhibit L hereto, Accredited shall remain liable to the Purchaser to
repurchase and/or indemnify for any Mortgage Loan affected by any outstanding
litigation.
(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 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 consent, approval-, authorization or order of,
or registration or filing with, or notice has been obtained prior to the 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 Closing Date as to which the representations and warranties set forth in
Subsection 8.02 could be made and such selection was not intentionally 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, if applicable, and any other documents required to be
delivered with respect to each Mortgage Loan pursuant to this Agreement, shall
be delivered to the Custodian all in compliance with the specific requirements
of this Agreement. 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) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished by Seller pursuant to this Agreement or any
Reconstitution Agreement or in connection with the transactions contemplated
hereby (including any Securitization Transfer or Whole Loan Transfer) contains
or will contain any untrue statement of material fact or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading;
(j) Financial Statements. The Seller has delivered to the Purchaser
financial statements as requested by the Purchaser. 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;
(k) Loan Experience. The Seller has delivered information as to its
loan experience as requested by the Purchaser, and all such information so
delivered shall be true and correct in all material respects;
(l) 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;
(m) Sale Treatment. The Seller acknowledges that under generally
accepted accounting principles the transfer of the Mortgage Loans may be treated
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;
(n) Owner of Record. Except for a MERS Designated Mortgage Loan, the
Seller is the owner of record of each Mortgage and the indebtedness evidenced by
each Mortgage Note, except for any Assignments of Mortgage which have been sent
for recording, and upon recordation the Seller will be the owner of record of
each Mortgage and the indebtedness evidenced by each Mortgage Note, and upon the
sale of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(o) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(q) Reports. On or prior to the date which is two Business Days
after the Closing Date, Seller will provide the Custodian and the Purchaser with
a MERS Report reflecting the Custodian as Investor with respect to each MERS
Designated Mortgage Loan and no Person as Interim Funder for each MERS
Designated Mortgage Loan;
(r) MERS Designations. With respect to each MERS Designated Mortgage
Loan, on the Closing Date, the Seller has initiated the process of designating
the Custodian as the Investor on the MERS(R) System. With respect to each MERS
Designated Mortgage Loan, no Person is listed as Interim Funder on the MERS(R)
System.
Subsection 8.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser and the
Successor Servicer that, as to each Mortgage Loan, as of the Closing Date for
such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. Except for payment defaults of less than
30 days, 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 month the Due Date of the
first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgage Loan has been modified so as to restructure the payment obligations or
re-age the Mortgage Loan. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, 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 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, or
subsequent to, the time the Mortgage Loan was funded;
(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 acceptable under the Xxxxxx Mae Guides against loss
by fire, hazards of extended coverage and such other hazards as are provided for
in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, in an amount which is at least equal
to the lesser of (i) the maximum insurable value of the improvements securing
such Mortgage Loan and (ii) the greater of (a) the outstanding principal balance
of the Mortgage Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac, with a
generally acceptable insurance carrier acceptable under the Xxxxxx Mae Guides in
an amount representing coverage not less than the lesser of (i) the aggregate
unpaid principal balance of the Mortgage Loan, (ii) maximum amount of insurance
which is available under the National Flood Insurance Act of 1968, as amended
(regardless of whether the area in which such Mortgaged Property is located is
participating in such program), and (iii) the full replacement value of the
improvements which are part of such Mortgaged Property. 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 and
such policies may not be reduced, terminated or cancelled without 30 days' prior
written notice to the mortgagee. 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. None of the Seller, the Mortgagor or any
servicer have 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, 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;
(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,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan 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;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated (except to a senior mortgage in the case of a
Second Lien Mortgage Loan) 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 a fee simple property located in the state identified in the Mortgage Loan
Schedule 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 Mortgaged Property may be a leasehold estate and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development or a manufactured home and no residence or dwelling
is a mobile home, provided, however, that any condominium unit or planned unit
development shall conform with the Underwriting Guidelines. In the case of any
Mortgaged Properties that are manufactured homes (a "Manufactured Home Mortgage
Loans"), (i) such Manufactured Home Mortgage Loan conforms with the applicable
Xxxxxx Xxx or Xxxxxxx Mac requirements regarding mortgage loans related to
manufactured dwellings, (ii) the related manufactured dwelling is permanently
affixed to the land, (iii) the related manufactured dwelling and the related
land are subject to a Mortgage properly filed in the appropriate public
recording office and naming Seller as mortgagee, (iv) the applicable laws of the
jurisdiction in which the related Mortgaged Property is located will deem the
manufactured dwelling located on such Mortgaged Property to be a part of the
real property on which such dwelling is located, and (v) such Manufactured Home
Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code. 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 a
Mortgaged Property which contains 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; notwithstanding the forgoing, the Mortgaged Property
is not characterized as mixed-use under which the Mortgaged Property falls into
two or more land use classifications.
