EXHIBIT 4
GS MORTGAGE SECURITIES CORP.,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer,
OCWEN FEDERAL BANK FSB,
Servicer,
AMERIQUEST MORTGAGE COMPANY,
a Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2004
------------------------------------------------------------
GSAMP TRUST 2004-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2004-HE2
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
Servicer and Ameriquest.....................................
Section 2.04 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.............
Section 2.08 Enforcement of First NLC Agreements.........................
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..............
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.................
Section 4.06 Certain Matters Regarding the Class A-1 Certificate
Insurer.....................................................
Section 4.07 Claims Upon the Class A-1 Certificate Insurance Policy;
Policy Payments Account.....................................
Section 4.08 Effect of Payments by Class A-1 Certificate Insurer;
Subrogation.................................................
Section 4.09 Notices to Class A-1 Certificate Insurer....................
Section 4.10 Trustee To Hold Class A-1 Certificate Insurance Policy......
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.............................
Section 5.07 Rights of the Class A-1 Certificate Insurer to Exercise
Rights of Class A-1 Certificateholders......................
Section 5.08 Class A-1 Certificate Insurer Default.......................
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......................................................
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 Agreement.......................................
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 Third Party Beneficiary.....................................
Section 10.12 Waiver of Jury Trial........................................
Section 10.13 Limitation of Damages.......................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Countrywide, as Servicer
Schedule III Representations and Warranties of Chase, as Servicer
Schedule IV Representations and Warranties of Ocwen, as Servicer
Schedule V Representations and Warranties of Ameriquest as to the Ameriquest
Mortgage Loans
Schedule VI Representations and Warranties of Ameriquest
EXHIBITS
Exhibit A-1 Form of Class A, Class M and Class B Certificates
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 First NLC Purchase Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2004, is
among GS MORTGAGE SECURITIES CORP., a Delaware corporation (the "Depositor"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership
("Countrywide"), CHASE MANHATTAN MORTGAGE CORPORATION, a New Jersey corporation
("Chase"), OCWEN FEDERAL BANK FSB, a federally chartered savings bank ("Ocwen"),
AMERIQUEST MORTGAGE COMPANY, a Delaware corporation ("Ameriquest"), and DEUTSCHE
BANK NATIONAL TRUST COMPANY, 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). As further described herein, the Class X
Interest and each Class of Principal Certificates (other than the right of each
Class of Principal Certificates to receive Basis Risk Carry Forward Amounts)
represents ownership of a regular interest in a 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. The Lower-Tier REMIC shall hold as assets the assets
described in the definition of "Trust Fund" herein (other than the Prepayment
Premiums and the Excess Reserve Fund Account). Each such Lower-Tier Regular
Interest is hereby designated as a regular interest in the Lower-Tier REMIC. The
Class LT-A-1, Class LT-A-2, Class LT-A-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-B-3 and Class LT-B-4 Interests are hereby designated the LT Accretion
Directed Classes (the "LT Accretion Directed Classes").
The Class X Certificates represent beneficial ownership of the Class
X Interest, the Excess Reserve Fund Account and the Cap Agreements, the Class P
Certificates represent beneficial ownership of the Prepayment Premiums, and each
Principal Certificate represents a beneficial ownership of a regular interest in
a Trust REMIC and the right to receive Basis Risk Carry Forward Amounts, which
portions of the Trust Fund shall be treated as a grantor trust.
Lower-Tier REMIC
Lower-Tier Lower-Tier Interest Corresponding
Class Designation Rate Initial Lower-Tier Principal Amount Upper-Tier REMIC Class
----------------- ---- ----------------------------------- ----------------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-2 (1) 1/2 initial Class Certificate Balance of A-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-3A (1) 1/2 initial Class Certificate Balance of A-3A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-3B (1) 1/2 initial Class Certificate Balance of A-3B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-3C (1) 1/2 initial Class Certificate Balance of A-3C
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate Balance of B-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus1/2
Overcollateralized Amount, less aggregate
initial Lower-Tier Principal Amount of
Class LT-Group I, Class LT-Group II and
Class LT-Group III
Class LT-Group I (2) .001% of the aggregate Stated Principal
Balance of the Group I Mortgage Loans (5)
Class LT-Group II (3) .001% of the aggregate Stated Principal
Balance of the Group II Mortgage Loans (5)
Class LT-Group III (4) .001% of the aggregate Stated Principal
Balance of the Group III Mortgage Loans
(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 (without
reduction for the Premium Rate).
(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) 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 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 Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and will be accrued and added to the Lower-Tier
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower-Tier Principal Amount of the Class LT-Accrual Interest
may not exceed interest accruals for such Distribution Date for the Class
LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class LT-Accrual
Interest for such Distribution Date, the excess for such Distribution Date
(accumulated with all such excesses for all prior Distribution Dates) will be
added to any increase in the Overcollateralized Amount for purposes of
determining the amount of interest accrual on the Class LT-Accrual Interest
payable as principal on the LT-Accretion Directed Classes on the next
Distribution Date pursuant to the first sentence of this paragraph. All payments
of scheduled principal and prepayments of principal generated by the Mortgage
Loans or paid under the Class A-1 Certificate Insurance Policy 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-Group I Interest, the Class LT-Group II
Interest and the Class LT-Group III Interest each from the related Loan Group so
that their respective Lower-Tier Principal Amounts (computed to at least eight
decimal places) are equal to 0.001% of the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group and (ii) the remainder to the Class
LT-Accrual Interest.
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 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-1 (1) $ 284,714,000 Class A-1(10)
Class A-2 (2) $ 236,934,000 Class A-2(10)
Class A-3A (3) $ 117,719,000 Class A-3A(10)
Class A-3B (4) $ 45,371,000 Class A-3B(10)
Class A-3C (5) $ 32,809,000 Class A-3C(10)
Class M-1 (6) $ 58,510,000 Class M-1(10)
Class M-2 (6) $ 31,750,000 Class M-2(10)
Class M-3 (6) $ 13,607,000 Class M-3(10)
Class M-4 (6) $ 13,607,000 Class M-4(10)
Class B-1 (6) $ 13,607,000 Class B-1(10)
Class B-2 (6) $ 9,072,000 Class B-2(10)
Class B-3 (6) $ 9,071,000 Class B-3(10)
Class B-4 (7) $ 20,411,000 Class B-4(10)
Class X (8) (8) Class X(8)
Class UT-R (9) Class R
(1) The Class A-1 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 0.290%, (ii) the Loan Group
I Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.580 %, (ii) the Loan Group I Cap and (iii)
the WAC Cap.
(2) 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 0.360%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.720%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) 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 0.180%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.360%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(4) 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 0.350%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.700%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(5) 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 0.580%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 1.160%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(6) The Class M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2 and
Class B-3 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 0.650%, 1.100%, 1.250%, 1.450%, 1.900%,
2.150% and 3.500%, respectively, and (ii) the WAC Cap or (b) after the
Optional Termination Date, the lesser of (i) LIBOR plus 0.975%, 1.650%,
1.875%, 2.175%, 2.850%, 3.225% and 5.250%, respectively, and (ii) the WAC
Cap.
(7) The Class B-4 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 lesser of (i) 5.000% and (ii) the WAC Cap or (b)
after the Optional Termination Date, the lesser of (i) 5.500% and (ii) the
WAC Cap
(8) The Class X Interest has an initial principal balance of $19,957,208.94,
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 the Class LT Accrual Interest, Class LT-Group
I, Class LT-Group II and Class LT-Group III 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; provided, however, that if
the Pass-Through Rate of the Class A-1 Interest is calculated by reference
to clause (a)(i) (or clause (b)(i) after the Optional Termination Date) of
its Pass-Through Rate, the cap with respect to the Class LT-A-1 Interest
shall be increased by the lesser of (A) the Premium Rate and (B) the
excess of (1) the lesser of (I) clause (a)(ii) (or clause (b)(ii) after
the Optional Termination Date) of such Class's Pass-Through Rate and (II)
clause (a)(iii) (or clause (b)(iii) after the Optional Termination Date)
of such Class's Pass-Through Rate over (2) the amount in clause (a)(i) (or
clause (b)(i) after the Optional Termination Date) thereof for purposes of
the calculation. 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
Principal Certificates. Such rights of the Class X Certificateholders and
Principal Certificateholders shall be treated as held in a portion of the
Trust Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(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.
The minimum denomination for each Class of Offered and Fixed Rate
Certificates will be $50,000 initial Certificate Balance, with integral
multiples of $1 in excess thereof except that one Certificate in each Class may
be issued in a different amount. The minimum denomination for (a) 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.
It is expected that each Class of Certificates will receive its
final distribution of principal and/or interest on or prior to the Final
Scheduled Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class A-1, Class X-0,
Xxxxx X-0X, Xxxxx X-0X and Class A-3C
Certificates.
Delay Certificates........... The Fixed Rate Certificates.
ERISA-Restricted
Certificates............... Class B-4 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.
Fixed Rate Certificates...... Class B-4 Certificates.
Non-Delay Certificates....... Class A, Class X and
Subordinated Certificates other than the Class B-4
Certificates.
LIBOR Certificates........... The Class A Certificates and the Subordinated
Certificates other than the Class B-4
Certificates.
Offered Certificates......... All Classes of Certificates other than the
Private Certificates.
Physical Certificates........ Class X, Class P and Class R Certificates.
Principal Certificates....... The LIBOR Certificates and the Fixed Rate
Certificates.
Private Certificates......... Class B-4, Class X, Class P and Class R
Certificates.
Rating Agencies.............. Standard & Poor's and Xxxxx'x.
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, Class B-2, Class B-3 and Class B-4
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 Mortgage Loan
serviced by Countrywide or Ocwen, those mortgage servicing practices set forth
in Section 3.01 of this Agreement; and (b) with respect to any Mortgage Loan
serviced by Chase, 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,
the Policy Payments Account, any Escrow Account or the Excess Reserve Fund
Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02. The term "Accrued
Certificate Interest" as used in the Class A-1 Certificate Insurance Policy has
the same meaning as the term "Accrued Certificate Interest Distribution Amount"
used herein.
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 (and solely for the purposes of determining the Pass-Through
Rate on the Class A-1 Certificates, net of the Premium 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.
Advance Reimbursement Amounts: As defined in Section 10.07.
Advancing Person: The Person to whom any 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.
Ameriquest: Ameriquest Mortgage Company, a Delaware corporation, and
its successors in interest.
Ameriquest Mortgage Loan: Each Mortgage Loan purchased by the
Purchaser pursuant to the Ameriquest Purchase Agreement and identified as an
"Ameriquest Mortgage Loan" on the Mortgage Loan Schedule.
Ameriquest Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of April 26, 2004, by and between Ameriquest and
the Purchaser, solely insofar as the Ameriquest Purchase Agreement relates to
the Ameriquest Mortgage Loans.
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
Principal Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: (a) With respect to any First Lien Mortgage Loan,
(i) in the case of a purchase, the least of the sale price of the related
Mortgaged Property, its appraised value or its review appraisal value (as
determined pursuant to the applicable Underwriting Guidelines) at the time of
sale, or (ii) in the case of a refinancing or modification of a Mortgage Loan,
the appraised value of the related Mortgaged Property at the time of the
refinancing or modification, and (b) with respect to any Second Lien Mortgage
Loan, the lesser of (i) the appraised value of the related Mortgaged Property at
the time the Second Lien Mortgage Loan was originated, or (ii) the sales price
of the related Mortgaged Property at the time of origination; provided, however,
that in the case of a refinanced Mortgage Loan, such value is based solely upon
the appraisal made at the time of origination of such refinanced Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received 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 received 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 (excluding Prepayment Premiums)
received during the related Prepayment Period together with all Compensating
Interest paid by the applicable Servicer in connection therewith; (iv) all
amounts received with respect to such Distribution Date as the Substitution
Adjustment Amount or Repurchase Price in respect of a Deleted Mortgage Loan or a
Mortgage Loan repurchased by Ameriquest, First NLC, the Purchaser or the
Depositor as of such Distribution Date; and (v) the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
9.01, reduced by (y) all amounts in reimbursement for P&I Advances and Servicing
Advances previously made with respect to the Mortgage Loans, and 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.
Back-up Report Delivery Date: As defined in Section 4.03(f).
Back-up Reports: As defined in Section 4.03(f).
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Cap Agreement: The interest rate cap agreement, dated
July 20, 2004, between the Purchaser and the Cap Provider, and its successors in
interest, for the benefit of the Offered Certificates.
Basis Risk Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal Certificates
is based upon a Loan Group Cap or the WAC Cap, as applicable, the excess of (i)
the amount of interest such Class of Principal 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, in the case of the
LIBOR Certificates, or at the applicable Fixed Rate, in the case of the Fixed
Rate Certificates for such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Principal Certificate
on such Distribution Date, based upon its Pass-Through Rate, as capped by the
applicable Loan Group Cap or the WAC Cap, as the case may be, 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, in the case of
the LIBOR Certificates, or at the applicable Fixed Rate, in the case of the
Fixed Rate Certificates, for such Class of Certificates for such Distribution
Dates.
Basis Risk Interest Rate Cap Payment: For the first 35 Distribution
Dates, the amount, if any, equal to the product of (a) the excess, if any, of
one-month LIBOR (as determined pursuant to the Basis Risk Cap Agreement) as of
the related reset date over a cap strike rate set forth on the interest rate cap
agreement schedule attached to the Basis Risk Cap Agreement, up to 9.62% per
annum, (b) the interest rate cap notional amount for such date set forth on such
schedule and (c) the actual number of days in the applicable Interest Accrual
Period divided by 360.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
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, Arizona, Texas 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 Basis Risk Cap Agreement and Class B Cap
Agreement.
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, and reduced by the amount of any Applied
Realized Loss Amounts previously allocated to such Class of Subordinated
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Subordinated Certificates that have been
previously reduced by Applied Realized Loss Amounts will be increased, in order
of seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class X, 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.
Chase Serviced Mortgage Loan: Each Mortgage Loan with respect to
which Chase is listed as Servicer on the Mortgage Loan Schedule.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Class A-1 Certificates, the Class A-2
Certificates or the Class A-3 Certificate Group, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: For any Distribution Date,
the percentage equivalent of a fraction, determined as follows: (A) with respect
to the Class A-1 Certificates, a fraction, the numerator of which is the portion
of the Principal Remittance Amount for such 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 such
Distribution Date; (B) with respect to the Class A-2 Certificates, a fraction,
the numerator of which is the portion of the Principal Remittance Amount for
such 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 such Distribution Date; and (C) with respect to
the Class A-3 Certificate Group, a fraction, the numerator of which is the
portion of the Principal Remittance Amount for such 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 such
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) 58.20% (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 A-1 Certificates: All Certificates bearing the class
designation of "Class A-1."
Class A-1 Certificate Insured Amount: With respect to each
Distribution Date, the distribution to be made to Holders of Class A-1
Certificates on such Distribution Date, in an aggregate amount equal to the sum
of (a) the Accrued Certificate Interest Distribution Amount on the Class A-1
Certificates on such Distribution Date, (b) any Class A-1 Principal Parity
Amount, and (c) if such Distribution Date is the Final Scheduled Distribution
Date, the Class Certificate Balance of the Class A-1 Certificates, to the extent
unpaid on the Final Scheduled Distribution Date (without duplication of amounts
included pursuant to clause (b) above), after giving effect to all payments,
including any Class A-1 Principal Parity Amounts, or earlier termination of the
Trust pursuant to the terms of this Agreement, in each case in accordance with
the original terms of the Class A-1 Certificates when issued and without regard
to any amendment or modification of the Class A-1 Certificates or this Agreement
except amendments or modifications to which the Class A-1 Certificate Insurer
has given its prior written consent. The Class A-1 Certificate Insured Amount
shall not include, nor shall coverage be provided under the Class A-1
Certificate Insurance Policy in respect of, any taxes, withholding or other
charge imposed by any governmental authority due in connection with the payment
of any Class A-1 Certificate Insured Amount to a Holder, any Relief Act Interest
Shortfall, any Prepayment Interest Shortfalls to the extent not covered by a
Servicer, or any Basis Risk Carry Forward Amounts that may be incurred or that
may be distributable to the Class A-1 Certificates.
Class A-1 Certificate Insurance Policy: The Financial Security
Assurance Inc. Policy No. 51542-N, and all endorsements thereto dated the
Closing Date, issued by the Class A-1 Certificate Insurer for the benefit of the
Class A-1 Certificateholders.
Class A-1 Certificate Insurer: Financial Security Assurance Inc., a
New York stock insurance company organized and created under the laws of the
State of New York, and its successors in interest.
Class A-1 Certificate Insurer Default: The existence and continuance
of any of the following:
(a) the Class A-1 Certificate Insurer shall have failed to make a
required payment when due under the Class A-1 Certificate Insurance Policy
in accordance with its terms;
(b) the Class A-1 Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State Insurance
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a
general assignment for the benefit of its creditors or (iii) had an order
for relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Class A-1 Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Class A-1 Certificate Insurer (or the taking of possession
of all or any material portion of property of the Class A-1 Certificate
Insurer).
Class A-1 Principal Parity Amount: With respect to any Distribution
Date, the excess of (i) the aggregate Class Certificate Balance of the Class A-1
Certificates on such Distribution Date, as reduced by any Class A-1 Principal
Parity Amounts paid by the Class A-1 Certificate Insurer prior to such
Distribution Date and after taking into account any reduction of such Class
Certificate Balance on such Distribution Date from sources other than the Class
A-1 Certificate Insurance Policy, over (ii) the aggregate Stated Principal
Balances of the Group I Mortgage Loans for such Distribution Date. With respect
to the first Distribution Date, the Class A-1 Principal Parity Amount shall
equal zero.
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2."
Class A-3 Certificate Group: The Class A-3A Certificates, Class A-3B
Certificates and Class A-3C Certificates, collectively.
Class A-3A Certificates: All Certificates bearing the class
designation of "Class A-3A."
Class A-3B Certificates: All Certificates bearing the class
designation of "Class A-3B."
Class A-3C Certificates: All Certificates bearing the class
designation of "Class A-3C".
Class B Cap Agreement: The interest rate cap agreement, dated July
20, 2004, between the Purchaser and the Cap Provider, and its successors in
interest, for the benefit of the Class B-1 Certificates, the Class B-2
Certificates and the Class B-3 Certificates.
Class B Interest Rate Cap Payment: For the first 52 Distribution
Dates, the amount, if any, equal to the product of (a) the excess, if any, of
one-month LIBOR (as determined pursuant to the Class B Cap Agreement) as of the
related reset date over a cap strike rate set forth on the interest rate cap
agreement schedule attached to the Class B Cap Agreement, up to 8.00% per annum,
(b) the interest rate cap notional amount for such date set forth on such
schedule and (c) the actual number of class in the applicable Interest Accrual
Period divided by 360.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate 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), and (F) the Class Certificate Balance of the
Class B-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 87.10% (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."
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 such
Distribution Date over (ii) the lesser of (A) 89.10% (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 B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate 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), (G) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to that
Distribution Date, and (H) the Class Certificate Balance of the Class B-3
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 91.10% (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 B-4 Certificates: All Certificates bearing the class
designation of "Class B-4."
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M-4 Certificates (after
taking into account the distribution of the Class M-4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date, (H) the Class Certificate Balance of the Class B-3
Certificates immediately prior to such Distribution Date, and (I) the Class
Certificate Balance of the Class B-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 95.60% (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 Certificates: The Class M-1, Class M-2, Class M-3 and Class
M-4 Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount 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) 71.10%
(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."
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) 78.10% (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."
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 on such Distribution Date), and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 81.10% (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."
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) 84.10% (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."
Class R Certificates: All Certificates bearing the class designation
of "Class R."
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."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus (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: July 30, 2004.