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable (subject to bankruptcy, insolvency, and similar laws affecting the
rights of creditors generally and to general principles of equity) and
perfected, first or second lien (as applicable) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not yet
due and payable;
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (b) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal;
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property; and
(4) with respect to Second Lien Mortgage Loans, the lien of the
first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable (subject to bankruptcy, insolvency and
similar laws affecting the rights of creditors and general principles of equity)
and perfected (A) first lien and first priority security interest with respect
to each first lien mortgage loan, or (B) second lien and second priority
security interest with respect to each Second Lien Mortgage Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to Purchaser.
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered a proceeding in equity or
a law). 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. 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 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, 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. Except to the extent the Mortgage
Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form 442 has
been delivered to the Purchaser as of the related Closing Date, the Mortgage
Loan has been closed and the proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder, and any
and all requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Except for the interests of the Seller's warehouse
lender, which interests will be released upon payment of the related Purchase
Price, the Seller is the sole owner and holder of the Mortgage Loan, the
Mortgage Loan has neither been assigned nor pledged, and the Seller has good and
marketable title thereto, and has full right to transfer and sell the Mortgage
Loan and the related Servicing Rights to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, chare, 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 and the
related Servicing Rights to the Purchaser pursuant to the terms of 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, or exempt from
such qualification, 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. No Mortgage Loan that is a Second Lien Mortgage Loan
has a CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%.
(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 clauses
(1), (2), (3) and (4) of paragraph (j) of this Subsection 8.02, 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 exception 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 purchase 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 and (iii) as of the 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) the applicable law or applicable Mortgage 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. Except as insured against by the related
title insurance, there are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. No Mortgage Loan contains terms or provisions which would
result in negative amortization. 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 for an Adjustable Rate Mortgage Loan are as set forth on
the Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly
installments of principal and interest, except for those Mortgage Loans
identified on the Mortgage Loan Schedule subject to a balloon payment, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on Mortgage Loan Schedule, 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;
(u) Customary Provisions. The Mortgage contains customary and
enforceable (subject to bankruptcy, insolvency, and similar laws affecting the
rights of creditors generally and to general principles of equity) 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;
(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 I). The Mortgage Note and Mortgage
are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and the Seller has not made
any representations to a Mortgagor that are inconsistent with the mortgage
instruments used.