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 the date of origination
and as to any Second Lien Mortgage Loan, the ratio, expressed as a percentage,
of (a) the sum of (i) the principal balance of the Second Lien Mortgage Loan as
of the date of origination and (ii) the principal balance as of the date of
origination of any First Lien Mortgage Loan 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 Mortgagors (excluding
any payments made upon liquidation of any 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 in the
State of California 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 0000 Xxxx Xx. Xxxxxx Xxxxx Xxxxx Xxx,
Xxxxxxxxxx 00000-0000, Attn: Trust Administration-GS04H2, facsimile no. (714)
247-6478 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-1 Class A-1 Class A-1
Class LT-A-2 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
Class LT-B-3 Class B-3 Class B-3
Class LT-B-4 Class B-4 Class B-4
N/A Class X Class X
Countrywide: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors in interest.
Cumulative Loss Percentage: As of any date of determination, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses on the First NLC Mortgage Loans serviced by Ocwen for
the period from the Cut-off Date to the date of determination and the
denominator of which is the Stated Principal Balance of the First NLC Mortgage
Loans serviced by Ocwen as of the Cut-off Date.
Cumulative Loss Trigger: A Cumulative Loss Percentage of greater
than (a) during the period from the Closing Date through the date one year after
the Closing Date, 1%, (b) during the period from the date one year after the
Closing Date through the date two years after the Closing Date, 2%, (c) during
the period from the date two years after the Closing Date through the date three
years after the Closing Date, 3%, (d) during the period from the date three
years after the Closing Date through the date four years after the Closing Date,
4%, and (e) during the period on or after the date four years after the Closing
Date, 5%.
Custodial File: With respect to each Mortgage Loan, any Mortgage
Loan Document which is delivered to the Trustee or which at any time comes into
the possession of the Trustee.
Cut-off Date: July 1, 2004.
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, whether or not
received).
Data File: As defined in Section 4.03(f).
Data File Delivery Date: As defined in Section 4.03(f).
Data Tape Information: The information provided by Ameriquest, First
NLC or the applicable Servicer as of the Cut-off Date to the Depositor setting
forth the following information with respect to each Ameriquest Mortgage Loan or
First NLC Mortgage Loan, as the case may be: (1) Ameriquest's or First NLC's, as
applicable, 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) with respect to
First Lien Mortgage Loans, the Loan-to-Value Ratio at origination, and with
respect to Second Lien Mortgage Loans, the Combined 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) with respect to Adjustable Rate Mortgage Loans, the Periodic Mortgage
Interest Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., fixed rate, adjustable rate, first lien, second lien); (22)
a code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (23) a code indicating the documentation
style (i.e., full documentation, limited documentation or stated income); (24)
the loan credit classification (as described in the Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Premium; (26) the
Prepayment Premium period of such Mortgage Loan, if applicable; (27) a
description of the Prepayment Premium, 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 date of the purchase of the Mortgage
Loan, if applicable; (32) a code indicating whether the Mortgage Loan is
assumable; (33) the Mortgage Interest Rate adjustment period; (34) the Mortgage
Interest Rate floor; (35) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (36) a code indicating whether the Mortgage
Loan has been modified; (37) the one-year payment history; (38) the Due Date for
the first Scheduled Payment; (39) the original Scheduled Payment due; (40) with
respect to the related Mortgagor, the debt-to-income ratio; (41) the Appraised
Value of the Mortgaged Property; (42) the sales price of the Mortgaged Property
if the Mortgage Loan was originated in connection with the purchase of the
Mortgaged Property; (43) whether the Mortgage Loan is covered by PMI policy and
name of insurer; (44) the MERS identification number; (45) a code indicating if
a Mortgage Loan is or has had a 30-Day Delinquency and (46) the Servicer. With
respect to the related 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(d).
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, divided by (2) the aggregate unpaid principal
balance of the First NLC Mortgage Loans, in each case serviced by Ocwen as of
the last day of the related Due Period, equals or exceeds 45.00% of the Senior
Enhancement Percentage as of the last day of the prior Due Period.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 18th
day of the calendar month in which such Distribution Date occurs or, if such day
is not a Business Day, the immediately preceding Business Day.
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 "Deutsche Bank National
Trust Company in trust for registered holders of GSAMP Trust 2004-HE2 Mortgage
Pass-Through Certificates, Series 2004-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 August 2004.
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 and
"P-1" by Moody's (and a comparable rating if another Rating Agency is specified
by the Depositor by written notice to the Servicers) 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
and the Class A-1 Certificate Insurer. 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
"Deutsche Bank National Trust Company in trust for registered holders of GSAMP
Trust 2004-HE2, Mortgage Pass-Through Certificates, Series 2004-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 and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Xxxxxx Mae: The Federal National Mortgage Association and its
successors in interest.
Xxxxxx Xxx Guides: The Xxxxxx Mae Seller's Guide and the Xxxxxx Xxx
Servicer's Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, and its successors
in interest.
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 Depositor, the Purchaser, Ameriquest or First NLC as contemplated by this
Agreement or the First NLC Agreement, as applicable), 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-1 Certificates.................................... September 2034
Class A-2 Certificates.................................... September 2034
Class A-3A Certificates................................... September 2034
Class A-3B Certificates................................... September 2034
Class A-3C Certificates................................... September 2034
Class M-1 Certificates.................................... September 2034
Class M-2 Certificates.................................... September 2034
Class M-3 Certificates.................................... September 2034
Class M-4 Certificates.................................... September 2034
Class B-1 Certificates.................................... September 2034
Class B-2 Certificates.................................... September 2034
Class B-3 Certificates.................................... September 2034
Class B-4 Certificates.................................... September 2034
Class X Certificates...................................... September 2034
Class P Certificates...................................... September 2034
Class R Certificates...................................... September 2034
First Lien Mortgage Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services, LLC, a Florida limited
liability company, and its successors in interest.
First NLC Agreements: The First NLC Purchase Agreement and the
Assignment, Assumption and Recognition Agreement, dated as of July 30, 2004,
among the Purchaser, the Depositor and First NLC, a copy of each of which,
without the mortgage loan schedule exhibits, is attached hereto as Exhibit P.
First NLC Mortgage Loan: Each Mortgage Loan purchased by the
Purchaser pursuant to a First NLC Purchase Agreement and identified as an "First
NLC Mortgage Loan" on the Mortgage Loan Schedule.
First NLC Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of March 25, 2004, by and between First NLC and
the Purchaser, solely insofar as the First NLC Purchase Agreement relates to the
First NLC Mortgage Loans.
Fixed Rate: With respect to the Fixed Rate Certificates, 5.000% per
annum on or prior to the Optional Termination Date, and 5.500% per annum
thereafter.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan purchased
pursuant to the Purchase Agreements.
Forbearance: As defined in Section 3.07(a).
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 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 Agreement: The Insurance and Indemnity Agreement, dated as
of July 1, 2004, among the Purchaser, the Depositor and the Class A-1
Certificate Insurer.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to 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). With respect to the Delay
Certificates and any Distribution Date, the calendar month preceding the month
in which such Distribution Date occurs. 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 period and each year is assumed to have
360 days. For purposes of computing interest accruals on the Delay Certificates,
each Interest Accrual Period has 30 days in such period and each year is assumed
to have 360 days.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to the Mortgage Loans in such Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
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.
Late Payment Rate: The lesser of (a) the greater of (i) the per
annum rate of interest publicly announced from time to time by XX Xxxxxx Xxxxx
Bank at its principal office in the City of New York, as its prime or base
lending rate (any change in such rate of interest to be effective on the date
such change is announced by XX Xxxxxx Chase Bank) plus 3%, and (ii) the then
applicable highest rate of interest on the Class A-1 Certificates and (b) the
maximum rate permissible under applicable usury or similar laws limiting
interest rates as determined by the Class A-1 Certificate Insurer. The Late
Payment Rate shall be computed on the basis of the actual number of days elapsed
over a year consisting of 360 days.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar deposits of leading European banks.
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 or
charged-off 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 made a Final Recovery Determination.
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 a trustee's sale, foreclosure sale or otherwise, including
any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans, the Group II Mortgage Loans
or 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 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, multiplied by 30 and divided by the actual
number of days in the related Interest Accrual Period.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of 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, multiplied by 30 and divided by the
actual number of days in the related Interest Accrual Period.
Loan Group III Cap: With respect to the Group III Mortgage Loans as
of any Distribution Date, the product of 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, multiplied by 30 and divided by the
actual number of days in the related Interest Accrual Period.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, at
any time, the ratio (expressed as a percentage) of the principal balance of the
Mortgage Loan as of the date of determination, to the Appraisal Value of the
related Mortgaged Property.
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-1, 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-B-3, Class LT-B-4,
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.
Lower-Tier Principal Amount: 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.
Market Value Change Report: A report setting forth changes in
property value of the Mortgaged Properties in a format agreed upon by the
Servicer and the Depositor.
MERS: As defined in Section 2.01.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) First
NLC 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 First NLC, in accordance with MERS Procedure Manual and (b) First NLC
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.
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, the Servicers and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
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: The information provided
by Ameriquest, First NLC or the Servicers, as applicable, as of the Cut-off Date
to the Depositor setting forth the following information with respect to each
Ameriquest Mortgage Loan or First NLC Mortgage Loan, as the case may be: (1)
Ameriquest's or First NLC's, as applicable, 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) with respect to First Lien Mortgage
Loans, the Loan-to-Value Ratio at origination, and with respect to Second Lien
Mortgage Loans, the Combined 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) with respect to Adjustable Rate Mortgage Loans, the Periodic Mortgage
Interest Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., fixed rate, adjustable rate, first lien, second lien); (22)
a code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (23) a code indicating the documentation
style (i.e., full documentation, limited documentation or stated income); (24)
the loan credit classification (as described in the Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Premium; (26) the
Prepayment Premium period of such Mortgage Loan, if applicable; (27) a
description of the Prepayment Premium, 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 date of the purchase of the Mortgage
Loan, if applicable; (32) a code indicating whether the Mortgage Loan is
assumable; (33) the Mortgage Interest Rate adjustment period; (34) the Mortgage
Interest Rate floor; (35) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (36) a code indicating whether the Mortgage
Loan has been modified; (37) the one-year payment history; (38) the Due Date for
the first Scheduled Payment; (39) the original Scheduled Payment due; (40) with
respect to the related Mortgagor, the debt-to-income ratio; (41) the Appraised
Value of the Mortgaged Property; (42) the sales price of the Mortgaged Property
if the Mortgage Loan was originated in connection with the purchase of the
Mortgaged Property; (43) whether the Mortgage Loan is covered by PMI policy and
name of insurer; (44) the MERS identification number; (45) a code indicating if
a Mortgage Loan is or has had a 30 Day Delinquency; (46) whether the Mortgage
Loan is an Ameriquest Mortgage Loan or a First NLC Mortgage Loan; (47) the
applicable Servicer for such Mortgage Loan; and (48) Loan Group. With respect to
the related 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, including all riders thereto.
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 with respect to such Distribution Date.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates.
NIM Trustee: The trustee for the NIM Securities.
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 applicable 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.
Ocwen: Ocwen Federal Bank FSB, a federally chartered savings bank,
and its successors in interest.
Ocwen Serviced Mortgage Loan: Each Mortgage Loan where Ocwen is
listed as Servicer on the Mortgage Loan Schedule.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of a
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 and the Class A-1 Certificate Insurer.
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 and the Class A-1 Certificate Insurer; 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 (unless otherwise stated in such
Opinion of Counsel) be 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.
Optional Termination Date: The date determined as follows:
(i) Countrywide (at the direction of the Majority Class X
Certificateholder (as evidenced on the records of the Registrar)) shall 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% 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);
(ii) The Class A-1 Certificate Insurer may cause the Optional
Termination Date to occur on the third Distribution Date after 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% or less of the Cut-off
Date Pool Principal Balance, provided that the Majority Class X
Certificateholder has not exercised its option in clause (i) above; and
(iii) Either Chase or Ocwen individually, or 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% or less of the Cut-off Date Pool
Principal Balance.
In the event that the Class A-1 Certificate Insurer, Chase, Ocwen
and/or Countrywide (at the direction of the Majority Class X Certificateholder)
have the right to cause the Optional Termination Date to occur at the same time,
the first Person to provide notice to exercise such right will have the right to
purchase the Mortgage Loans.
Original Purchase Date: With respect to the Ameriquest Mortgage
Loans, June 2, 2004, and with respect to the First NLC Mortgage Loans, April 29,
2004, May 10, 2004, June 15, 2004, July 15, 2004 or July 16, 2004, as
applicable.
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 cancelled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the Principal Certificates as of such Distribution Date (after giving effect
to the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the 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-1 Certificates, 0.290%; Class
A-2 Certificates, 0.360%; Class A-3A Certificates, 0.180%; Class A-3B
Certificates, 0.350%; Class A-3C Certificates, 0.580%; Class M-1 Certificates,
0.650%; Class M-2 Certificates, 1.100%; Class M-3 Certificates, 1.250%; Class
M-4 Certificates, 1.450%; Class B-1 Certificates, 1.900%; Class B-2
Certificates, 2.150%; and Class B-3 Certificates, 3.500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.580%; Class A-2 Certificates,
0.720%; Class A-3A Certificates, 0.360%; Class A-3B Certificates, 0.700%; Class
A-3C Certificates, 1.160%; Class M-1 Certificates, 0.975%; Class M-2
Certificates, 1.650%; Class M-3 Certificates, 1.875%; Class M-4 Certificates,
2.175%; Class B-1 Certificates, 2.850%; Class B-2 Certificates, 3.225%; and
Class B-3 Certificates, 5.250%.
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: 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 P-1 by Moody's and A-1+ by
S&P;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 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 Moody's and "AAAm" or "AAAm-G" by Standard & Poor's;
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.
For investments in the Distribution Account (except during the Trustee Float
Period), only the obligations or securities (or instruments which invest in the
obligations or securities) specified in clause (i) above shall constitute
Permitted Investments.
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.
Policy Payments Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.07(b) in the name of the Trustee
for the benefit of the Class A-1 Certificateholders and the Class A-1
Certificate Insurer and designated "Deutsche Bank National Trust Company in
trust for Financial Security Assurance Inc. and the registered holders of GSAMP
Trust 2004-HE2, Mortgage Pass-Through Certificates, Series 2004-HE2, Class A-1".
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.
Preference Amount: Any amounts covered by the Class A-1 Certificate
Insurance Policy that were distributed in respect of the Class A-1 Certificates
which are recovered from any Holder of a Class A-1 Certificate as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code or other similar law in accordance with a final, nonappealable order of a
court having competent jurisdiction and which have not theretofore been repaid
to such Holders.
Preference Claim: As defined in Section 4.07(d) hereof.
Premium Amount: The product of the Premium Rate and the Class
Certificate Balance of the Class A-1 Certificates immediately prior to such
Distribution Date.
Premium Rate: The rate set forth in the Premium Letter, dated July
30, 2004, among the Class A-1 Certificate Insurer, the Purchaser and the
Depositor.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was, during the related Prepayment
Period, 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.
Prepayment Period: With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
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 applicable Servicer
on or prior to the related Determination Date or advanced by the applicable
Servicer for the related Remittance Date (ii) all Principal Prepayments received
during the related Prepayment Period, (iii) all Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans allocable to
principal actually collected by the Servicers during the related Prepayment
Period, (iv) the portion of the Repurchase 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, (v) 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 (vi) the
allocable portion of the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 9.01 (to the extent such
proceeds relate to principal).
Privacy Laws: Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as
amended, and all applicable regulations promulgated thereunder.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated July 28,
2004, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Ameriquest Purchase Agreement or the First
NLC Purchase Agreement, as applicable.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest, as purchaser of the Mortgage Loans
under the Purchase Agreements.
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 related Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last day of the related Interest Accrual Period; provided,
however, that for any Certificate issued in definitive form, the Record Date
shall be the close of business on the last Business Day of the month preceding
the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amount: As of any Distribution Date, the sum of (i)
all Class A-1 Certificate Insured Amounts and Preference Amounts previously
received by the Trustee previously paid by the Class A-1 Certificate Insurer and
in each case not previously repaid to the Class A-1 Certificate Insurer pursuant
to Section 4.02 plus (ii) interest accrued on each such Class A-1 Certificate
Insured Amount and Preference Amount not previously repaid calculated at the
Late Payment Rate from the date the Class A-1 Certificate Insurer paid to the
Trustee the related Class A-1 Certificate Insured Amounts or Preference Amounts,
as applicable.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act, or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Opinion: As defined in Section 9.03.
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 18th day of each calendar month or the
immediately following Business Day if the 18th is not a Business Day.
Representations and Warranties Agreement: The Representations and
Warranties Agreement, dated as of July 30, 2004, by and between the Depositor
and the Purchaser.
Repurchase Price: With respect to any Mortgage Loan, (a) in the case
of any Mortgage Loan repurchased by the Depositor or Ameriquest, 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 Depositor's
or Ameriquest'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, and (b) in the case of any Mortgage Loan repurchased by First NLC
or the Purchaser, the repurchase price specified in the First NLC Agreements.
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.
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, 41.80%.
Servicer: With respect to (i) each Ameriquest Mortgage Loan,
Countrywide after the Servicing Transfer Date, and (ii) each First NLC Mortgage
Loan, Ocwen with respect to each Ocwen Serviced Mortgage Loan and Chase with
respect to each Chase Serviced Mortgage Loan, after the Servicing Transfer Date,
and in any case, if a successor servicer is appointed hereunder, such successor
servicer.
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, (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 and (v) obtaining or correcting any legal documentation required to be
included in the Mortgage Files and necessary for the applicable Servicer to
perform its obligations under this Agreement. No 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 the
product of (i) one-twelfth of Servicing Fee Rate and (ii) 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: With respect to each Mortgage Loan, 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 any 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 Transfer Costs: All reasonable out-of-pocket costs and
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.
Servicing Transfer Date: On or about August 2, 2004 or August 3,
2004, as the case may be.
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 2.20% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 4.40% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Principal Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance of
the Mortgage Loans until the Distribution Date on which a Trigger Event is no
longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. and its successors in interest. 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 2004-HE2, or such other
address as Standard & Poor's may hereafter furnish to the Depositor, the
Servicers and the Trustee.
Standard & Poor's Glossary: Version 5.6 of the Standard & Poor's
LEVELS(R)Glossary.
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
August 2007, 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.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
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: With respect to the First NLC Mortgage
Loans, a "Qualified Substitute Mortgage Loan" as that term is defined in the
First NLC Purchase Agreement.
Substitution Adjustment Amount: Any amount to be paid in connection
with a Substitute Mortgage Loan pursuant to Section 8.03 of the First NLC
Purchase Agreement, and any additional amounts required to be paid by the First
NLC Agreements in connection with such a substitution.
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,
the Premium Amount and the Reimbursement Amount, if any) over (ii) the sum of
amounts payable to the Principal Certificates and to the Class A-1 Certificate
Insurer 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 38.00% 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
------------------------------ ---------------
August 2007 through July 2008 2.7500% for the first month, plus
an additional 1/12th of 1.7500% for
each month thereafter (e.g.,
approximately 2.896% in
September 2007)
August 2008 through July 2009 4.5000% for the first month, plus
an additional 1/12th of 1.2500% for
each month thereafter (e.g.,
approximately 4.604% in
September 2008)
August 2009 through July 2010 5.7500% for the first month, plus
an additional 1/12th of 0.7500% for
each month thereafter (e.g.,
approximately 5.813% in
September 2009)
August 2010 and thereafter 6.5000%
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, the 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 First NLC
Agreements (solely insofar as the First NLC Agreements relate to the Mortgage
Loans); (v) the Cap Agreements; (vi) the Representations and Warranties
Agreement; (vii) with respect to the Class A-1 Certificates only, the rights of
the Trustee under the Class A-1 Certificate Insurance Policy; and (viii) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing.
Trust REMIC: Either the Lower-Tier REMIC or the Upper-Tier REMIC, as
applicable.
Trustee: Deutsche Bank National Trust Company, 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 preceding Distribution
Date (or as of the Closing Date in the case of the first Distribution Date) or,
in the event of any payment of interest which accompanies a Principal Prepayment
in Full made by the Mortgagor, interest at the Trustee Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the period covered by such payment
of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0029% per
annum.
Trustee Float Period: With respect to any 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 the
applicable Purchase Agreement.
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, a per annum rate equal to (a) the weighted average of the Adjusted Net
Mortgage Interest Rates for each Mortgage Loan then in effect on the beginning
of the related Due Period on the Mortgage Loans, multiplied by, in the case of
the Principal Certificates other than the Fixed Rate Certificates, (b) 30
divided by the actual number of days in the related Interest Accrual Period.
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 and the Class A-1 Certificate Insurer, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund, and the
Trustee, on behalf of the Trust, hereby accepts the Trust Fund.
(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 and the Class A-1 Certificate Insurer the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) 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. To the extent that there is no room on
the face of any Mortgage Note for an endorsement, 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) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, Ameriquest or the Depositor 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, Ameriquest or First NLC, as applicable (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 (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of Ameriquest or First NLC, as
applicable (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
Ameriquest or First NLC, as applicable; or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(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) 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, Ameriquest or First NLC, as
applicable (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 Ameriquest or First NLC, as applicable (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 Ameriquest or First NLC, as applicable; 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;
(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; and
(viii) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage (if provided).
The Depositor shall use reasonable efforts to assist the Trustee and
the applicable Servicer in enforcing the obligations of First NLC and the
Purchaser under the First NLC Agreements.
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 one or
more lost note affidavits are provided to cover multiple missing Mortgage Notes
on the Closing Date, Ameriquest shall deliver (or the Depositor, as applicable,
shall use reasonable efforts to cause First NLC to deliver) to the Trustee the
applicable individual lost note affidavits within ten (10) Business Days of the
Closing Date. If Ameriquest or First NLC fails to deliver the required
individual lost note affidavits within the specified period of time, the Trustee
shall notify Ameriquest or First NLC, as applicable, to take such remedial
actions, including, without limitation, the repurchase by Ameriquest or First
NLC of such Mortgage Loan within 30 days of the Closing Date.
Ameriquest shall deliver (or the Depositor, as applicable, shall use
reasonable efforts to cause First NLC to 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, Ameriquest 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 Ameriquest, in accordance with the terms of this
Agreement. The Depositor shall use reasonable efforts to cause First NLC to
forward to the Trustee additional original documents, additional documents
evidencing an assumption, modification, consolidation or extension of a Mortgage
Loan approved by First NLC in accordance with the terms of the First NLC
Agreements. 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, Ameriquest shall deliver (or the
Depositor, as applicable, shall use reasonable efforts to cause First NLC to
deliver) to the Trustee Assignments of Mortgages, in blank, for each applicable
Mortgage Loan (except with respect to each MERS Designated Mortgage Loan).
Ameriquest shall cause (or the Depositor, as applicable, shall use reasonable
efforts to cause First NLC to cause) the Assignments of Mortgage with completed
recording information to be provided to the Depositor 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 Depositor of the fully completed
Assignments of Mortgages in recordable form, the Depositor shall promptly submit
or cause to be submitted for recording, at the expense of Ameriquest or First
NLC pursuant to the First NLC Purchase Agreement, as applicable, at no expense
to the Trust Fund, the Trustee, the Class A-1 Certificate Insurer 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 and the Class A-1 Certificate Insurer has
received an opinion of counsel, satisfactory in form and substance to the
Trustee, each Rating Agency and the Class A-1 Certificate Insurer, 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 Ameriquest at Ameriquest's expense (or the Depositor, as
applicable, shall use reasonable efforts to cause First NLC to assign at First
NLC's expense, pursuant to the First NLC Purchase Agreement) to "Deutsche Bank
National Trust Company as trustee under the Pooling and Servicing Agreement
dated as of July 1, 2004, GSAMP Trust 2004-HE2." In the event that any such
assignment is lost or returned unrecorded because of a defect therein, with
respect to the Ameriquest Mortgage Loans, Ameriquest shall promptly prepare a
substitute assignment to cure such defect and thereafter cause each such
assignment to be duly recorded. If there is such a defect with respect to a
First NLC Mortgage Loan, the Trustee shall take such actions, with the
Depositor's consent, to enforce the rights of the Trust as "Purchaser" under the
First NLC Agreements.
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, the Class A-1 Certificate Insurer and each Servicer.
In the event, with respect to any Ameriquest 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 90
days following the Closing Date, and in the event that Ameriquest 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 Ameriquest at the price and in the
manner specified in Section 2.03. In the event, with respect to any First NLC
Mortgage Loan, 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 180 days of the applicable Original Purchase Date as
specified in the First NLC Purchase Agreement, the Trustee shall notify the
Depositor and the Depositor shall take or cause to be taken such remedial
actions under the First NLC Purchase Agreement as may be permitted to be taken
thereunder, including without limitation, if applicable, the repurchase by First
NLC of such Mortgage Loan. The foregoing repurchase remedy shall not apply in
the event that Ameriquest or First NLC, as applicable, 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 Ameriquest or
First NLC, as applicable, 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 Ameriquest or First NLC, as applicable, 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
Ameriquest or First NLC, as applicable shall be deemed to have been satisfied
upon delivery by Ameriquest or First NLC, as applicable, 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 2004-HE2" and
Deutsche Bank National Trust Company 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 Mortgage Loans and the First NLC Agreements)
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 and the Class A-1 Certificate Insurer.
The Trustee acknowledges that it will maintain possession of the related
Mortgage Notes in the State of California 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, each Servicer and the Class A-1 Certificate Insurer 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, each Servicer and the Class A-1 Certificate Insurer an Initial
Certification, in the form annexed hereto as Exhibit E, and shall deliver to the
Depositor, each Servicer and the Class A-1 Certificate Insurer 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.
Ameriquest shall deliver (or the Depositor, as applicable, shall use
reasonable efforts to cause First NLC to deliver) to the applicable 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 Ameriquest at Ameriquest's
expense (or the Depositor, as applicable, shall use reasonable efforts to cause
First NLC to deliver at First NLC's expense pursuant to the First NLC
Agreements) to the applicable Servicer and in no event shall such Servicer be
responsible for such expense.
Section 2.03 Representations, Warranties and Covenants of each
Servicer and Ameriquest. (a) Countrywide hereby makes the representations and
warranties set forth in Schedule II hereto to the Depositor, Ameriquest, the
Class A-1 Certificate Insurer and the Trustee as of the Closing Date. Chase
hereby makes the representations and warranties set forth in Schedule III hereto
to the Depositor, Ameriquest, the Class A-1 Certificate Insurer and the Trustee
as of the Closing Date. Ocwen hereby makes the representations and warranties
set forth in Schedule IV hereto to the Depositor, Ameriquest, the Class A-1
Certificate Insurer and the Trustee as of the Closing Date.
(b) Ameriquest hereby makes the representations and warranties set
forth in Schedule V and Schedule VI hereto to the Depositor, Countrywide, the
Trustee and the Class A-1 Certificate Insurer.
(c) It is understood and agreed by the Servicers and Ameriquest 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, the Trustee and the Class A-1 Certificate
Insurer 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 Ameriquest, the Depositor, the Trustee,
either Servicer or the Class A-1 Certificate Insurer 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.
(d) Within 60 days of the earlier of either discovery by or notice
to Ameriquest of any breach of a representation or warranty set forth in Section
2.03(b) that materially and adversely affects the value of any Mortgage Loan or
the interest of the Trustee or the Certificateholders therein, Ameriquest 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, Ameriquest
shall repurchase such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust
Fund at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Schedule V, and such breach cannot be
cured within 60 days of the earlier of either discovery by or notice to
Ameriquest of such breach, all of the Mortgage Loans shall, at the Depositor's
option, be repurchased by Ameriquest 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 or (y)
by Ameriquest of any of the representations and warranties set forth in
paragraphs (jj), (kk), (ll), (nn), (oo), (pp) or (ddd) of Schedule V, 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
Ameriquest of any of the representations and warranties set forth in paragraphs
(jj), (kk), (ll), (nn), (oo), (pp) or (ddd) of Schedule V, the Trustee shall
give notice of such breach to Ameriquest and request Ameriquest to repurchase
the Mortgage Loan at the Repurchase Price within sixty (60) days of Ameriquest's
receipt of such notice. Ameriquest 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.
(e) In connection with any repurchase or substitution of a Mortgage
Loan pursuant to this Section 2.03, Section 2.07 or Section 2.08, the applicable
Servicer shall, based on information provided by Ameriquest or First NLC, as
applicable, 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 and the Class A-1
Certificate Insurer. Upon any such repurchase or any substitution and the
deposit to the Collection Account of any Substitution Adjustment Amount, the
Trustee shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to Ameriquest or First
NLC, as applicable, and shall execute and deliver at the direction of Ameriquest
or First NLC, as applicable, such instruments of transfer or assignment prepared
by Ameriquest or First NLC, as applicable, in each case without recourse, as
shall be necessary to vest title in Ameriquest or First NLC, as applicable, or
its designee, the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
(f) In addition to such repurchase obligation, Ameriquest shall
indemnify the Depositor, any of its Affiliates, each Servicer, the Trustee and
the Class A-1 Certificate Insurer 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 Ameriquest of any of its representations and warranties
contained in the Ameriquest Purchase Agreement or this Agreement.
(g) For any month in which First NLC 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 Depositor
shall use reasonable efforts to cause First NLC to remit to the applicable
Servicer for deposit into the related Collection Account on or before the next
Remittance Date any Substitution Adjustment Amount.
(h) In the event that a Mortgage Loan shall have been repurchased
pursuant to this Agreement or the First NLC Agreements, the Repurchase Price
therefor 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 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, the Class A-1 Certificate Insurer 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 Non-Qualified Mortgages. Upon discovery by the
Depositor, Ameriquest, any Servicer or the Trustee that any Ameriquest 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
Ameriquest 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 Ameriquest 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, and for
the benefit of the Class A-1 Certificate Insurer (and all references in this
Agreement for the benefit of or actions on behalf of the Class A-1
Certificateholders shall be deemed to include the Class A-1 Certificate
Insurer). The Trustee shall cooperate with all reasonable requests by the Class
A-1 Certificate Insurer regarding action to preserve or enforce the Class A-1
Certificate Insurer's rights or interests under this Agreement and the Class A-1
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 September
2034, which is the Distribution Date following the latest Mortgage Loan maturity
date. Amounts paid to the Class X Certificates (prior to any reduction for any
Basis Risk Payment) shall be deemed paid from the Upper-Tier REMIC in respect of
the Class X Interest to the holders of the Class X Certificates prior to the
distribution of Basis Risk Payments to the Principal Certificates.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Class
A-1 Certificate Insurer, each Servicer and Ameriquest 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, 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; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated by this Agreement is sufficient
either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders and for the benefit of the Class A-1 Certificate Insurer, 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 and
for the benefit of the Class A-1 Certificate Insurer, the security interest
referred to in Section 10.04; and
(i) No Mortgage Loan that is a Group I Mortgage Loan or a Group II
Mortgage Loan had a Prepayment Premium with a term in excess of three years from
the applicable origination date.
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) 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. 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.
Section 2.08 Enforcement of First NLC Agreements. Upon discovery by
any of the parties hereto of a breach of a representation or warranty made by
First NLC or the Purchaser pursuant to the First NLC Agreements, the party
discovering such breach shall give prompt written notice thereof to the other
parties to this Agreement, the Class A-1 Certificate Insurer and First NLC. The
Trustee shall take such action, with the Depositor's consent, with respect to
such breach under the First NLC Agreements as may be necessary or appropriate to
enforce the rights of the Trust with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders and for the benefit of the Class A-1
Certificate Insurer (and all reference in this Agreement for the benefit of
actions on behalf of the Class A-1 Certificateholders shall be deemed to include
the Class A-1 Certificate Insurer), each Servicer shall service and administer
the Mortgage Loans serviced by it 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 Accepted Servicing
Practices, to execute and deliver any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the 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 and in the name of the Trust. 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 a 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 and in the name of the Trust. The Trustee
shall execute any power of attorney furnished to it by the related Servicer in
favor of such Servicer for the purposes described herein to the extent necessary
or desirable to enable such Servicer to perform its duties hereunder. The
Trustee shall not be liable for the actions of any 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, no
Servicer may make any future advances with respect to a Mortgage Loan (except as
provided in Section 4.01) and no Servicer shall (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 Servicemembers Civil Relief Act 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.
(e) Prior to the applicable Servicing Transfer Date, the Depositor
shall cause the applicable Mortgage Loans to be serviced pursuant to interim
servicing agreements currently in place relating to such Mortgage Loans.
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 or the Class A-1
Certificate Insurer, without the consent of the Trustee or the Class A-1
Certificate Insurer, respectively. Any variation without the consent of the
Trustee and the Class A-1 Certificate Insurer 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, the Class A-1 Certificate Insurer 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 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 which the predecessor Servicer was a party 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 to which it is a party 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 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;
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 in the judgment of the applicable Servicer,
such default is reasonably foreseeable, the applicable Servicer, consistent with
the standards set forth in Section 3.01, may also waive, modify or vary any term
of such Mortgage Loan (including modifications that would change the Mortgage
Interest 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 Principal 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 or on the applicable Servicer's servicing records. In addition,
notwithstanding the foregoing, each Servicer may also waive (or permit a
Subservicer to waive), in whole or in part, a Prepayment Premium if such waiver
would, in the applicable Servicer's judgment, maximize recoveries on the related
Mortgage Loan or if such Prepayment Premium is (i) not permitted to be collected
by applicable law, or the collection thereof would be considered "predatory"
pursuant to written guidance published by any applicable federal, state or local
regulatory authority having jurisdiction over such matters, 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 in this Section 3.07(a),
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 Mortgage Loans
serviced by such Servicer shall be covered by a paid-in-full, life-of-the-loan
tax service contract in effect with respect to each First Lien Mortgage Loan
(each, a "Tax Service Contract") serviced by such Servicer. 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 with respect to the Mortgage Loans serviced by such Servicer. 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, fire and hazard insurance
premiums, condominium charges 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
Collection 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 applicable Servicer 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 or for which
amounts previously deposited are returned due to a "not sufficient funds" or
other denial of payment by the related Mortgagor's banking institution. 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 segregated Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
Funds in the Collection Account shall not be commingled with any other funds of
the Servicers. 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; and
(vii) all Prepayment Premiums collected by such Servicer.
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 serviced by such Servicer, 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 Ameriquest, 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 serviced by
such Servicer 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, the Class A-1 Certificate Insurer
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 withdraw any amounts deposited in the related Collection
Account in error or for which amounts previously deposited are returned
due to a "not sufficient funds" or other denial of payment by the related
Mortgagor's banking institution;
(xi) 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;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; 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) and
(ix) 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, each of the Collection Accounts
and the Distribution 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
(except for investments made at the Depositor's direction, which shall mature no
later than the Business Day immediately preceding the date of required
withdrawal). 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 except
as permitted by applicable law. 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.
(f) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment (except that during the Trustee Float
Period, it will be responsible for reimbursing the Trust for such loss) or lack
of investment of funds held in any Investment Account or the Distribution
Account if made in accordance with this Section 3.12.
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 serviced by such Servicer fire insurance with extended coverage on
the related Mortgaged Property in an amount which is at least equal to the least
of (i) the outstanding 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 serviced by such Servicer 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 either (i) acceptable to Xxxxxx Xxx or Xxxxxxx Mac, or
(ii) 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 Mae 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 and the
Class A-1 Certificate Insurer 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, 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; provided,
however with respect to any Second Lien Mortgage Loan for which the related
First Lien Mortgage Loan is not included in the Trust Fund, if, after such
Mortgage Loan becomes 180 days or more delinquent, the Servicer determines that
a significant net recovery is not possible through foreclosure, such Mortgage
Loan may be charged off and the Mortgage Loan will be treated as a Liquidated
Mortgage Loan giving rise to a Realized Loss. 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.
In the event that the related First Lien Mortgage Loan is not being
serviced by a Servicer, such Servicer shall have no liability for any losses
resulting from a foreclosure on a Second Lien Mortgage Loan in connection with
the foreclosure on the related First Lien Mortgage Loan for which the related
First Lien Mortgage Loan is not included in the Trust Fund where the Servicer
did not receive notice or otherwise had no actual knowledge regarding such
foreclosure on the related First Lien Mortgage Loan; provided, however, if the
Servicer is either notified or has actual knowledge that any holder of a First
Lien Mortgage Loan intends to accelerate the obligations secured by the First
Lien Mortgage Loan, or that any such holder intends to declare a default under
the mortgage or promissory note secured thereby, or has filed or intends to file
an election to have the related Mortgaged Property sold or foreclosed, the
Servicer shall take, on behalf of the Trust, whatever actions are necessary to
protect the interests of the Trust in accordance with Accepted Servicing
Practices and the REMIC Provisions. The Servicer shall not be required to make a
Servicing Advance pursuant to Section 4.01 with respect thereto except to the
extent that it determines in its reasonable good faith judgment that such
advance would be recoverable from Liquidation Proceeds on the related Second
Lien Mortgage Loan and in no event in an amount that is greater than the then
outstanding principal balance of the related Second Lien Mortgage Loan. The
Servicer shall thereafter take such action as is reasonably necessary to recover
any amount so advanced and to otherwise reimburse itself as a Servicing Advance
from the Collection Account pursuant to 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 and the Depositor, with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices, to
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 applicable
Servicer determines, consistent with Accepted Servicing Practices, 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 applicable Servicer
determines 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 determination made by the applicable Servicer pursuant to
this paragraph or otherwise.
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 Depositor shall use reasonable best efforts to
cause Ameriquest (or the Depositor, as applicable, shall use reasonable best
efforts to cause First NLC to reimburse) to 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) Ocwen shall use its best efforts, and Chase and Countrywide
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. 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) Ocwen shall use its reasonable best efforts, and Chase and
Countrywide shall use Accepted Servicing Practices to sell, or cause the
Subservicer to sell, in accordance with Accepted Servicing Practices, 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 serviced by such Servicer 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, the applicable 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
Adjustable Rate Mortgage Loan, the applicable 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. In the event that an Index becomes unavailable or otherwise
unpublished, the applicable Servicer shall select a comparable alternative index
over which it has no direct control and which is readily verifiable. 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 applicable Subservicer to provide, to the Depositor, the Class A-1
Certificate Insurer, 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 Ocwen, such access shall be afforded without charge, but only upon
reasonable and prior written request and during normal business hours at the
offices of Ocwen. With respect to Chase and Countrywide, such access shall be
afforded without charge, but only upon 15 days' (or, if an Event of Default has
occurred and is continuing, 3 Business Days') prior written request and during
normal business hours at the offices of Chase. 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.
Nothing in this Section 3.19 shall require a Servicer to collect,
create, collate or otherwise generate any information that it does not generate
in its usual course of business. The Servicers shall not be required to make
copies of or to ship documents to any Person who is not a party to this
Agreement, and then only if provisions have been made for the reimbursement of
the costs thereof.
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 serviced by such Servicer. 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 any Collection Account, 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. The right to receive the
Servicing Fee may not be transferred in whole or in part except as provided in
Section 10.07 or 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 Section 3.09(b)(vi) and Section
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, the
Class A-1 Certificate Insurer and the Trustee on or before March 15th of each
calendar year, commencing in 2005, 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 2005, 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 Class A-1 Certificate Insurer, 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 calendar year 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 any
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, 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 any 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) to which it is a party
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 such 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 the three national credit repositories, on a monthly
basis.