(w) Occupancy of the Mortgaged Property. The Mortgaged Property is
not unlawfully 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, 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. To the Seller's knowledge, 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
(other than the status of the Mortgage Loan as a subprime mortgage loan) that
can reasonably be expected to cause private institutional investors to regard
the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage, if applicable, and any other documents
required to be delivered to the Custodian under this Agreement 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 is acceptable to Seller and underwritten in accordance with the
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage, (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee), with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and, subject to applicable law, such provision is
enforceable;
(ee) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the 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 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, 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;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller or the current 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
control of, the current servicer 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. To the
extent there exists an escrow of funds, such 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. 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) 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;
(ll) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, of any relief requested or allowed to the Mortgagor under
the Soldiers' and Sailors' Civil Relief Act of 1940 or any similar state or
local law;
(mm) 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 who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation was not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfied 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;
(nn) Disclosure Materials. The Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans;
(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made to finance the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(pp) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could be expected to adversely affect the value or
the marketability of any Mortgaged Property or Mortgage Loan or to cause the
Mortgage Loans to prepay during any period materially faster or slower than
similar mortgage loans held by the Seller generally secured by properties in the
same geographic area as the related Mortgaged Property;
(qq) No Defense to Insurance Coverage. The Seller has caused 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 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 applicable, special hazard insurance
policy, or bankruptcy bond (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;
(rr) Escrow Analysis. With respect to each Mortgage for which taxes
and insurance are being escrowed, the current 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;
(ss) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
related servicer has reported the Mortgagor credit files monthly to each of the
three credit repositories in a timely manner on a monthly basis;
(tt) 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 from furnishing
the same to any subsequent or prospective purchaser of such Mortgage;
(uu) Leaseholds. If a 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 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;
(vv) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty unless otherwise set forth on the Mortgage Loan Schedule
hereof, enforceable under the terms of the related Mortgage Note and originated
in compliance with all applicable federal, state, and local laws. No Mortgage
Loan has a Prepayment Penalty period in excess of five years;
(ww) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," "covered" or
"predatory" loans under, any other applicable state, federal or local law.
(xx) 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 a single-premium credit life insurance policy;
(yy) 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;
(zz) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(aaa) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or an Illinois land trust or a "living trust" and such "living
trust" is in compliance with Xxxxxx Mae guidelines for such trusts;
(bbb) Recordation. Each original Mortgage was recorded and, except
for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ccc) FICO Scores. Except as permitted by the Underwriting
Guidelines, each Mortgagor has a non-zero FICO score;
(ddd) 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");
(eee) Georgia Mortgage Loans. There is no Mortgage Loan that was
funded prior to March 7, 2003 and is secured by property located in the State of
Georgia. There is no Mortgage Loan that was funded after March 7, 2003, which is
a "high-cost home loan" as defined under the Georgia Fair Lending Act;
(fff) Mortgaged Premises Located in New York State. No Mortgage Loan
(a) is secured by property located in the state of New York; (b) had an original
principal balance of $300,000 or less, and (c) has an application date on or
after April 1, 2003, the terms of which Mortgage Loan equal or exceed either the
APR or the points and fees threshold for "high-cost home loans," as defined in
Section 6-L of the New York State Banking Law; and
(ggg) Litigation. The Mortgage Loan is not subject to any
outstanding litigation for fraud, origination, predatory lending, servicing or
closing practices.
Subsection 8.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 8.01 and 8.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage, subject to Section 5, 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 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, within thirty (30) calendar days of Seller's receipt of
request from the Purchaser, repurchase such Mortgage Loan at the Repurchase
Price. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (vv), (ww), (xx) or (zz) of
Subsection 8.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price. In the event that such a breach shall involve any
representation or warranty set forth in Subsection 8.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans materially and adversely
affected thereby shall, at the Purchaser's option, be repurchased by the Seller
at the Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to
the foregoing provisions of this Subsection 8.03 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, the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller, free
and clear of any lien, charge or encumbrance suffered or incurred by the
Purchaser, and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan.
In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and the Successor Servicer and hold it harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 8.03 to cure, or
repurchase a defective Mortgage Loan and to indemnify the Purchaser as provided
in this Subsection 8.03 constitute the sole remedies of the Purchaser and the
Successor Servicer respecting a breach of the foregoing representations and
warranties. For purposes of this paragraph, "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean the Person then acting as the Successor Servicer under this Agreement and
any and all Persons who previously were "Successor Servicers" under this
Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement in the form of Exhibit K hereto recognizing the
servicer designated by the Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 8.01 and
8.02 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 8.04. Repurchase of Mortgage Loans With Early Payment
Defaults.
With respect to each Mortgage Loan, if the related Mortgagor fails
to make the first Monthly Payment due after the Cut-off Date before the date
which is 30 days after the related Due Date (the "Early Payment Default Date"),
the Seller, at the Purchaser's option exercised in its sole discretion, shall,
within thirty (30) calendar days of Seller's receipt of notice of Purchaser's
request for repurchase, repurchase such Mortgage Loan from the Purchaser at a
price equal to the Repurchase Price.
Subsection 8.05. Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
perform on-site due diligence at the premises of the Seller with respect to the
Mortgage Loans. The Seller will provide information and otherwise cooperate with
the due diligence reviews of the Purchaser, its co-investor's, its financial
partner's, and the rating agencies. The Seller shall make the legal files and
the credit files, together with any payment histories, collection histories,
bankruptcy histories, broker's price opinions, to the extent available, and any
other information with respect to the Mortgage Loans requested by the Purchaser,
available at the Seller's offices for review by Purchaser or its agents during
normal business hours before the Closing Date. The Purchaser shall have the
right to order additional broker's price opinions in its sole discretion at the
Purchaser's expense.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the documentation listed in Section 6.03 is missing or defective in
whole or in part, (b) for which the related broker's price opinion is below the
appraisal provided in connection with the origination of the related Mortgage
Loan, (c) for which the loan-to-value ratio calculated based upon the broker's
price opinion is greater than 100%, (d) which does not conform to the Seller's
underwriting guidelines, (e) which does not conform to the terms of the Purchase
Price and Terms Letter or is in breach of the representations and warranties set
forth in this Purchase Agreement, (f) that is not securitizable in the
reasonable opinion of the Purchaser, or (g) which does not conform to the terms
of any applicable federal, state, or local law or regulation. The Purchaser
shall use its best efforts to notify the Seller of any such rejected Mortgage
Loan immediately upon discovery.
The fact that the Purchaser has conducted or failed to conduct any
partial or complete examination of the files shall not affect the Purchaser's
(or any of its successor's) rights to demand repurchase or other relief for
breach of Mortgage Loan representations and warranties, missing or defective
documents or as otherwise provided in this Agreement; provided, however, that
Purchaser may not demand repurchase or other relief or remedy on the basis that
a Mortgage Loan examined by Purchaser or its designee prior to purchase does not
comply with the Underwriting Guidelines.
SECTION 9. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date or such
later date on which the Purchaser has identified to the Seller
the final list of Mortgage Loans the Purchaser desires to
purchase, the Seller shall deliver to the Purchaser via
electronic medium a Mortgage Loan Schedule acceptable to the
Purchaser;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all Closing Documents
as specified in Section 10 of this Agreement, in such forms as
are agreed upon and reasonably acceptable to the Purchaser,
duly executed by all signatories other than the Purchaser as
required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required hereunder; and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account(s) designated by the Seller.
SECTION 10. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Interim Servicing Agreement;
3. the 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. a Custodian's Certification, as required under this Agreement;
5. an Officer's Certificate, in the form of Exhibit E hereto with respect to
the Seller, including all attachments thereto;
6. an Opinion of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit F hereto ("Opinion of Counsel of the
Seller");
7. a Security Release Certification, substantially in the form of Exhibit G
or H, 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; and
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 Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present
name, if applicable.
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 11. Costs.
The Purchaser shall pay its due diligence fees the fees and expenses
of its counsel and the ongoing fees of its document custodian. All servicing
fees incurred prior to the Closing Date (other than servicing fees to be netted
from payments collected for the account of the Purchaser), and all costs and
expenses incurred in connection with the one-time transfer of the Mortgage
Loans, including the fees to transfer files and prepare
assignments/endorsements, all initial recording fees, if any, for the
assignments of mortgage for all Mortgage Loans not recorded in the name of MERS,
and all fees, if any, for transferring record ownership on the MERS system of
Mortgage Loans recorded in the name of MERS, the costs associated with clearing
exceptions, (including costs to record intervening assignments and any existing
assumption and modification agreements), together with the fees and expenses of
Seller's counsel, shall be payable by the Seller.