(b) The Servicer shall comply with all provisions of the Privacy
Laws relating to the Mortgage Loans, the related borrowers and any "nonpublic
personal information" (as defined in the Privacy Laws) received by the Servicer
incidental to the performance of its obligations under this Agreement,
including, maintaining adequate information security procedures to protect such
nonpublic personal information and providing all privacy notices required by the
Privacy Laws.
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
to pay to the Principal Certificateholders any Basis Risk Carry Forward Amounts.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class of Principal Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(J), the lesser of the Class X
Distributable Amount (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(I)) 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 Principal 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)(K)-(M). In
the event that the Class Certificate Balance of any Class of Certificates is
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 (except to the extent such Class Certificate Balance is
increased as a result of any Subsequent Recoveries), 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
Principal 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 Principal Certificates. In addition, the Trustee shall
account for the rights of Holders of each Class of Principal 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 any 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 and the Class A-1
Certificate Insurer until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 4.02.
(c) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee shall obtain and verify certain information and documentation
from the other parties to this Agreement, including, but not limited to, each
such party's name, address, and other identifying information.
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.
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
serviced by such Servicer, 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 each 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 serviced by such Servicer 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. In addition no
Servicer shall be required to advance any Relief Act Interest Shortfalls.
(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 Principal Certificates and to
the Class A-1 Certificate Insurer in the following order of priority:
(A) concurrently:
(1) from the Interest Remittance Amount related to the Group I
Mortgage Loans pursuant to the allocation set forth in clauses
(iv), (v) and (vi) of this Section 4.02(a),
(x) to the Class A-1 Certificate Insurer, any
accrued and unpaid Premium Amount payable to the Class
A-1 Certificate Insurer for such Distribution Date;
(y) to the Class A-1 Certificates, the related
Accrued Certificate Interest Distribution Amounts and
Unpaid Interest Amounts for the Class A-1 Certificates;
and
(z) to the Class A-1 Certificate Insurer, any
Reimbursement Amount for prior unreimbursed claims (or
to the Class A-1 Certificates in lieu of any claims
under the Class A-1 Certificate Insurance Policy for
such Distribution Date) under the Class A-1 Certificate
Insurance Policy for either interest or principal
payments to the Class A-1 Certificates, as well as all
other amounts owed to the Class A-1 Certificate Insurer;
and
(2) from the Interest Remittance Amount related to the Group
II Mortgage Loans pursuant to the allocation set forth in
clauses (iv), (v) and (vi) of this Section 4.02(a), Class A-2
Certificates, the related Accrued Certificate Interest
Distribution Amounts and Unpaid Interest Amounts for the Class
A-2 Certificates;
(3) from the Interest Remittance Amount related to the Group
III Mortgage Loans pursuant to the allocation set forth in
clauses (iv), (v) and (iv) of this Section 4.02(a), pro rata
(based on the accrued and unpaid interest distributable under
this clause (i)(A)(3) 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 related Accrued Certificate Interest
Distribution Amounts and Unpaid Interest Amounts for the Class
A-3A, Class A-3B and Class A-3C Certificates;
provided, that if the Interest Remittance Amount for any Loan
Group is insufficient to make the related payments set forth
clause (1), (2) or (3) above, any Interest Remittance Amount
relating to the other Loan Groups remaining after payment of
the related Accrued Certificate Interest Distribution Amounts
and Unpaid Interest Amounts (and, if applicable, payments and
reimbursements to the Class A-1 Certificate Insurer) will be
available to cover such shortfall;
(B) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(C) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(H) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(I) from any remaining Interest Remittance Amounts, to the
Class B-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(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 Principal Certificates then entitled to
distributions of principal and to the Class A-1 Certificate Insurer 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 X-0, Xxxxx X-0, Class A-3A, Class A-3B and
Class A-3C Certificates, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(b) to the Class A-1 Certificate Insurer, the amount of any
remaining Reimbursement Amount then owing to it on account of a
prior claim relating to principal on the Class A-1 Certificates;
(c) sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in
that order, until the respective Class Certificate Balances are
reduced to zero;
(B) on each Distribution Date (a) on and after the related Stepdown
Date and (b) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of Principal Certificates then entitled to
distribution of principal and to the Class A-1 Certificate Insurer, 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) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(b) to the Class A-1 Certificate Insurer, 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 amount of any remaining Reimbursement Amount then
owing to the Class A-1 Certificate Insurer on account of a prior
claim relating to principal on the Class A-1 Certificates;
(c) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above
and to the Class A-1 Certificate Insurer in clause (ii)(B)(b) 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;
(d) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above and
to the Class M-1 Certificates in clause (ii)(B)(c) above and (y) the
Class M-2 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(e) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above and to the
Class M-2 Certificates in clause (ii)(B)(d) above, and (y) the Class
M-3 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(f) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above, to the Class
M-2 Certificates in clause (ii)(B)(d) above, to the Class M-3
Certificates in clause (ii)(B)(e) above and (y) the Class M-4
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(g) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above, to the Class
M-2 Certificates in clause (ii)(B)(d) above, to the Class M-3
Certificates in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(h) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above, to the Class
M-2 Certificates in clause (ii)(B)(d) above, to the Class M-3
Certificates in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, and to the Class B-1
Certificates in clause (ii)(B)(g) above, and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(i) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above, to the Class
M-2 Certificates in clause (ii)(B)(d) above, to the Class M-3
Certificates in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, to the Class B-1
Certificates in clause (ii)(B)(g) above and to the Class B-2
Certificates in clause (ii)(B)(h) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(j) to the Class B-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class A-1 Certificate Insurer in clause (ii)(B)(b) above, to
the Class M-1 Certificates in clause (ii)(B)(c) above, to the Class
M-2 Certificates in clause (ii)(B)(d) above, to the Class M-3
Certificates in clause (ii)(B)(e) above, to the Class M-4
Certificates in clause (ii)(B)(f) above, to the Class B-1
Certificates in clause (ii)(B)(g) above, to the Class B-2
Certificates in clause (ii)(B)(h) above and to the Class B-3
Certificates in clause (ii)(B)(i) above and (y) the Class B-4
Principal Distribution Amount, until their Class Certificate Balance
has been reduced to zero.
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Account, shall be distributed in the
following order of priority:
(A) to the Class A-1 Certificate Insurer, to the extent of any
remaining Reimbursement Amount then owing to it, as well as other
amounts owed to the Class A-1 Certificate Insurer;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B-4 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(K) from funds on deposit in the Excess Reserve Fund Account
(not including Basis Risk Interest Rate Cap Payments and Class B
Interest Rate Cap Payments) with respect to the related Distribution
Date, an amount equal to any Basis Risk Carry Forward Amount with
respect to any Principal Certificate for such Distribution Date to
the Principal Certificates in the same order and priority in which
Accrued Certificate Interest Distribution Amount is allocated among
those Classes of Certificates with the allocation to the Class A
Certificates being pro rata based on their respective Class
Certificate Balances at the beginning of the related Interest
Accrual Period;
(L) (x) from any Basis Risk Interest Rate Cap Payments on
deposit in the Excess Reserve Fund Account with respect to such
Distribution Date, sequentially to the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificate Group, the Class
M-1 Certificates, the Class M-2 Certificates, the Class M-3
Certificates, the Class M-4 Certificates, the Class B-1
Certificates, the Class B-2 Certificates, the Class B-3 and the
Class B-4 Certificates, in each case, up to their unpaid remaining
Basis Risk Carry Forward Amounts (the allocation within the Class
A-3 Certificate Group being pro rata among the Class A-3A
Certificates, the Class A-3B and Class A-3C Certificates based on
their respective Class Certificate Balances at the beginning of the
related Interest Accrual Period), and then (y) any remaining amounts
to the Class X Certificates;
(M) (x) from any Class B Interest Rate Cap Payments on deposit
in the Excess Reserve Fund Account with respect to such Distribution
Date, to the Class B-1, Class B-2 and Class B-3 Certificates, in
each case, up to their unpaid remaining Basis Risk Carry Forward
Amounts, allocated pro rata based on their respective Class
Certificate Balances at the beginning of the related Interest
Accrual Period, and then (y) any remaining amounts to the Class X
Certificates;
(N) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(M); and
(O) to the holders of the Class R Certificates, any remaining
amount.
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amounts attributable to Group I Mortgage Loans will be
allocated:
(A) first, to the Class A-1 Certificates and the Class A-1
Certificate Insurer, the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amounts for the Class A-1
Certificates, and the amount of any Premium Amount and any
Reimbursement Amount then owing to the Class A-1 Certificate Insurer
as well as other amounts owed to the Class A-1 Certificate Insurer;
and
(B) second, to the Class A-2, Class A-3A, Class A-3B and Class
A-3C Certificates, pro rata, in accordance with the priorities set
forth in Section 4.02(a)(i)(A), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for each such
Class, to the extent not otherwise previously paid from Interest
Remittance Amounts attributable to the Group II and Group III
Mortgage Loans;
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amounts 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; and
(B) second, to the Class X-0, Xxxxx X-0X, Xxxxx X-0X and Class
A-3C Certificates and to the Class A-1 Certificate Insurer, in
accordance with the priorities set forth in Section 4.02(a)(i)(A),
the Accrued Certificate Interest Distribution Amount and any Unpaid
Interest Amounts for the Class A-1, Class A-3A, Class A-3B and Class
A-3C Certificates, and the amount of any Premium Amount and any
Reimbursement Amount then owing to the Class A-1 Certificate Insurer
as well as other amounts owed to the Class A-1 Certificate Insurer,
to the extent not otherwise previously paid from the Interest
Remittance Amounts attributable to the Group I and Group III
Mortgage Loans.
(vi) Solely for purposes of interest allocation calculations, the
Interest Remittance Amounts attributable to Group III Mortgage Loans will
be allocated:
(A) first, to the Class A-3A, Class A-3B and Class A-3C
Certificates, pro rata, the Accrued Certificate Interest
Distribution Amounts and any Unpaid Interest Amounts for the Class
A-3A, Class A-3B and Class A-3C Certificates; and
(B) second, to the Class A-1 and Class A-2 Certificates and
the Class A-1 Certificate Insurer, in accordance with the priorities
set forth in Section 4.02(a)(i)(A), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for the Class
A-1 and Class A-2 Certificates, and the amount of any Premium Amount
and any Reimbursement Amount then owing to the Class A-1 Certificate
Insurer as well as other amounts owed to the Class A-1 Certificate
Insurer, to the extent not otherwise previously paid from the
Interest Remittance Amounts 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 Amount,
if any, then that unpaid amount will be recoverable by the holders of those
Classes, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above. In the event the
Class Certificate Balance of any Class of Principal Certificates has been
reduced to zero, that Class of Certificates shall no longer be entitled to
receive any related unpaid Basis Risk Carry Forward Amounts except to the extent
the Class Certificate Balance is increased as a result of any Subsequent
Recovery.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
shall be deemed paid to the distributed to the holders of the Class P
Certificates.
(c) All principal distributions to the Holders of 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 Certificate Group
based on the Class A Principal Allocation Percentage for such Distribution Date.
However, if the Class Certificate Balances of the Class A Certificates in any
Class A Certificate Group are reduced to zero, then the remaining amount of
principal distributions distributable to the Class A Certificates on such
Distribution Date, and the amount of such principal distributions distributable
on all subsequent Distribution Dates, shall be distributed to the Holders of the
Class A Certificates in the other Class A Certificate Groups remaining
outstanding, in accordance with the principal distribution allocations described
in this Section 4.02(c), until their Class Certificate Balances have been
reduced to zero (with any remaining amounts of principal distributions allocable
to the Class A-1 Certificates distributed to the Class A-1 Certificate Insurer
as reimbursement for unreimbursed claims under the Class A-1 Certificate
Insurance Policy in respect of Class A-1 Principal Parity Amounts) and if the
Class Certificate Balances of the Class A-1 Certificates are reduced to zero and
the Class A-1 Certificate Insurer has been reimbursed for claims under the Class
A-1 Certificate Insurance Policy as well as other amounts owed to the Class A-1
Certificate Insurer, then the remaining amount of principal distributions on the
Class A Certificates shall be distributed to the holders of the Class A
Certificates in the Class A Certificate Groups remaining outstanding, in
accordance with the principal distribution allocations described in this Section
4.02(c), until their Class Certificate Balances have been reduced to zero.
(i) Any payments of principal to the Class A-1 Certificates shall be
made first from payments relating to the Group I Mortgage Loans, any
payments of principal to the Class A-2 Certificates will be made first
from payments relating to the Group II Mortgage Loans and any payments of
principal to the Class A-3 Certificate Group will be made first from
payments relating to the Group III Mortgage Loans.
(ii) Any principal distributions allocated to the Class A-3
Certificate Group shall be allocated sequentially, first to the Class A-3A
Certificates, until their Class Certificate Balance has been reduced to
zero, then 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.
(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.
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 Class A-1 Certificate Insurer, 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 Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicer as outstanding as of the close of business on the Determination
Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days 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;
(x) 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;
(xi) 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;
(xii) 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;
(xiii) 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);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xvi) 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;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) Prepayment Premiums collected by or paid by each Servicer;
(xix) the Cumulative Loss Percentage;
(xx) the amount distributed on the Class X Certificates;
(xxi) the amount of any Subsequent Recoveries for such Distribution
Date; and
(xxii) the amount of any payment of principal or of interest on the
Class A-1 Certificates to be paid from funds transferred from the Policy
Payments Account.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, each Servicer, Ameriquest and the
Depositor is limited to the availability, timeliness and accuracy of the
information derived from the applicable Servicer or Ameriquest. The Trustee will
provide the above statement via the Trustee's internet website. The Trustee's
website will initially be located at xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx and
assistance in using the website can be obtained by calling the Trustee's
investor relations desk at 0-000-000-0000. A paper copy of the above statement
will also be made available upon request. Notwithstanding the method by which
such statements are distributed as provided above, the Trustee shall transmit by
electronic mail to the Class A-1 Certificate Insurer at xxxxxxxxxx@xxx.xxx, no
later than two Business Days prior to each Distribution Date, such statements
for such Distribution Date.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) 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 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).
(e) Ocwen shall provide the Trustee and the Depositor with full,
continuous access to its online mortgage loan servicing data system (Datamart)
(the "Data System") with respect to the First NLC Mortgage Loans that Ocwen is
Servicing.
To the extent that the Data System is not available or otherwise
accessible, or the information in the following documents is not available on
the Data System or Ocwen fails to provide any report set forth in Section
4.03(f) or Exhibit L hereto in a timely manner, Ocwen shall provide the
documentation listed below to the Depositor and the Trustee in an electronic
format acceptable to the Trustee and the Depositor:
(i) Initiation of foreclosure - Ocwen shall deliver to the Depositor
and the Trustee a copy of the collection comments and a current BPO;
(ii) Deed-in-lieu of foreclosure - Ocwen shall deliver to the
Depositor and the Trustee a copy of current value and a copy of a title
report showing clean title;
(iii) Bidding instructions at foreclosure sale - Ocwen shall deliver
to the Depositor and the Trustee a statement of total debt and current
BPO;
(iv) Short sale - Ocwen shall deliver to the Depositor and the
Trustee a statement of the Mortgagor's hardship, current BPO, and
statement detailing net proceeds to the Depositor and the Trustee;
(v) REO Property list price - Ocwen shall deliver to the Depositor
and the Trustee a current BPO done at the time of taking title to the REO
Property and broker's recommendation for list price;
(vi) REO Property sales price - Ocwen shall deliver to the Depositor
and the Trustee a summary of the REO contract being proposed; and
(vii) REO Property net proceeds - Ocwen shall deliver to the
Depositor and the Trustee a copy of the HUD-1 statement prior to closing.
(f) On the 5th Business Day of each month (the "Data File Delivery
Date"), Ocwen shall deliver to the Trustee and the Depositor a Market Value
Change Report and a data file incorporating the fields set forth in the data
file layout set forth on Exhibit L hereto (the "Data File"). In the event that
Ocwen is unable to provide the complete data file on such Data File Delivery
Date, Ocwen shall provide to the Trustee and the Depositor additional reports as
set forth on Exhibit L hereto (the "Back-up Reports") on or prior to the 8th
Business Day of such month (the "Back-up Report Delivery Date") in an electronic
format acceptable to the Trustee and the Depositor.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
"LIBOR." Until all of the LIBOR Certificates are paid in full, the Trustee will
at all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long 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
Subordinated Certificates then outstanding in reduction of the Class Certificate
Balance thereof. In the event Applied Realized Loss Amounts are allocated to any
Class of Principal Certificates, their Class Principal Balances shall be 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. Notwithstanding the foregoing, the Class Certificate
Balance of each Class of Subordinated Certificates that has been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recoveries (but not in excess of the
Applied Realized Loss Amount allocated to the applicable Class of Subordinated
Certificates).
Section 4.06 Certain Matters Regarding the Class A-1 Certificate
Insurer (a) Each of the Depositor, the Servicers and the Trustee, and, by
accepting its Class A-1 Certificate, each Holder of a Class A-1 Certificate,
agrees that unless a Class A-1 Certificate Insurer Default has occurred and is
continuing, the Class A-1 Certificate Insurer shall have the right to exercise
all rights of the Holders of the Class A-1 Certificates under this Agreement
(except as provided in Section 5.07 hereof) without any further consent of the
Holders of the Class A-1 Certificates.
In addition, each Holder of Class A-1 Certificates agrees that,
unless a Class A-1 Certificate Insurer Default has occurred and is continuing,
the rights specifically set forth above may be exercised by the Holders of Class
A-1 Certificates only with the prior written consent of the Class A-1
Certificate Insurer.
(b) Unless a Class A-1 Certificate Insurer Default has occurred and
is continuing, the Trustee shall not undertake any litigation pursuant to
Section 8.02(i) at the request or direction of the Holders of the Class A-1
Certificates, without the prior written consent of the Class A-1 Certificate
Insurer, which consent shall not be unreasonably withheld; provided, however,
nothing contained herein shall prohibit or prevent the Trustee from defending
itself or the Trust Fund or taking any action related thereto.
Section 4.07 Claims Upon the Class A-1 Certificate Insurance Policy;
Policy Payments Account.
(a) If, at or before 12:00 p.m., New York time, on the second
Business Day prior to a Distribution Date, the Trustee determines that the Class
A-1 Certificate Insured Amount will be greater than zero, then the Trustee shall
give notice to the Class A-1 Certificate Insurer by telephone or telecopy of the
amount of such Class A-1 Certificate Insured Amount. Such notice of such Class
A-1 Certificate Insured Amount shall be confirmed in writing in the form set
forth as Exhibit A to the Endorsement to the Class A-1 Certificate Insurance
Policy, to the Class A-1 Certificate Insurer and the Fiscal Agent (as defined in
the Class A-1 Certificate Insurance Policy), if any, at or before 12:00 p.m.,
New York time, on the second Business Day prior to such Distribution Date.
Following Receipt (as defined in the Class A-1 Certificate Insurance Policy) by
the Class A-1 Certificate Insurer of such notice in such form, the Class A-1
Certificate Insurer or the Fiscal Agent will pay any amount payable under the
Class A-1 Certificate Insurance Policy on the later to occur of (i) 12:00 p.m.,
New York time, on the second Business Day following such receipt and (ii) 12:00
p.m., New York time, on the Distribution Date to which such Class A-1
Certificate Insured Amount relates, as provided in the Endorsement to the Class
A-1 Certificate Insurance Policy.