SECTION 12. 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 Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) one or more third party purchasers in one or more Whole Loan
Transfers; or
(ii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to use its
reasonable best efforts to cooperate with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due diligence procedures;
(2) to restate as of the Reconstitution Date for the benefit of the Purchaser
and the Successor Servicer, the same representations and warranties as to the
Mortgage Loans as set forth herein, but modified, if necessary, to reflect
changes due to events that may have occurred since the Closing Date (including
events which occur after the Closing Date which are reasonably unknown to the
Seller), and (3) to execute, deliver and perform a pooling and servicing
agreement or other agreement in connection with such Reconstitution setting
forth such restated representations and warranties and the remedies for breach
of same (which remedies will be the same as those set forth herein) (a
"Reconstitution Agreement"). The Seller shall use its reasonable best efforts to
provide to such master servicer or issuer, as the case may be, and any other
participants or purchasers in such Reconstitution: (i) any and all information
and appropriate verification of information which may be reasonably available to
the Seller or its affiliates, whether through letters of its auditors and
counsel or otherwise, as the Purchaser or any such other participant shall
request (provided, if the Seller is required to engage a third party service
provider to fulfill a Purchaser request pursuant to this subsection, the
Purchaser shall reimburse the Seller for any reasonable out-of-pocket costs
incurred by the Seller with respect to such service provider); (ii) delivering
an opinion of counsel as to customary corporate matters (which may be from
in-house counsel) in form and substance reasonably satisfactory to the Seller
and the Purchaser if requested by the Purchaser; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement required by the
Purchaser or any such participant (provided, that such agreement shall set forth
an indemnity substantially similar to that set forth in this paragraph).
Moreover, the Seller agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution Agreements. 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 regarding the
Seller, the Mortgage Loans or the Underwriting Guidelines which is 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.
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 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold it 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 13.01) and related reasonable costs, judgments,
and any other reasonable 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 or any breach of any of Seller's
representations, warranties or covenants set forth in this Agreement, and to
perform its duties in strict compliance with the terms of any Reconstitution
Agreement entered into pursuant to Section 12.
Subsection 13.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 14. Financial Statements.
Financial information regarding the Seller may be provided to
prospective purchasers for a period of two (2) years following the Closing Date;
provided, however, that such information will be limited to the publicly
available audited financial statements of the Seller.
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 15. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the 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 Mortgage Loans otherwise
acceptable to the Purchaser on or before the Closing Date. Upon the consummation
of the transactions contemplated by this Agreement, the Seller hereby grants to
the Purchaser a lien on and a continuing security interest in each Mortgage Loan
and each document and instrument evidencing each such Mortgage Loan to secure
the performance by the Seller of its obligations under the Purchase Price and
Terms Agreement, and the Seller agrees that it shall hold such Mortgage Loans in
custody for the Purchaser subject to the Purchaser's (i) right to reject any
Mortgage Loan under the terms of this Agreement and to require another Mortgage
Loan to be substituted therefor, and (ii) obligation to pay the Purchase Price
for the Mortgage Loans. Subject to Subsection 8.03, all rights and remedies of
the Purchaser under this Agreement are distinct from, and cumulative with, any
other rights or remedies under this Agreement or afforded by law or equity and
all such rights and remedies may be exercised concurrently, independently or
successively.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Accredited Home Lenders, Inc.
000000 Xxxxxx xx Xxxxxxx, #000
Xxx Xxxxx, XX 00000
Attention: Director of Operations
Telephone: 000-000-0000
Fax: 000-000-0000
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
00xx Xxxxx
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 17. Severability Clause.
Any part, provision, representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes and accounting purposes as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. Except as set forth under Section 13.02 above, 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, with written notice to the Seller. There shall be no
limitation on the number of assignments or transfers allowable by the Purchaser
with respect to the Mortgage Loans and this Agreement. In the event the
Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser's obligations hereunder, the Seller acknowledges and agrees to look
solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed. The Purchaser shall deliver written notice to the Seller
of any such assumption of the Purchaser's obligations and upon delivery thereof
the Purchaser shall be relieved from any liability to the Seller with respect to
such obligations. The Successor Servicer shall be an intended third party
beneficiary of this Agreement to the same extent as if it were a party hereto,
and shall have the right to enforce the provisions of this Agreement.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, for Mortgage Loans which
are not registered with MERS, each of the Assignments of Mortgage is subject to
recordation in the appropriate public offices for real property records in the
county or other comparable jurisdiction in which the related Mortgaged Property
is situated, 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 28. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action 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 for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the Closing Date and the Seller shall take no action to
undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any affiliate
of the Seller which are directed to the general public at large, including,
without limitation, mass mailing based on commercially acquired mailing lists,
newspaper, internet (other than targeted e-mail) radio and television
advertisements shall not constitute solicitation under this Section 28.
SECTION 29. Confidentiality.
The Seller and Purchaser understand and agree that this Agreement,
any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with any Reconstitution, and
any offering circulars or other disclosure documents produced in connection with
any Reconstitution are confidential and proprietary to the Purchaser or Seller,
and the Seller and Purchaser agree to hold such documents confidential and not
to divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under this Agreement, (b) to
the extent such information enters into the public domain other than through the
wrongful act of the Seller or the Purchaser, as the case may be, (c) as is
necessary in working with legal counsel, rating agencies, auditors, agents,
taxing authorities or other governmental agencies or (d) the federal income tax
treatment of the transactions hereunder, any fact relevant to understanding the
federal tax treatment of the transactions hereunder, and all materials of any
kind (including opinions or other tax analyses) relating to such federal income
tax treatment; provided that the Seller may not disclose the name of or
identifying information with respect to Purchaser or any pricing terms or other
nonpublic business or financial information that is unrelated to the purported
or claimed federal income tax treatment of the transactions hereunder and is not
relevant to understanding the purported or claimed federal income tax treatment
of the transactions hereunder. Notwithstanding the foregoing, the Seller may
disclose (i) in its periodic public filings the Purchaser's name and the total
dollar amount of Mortgage Loans purchased by the Purchaser during the related
period and (ii) the Purchaser's identity and the Purchase Price in connection
with obtaining the release of the liens of the Seller's warehouse lenders.
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 and the Purchaser each 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 OTHER PARTY 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.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:_______________________________
Name:
Title:
ACCREDITED HOME LENDERS, INC.
(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. 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 Mortgage with evidence of recording thereon;
(c) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(d) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(e) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or to MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon;
(f) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a copy of the related policy
binder, preliminary report or commitment for title; and
(g) Any security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
If in connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered an original document with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such document has been delivered for recordation or because such document
has been lost or because such public recording office retains the original
recorded document, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such document, together with (i) in the case of a
delay caused by the public recording office, a copy of such document certified
by an Authorized Signatory of the Seller (or certified by the title company,
escrow agent, or closing attorney) to be a true and correct copy of such
document dispatched to the appropriate public recording office for recordation,
and the original recorded document will be promptly delivered to the Custodian
upon receipt thereof by the Seller; or (ii) in the case of a document where a
public recording office retains the original recorded document or in the case
where a document is lost after recordation in a public recording office, a copy
of such document certified by such public recording office to be a true and
complete copy of the original recorded document.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(b) Evidence of the original hazard insurance policy and, if
required by law, flood insurance policy.
(c) Residential loan application.
(d) Mortgage Loan closing statement.
(e) All applicable verification of employment and income except for
Mortgage Loans originated under a Limited Documentation Program.
(f) Verification of acceptable evidence of source and amount of
downpayment, if applicable.
(g) Credit report on the Mortgagor.
(h) Residential appraisal report.
(i) Photograph of the Mortgaged Property.
(j) Survey of the Mortgaged Property, if any.
(k) 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.
(l) All required disclosure statements (other than the 3-day
packages, copies of which shall be retained by the Seller and made available
upon request).
(m) If available, termite report, structural engineer's report,
water potability and septic certification.
(n) Sales contract, if it is a purchase transaction.
(o) 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.
(p) The original power of attorney, if applicable, with evidence of
recording thereon, or a certified copy thereof.