(b) The Trustee shall establish a segregated non-interest bearing
trust account for the benefit of Holders of the Class A-1 Certificates and the
Class A-1 Certificate Insurer referred to herein as the "Policy Payments
Account" over which the Trustee shall have exclusive control and sole right of
withdrawal. The Trustee shall deposit any amount paid under the Class A-1
Certificate Insurance Policy in the Policy Payments Account and distribute such
amount only for purposes of payment to Holders of Class A-1 Certificates of the
Class A-1 Certificate Insurance Amount or any amount in respect of a Preference
Claim (as defined in the Class A-1 Certificate Insurance Policy) for which a
claim under the Class A-1 Certificate Insurance Policy was made, and such amount
may not be applied to satisfy any costs, expenses or liabilities of any
Servicer, the Depositor, the Trustee or the Trust Fund. Amounts paid under the
Class A-1 Certificate Insurance Policy shall be transferred to the Distribution
Account in accordance with the next succeeding paragraph and disbursed by the
Trustee to Holders of Class A-1 Certificates in accordance with this Section
4.07(b) (or, in the case of an amount in respect of a Preference Claim, to the
related Holders of Class A-1 Certificates as contemplated in Section 4.07(d)).
It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay the other
distributions to be made to such Holders pursuant to Section 4.02. However, the
amount of any payment of principal of or interest on the Class A-1 Certificates
to be paid from funds transferred from the Policy Payments Account shall be
noted as provided in Section 4.07(c) and in the statement to be furnished to
Holders of the Class A-1 Certificates pursuant to Section 4.03. Funds held in
the Policy Payments Account shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Class A-1 Certificate Insurance Policy, the amount of any funds
received by the Trustee as a result of any claim under the Class A-1 Certificate
Insurance Policy, to the extent required to pay the Class A-1 Certificate
Insured Amount on such Distribution Date, shall be withdrawn from the Policy
Payments Account and deposited in the Distribution Account and applied by the
Trustee, directly to the payment in full of the Class A-1 Certificate Insured
Amount due on the Class A-1 Certificates. Funds received by the Trustee as a
result of any claim under the Class A-1 Certificate Insurance Policy shall be
deposited by the Trustee in the Policy Payments Account and used solely for
payment to the Holders of the Class A-1 Certificates and may not be applied to
satisfy any costs, expenses or liabilities of any Servicer, the Representative,
the Depositor, the Trustee or the Trust Fund. Any funds remaining in the Policy
Payments Account on the first Business Day following a Distribution Date shall
be remitted to the Class A-1 Certificate Insurer, pursuant to the instructions
of the Class A-1 Certificate Insurer, by the end of such Business Day.
(c) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A-1 Certificate
from moneys received under the Class A-1 Certificate Insurance Policy. The Class
A-1 Certificate Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon two Business Days' prior
notice to the Trustee.
(d) The Trustee shall promptly notify the Class A-1 Certificate
Insurer and its fiscal agent of any proceeding or the institution of any action,
of which a Responsible Officer of the Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any Class A-1 Certificate
Insured Amount made with respect to the Class A-1 Certificates. Each Holder of
the Class A-1 Certificates, by its purchase of such Certificates, the Servicers,
the Depositor and the Trustee hereby agree that the Class A-1 Certificate
Insurer (so long as no Class A-1 Certificate Insurer Default has occurred and is
continuing) may at any time during the continuation of any proceeding relating
to a Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to such Preference Claim and (ii) the posting of any surety,
supersedeas or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Class A-1 Certificate Insurer shall be
subrogated to the rights of the Servicers, the Depositor, the Trustee and each
Holder of the Class A-1 Certificates in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
Section 4.08 Effect of Payments by Class A-1 Certificate Insurer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Class A-1 Certificates which
is made with moneys received pursuant to the terms of the Class A-1 Certificate
Insurance Policy shall not, other than for federal income tax purposes, be
considered payment of such Certificates from the Trust Fund and shall not, other
than for federal income tax purposes, result in the payment of or the provision
for the payment of the principal of or interest on such Certificates within the
meaning of Section 4.01. The Depositor, each Servicer and the Trustee
acknowledge, and each Holder of a Class A-1 Certificate by its acceptance of
such a Certificate agrees, that without the need for any further action on the
part of the Class A-1 Certificate Insurer, the Depositor, any Servicer or the
Trustee (a) to the extent the Class A-1 Certificate Insurer makes payments,
directly or indirectly, on account of principal of or interest on any Class A-1
Certificates to the Holders of such Certificates, the Class A-1 Certificate
Insurer will be fully subrogated to the rights of such Holders to receive such
principal and interest from the Trust Fund and (b) the Class A-1 Certificate
Insurer shall be paid such principal and interest but only from the sources and
in the manner provided herein for the payment of such principal and interest.
The Trustee, the Depositor and the Servicers shall cooperate in all
respects with any reasonable request by the Class A-1 Certificate Insurer for
action to preserve or enforce the Class A-1 Certificate Insurer's rights or
interests under this Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein.
Section 4.09 Notices to Class A-1 Certificate Insurer. All notices,
statements, reports, certificates or opinions required by this Agreement to be
sent to any other party hereto or to any of the Holders of the Class A-1
Certificates shall also be sent to the Class A-1 Certificate Insurer.
Section 4.10 Trustee To Hold Class A-1 Certificate Insurance Policy.
The Trustee shall hold the Class A-1 Certificate Insurance Policy in trust as
agent for the Holders of the Class A-1 Certificates for the purpose of making
claims thereon and distributing the proceeds thereof. Upon the later of (a) the
date upon which the Certificate Principal Balance of the Class A-1 Certificates
has been reduced to zero and all Class A-1 Certificate Insured Amounts have been
paid and (b) the date the Term of This Policy (as defined in the Class A-1
Certificate Insurance Policy) ends, the Trustee shall surrender the Class A-1
Certificate Insurance Policy to the Class A-1 Certificate Insurer for
cancellation. Neither the Class A-1 Certificate Insurance Policy nor the amounts
paid on the Class A-1 Certificate Insurance Policy will constitute part of the
Trust Fund or assets of any Trust REMIC created by this Agreement. Each Holder
of Class A-1 Certificates, by accepting its Certificates, appoints the Trustee
as attorney in fact for the purpose of making claims under the Class A-1
Certificate Insurance Policy.
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 and
Class P Certificates in the name of the Depositor or its designee. On a date as
to which the Depositor notifies the Trustee, the Depositor hereby directs the
Trustee to transfer the Class X and Class P Certificates in the name of the NIM
Trustee, or such other name or names as the Depositor shall request, and to
deliver such Class X and Class P Certificates to Deutsche Bank National Trust
Company, as NIM Trustee, or to such other Person or Persons as the Depositor
shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor as directed by that
Certificateholder by written wire instructions provided to the Trustee or (y),
in the event that no wire instructions are provided to the Trustee, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
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 (i) the transfer of the Class X, Class P and Class R
Certificates, to the Depositor or an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, in
the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Trustee in writing the facts surrounding the transfer in substantially the
form set forth in Exhibit H (the "Transferor Certificate") and either (i) there
shall be delivered to the Trustee a letter in substantially the form of Exhibit
I (the "Rule 144A Letter") or (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 the 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 the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class R, Class X and
Class P Certificates to the Depositor or an affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, (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 a Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Depositor, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such ERISA-Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Trustee or the Servicer to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA Restricted Certificate,
other than a Class P Certificate Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
None of the Class R or Class P Certificates may be sold to any
employee benefit plan subject to Title I of ERISA, any plan subject to Section
4975 of the Code, or any plan subject to any Similar Law or any person investing
on behalf 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, Ameriquest or
any 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 notifies the
Depository of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully-registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the 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 cancelled 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, the
Class A-1 Certificate Insurer and the Trustee such security or indemnity as may
be required by them to hold each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the Trustee, the
Depositor, the Class A-1 Certificate Insurer and any agent of a Servicer, the
Depositor, the Class A-1 Certificate Insurer 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, the Class A-1 Certificate Insurer or any agent of a Servicer, the
Depositor, the Class A-1 Certificate Insurer 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 New York City where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent for such purposes, located at DTC Transfer Agent Services,
00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Trustee
will give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
Section 5.07 Rights of the Class A-1 Certificate Insurer to Exercise
Rights of Class A-1 Certificateholders. (a) By accepting its Class A-1
Certificate, each Class A-1 Certificateholder agrees that, unless a Class A-1
Certificate Insurer Default exists, the Class A-1 Certificate Insurer shall be
deemed to be the Class A-1 Certificateholders for all purposes (other than with
respect to the receipt of payment on the Class A-1 Certificates) and shall have
the right to exercise all rights of the Class A-1 Certificateholders under this
Agreement and under the Class A-1 Certificates without any further consent of
the Class A-1 Certificateholders.
Section 5.08 Class A-1 Certificate Insurer Default. Notwithstanding
anything elsewhere in this Agreement or in the Certificates to the contrary, if
a Class A-1 Certificate Insurer Default exists, or if and to the extent the
Class A-1 Certificate Insurer has delivered its written renunciation of all of
its rights under this Agreement, all provisions of this Agreement which (a)
permit the Class A-1 Certificate Insurer to exercise rights of the Class A-1
Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicers or the Trustee to act without the consent or approval of the Class A-1
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Class A-1 Certificate Insurer, (d) permit the Class A-1
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Servicer or the Certificateholders, (e) provide that any action or
omission taken with the consent, approval or authorization of the Class A-1
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Certificates. Nothing in the foregoing sentence,
nor any action taken pursuant thereto or in compliance therewith, shall be
deemed to have released the Class A-1 Certificate Insurer from any obligation or
liability it may have to the Class A-1 Certificateholders, under the Class A-1
Certificate Insurance Policy or under applicable law; provided, however, that
any rights relating to payment (including reimbursements and payment of
Premium), receipt of notices or reports, or consent rights relating to
amendments to this Agreement or consent rights relating to the optional
termination provided for in Section 9.01 of this Agreement shall continue during
any such Class A-1 Certificate Insurer Default. At such time as the Class A-1
Certificates are no longer outstanding hereunder, and no amounts owed to the
Class A-1 Certificate Insurer hereunder remain unpaid and the Class A-1
Certificate Insurance Policy is marked cancelled and returned to the Class A-1
Certificate Insurer, the Class A-1 Certificate Insurer's rights hereunder (other
than rights of indemnification) shall terminate.
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, federally chartered savings
bank or limited partnership 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 or limited
partnership, as applicable, 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 meets the requirements of Section 7.02, and provided, further,
that such merger, consolidation or succession does not adversely affect the then
current rating or ratings on the Principal Certificates without reference to the
Class A-1 Certificate Insurance Policy.
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, Affiliate 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 any 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. (a) None of
the Servicers 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.
(b) Notwithstanding anything to the contrary herein, Ocwen may
pledge or assign as collateral all its rights, title and interest under this
Agreement to a lender. No such pledge shall reduce or otherwise affect Ocwen's
obligations under this Agreement.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims. Each Servicer shall indemnify the Depositor and any Affiliate,
director, officer, employee or agent of the Depositor, the Class A-1 Certificate
Insurer and the Trustee and hold each of 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, the Class A-1 Certificate
Insurer 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, the Class A-1 Certificate Insurer discharge and satisfy any
judgment or decree which may be entered against it or the Depositor, the Class
A-1 Certificate Insurer or the Trustee in respect of such claim.
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, 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) (1) with respect to Ocwen and Countrywide only, the failure by
Ocwen or Countrywide in any month, (i) to deliver to the Trustee and the
Depositor the Data File and the Market Value Change Report on the Data File
Delivery Date or (ii) to deliver the Servicer Remittance Report to the Trustee,
and in each case such failure continues uncured for more than 30 days after
written notice of such failure, or (2) with respect to Chase only, the failure
by Chase 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 Chase by the Depositor, or by the Trustee, or to Chase, 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) with respect to Ocwen only, if a Cumulative Loss Trigger occurs;
or
(h) 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
(i) with respect to Ocwen only, if a Delinquency Trigger occurs; or
(j) 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
(k) (1) with respect to Ocwen only, Xxxxx'x reduces its servicer
rating of Ocwen to "SQ4" or lower or Standard & Poor's reduces its servicer
rating of Ocwen to "below average" or lower, or (2) with respect to Chase and
Countrywide only, any reduction, withdrawal or qualification of the servicer
rating of Chase or Countrywide by any Rating Agency which results in the
inability of Chase or Countrywide to act as a primary or special servicer for
any mortgage-backed or asset-backed transaction rated or to be rated by any
Rating Agency.
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 serviced by such
Servicer 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), (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. The Trustee, upon a
Responsible Officer having actual knowledge of such default, shall deliver a
written notice to the applicable Servicer of the default on any Remittance Date
on which a Servicer fails to make any deposit or payment required pursuant to
this Agreement (including, but not limited to Advances, to the extent required
by this Agreement); provided, however, that if an Event of Default occurs due to
the failure of a Servicer to make an Advance to the extent required, the
Trustee, as successor Servicer, or another successor Servicer shall, prior to
the next Distribution Date, immediately make such Advance. Any such notice to a
Servicer shall also be given to each Rating Agency and the Depositor.
Notwithstanding any other provision of this Agreement, any remedy with respect
to clauses (a) or (h) of this Section 7.01 shall be effective only if taken no
later than 8:00 AM Eastern time on the Business Day immediately following (i)
with respect to clause (a) of this Section 7.01, the date of written notice to
the applicable Servicer, or (ii) with respect to clause (h) of this Section
7.01, the related Remittance Date. 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, such 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 to continue to receive 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 the Trustee gives, and a Servicer receives a notice of termination
pursuant to Section 7.01, the Trustee shall, subject to and to the extent
provided in Sections 3.06 and 7.03, and subject to the rights of Ocwen (in the
case of a successor to Ocwen hereunder) and the Trustee to appoint a successor
Servicer, 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 as successor Servicer 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 as provided herein). 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 (without
reference to the Class A-1 Certificate Insurance Policy), 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. No such
appointment of a successor to a Servicer hereunder shall be effective until the
Depositor shall have consented thereto. Any successor to such Servicer shall be
an institution which is a Xxxxxx Xxx- and Xxxxxxx Mac-approved seller/servicer
in good standing, which has a net worth of at least $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 terminated Servicer (other
than liabilities of such terminated 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 (without reference to the Class
A-1 Certificate Insurance Policy) 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 and amounts paid to the
predecessor Servicer from investments. The Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. Neither the Trustee nor any other successor Servicer shall
be deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the predecessor Servicer to
deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.
Notwithstanding anything to the contrary herein, for a period of 30
days following the date on which Ocwen receives a notice of termination or
removal as a Servicer pursuant to Section 7.01(other than a termination or
removal based upon the Event of Default listed as clause (h) in Section 7.01
above), Ocwen or its designee may appoint a successor Servicer that satisfies
the eligibility criteria of a successor Servicer set forth in this Section 7.02,
subject to the consent of the Depositor, the Class A-1 Certificate Insurer and
the Trustee, which consent shall not be unreasonably withheld or delayed. The
successor Servicer appointed by Ocwen or its designee must agree to act as
successor Servicer no later than such 30-day period, fully effect the servicing
transfer within 90 days following the notice of termination or removal of Ocwen
as a Servicer, make all P&I Advances that are otherwise required to be made by
Ocwen as of the date of such appointment, and reimburse any expenses that the
Trustee may have incurred in connection with the termination or removal of Ocwen
and the appointment of a successor Servicer to Ocwen. This 30-day period shall
terminate immediately if Ocwen fails to make (or cause to be made) any P&I
Advances.
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. If such predecessor Servicer defaults in its
obligations to pay such costs, such costs shall be paid by the successor
Servicer (in which case the successor Servicer shall be entitled to
reimbursement therefor from the Trust Fund or if the successor Servicer fails to
pay, the Trustee pays such amounts 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.
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, the Class A-1
Certificate Insurer 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, the Class A-1
Certificate Insurer 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.
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
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and,
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 attorneys' fees) incurred in connection with any claim or legal
action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the 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 Ameriquest's obligations in connection with
this Agreement for which Ameriquest 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 (without reference to the Class A-1 Certificate Insurance Policy)
(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, the Class A-1
Certificate Insurer 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 a 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 either 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 amounts from the Excess Reserve Fund Account (subject to the obligation
to pay Basis Risk Carry Forward Amounts) and the rights of the Offered
Certificateholders to receive Basis Risk Carry Forward Amounts as the beneficial
ownership of interests in a grantor trust and not as 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 Principal Certificates of the right to receive Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Trustee is hereby
directed to assign a value of zero to the right of each Holder of a Principal
Certificate to receive the related Basis Risk Carry Forward Amount for purposes
of allocating the purchase price of a Principal Certificate acquired by an
initial Holder thereof between such right and the related Upper-Tier Regular
Interest. Thereafter, the Depositor shall provide to the Trustee promptly upon
written request therefor any additional information or data that the Trustee
may, from time to time, reasonably request to enable the Trustee to perform its
duties under this Agreement. 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) Ameriquest if such tax arises out of or results from
Ameriquest's obligation to repurchase a Mortgage Loan pursuant to Section 2.03,
or (iv) in all other cases, or if the Trustee or the applicable Servicer or
Ameriquest 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).
For as long as each Trust REMIC shall exist, the Trustee shall act
in accordance with this Agreement and shall comply with any directions of the
Depositor or a Servicer as provided herein so as to assure such continuing
treatment. The Trustee shall not (a) sell or permit the sale of all or any
portion of the Mortgage Loans unless pursuant to a repurchase in accordance with
this Agreement, or of any investment of deposits in an Account, and (b) accept
any contribution to either Trust REMIC after the Startup Day without receipt of
a REMIC Opinion.
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. Except as provided
for in Section 8.12(b), 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) The Depositor shall prepare or cause to be prepared and file the
current Report on Form 8-K attaching this Agreement as an exhibit and,
thereafter, 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 (and upon which the Trustee may rely in delivering its
certification hereunder). 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
Trustee shall sign the Certification in respect of items 1 through 3 thereof and
the each 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, solely
and with respect to such Servicer and the Trustee 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 solely with respect to such Servicer (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 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 by March 25th 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, employees, agents and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon 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 Agreement. 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 Principal
Certificates has to receive payments of Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account as rights to receive payments under an interest
rate cap contract written by the Class X Certificateholders in favor of each
Class. Accordingly, each Class of Certificates (excluding the Class X, Class P
and Class R 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 Certificateholders will be comprised of three components - an Upper Tier
Regular Interest, ownership of the Excess Reserve Fund Account, subject to an
obligation to pay Basis Risk Carry Forward Amounts and an interest in the Cap
Agreements. 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. Unless otherwise advised by the Depositor in
writing, for federal income tax purposes, the Trustee is hereby directed to
assign a value of zero to the right of each Holder of a Principal Certificate to
receive the related Basis Risk Carry Forward Amount for purposes of allocating
the purchase price of an initial Principal Certificateholder between such right
and the related Upper-Tier Regular Interest.
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 Countrywide (at the direction of the Majority
Class X Certificateholder), the Class A-1 Certificate Insurer or Chase and
Ocwen, individually or 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, together with any
unpaid remaining Basis Risk Carry Forward Amounts, 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
electing to terminate the Trust Fund (or in the case of Countrywide, selected by
the Majority Class X Certificateholder), at the expense of such Person (or in
the case of Countrywide, the Majority Class X Certificateholder), 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.