Exhibit C
EXHIBIT C
MORTGAGE LOAN SCHEDULE FIELDS
(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) a code indicating whether the Mortgage Loan is secured by a
leasehold estate;
(7) 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;
(8) with respect to First Lien Loans, the LTV at the origination;
(9) with respect to Second Lien Loans, the CLTV at the origination;
(10) with respect to Second Lien Loans, the outstanding principal
balance of the senior mortgage loan;
(11) a code indicating whether the Mortgage Loan is a piggyback
loan:
(12) the Mortgage Interest Rate as of the Cut-off Date;
(13) 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;
(14) the stated maturity date;
(15) the amount of the Monthly Payment as of the Cut-off Date;
(16) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(17) the original principal amount of the Mortgage Loan;
(18) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(19) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(20) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(21) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(22) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(23) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(24) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap at the initial interest rate adjustment date;
(25) with respect to the Mortgagor, monthly income;
(26) Current LTV;
(27) with respect to Adjustable Rate Mortgage Loans, the next
interest rate adjustment date;
(28) first time homebuyer flag;
(29) a code indicating the race of the Mortgagor;
(30) a code indicating the gender of the Mortgagor;
(31) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(32) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien, Second Lien and/or balloon Mortgage Loan);
(33) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(34) a code indicating the documentation style (i.e. full,
alternative or reduced);
(35) the loan credit classification (as described in the
Underwriting Guidelines);
(36) whether such Mortgage Loan provides for a Prepayment Penalty;
(37) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(38) a description of the Prepayment Penalty, if applicable (which
may be delivered separately);
(39) the Mortgage Interest Rate as of origination;
(40) the credit risk score (FICO score) at origination;
(41) the date of origination;
(42) the Mortgage Interest Rate adjustment period;
(43) the Mortgage Interest Rate adjustment percentage;
(44) the Mortgage Interest Rate floor;
(45) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(46) the Current CLTV;
(47) the Due Date for the first Monthly Payment;
(48) the original Monthly Payment due;
(49) with respect to the related Mortgagor, the debt-to-income
ratio;
(50) the Appraised Value of the Mortgaged Property;
(51) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(52) the MERS Identification Number; and
(53) with respect to Adjustable Rate Mortgage Loans, the Index.
With respect to the Mortgage Loans in the aggregate:
(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.
Exhibit D
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Exhibit E
EXHIBIT E
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Executive/Assistant] [Vice] President of ________________ Accredited Home
Lenders, Inc., 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 agreements such as the
Mortgage Loan Purchase and Warranties Agreement, dated as of June 1, 2003,
by and between Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the
Company (the "Purchase Agreement"), and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification.
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 Purchase Agreement, the Interim Servicing Agreement or the sale
of the mortgage loans or the consummation of the transactions contemplated
by such Agreement; 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 Purchase Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is subject, or
any statute or order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
7. Except as disclosed by the Company to the Purchaser and attached
to the Purchase Agreement as Exhibit L, there is no action, suit,
proceeding or investigation pending or to the best of my knowledge,
threatened against the Company which, in my judgment, either in any one
instance or in the aggregate, is likely to 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 Purchase Agreement, or the
mortgage loans or of any action taken or to be taken in connection with
the transactions contemplated hereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered before 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, 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 Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Executive/Assistant] [Vice] President
I, ________________________, an [Assistant] Secretary of
______________ Accredited Home Lenders, Inc., hereby certify that ____________
is the duly elected, qualified and acting [Executive/Assistant] [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
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit F
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to Accredited Home Lenders, Inc. (the "Company"), with respect to
certain matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement by and
between the Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated
as of June 1, 2003 (the "Purchase Agreement") which sale is in the form of whole
loans. Capitalized terms not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the 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].
2. The Company has the power to engage in the transactions
contemplated by the Purchase Agreement and all requisite
power, authority and legal right to execute and deliver the
Purchase Agreement and to perform and observe the terms and
conditions of the Purchase Agreement.
3. The Purchase Agreement 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 certain of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Purchase Agreement.