No such purchase will be permitted without the consent of the Class
A-1 Certificate Insurer, if the resulting amount available for payment on the
Class A-1 Certificates would result in a claim under the Class A-1 Certificate
Insurance Policy or any Reimbursement Amounts would remain unpaid to the Class
A-1 Certificate Insurer.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers notify the Trustee that there are no Outstanding
Mortgage Loans and no other funds or assets in the Trust Fund other than the
funds in the Collection Account, the Servicers shall direct the Trustee promptly
to send a Notice of Final Distribution to each Certificateholder. If Chase or
Ocwen individually elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, such Servicer shall notify the other such Servicer of such
election at least 30 days prior to the date the Notice of Final Distribution is
to be mailed and such other Servicer shall have 5 days to notify the electing
Servicer that such other Servicer elects to purchase the Mortgage Loans it
services. If Countrywide (at the direction of the Majority Class X
Certificateholder), the Class A-1 Certificate Insurer or Chase or Ocwen,
individually or together (after providing the notices, if any, required pursuant
to the preceding sentence), elects to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, at least 20 days prior to the date the Notice of
Final Distribution is to be mailed, the Person electing to terminate the Trust
Fund shall notify the Depositor, the Servicers (or the other Servicers, if
applicable) and the Trustee of the date the electing Person intends to terminate
the Trust Fund and of the applicable Termination Price of the Mortgage Loans and
REO Properties. Countrywide shall be entitled to reasonably rely on a
representation from the Majority Class X Certificateholder that it is the
Majority Class X Certificateholder and is entitled under this Agreement to
direct Countrywide to terminate the Trust Fund.
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 and the
Person electing to terminate the Trust Fund is Countrywide (at the direction of
the Majority Class X Certificateholder), the Majority Class X Certificateholder
shall remit the applicable Termination Price in immediately available funds to
Countrywide at least two Business Days prior to the applicable Distribution
Date, and, upon receipt of such funds from the Majority Class X
Certificateholder, Countrywide shall promptly deposit such funds in the
applicable Collection Account. During the time such funds are held in such
Collection Account, such funds shall be invested, at the direction of the
Majority Class X Certificateholder, in Permitted Investments, and the Majority
Class X Certificateholder shall be entitled to all income from such investments,
and shall be responsible for, and shall reimburse Countrywide for all losses
from such investments. The Majority Class X Certificateholder shall be obligated
to reimburse Countrywide for its reasonable out-of-pocket expenses incurred in
connection with its termination of the Trust Fund at the direction of the
Majority Class X Certificateholder and shall indemnify and hold harmless
Countrywide for any losses, liabilities or expenses resulting from any claims
directly resulting from or relating to Countrywide's termination of the Trust
Fund at the direction of the Majority Class X Certificateholder, except to the
extent such losses, liabilities or expenses arise out of or result from
Countrywide's negligence, bad faith or willful misconduct. In the event the
Notice of Final Distribution is given and the Person electing to terminate the
Trust Fund is the Class A-1 Certificate Insurer, the Class A-1 Certificate
Insurer shall remit the applicable Termination Price in immediately available
funds to the Trustee at least one Business Day prior to the applicable
Distribution Date. In connection with any such termination of the Trust Fund,
each Servicer shall cause all funds in its Collection Account, including the
applicable Termination Price for the Mortgage Loans and REO Properties if such
Servicer is electing to terminate the Trust Fund (individually or together with
another Servicer), to be remitted to the Trustee for deposit in the Distribution
Account on the Business Day prior to the applicable Distribution Date. 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 Person
electing to terminate the Trust Fund, 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 (including all unreimbursed
Advances and any Servicing Fees accrued and unpaid as of the date the
Termination Price is paid), the Depositor, the Class A-1 Certificate Insurer 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 a
Person elects to terminate the Trust Fund 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 electing Person, 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 Person electing to terminate the Trust Fund, or its designee, 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 electing Person.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, Ameriquest, 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, Ameriquest 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, Ameriquest 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.
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 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.
Notwithstanding the foregoing, no amendment to this Agreement shall
be made without the prior written consent of the Class A-1 Certificate Insurer
until the later of (a) the date on which the Class Certificate Balance of the
Class A-1 Certificates is reduced to zero and (b) the date on which all amounts
owing to the Class A-1 Certificate Insurer under the Class A-1 Certificate
Insurance Policy and the Insurance Agreement have been paid in full.
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.
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 and
2. Any notice of a purchase of a Mortgage Loan pursuant to Sections
2.07 or 3.28.
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 Ocwen to Ocwen Federal Bank FSB, 0000 Xxxx Xxxxx Xxxxx Xxxx.,
Xxxxx 00X, Xxxx Xxxx Xxxxx, Xxxxxxx, 00000, Attention: Secretary or such other
address as may be hereafter furnished to the Depositor and Trustee by Ocwen in
writing; (c) 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; in the case of Ameriquest, 0000 Xxxx &
Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Secretary, or such other
address as may be hereafter furnished to the Depositor and the Trustee by
Ameriquest in writing, (d) in the case of Countrywide, to Countrywide Home Loans
Servicing LP, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx
Xxxx, or such other address as may be hereafter furnished to the Depositor and
Trustee by Countrywide in writing, (e) in the case of the Trustee to the
Corporate Trust Office, or such other address as the Trustee may hereafter
furnish to the Depositor, Ocwen and Chase, (f) in the case of each of the Rating
Agencies, the address specified therefor in the definition corresponding to the
name of such Rating Agency and (g) in the case of the Class A-1 Certificate
Insurer, to Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. 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 any Servicer with the prior
written consent of the Depositor, the Class A-1 Certificate Insurer 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
to an Advance Reimbursement Amount so assigned or to the portion of the
Servicing Fee so assigned; it being further understood that upon resignation or
termination of such Servicer and reimbursement of all amounts due to the
Servicer hereunder, the assignment of further Advance reimbursement rights to
such Advance Facility (in the case of clause (i)) and such assignment (in the
case of clause (ii)) shall be terminated with respect to amounts due related to
this Agreement. No consent of the Trustee, Certificateholders, the Class A-1
Certificate Insurer 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) Advance reimbursement amounts ("Advance 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) Advance Reimbursement Amounts distributed with respect to each
Mortgage Loan shall 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 Advance 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 Advance 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, with the consent
of the Class A-1 Certificate Insurer 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 and the Class A-1 Certificate
Insurer which opinion shall be an expense of the Servicer entering into the
Advance Facility 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. Ocwen and Countrywide
agree that on reasonable prior notice, and Chase agrees that on 15 days' prior
notice or, if an Event of Default has occurred and is continuing, 3 Business
Days', it will permit any representative of the Depositor, the Class A-1
Certificate Insurer 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, the Class A-1 Certificate
Insurer or the Trustee of any right under this Section 10.09 shall be borne by
such Servicer. The Servicers may impose commercially reasonable restrictions on
dissemination of information the Servicer defines as confidential.
Nothing in this Section 10.09 shall limit the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section. Nothing in this Section 10.09 shall require a Servicer
to collect, create, collate or otherwise generate any information that it does
not generate in its usual course of business. The Servicers shall not be
required to make copies of or to ship documents to any Person who is not a party
to this Agreement, and then only if provisions have been made for the
reimbursement of the costs thereof.
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 Third Party Beneficiary. The parties agree that the
Class A-1 Certificate Insurer is intended and shall have all rights of a
third-party beneficiary of this Agreement to the same extent as if it were a
party to this Agreement.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Limitation of Damages. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NO PARTY SHALL BE
LIABLE TO ANY OTHER PARTY FOR ANY PUNITIVE DAMAGES WHATSOEVER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL
OR EQUITABLE PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE
APPLICABLE WITH RESPECT TO THIRD PARTY CLAIMS MADE AGAINST A PARTY.
* * * * * * *
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicers and
Ameriquest have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
GS MORTGAGE SECURITIES CORP.,
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Associate
OCWEN FEDERAL BANK FSB,
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
AMERIQUEST MORTGAGE COMPANY,
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
SCHEDULE I
Mortgage Loan Schedule
(As Delivered to the Trustee on the Closing Date)
SCHEDULE II
Representations and Warranties of Countrywide Home Loans Servicing LP,
as Servicer
COUNTRYWIDE HOME LOANS SERVICING LP ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule IV to the Depositor,
the Class A-1 Certificate Insurer and the Trustee, as of the Closing Date, or if
so specified herein, as of the Cut-off Date.
(1) Countrywide is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the State of
Texas, and is licensed and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Countrywide in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Ameriquest Mortgage Loan and to service the Ameriquest Mortgage Loan in
accordance with the terms of this Pooling and Servicing Agreement;
(2) Countrywide has the full power and authority to service each
Ameriquest 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 Countrywide 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, the Servicers, Ameriquest and the Trustee, constitutes a legal,
valid and binding obligation of Countrywide, enforceable against
Countrywide 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 Countrywide, the servicing of the Ameriquest Mortgage Loans
by Countrywide hereunder, the consummation by Countrywide 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
Countrywide and will not (A) result in a breach of any term or provision
of the organizational documents of Countrywide 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
Countrywide is a party or by which it may be bound, or any statute, order
or regulation applicable to Countrywide of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Countrywide; and Countrywide 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
Countrywide's knowledge, would in the future materially and adversely
affect, (x) the ability of Countrywide to perform its obligations under
this Pooling and Servicing Agreement or (y) the business, operations,
financial condition, properties or assets of Countrywide taken as a whole;
(4) Countrywide is an approved seller/servicer for Xxxxxx Xxx and an
approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against Countrywide that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or the ability of Countrywide to
service the Ameriquest 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 Countrywide of, or compliance by Countrywide with, this
Pooling and Servicing Agreement or the consummation by Countrywide 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;
(7) Countrywide covenants that its computer and other systems used
in servicing the Ameriquest Mortgage Loans operate in a manner such that
Countrywide can service the Ameriquest Mortgage Loans in accordance with
the terms of this Pooling and Servicing Agreement; and
With respect to each Ameriquest Mortgage Loan, to the extent
Countrywide serviced such Ameriquest Mortgage Loan and to the extent Countrywide
provided monthly reports to the three credit repositories, Countrywide 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.
SCHEDULE III
GSAMP Mortgage Loan Trust 2004-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,
the Class A-1 Certificate Insurer 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 Chase
Serviced 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 Chase Serviced Mortgage
Loan and to service the Chase Serviced Mortgage Loans in accordance with
the terms of this Pooling and Servicing Agreement;
(2) Chase has the full power and authority to service each Chase
Serviced 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,
Ameriquest, each Servicer 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 Chase Serviced 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 Chase
Serviced 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 Chase Serviced Mortgage Loans.
SCHEDULE IV
GSAMP Mortgage Loan Trust 2004-HE2,
Mortgage Pass-Through Certificates
Representations and Warranties of Ocwen Federal Bank FSB, as Servicer
OCWEN FEDERAL BANK FSB ("Ocwen") hereby makes the representations
and warranties set forth in this Schedule II to the Depositor, the Class A-1
Certificate Insurer, and the Trustee, as of the Closing Date, or if so specified
herein, as of the Cut-off Date.
(1) Ocwen is a federally chartered savings bank duly organized,
validly existing and in good standing under the laws of the United States
and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Ocwen in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Ocwen Serviced Mortgage Loan and to service the Ocwen Serviced Mortgage
Loan in accordance with the terms of this Pooling and Servicing Agreement;
(2) Ocwen has the full power and authority to service each Ocwen
Serviced 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 Ocwen 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,
the Servicers, Ameriquest and the Trustee, constitutes a legal, valid and
binding obligation of Ocwen, enforceable against Ocwen 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 Ocwen, the servicing of the Ocwen Serviced Mortgage Loans by
Ocwen hereunder, the consummation by Ocwen 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 Ocwen and
will not (A) result in a breach of any term or provision of the
organizational documents of Ocwen 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 Ocwen is a
party or by which it may be bound, or any statute, order or regulation
applicable to Ocwen of any court, regulatory body, administrative agency
or governmental body having jurisdiction over Ocwen; and Ocwen 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 Ocwen's knowledge, would in the future materially
and adversely affect, (x) the ability of Ocwen to perform its obligations
under this Pooling and Servicing Agreement or (y) the business,
operations, financial condition, properties or assets of Ocwen taken as a
whole;
(4) Ocwen is an approved seller/servicer for Xxxxxx Xxx and an
approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against Ocwen that would materially and
adversely affect the execution, delivery or enforceability of this Pooling
and Servicing Agreement or the ability of Ocwen to service the Ocwen
Serviced 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 Ocwen of, or compliance by Ocwen with, this Pooling and
Servicing Agreement or the consummation by Ocwen 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;
(7) Ocwen covenants that its computer and other systems used in
servicing the Ocwen Serviced Mortgage Loans operate in a manner such that
Ocwen can service the Ocwen Serviced Mortgage Loans in accordance with the
terms of this Pooling and Servicing Agreement; and
With respect to each Ocwen Serviced Mortgage Loan, to the extent
Ocwen serviced such Ocwen Serviced Mortgage Loan and to the extent Ocwen
provided monthly reports to the three credit repositories, Ocwen 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.
SCHEDULE V
Representations and Warranties of Ameriquest as to the Ameriquest
Mortgage Loans
Ameriquest hereby makes the representations and warranties set forth
in this Schedule V as to the Ameriquest Mortgage Loans only to the Depositor,
the Class A-1 Certificate Issuer, the Servicers and the Trustee, as of the
Closing Date (or such other date as may be expressly set forth below):
(a) Mortgage Loans as Described. As of the Servicing Transfer Date, the
information set forth in the Mortgage Loan Schedule is complete,
true and correct as of the date set forth therein;
(b) Payments Current. As of the Original Sale Date, except with respect
to approximately 0.01% of the Mortgage Loans (by Stated Principal
Balance) all payments required to be made up to the Original Sale
Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments for which the related due date was not thirty or
more days prior to the Original Sale Date, have been made and
credited. No Mortgage Loan has been delinquent for thirty or more
days at any time since the origination of the Mortgage Loan;
(c) No Outstanding Charges. As of the Original Sale Date, all real
estate taxes, insurance premiums, 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. All
governmental assessments, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and
owing have been paid on or prior to the date on which such charges
would constitute a lien on the related Mortgaged Property. Except
for (A) payments in the nature of escrow payments and (B) interest
accruing from the date of the Mortgage Note or date of disbursement
of the Mortgage Loan proceeds, whichever is earlier to the day which
precedes by one month the Due Date of the first installment of
principal and interest, including, without limitation, taxes and
insurance payments, Ameriquest 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;
(d) Original Terms Unmodified. As of the Original Sale Date, 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 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 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 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 the time the Mortgage Loan
was originated;
(f) Hazard Insurance. As of the Servicing Transfer Date, 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 meeting Accepted
Origination Practices, as well as all additional requirements set
forth in Section 2.10 of the Flow Interim Servicing Agreement, dated
as of April 26, 2004, between the Purchaser and Ameriquest. 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 in effect. All individual insurance policies contain
a standard mortgagee clause naming Ameriquest 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. Ameriquest has not
engaged in, and has no knowledge of the Mortgagor's or any
servicer's having engaged in, any act or omission which would impair
the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of such
policy, 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 Ameriquest;
(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, predatory and abusive lending
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 Ameriquest 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. As of the Servicing Transfer Date, 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. Except for the
acceptance of a payment on a day other than a Due Date, Ameriquest
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 Ameriquest 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 generally-accepted practice, the Mortgaged Property
may be a leasehold estate provided such leasehold meets the
standards set forth in the Xxxxxx Xxx Seller's Guide). The Mortgage
Property 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, an individual unit in a planned unit
development or a manufactured home; provided, however, no Mortgaged
Property is a cooperative home and that any condominium unit or
planned unit development shall not fall within any of the
"Ineligible Projects" of part XII, Section 102 of the Xxxxxx Mae
Selling Guide and shall conform with the Underwriting Guidelines.
With respect to any Mortgage Loan secured by a Mortgaged Property
improved by manufactured housing, (i) such manufactured dwelling
shall conform with the applicable Xxxxxx Xxx and Xxxxxxx Mac
requirements regarding such dwellings, (ii) the related manufactured
housing unit is permanently affixed to the land, (iii) the related
manufactured housing unit and the related land are subject to a
Mortgage properly filed in the appropriate public recording office
and naming Ameriquest as mortgagee and (iv) the related Mortgaged
Property is not located in the state of New Jersey. As of the date
of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination, no portion
of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other
than those commonly used for homeowner repair, maintenance and/or
household purposes;
(j) Valid First Lien. Each Mortgage is a valid, subsisting, enforceable
and perfected first 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 additions,
alterations and replacements made at any time. 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; and
(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.
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 first lien and first priority security interest on the
property described therein and Ameriquest 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 or
guarantor, if applicable, in connection with a Mortgage Loan are
genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to Prepayment
Premiums). 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 other related agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and
properly executed by other such related parties;
(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. Excluding any pledge obligation pursuant to Ameriquest's
warehouse lending agreements (which obligation shall have been
released on or before the Original Sale Date), on the Original Sale
Date, Ameriquest was the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to the Purchaser, Ameriquest
retained the Mortgage Files or any part thereof with respect thereto
not delivered to the Trustee, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising
the servicing of each Mortgage Loan. Immediately prior to the sale
of the Mortgage Loans to the Purchaser on the Original Sale Date,
the Mortgage Loan was not assigned or pledged, and Ameriquest 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 this Agreement and following the sale of each Mortgage
Loan to the Purchaser, the Purchaser will own such Mortgage Loan
free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. Ameriquest intends
to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Original Sale Date, Ameriquest will have no
right to modify or alter the terms of the sale of the Mortgage Loan
and Ameriquest will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) either (i) organized under
the laws of such state, or (ii) qualified to do business in such
state, or (iii) a federal savings and loan association, a savings
bank or a national bank having a principal office in such state, or
(3) not doing business in such state;
(o) LTV; FICO Score. As of the Original Sale Date, no Mortgage Loan has
an LTV greater than 100%. At origination of the Mortgage Loan, the
Qualifying FICO Score was not less than 500;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy or other form of policy or insurance that is
generally acceptable to Xxxxxx Xxx and Xxxxxxx Mac that was issued
by a title insurer licensed and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring
Ameriquest, its successors and assigns, as to the first priority
lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses
(1), (2) and (3) of paragraph (j) 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. The title policy does not contain
any special exceptions (other than the standard exclusions) for
zoning and uses and has been marked to delete the standard survey
exceptions or to replace the standard survey exception with a
specific survey reading. Ameriquest, 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 Ameriquest, 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 Ameriquest;
(q) No Defaults. As of the Original Sale Date 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 Ameriquest nor any of
its Affiliates nor any of their respective predecessors, have waived
any default, breach, violation or event which would permit
acceleration;
(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. As of the Original Sale
Date, 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. The Mortgaged Property and all improvements
located on or being part of the Mortgaged Property are in compliance
with all applicable zoning and building laws, ordinances and
regulations;
(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 (as
amended from time to time) 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 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, 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 related Mortgage
Loan Schedule, 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 agency and Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the Underwriting Guidelines
(a copy of which is attached to the related assignment and
conveyance agreement as Exhibit C). The Mortgage Note and Mortgage
are on forms generally acceptable in the secondary market and no
representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Original Sale Date,
the Mortgaged Property is lawfully occupied under applicable law.
All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged
Property have been made or obtained from the appropriate
authorities. Ameriquest has not received notification from any
governmental authority that the Mortgaged Property is in material
non-compliance with such laws or regulations, is being used,
operated or occupied unlawfully or has failed to have or obtain such
inspection, licenses or certificates, as the case may be. Ameriquest
has not received notice of any violation or failure to conform with
any such law, ordinance, regulation, standard, license or
certificate. Except as indicated on the Mortgage Loan Schedule, the
Mortgagor represented at the time of origination of the Mortgage
Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(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 paragraph (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 (or in the case of a
substitution of trustee, is named in a properly recorded
substitution of trustee), and no fees or expenses are or will become
payable by the Purchaser, the Trustee or the Servicer to the trustee
under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) 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 (excepting therefrom mortgage recordation
information where such has not been returned by the applicable
county recorder's office and the name of the assignee). The
transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by Ameriquest are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable
jurisdiction;
(aa) Mortgaged Property Undamaged; No Condemnation Proceedings. As of the
Original Sale Date, to the best of Ameriquest's knowledge, 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. There have not been any condemnation proceedings
with respect to the Mortgaged Property and Ameriquest has no
knowledge of any such proceedings in the future;
(bb) 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 Ameriquest, 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. The indebtedness evidenced by the
Mortgage Note is not convertible to an ownership interest in the
Mortgaged Property or the Mortgagor and Ameriquest has not financed
nor does it own directly or indirectly, any equity of any form in
the Mortgaged Property or the Mortgagor;
(cc) No Balloon Mortgage Loans. The Mortgage Loan is not a Balloon
Mortgage Loan;
(dd) Qualified Mortgage. The Mortgage Loan is a qualified mortgage under
Section 860G(a)(3) of the Code;
(ee) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the applicable Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence in accordance with Accepted
Originating Practices. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(ff) Collection Practices; Escrow Deposits; Interest Rate Adjustments. As
of the Servicing Transfer Date, the origination, servicing and
collection practices utilized 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. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of
Ameriquest and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been
made. Each Mortgage Loan is covered by a paid in full, life of loan,
tax service contract and each of these contracts is assignable to
the Purchaser. All Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the
related voluntary escrow agreement. An escrow of funds is not
prohibited by applicable law, and, where requested by the Mortgagor,
and has been established in an amount sufficient to pay for every
applicable 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 Ameriquest 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. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the
Mortgage Interest Rate, the same index was used with respect to each
Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage
Note. 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 have
been delivered. Any interest required to be paid pursuant to state,
federal and local law has been properly paid and credited;
(gg) 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 Xxx guidelines for such trusts;
(hh) Servicemembers' Civil Relief Act. As of the Original Sale Date, the
Mortgagor has not notified Ameriquest, and Ameriquest has no
knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers' Civil Relief Act of 2003, as amended, or any
similar state statute;
(ii) Appraisal. Ameriquest has delivered to the Purchaser an appraisal of
the Mortgaged Property signed prior to the approval of the Mortgage
application by an appraiser qualified under applicable law who (i)
is licensed in the state where the Mortgaged Property is located,
(ii) has no interest, direct or indirect, in the Mortgaged Property
or in any Loan or the security thereof, and (iii) does not receive
compensation that is affected by the approval or disapproval of the
Mortgage Loan. The appraisal and 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. The appraisal shall have been made within one
hundred and eighty (180) days of the origination of the Mortgage
Loan and shall be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, and all applicable federal and
state laws and regulations. If the appraisal was made more than one
hundred and twenty (120) days before the origination of the Mortgage
Loan, Ameriquest shall have received and delivered to the Purchaser
a recertification of the appraisal;
(jj) Prepayment Penalty. The Mortgage Loan is subject to a Prepayment
Penalty as provided in the related Mortgage Note except as set forth
on the related Mortgage Loan Schedule. With respect to each Mortgage
Loan that has a prepayment fee charge, each such prepayment penalty
is enforceable and will be enforced by Ameriquest for the benefit of
Purchaser upon the full and voluntary principal prepayment, and each
prepayment charge is permitted pursuant to federal, state and local
law and is only payable, during the first 3 years of the term of the
Mortgage Loan. Each such prepayment penalty is in an amount equal to
the maximum amount permitted under applicable law;
(kk) Single-premium credit life insurance policy. In connection with the
origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life
insurance policy; No Mortgagor was required to purchase any credit
life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit life, disability, accident
or health insurance policy in connection with the origination of the
Mortgage Loan;
(ll) Predatory Lending Regulations. None of the Mortgage Loans is
classified as a (a) "high cost" loan under the Home Ownership and
Equity Protection Act of 1994 or (b) "high cost home," "threshold,"
"covered" (excluding a "covered home loan" as defined in clause (1)
of the definition of such term under the New Jersey Home Ownership
Security Act of 2002), "high risk home", "predatory" or similar loan
under any other applicable federal, state or local law (including
without limitation any regulation or ordinance) (or a similarly
classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or
fees) or (c) a Mortgage Loan categorized as "High Cost" or "Covered"
pursuant to Appendix E of the Standard & Poor's Glossary; except for
Mortgage Loans secured by Mortgaged Properties originated in Los
Angeles, California, as to which this representation set forth
solely in this clause (c) is not made;
(mm) Flood Certification Contract. The Mortgage Loan is covered by a paid
in full, life of loan, transferable flood certification contract;
(nn) Credit Reporting. Ameriquest has, in its capacity as servicer, for
each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis;
(oo) No Violation of Environmental Laws. As of the Servicing Transfer
Date, the Mortgaged Property is free from any and all toxic or
hazardous substances, other than those commonly used for homeowner
repair maintenance and/or household purposes, and there exists no
pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or
regulation is an issue;
(pp) Georgia Fair Lending Act. As of the applicable Original Sale Date,
no Mortgage Loan is a "High-Cost Home Loan" as defined in the
Georgia Fair Lending Act, as amended (the "Georgia Act"). No
Mortgage Loan subject to the Georgia Act and secured by owner
occupied real property or an owner occupied manufactured home
located in the State of Georgia was originated (or modified) on or
after October 1, 2002 through and including March 6, 2003;
(qq) Fraud. No fraud was committed in connection with the origination of
any Mortgage Loan;
(rr) HELOC. No Mortgage Loan is an open-ended loan;
(ss) Xxxxxx Xxx Representations. With respect to any Mortgage Loans which
are subsequently purchased by Xxxxxx Mae or included in a Xxxxxx Xxx
securitization for which the related Mortgage Loan Schedule
indicated that such Mortgage Loans meet the 5% points and fees cap
and conforming limits set by Xxxxxx Mae:
(i) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of Xxxxxx Mae's
Selling Guide;
(ii) (a) No mortgage loan is classified as a high-cost mortgage
loan under HOEPA; and (b) no mortgage loan is a "high-cost
home," "covered," "high risk home" or "predatory" loan under
any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high
interest rates, points and/or fees);
(iii) No Mortgage Loan is a "High-cost Home Loan" as defined in New
York Banking Law 6-1.
(iv) No Mortgage Loan is a "High-cost Home Loan" as defined in the
Arkansas Home Loan Protection Act effective July 16, 2003
(Act 1340 of 2003);
(v) No Mortgage Loan is a "High-cost Home Loan" as defined in the
Kentucky high-cost home loan statute effective June 24, 2003
(Ky. Rev. Stat. Section 360.100);
(vi) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Jersey Home Ownership Act effective November 27, 2003
(N.J.S.A. 46:10B-22 et seq.);
(vii) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004
(N.M. Stat. Xxx. xx.xx. 58-21A-1 et seq.);
(viii) No Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High-Risk Home Loan Act effective January 1, 2004
(815 Ill. Comp. Stat. 137/1 et seq.);
(ix) No borrower was encouraged or required to select a Mortgage
Loan product offered by the Mortgage Loan's originator which
is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's
origination, such borrower did not qualify taking into
account credit history and debt to income ratios for a lower
cost credit product then offered by the Mortgage Loan's
originator. As used herein, "originator" mean the lender
funding the loan transaction;
(x) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical
principles which relate the borrower's income, assets and
liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the borrower's
equity in the collateral as the principal determining factor
in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability
to make timely payments on the Mortgage Loan;
(xi) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the loan's origination, the borrower
agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii)
prior to the loan's origination, the borrower was offered the
option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is
disclosed to the borrower in the loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Servicer shall
not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the borrower's
default in making the loan payments;
(xii) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a
condition of obtaining the extension of credit. No borrower
obtained a prepaid single premium credit life, disability,
accident or health insurance policy in connection with the
origination of the Mortgage Loan; No proceeds from any
Mortgage Loan were used to purchase single premium credit
insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(xiii) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with
applicable state and federal law and regulation. Except in
the case of a Mortgage Loan in an original principal amount
of less than $60,000 which would have resulted in an
unprofitable origination, no borrower was charged "points and
fees" (whether or not financed) in an amount greater than 5%
of the principal amount of such loan, such 5% limitation is
calculated in accordance with Xxxxxx Mae's anti-predatory
lending requirements as set forth in the Xxxxxx Mae Guide;
(xiv) All fees and charges (including finance charges) and whether
or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each
Mortgage Loan has been disclosed in writing to the borrower
in accordance with applicable state and federal law and
regulation; and
(xv) The Interim Servicer will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide
Announcement 95-19 and that for each Mortgage Loan, Servicer
agrees it shall report one of the following statuses each
month as follows: new origination, current, delinquent (30-,
60-, 90-days, etc.), foreclosed, or charged-off.
(tt) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents constituting the
Mortgage File for each Mortgage Loan have been delivered to the
Trustee. Ameriquest is in possession of a complete, true and
accurate Mortgage File except for such documents the originals of
which have been delivered to the Trustee;
(uu) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in
the event that the Mortgaged Property is sold or transferred without
the prior written consent of the mortgagee thereunder, and such
provision is enforceable. None of the Mortgage Loans are, by their
terms, assumable;
(vv) 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, except for any Mortgage Loans identified in
the related Mortgage Loan Schedule as being subject to a escrow
holdback;
(ww) Prior Servicing. Each Mortgage Loan has been serviced in strict
compliance with Accepted Servicing Practices;
(xx) 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;
(yy) Recordation. Each original Mortgage was recorded, or has been
delivered to the appropriate public recording office for recordation
and all subsequent assignments of the original Mortgage (other than
the assignment to the Purchaser) have been delivered to the
Purchaser in recordable form, other than the insertion of any
necessary Mortgage recording information;
(zz) Litigation. The Mortgage Loan is not subject to any outstanding
litigation for fraud, origination, predatory lending, servicing or
closing practices;
(aaa) Mortgaged Premises Located in New Jersey. All Mortgage Loans
originated in New Jersey are ratable by Standard & Poor's, Fitch
Ratings and Xxxxx'x and comply with the Purchase's standards for
purchasing New Jersey mortgage loans;
(bbb) Oakland Mortgage Loans. No Mortgage Loan is subject to the Oakland,
California Anti-Predatory Lending Ordinance;
(ccc) South Carolina Mortgage Loans. No Mortgage Loan subject to the South
Carolina High Cost and Consumer Home Loan Act is a refinance or
non-purchase money Mortgage Loan; and
(ddd) New York Mortgage Loans. No Mortgage Loan is a "High-cost Home Loan"
as defined in New York Banking Law 6-1.
SCHEDULE VI
Ameriquest hereby makes the representations and warranties set forth
in this Schedule VI to the Depositor, the Servicer and the Trustee, as of the
Closing Date.
(a) Due Organization and Authority. Ameriquest is a corporation 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 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 Ameriquest, and in any event
Ameriquest is in compliance with the laws of any such state to the
extent necessary; Ameriquest has the full corporate power, authority
and legal right to execute and deliver this Agreement and to perform
its obligations hereunder; the execution, delivery and performance
of this Agreement by Ameriquest 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 Ameriquest, regardless
of whether such enforcement is sought in a proceeding in equity or
at law; and all requisite corporate action has been taken by
Ameriquest to make this Agreement and all agreements contemplated
hereby valid and binding upon Ameriquest in accordance with their
terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
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 Ameriquest's charter or by laws
or any legal restriction or any agreement or instrument to which
Ameriquest 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 Ameriquest 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;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against Ameriquest, before any
court, administrative agency or other tribunal asserting the
invalidity of this Agreement, seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or which,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial
condition, properties or assets of Ameriquest, or in any material
impairment of the right or ability of Ameriquest to carry on its
business substantially as now conducted, or in any material
liability on the part of Ameriquest, or which would draw into
question the validity of this Agreement or of any action taken or to
be taken in connection with the obligations of Ameriquest
contemplated herein, or which would be likely to impair materially
the ability of Ameriquest to perform under the terms of this
Agreement;
(d) No Consent Required. No consent, approval, authorization or order
of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the VA is
required for the execution, delivery and performance by Ameriquest
of or compliance by Ameriquest with this Agreement or the
consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the Closing
Date;
EXHIBIT A-1
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[To be added to Class B-4 Certificates: IF THIS CERTIFICATE IS A PHYSICAL
CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE
"TRANSFEROR LETTER") IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO
HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A 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.
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 SERVICERS, TO THE EFFECT THAT THE PURCHASE
OR HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR
ANY SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE SERVICERS 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.]
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 : July 1, 2004
First Distribution Date : August 25, 2004
Initial Certificate Balance
of this Certificate
("Denomination") :
Initial Certificate
Balances of all
Certificates of this Class : Class Principal Amount
Class A-1 $ 284,714,000
Class A-2 $ 236,934,000
Class A-3A $ 117,719,000
Class A-3B $ 45,371,000
Class A-3C $ 32,809,000
Class M-1 $ 58,510,000
Class M-2 $ 31,750,000
Class M-3 $ 13,607,000
Class M-4 $ 13,607,000
Class B-1 $ 13,607,000
Class B-2 $ 9,072,000
Class B-3 $ 9,072,000
Class B-4 $ 20,411,000
CUSIP : Class CUSIP No.
Class X-0 00000X XX 1
Class X-0 00000X XX 9
Class A-3A 36242D AC 7
Class A-3B 36242D AQ 6
Class A-3C 36242D AR 4
Class M-1 36242D AD 5
Class M-2 36242D AE 3
Class M-3 36242D AF 0
Class M-4 36242D AG 8
Class B-1 36242D AH 6
Class B-2 36242D AJ 2
Class B-3 36242D AK 9
Class B-4 36242D AL 7
ISIN : Class ISIN
Class A-1 US36242DAA19
Class A-2 US36242DAB91
Class A-3A US36242DAC74
Class A-3B US36242DAQ60
Class A-3C US36242DAR44
Class M-1 US36242DAD57
Class M-2 US36242DAE31
Class M-3 US36242DAF06
Class M-4 US36242DAG88
Class B-1 US36242DAH61
Class B-2 US36242DAJ28
Class B-3 US36242DAK90
Class B-4 US36242DAL73
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates, Series 2004-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 Servicers 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 July 1,
2004 (the "Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Ocwen Federal Bank FSB, as servicer, Chase Manhattan Mortgage
Corporation, as servicer, Countrywide Home Loans Servicing LP, as servicer
(collectively, the "Servicers"), Ameriquest Mortgage Company ("Ameriquest") and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2004-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 for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers, Ameriquest 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 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 : July 1, 2004
First Distribution Date : August 25, 2004
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP : 36242D AN 3
ISIN : US36242DAN30
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates, Series 2004-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 Servicers 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 July 1, 2004 (the
"Agreement") among GS Mortgage Securities Corp., as depositor (the "Depositor"),
Ocwen Federal Bank FSB, as servicer, Chase Manhattan Mortgage Corporation, as
servicer, Countrywide Home Loans Servicing LP, as servicer (collectively, the
"Servicers"), Ameriquest Mortgage Company ("Ameriquest") and Deutsche Bank
National Trust Company, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2004-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 for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
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, Ameriquest, the Servicers 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 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 : July 1, 2004
First Distribution Date : August 25, 2004
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP : 36242D AP 8
ISIN : US36242DAP87
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates, Series 2004-HE2
Class R
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Class R Certificate 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 Servicers 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
July 1, 2004 (the "Agreement") among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Ocwen Federal Bank FSB, as servicer, Chase Manhattan Mortgage
Corporation, as servicer, Countrywide Home Loans Servicing LP, as servicer
(collectively, the "Servicers"), Ameriquest Mortgage Company ("Ameriquest") and
Deutsche Bank National Trust Company, 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.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2004-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 for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
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, Ameriquest, the Servicers 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 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 A
DIRECT OR INDIRECT 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 CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR
LAW AND WILL NOT SUBJECT THE TRUSTEE 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 : July 1, 2004
First Distribution Date : August 25, 2004
Percentage Interest of this
Certificate ("Denomination") :
CUSIP : 36242D AM 5
ISIN: : US36242DAM56
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates, Series 2004-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 Class X 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 Servicers 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 X
Certificates pursuant to a Pooling and Servicing Agreement dated as of July 1,
2004 (the "Agreement") among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Ocwen Federal Bank FSB, as servicer, Chase Manhattan Mortgage
Corporation, as servicer, Countrywide Home Loans Servicing LP, as servicer
(collectively, the "Servicers"), Ameriquest Mortgage Company ("Ameriquest") and
Deutsche Bank National Trust Company, 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 X
Certificate at the offices designated by the Trustee for such purposes.
No transfer of a Class X Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class X Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class X Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class X Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class X Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class X Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class X Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class X Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class X
Certificate, (C) not to cause income with respect to the Class X Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class X
Certificate or to cause the Transfer of the Ownership Interest in this Class X
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class X Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
Re: IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
By:____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2004-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2004-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 for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers 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, the Servicers 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, Ocwen Federal Bank FSB, as Servicer,
Chase Manhattan Mortgage Corporation, as Servicer, Countrywide
Home Loans Servicing LP, as Servicer, Ameriquest Mortgage
Company, as Responsible Party and Deutsche Bank National Trust
Company, as Trustee, GSAMP Trust, 2004-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. 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.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
_____________________
_____________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Ocwen Federal Bank FSB, as Servicer,
Chase Manhattan Mortgage Corporation, as Servicer, Countrywide
Home Loans Servicing LP, as Servicer, Ameriquest Mortgage
Company, as Responsible Party and Deutsche Bank National Trust
Company, as Trustee, GSAMP Trust, 2004-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 Trustee
has actual knowledge 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.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2004-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 July 1, 2004 (the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer, Chase
Manhattan Mortgage Corporation, as servicer, Countrywide Home Loans Servicing
LP, as Servicer, Ameriquest Mortgage Company, as Responsible Party and Deutsche
Bank National Trust Company, 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.
Re: 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:
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: XXXXX Xxxxx, 0000-XX0, Xxxxxxxx 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:
Deutsche Bank National Trust Company,
as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: GSAMP Trust 2004-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 B-4 or 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, we 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.
-----------------
(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.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of 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: [Address]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Section 2.03 of the Pooling and
Servicing Agreement. (The Company hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain). ________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If Box 4 or 5 above is checked, upon our return of all of the above documents to
you as the Trustee, please acknowledge your receipt by signing in the space
indicated below, and returning this form, if requested.
Address to which Trustee should
Deliver the Trustee's Mortgage File:
_______________________________________
_______________________________________
_______________________________________
By:____________________________________
(authorized signer)
Issuer:________________________________
Address:_______________________________
_______________________________
Date:__________________________________
Trustee
Acknowledged receipt by:
Deutsche Bank National Trust Company, as Trustee
By:________________________________________
Name:
Title:
Date
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the applicable Servicer or delivered to
and retained by the Trustee, as applicable:
(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. 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.
(b) The original of any guaranty executed in connection with the
Mortgage Note.
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, Ameriquest 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, Ameriquest shall deliver or cause to be delivered to the
Trustee, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of Ameriquest (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 Ameriquest; or (ii)
in the case of a Mortgage where a public recording office retains
the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
(d) The originals of all assumption, modification, consolidation or
extension agreements, 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) 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 a
certified true copy of such intervening Assignments of Mortgage
submitted for recording, 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 originator shall
deliver or cause to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of
the applicable originator or a certificate from an escrow company, a
title company or a 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 originator; or (ii)
in the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation
in a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment.
(g) The original mortgagee 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
Servicer REPORTING REQUIREMENTS
Data File Layout
--------------------------------------------------------------------------------
XXXXXXX XXXXX LOAN SERVICER INFORMATION REQUEST LIST
--------------------------------------------------------------------------------
Legend:
A=Available at Inception
T=Tech staff to resolve
B=Best efforts to provide data
N=Not available
FIELD NAME FIELD DESCRIPTION FORMAT
--------------------------------------------------------------------------------
ONE TIME, STATIC Legend
FIELDS
--------------------------------------------------------------------------------
Loan Number A Loan Number currently being used to Text
service this loan.