5. The Company has been duly authorized to allow certain of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and any 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 by the with the Purchase Agreement and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Purchase Agreement 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 Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or 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. Except as previously disclosed by the Company to the Purchaser
and amended to the Purchase Agreement as Exhibit L, 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
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 is sufficient to
fully transfer to the Purchaser all right, title and interest
of the Company thereto as noteholder and mortgagee.
10. I have reviewed the form of Assignment of Mortgage for a
Mortgage Loan secured by a Mortgaged Property located in the
State of California, and upon the completion of all blanks in
such form with appropriate information, such form would be
acceptable for recording in the State of California. The
endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of any Assignments of Mortgage,
the transfer to the Purchaser, or its designee, in the MERS
System of beneficial ownership of each MERS Designated
Mortgage Loan, and the delivery of the original endorsed
Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser or its designee 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.
I am admitted to the bar of the State of California, and I express
no opinion as to the laws of any other jurisdiction except as to matters that
are governed by federal law. 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. I
make no undertaking to supplement or update this opinion if, after the date
hereof, facts or circumstances come to my attention or changes in the law occur
which could affect such opinion.
Very truly yours,
________________________________________
[Name]
[Assistant] General Counsel
Exhibit G
EXHIBIT G
INTENTIONALLY OMITTED
Exhibit H
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_________ in immediately available funds
in accordance with wiring instructions separately provided, the financial
institution named below hereby relinquishes any and all right, title and
interest it may have in the Mortgage Loans identified in the attached schedule
to be purchased by Xxxxxxx Xxxxx Mortgage Company from Accredited Home Lenders,
Inc. (the "Company"), and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees, as of the
date and time of the sale of such Mortgage Loans to Xxxxxxx Sachs Mortgage
Company.
Name and Address of Financial Institution
_________________________________
(name)
_________________________________
(Address)
By:______________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxxx Xxxxx Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxxx Sachs Mortgage Company, the security interests in the
Mortgage Loans released by the above-named financial institution comprise all
security interests relating to or affecting any and all such Mortgage Loans. The
Company warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
________________________________________
By:_____________________________________
Title:__________________________________
Date:___________________________________
Exhibit I
EXHIBIT I
UNDERWRITING GUIDELINES
Exhibit J
EXHIBIT J
[INTENTIONALLY OMITTED]
Exhibit K
EXHIBIT K
SERVICER ACKNOWLEDGMENT
As of [_________]
Accredited Home Lenders, Inc.
[Street]
[City, State]
Re: Letter Agreement in connection with the purchase by Xxxxxxx Xxxxx
Mortgage Company (the "Purchaser") and the sale by Accredited Home
Lenders, Inc. (the "Company") of mortgage loans pursuant to that
certain Mortgage Loan Purchase and Warranties Agreement (the
"Agreement"), dated as of June 1, 2003, by and between the Company
and the Purchaser
Ladies and Gentlemen:
In connection with the above-referenced transaction, and in
consideration of the mutual agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchaser and the Company hereby agree as follows:
1. Unless otherwise specified in this letter agreement, all capitalized terms
herein shall have the meaning as provided in the Agreement.
2. The Purchaser hereby requests, and the Company hereby acknowledges, that
[SERVICER] shall be the "Successor Servicer" under the agreement.
3. This letter may be executed in any number of counterparts each of which
shall constitute one and the same instrument, and either party hereto may
execute this letter by signing any such counterpart.
[the remainder of this page intentionally left blank]
4. This letter shall be deemed in effect when a fully executed counterpart
thereof is received by the Company in the State of New York and shall be
deemed to have been made in the State of New York. This letter 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 laws of the State of New York except to
the extent preempted by Federal law.
Very truly yours,
XXXXXXX XXXXX MORTGAGE COMPANY
By:_____________________________________
Name:___________________________________
Title:__________________________________
Accepted and Agreed:
ACCREDITED HOME LENDERS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Exhibit L
EXHIBIT L
LITIGATION
EXHIBIT R
PMI MORTGAGE LOAN SCHEDULE
(On file with Trustee)
EXHIBIT S
MGIC PMI POLICY
(On file with Trustee)
EXHIBIT T
RADIAN PMI POLICY
(On file with Trustee)