--------------------------------------------------------------------------------
Prior Loan Number A Prior Loan Number (if any). If servicing Text
has transferred this should contain the
Loan Number used by the previous
servicer.
--------------------------------------------------------------------------------
Trustee File Number T Trustee ID used to file documents. This Text
can be the Trustee's only id or a category
used to arrange documents into proper pools.
--------------------------------------------------------------------------------
Trustee Loan Number T Trustee secondary ID used to file Text
documents. Often this is used in
conjunction with Trustee File Number to
uniquely identify loans.
--------------------------------------------------------------------------------
Origination Date A Origination Date shown on loan Date
documents.
--------------------------------------------------------------------------------
Original Balance A Original amount of loan granted to Numeric
borrower. In the case of construction
loans this should be the full amount
extended on which the monthly payments
are based.
--------------------------------------------------------------------------------
First Payment Date A This is the contractual date when the first
payment was to be made. If the loan has been
modified this should be the first scheduled
payment date following the modification.
--------------------------------------------------------------------------------
Original Maturity A This is the contractual date when the Date
Date last payment on the loan is scheduled
to be made. For balloons it should be
the balloon date. For modified loans
it should not be the modified maturity
date.
--------------------------------------------------------------------------------
Original Term A The number of months from First Payment Number
Date to Maturity Date inclusive.
--------------------------------------------------------------------------------
Balloon Flag A Code/literal to identify balloon Text
loans. Example: Y, N.
--------------------------------------------------------------------------------
Loan Type A Code/literal to identify the loan type. Text
See Enumerations worksheet.
--------------------------------------------------------------------------------
Amortization Type A Generic category to describe loan Text
type. See Enumerations worksheet.
--------------------------------------------------------------------------------
Original A Original Amortization Term of the loan Number
Amortization Term in number of months. For fully
amortizing loans would be the same as
Original Term. For balloon loans this
would exceed Original Term. For IO
loans this would have no value.
--------------------------------------------------------------------------------
Interest Calculation A The basis on which interest is
Method calculated. See Enumerations worksheet.
--------------------------------------------------------------------------------
Daily Simple T Flag to identify loans where interest is due is
Interest Flag calculated based on the date that each payment is
actually received.
--------------------------------------------------------------------------------
Original Principal A Original contractual principal and Number
and Interest interest payment amount.
--------------------------------------------------------------------------------
Original Interest A Original contractual interest rate for
Rate loan.
--------------------------------------------------------------------------------
Negative A Code/literal to identify loans where Text
Amortization Flag negative amortization is allowed.
Example: Y=neg am allowed, N=no neg am
allowed.
--------------------------------------------------------------------------------
Negam Percent Cap A Maximum percentage of original balance Number
that a loan may negatively amortize
by. Example: 1.25, 1,10.
--------------------------------------------------------------------------------
Servicing Fee A Servicing Fee rate due servicer. Number
Example: 0.25%.
--------------------------------------------------------------------------------
Property Type A Code/literal that identifies the type Text
of property securing the loan. See
Enumerations worksheet.
--------------------------------------------------------------------------------
Property Address A Property address, not billing address. Text
--------------------------------------------------------------------------------
Property City A Property city. Text
--------------------------------------------------------------------------------
Property State A Property state. Text
--------------------------------------------------------------------------------
Property Zip A Property zip. Number
--------------------------------------------------------------------------------
Borrower Name A Name of borrower. Preferably in a Text
fixed format.
Example: XXXXX
XXXX W.
--------------------------------------------------------------------------------
CoBorrower Name A Name of Co borrower. Preferably in a Text
fixed format.
Example: XXXXX
XXXX W.
--------------------------------------------------------------------------------
Borrower Social Eleven character ID. Example: Number
Security 000-00-0000.
Number/TIN
A
--------------------------------------------------------------------------------
CoBorrower Social Security Eleven character ID. Example: Number
Number/TIN 000-00-0000.
A
--------------------------------------------------------------------------------
Original FICO score A Credit bureau score obtained at Number
application.
--------------------------------------------------------------------------------
Original Credit Grade A Internal credit grade assigned at Text
origination.
--------------------------------------------------------------------------------
Original Loan To A Ratio representing the Original Loan Balance to
Value Ratio the lower of the Original Appraised Value or
Original Purchase Price. Example: 80.00.
--------------------------------------------------------------------------------
Original Appraised A Appraised value at time of application. Number
Value
--------------------------------------------------------------------------------
Original Appraisal A Date of the original Appraisal Date
Date
--------------------------------------------------------------------------------
Original Appraisal A Name of the Appraisal firm Text
Firm
--------------------------------------------------------------------------------
Original Purchase A Price paid for home. Number
Price
--------------------------------------------------------------------------------
Purchase BPO A BPO at the time of Purchase by GS. Number
--------------------------------------------------------------------------------
Purchase BPO Date A Date of the Purchase BPO Date
--------------------------------------------------------------------------------
Lien Position A Number used to identify the lien Number
position in effect at the time of
application. Example: 1, 2, 3
--------------------------------------------------------------------------------
PMI Provider A Name or code for company providing
private mortgage insurance.
--------------------------------------------------------------------------------
PMI Coverage A Percentage of insurance provided by PMI
Percentage agreement.
--------------------------------------------------------------------------------
PMI Certificate ID A Unique ID to identify PMI insurance
certificate.
--------------------------------------------------------------------------------
Occupancy Type A Occupancy status at time of Text
application. See Enumerations
worksheet.
--------------------------------------------------------------------------------
Purpose of Loan A Code/literal used to identify the Text
original purpose of the loan. See
Enumerations worksheet.
--------------------------------------------------------------------------------
Prepayment Flag A Code/Flag to determine if loan was Text
originated with a prepayment penalty.
--------------------------------------------------------------------------------
Prepayment Penalty T Code/literal to identify Text
Type characteristics of penalty. Example:
6 MO INT ON 80% XXXX, 5/4/3/2/1, 3%.
--------------------------------------------------------------------------------
Prepayment Term A Original number of months that penalty Number
was imposed.
--------------------------------------------------------------------------------
Front Ratio T Front End Ratio at time of Number
application. Mortgage debt to borrower
income.
--------------------------------------------------------------------------------
Back Ratio T Back End Ratio at time of application. Number
Total debt to borrower income.
--------------------------------------------------------------------------------
MONTHLY LOAN DATA
UPDATES
--------------------------------------------------------------------------------
As Of Date A As Of Date for data sent. Date
--------------------------------------------------------------------------------
Loan Number A Loan Number currently being used to Number
service this loan.
--------------------------------------------------------------------------------
Investor Number A This is the servicer assigned number Number
for reporting purposes.
--------------------------------------------------------------------------------
Investor Category A This is the servicer assigned category
for reporting purposes.
--------------------------------------------------------------------------------
Current Maturity Date A This is the actual date when the last Date
payment on the loan is scheduled to be
made. For balloons it should be the
balloon date. For modified loans it
should be the modified maturity date.
--------------------------------------------------------------------------------
Remaining Term A The Remaining Term of the loan Number
--------------------------------------------------------------------------------
Current Principal & A Principal & Interest in effect for Number
Interest Payment currently outstanding payment.
--------------------------------------------------------------------------------
Current Interest Rate A Interest Rate in effect for currently Number
outstanding payment.
--------------------------------------------------------------------------------
Next Due Date A Date next payment is due.
--------------------------------------------------------------------------------
Interest Paid To Date A Date interest is paid to. Typically for 30/360
loans it is one month prior to Next Due Date.
--------------------------------------------------------------------------------
Last Payment Date A Date last payment was made. Date
--------------------------------------------------------------------------------
Current Balance A Actual outstanding balance of loan. Number
--------------------------------------------------------------------------------
Current Balance Net T The net present value of the current Number
Present Value balance
--------------------------------------------------------------------------------
Days Past Due A Number of days loan is past due.
--------------------------------------------------------------------------------
Delinquency Indicates if ABS or MBS method for
Convention reporting delinquencies is used.
--------------------------------------------------------------------------------
Delinquency Status A Indicates delinquency reported. Number
Example: 30, 60, 90.
--------------------------------------------------------------------------------
Status of Loan A Code/literal used to identify loan Text
status. See Enumerations worksheet.
--------------------------------------------------------------------------------
12 Month Pay String T 12 character string representing the timing of
payments received on a rolling 12 month basis.
String should begin with January and end with
December.
--------------------------------------------------------------------------------
Time 30 Days Delinquent in Indicates the number of times a loan payment has
Past 12 been made 30 or more days delinquent in the past
Months 12 months.
A
--------------------------------------------------------------------------------
Time 60 Days Delinquent in Indicates the number of times a loan payment has
Past 12 been made 60 or more days delinquent in the past
Months 12 months.
A
--------------------------------------------------------------------------------
Time 90 Days Delinquent in Indicates the number of times a loan payment has
Past 12 been made 90 or more days delinquent in the past
Months 12 months.
A
--------------------------------------------------------------------------------
Last Modification B Date that loan was last modified.
Date
--------------------------------------------------------------------------------
Last Extension Date B Date loan term was last extended.
--------------------------------------------------------------------------------
Total Extension B Number of months loan has been extended
Months in total.
--------------------------------------------------------------------------------
Restructured Interest B Total amount of restructured interest.
--------------------------------------------------------------------------------
Property Sale Date A Date property sold. Date
--------------------------------------------------------------------------------
Debt To Income Ratio A Debt To Income Ratio Number
--------------------------------------------------------------------------------
Senior Lien Amount A Most recently recorded senior lien Number
amount.
--------------------------------------------------------------------------------
Recent Property A Most recent appraised value or BPO Number
Valuation value.
--------------------------------------------------------------------------------
Recent Property A Date of most recent valuation. Date
Valuation Date
--------------------------------------------------------------------------------
Valuation Method A Identify method used to obtain new Text
valuation. See Enumerations worksheet.
--------------------------------------------------------------------------------
Valuation Firm T Name of the Firm who appraised the Text
property
--------------------------------------------------------------------------------
Current FICO T Current FICO score. Number
--------------------------------------------------------------------------------
FICO Date T FICO Date. Date
--------------------------------------------------------------------------------
MONTHLY SERVICING
UPDATES
--------------------------------------------------------------------------------
Borrower Payments
--------------------------------------------------------------------------------
Total Monthly Payment A Total cash received from borrower. Number
--------------------------------------------------------------------------------
Total Monthly A Cash applied to principal. Number
Payment Principal
--------------------------------------------------------------------------------
Total Monthly A Cash applied to interest. Number
Payment Interest
--------------------------------------------------------------------------------
Total Monthly Payment Cash applied to fees. Text
Penalties / Fee
A
--------------------------------------------------------------------------------
Total Monthly Escrow A Cash applied to escrow account. Number
Payment
--------------------------------------------------------------------------------
Total Monthly T Total amount borrower prepaid Number
Prepayment Amount
--------------------------------------------------------------------------------
Payment Date A Date the payment was made. Date
--------------------------------------------------------------------------------
Scheduled P&I A Borrower Scheduled P&I payment for the Number
month
--------------------------------------------------------------------------------
REO Rent Collection A Collection of rent on an REO Property
--------------------------------------------------------------------------------
Servicer Payments
--------------------------------------------------------------------------------
Monthly Escrow A Net escrow advances made or recovered Number
Advances by servicer. Positive value denotes
payments made by servicer.
--------------------------------------------------------------------------------
Monthly Corporate A Net corporate advances made or Number
Advances recovered by servicer. Positive value
denotes payments made by servicer.
--------------------------------------------------------------------------------
Monthly Non Recoverable Net Non Recoverable Corporate Advances Number
Corporate made or recovered by Servicer.
Advances Positive value denotes payments made by
A Servicer.
--------------------------------------------------------------------------------
Principal Advances A Total outstanding principal advances Number
made by servicer.
--------------------------------------------------------------------------------
Interest Advances A Total outstanding interest advances Number
made by servicer.
--------------------------------------------------------------------------------
LPMI Flag A Code/Flag to determine if PMI is paid Text
by owner of loan
--------------------------------------------------------------------------------
LPMI Rate A Rate per annum of LPMI premiums Number
--------------------------------------------------------------------------------
Account Balances
--------------------------------------------------------------------------------
Beginning Scheduled A Beginning scheduled loan balance. If Number
Balance the loan is serviced on a scheduled
balance basis
--------------------------------------------------------------------------------
Ending Scheduled A Ending scheduled loan balance. If the
Balance loan is serviced on a scheduled balance
basis
--------------------------------------------------------------------------------
Escrow Balance A Current balance of escrow account Number
(borrower's positive funds).
--------------------------------------------------------------------------------
Escrow Advance A Total outstanding escrow advance Number
Balance balance.
--------------------------------------------------------------------------------
Recoverable Corporate Total outstanding Recoverable corporate Number
Advance advance balance amount.
Balance
A
--------------------------------------------------------------------------------
Non Recoverable Corporate Total outstanding Non Recoverable Number
Advance corporate advance balance amount.
Balance
A
--------------------------------------------------------------------------------
Suspense Account A Total suspense account balance Number
Balance
--------------------------------------------------------------------------------
Accrued Interest A Total Accrued Interest on loan. Number
--------------------------------------------------------------------------------
Account Management
Statistics
--------------------------------------------------------------------------------
Forced Placed T Code indicating loan is on forced
Insurance Flag placed insurance.
--------------------------------------------------------------------------------
Annual Forced Placed T Amount of forced placed policy.
Insurance
--------------------------------------------------------------------------------
Stop Advance Flag B Code indicating loan has been placed in Text
a stop advance status. Example:
Y=Stop Advance.
--------------------------------------------------------------------------------
Stop Advance B Amount of principal and interest
Recovered advances recovered at stop date.
--------------------------------------------------------------------------------
Stop Advance Start B Date loan was initially placed on a Date
Date stop advance status.
--------------------------------------------------------------------------------
Stop Advance B Date stop advance status was reversed. Date
Reversal Date
--------------------------------------------------------------------------------
Stop Advance B Amount of advances reversed. Number
Reversal Amount
--------------------------------------------------------------------------------
Last Contact Date A Date of Servicer's last contact with Date
the borrower.
--------------------------------------------------------------------------------
Last Attempt Date A Date of the Servicer's last attempt to Date
contact the borrower.
--------------------------------------------------------------------------------
Bankruptcy Flag A Flag indicating loan is in bankruptcy. Text
--------------------------------------------------------------------------------
Bankruptcy Chapter A Chapter of bankruptcy (7, 11, 12, 13). Text
--------------------------------------------------------------------------------
Bankruptcy Start Date A Bankruptcy filing date. Date
--------------------------------------------------------------------------------
Bankruptcy End Date A Dismissal/Discharge date. Date
--------------------------------------------------------------------------------
Bankruptcy Post A Payment due date of Bankruptcy payment Date
Petition Due Date plan. In essence the new due date.
--------------------------------------------------------------------------------
Motion for Relief A Motion for Relief Request Date. Date
Request Date
--------------------------------------------------------------------------------
Motion for Relief A Date
Filing Date
--------------------------------------------------------------------------------
Motion for Relief A Motion for Relief Hearing Date. Date
Hearing Date
--------------------------------------------------------------------------------
Motion for Relief A Motion for Relief Granted Date. Date
Granted Date
--------------------------------------------------------------------------------
Motion for Relief N Date the motion was Denied (if Date
Denied Date applicable)
--------------------------------------------------------------------------------
In Demand Flag T Code indicating demand letter has been Text
sent.
--------------------------------------------------------------------------------
In Demand Start Date T Date demand letter was sent. Date
--------------------------------------------------------------------------------
In Demand End Date T Expiration of demand letter. Date
--------------------------------------------------------------------------------
Foreclosure Start A Date foreclosure flag placed on loan. Date
Date
--------------------------------------------------------------------------------
Due Date At Referral T The revised due date on any payment Date
modification.
--------------------------------------------------------------------------------
Foreclosure T On loans that are in Foreclosure the Servicers
Estimated End Date estimate of when the FCL will be completed.
--------------------------------------------------------------------------------
Foreclosure Sale Date A Date of actual foreclosure sale. Date
--------------------------------------------------------------------------------
Foreclosure end date T Date of recording of foreclosure deed. Date
--------------------------------------------------------------------------------
First Legal Date A Date of first legal action taken on Date
foreclosure.
--------------------------------------------------------------------------------
Foreclosure B Indicates if the loan has moved out of Number
Resolution Flag foreclosure (i.e. Did not go to REO).
--------------------------------------------------------------------------------
Foreclosure B Method used by the servicer to prevent the
Resolution Type foreclosed loan from moving into REO (i.e.
Reinstated, Paid Off, Worked out Repayment
plan...).
--------------------------------------------------------------------------------
Foreclosure On Hold B Flag indicating that the loan is in
foreclosure but on hold.
--------------------------------------------------------------------------------
Foreclosure Hold B Date indicating when the loan's Date
Start Date foreclosure proceedings were put on
hold.
--------------------------------------------------------------------------------
Bankruptcy Cash B Number of days an active foreclosure has been in
Delays BK subsequent to its initial foreclosure start
date.
--------------------------------------------------------------------------------
Forbearance Cash B Number of days an active foreclosure has been in
Delays forbearance subsequent to its initial foreclosure
start date.
--------------------------------------------------------------------------------
Non - Cash Delays B Number of allowable days that a loan's
foreclosure proceedings have been on hold due to
a non cash delay (i.e. Title problem...) [again as
per Fannie time line]
--------------------------------------------------------------------------------
Forbearance Start A Date forbearance plan was initiated. Date
Date
--------------------------------------------------------------------------------
Forbearance Payment A Amount of payment under Forbearance Number
plan.
--------------------------------------------------------------------------------
Forbearance End Date A Date forbearance plan scheduled to be Date
complete.
--------------------------------------------------------------------------------
Eviction Start Date A Date eviction flag placed on loan. Date
--------------------------------------------------------------------------------
Eviction End Date A Date property is vacated. Date
--------------------------------------------------------------------------------
REO Start Date A Date REO flag placed on loan (including Date
any redemption periods).
--------------------------------------------------------------------------------
REO End Date A Date property is sold. Date
--------------------------------------------------------------------------------
REO Sub Status A Status while within REO. See
Enumerations worksheet.
--------------------------------------------------------------------------------
Not Acquired Date T Date that the REO enters "Not Acquired" Date
sub status
--------------------------------------------------------------------------------
Eviction Date A Date that the REO enters "Eviction" sub Date
status
--------------------------------------------------------------------------------
Possession Date T Date that the REO enters "Possession" Date
sub status
--------------------------------------------------------------------------------
Listed Date A Date that the REO enters "Listed" sub Date
status
--------------------------------------------------------------------------------
Under Contract Date T Date that the REO enters "Under Date
Contract" sub status
--------------------------------------------------------------------------------
Estimated Sale Date A Servicer estimated closing date on loan Date
--------------------------------------------------------------------------------
Days In REO A Number of Days from the REO becomes Number
marketable to the As of Date
--------------------------------------------------------------------------------
Estimated Sales Price A Servicer estimated REO Sales Price Number
--------------------------------------------------------------------------------
Possession Date A Date when the servicer takes possession of the
property. Date we have full access to the
property, eviction completed
--------------------------------------------------------------------------------
Redemption End Date A Legal time period, determined by State, when
borrower can redeem their property. Property not
available for sale until redemption completed (no
beginning date, just an end date)
--------------------------------------------------------------------------------
Initial Listing Price A First listing price of property. Number
--------------------------------------------------------------------------------
Initial Listing Date A Date of the first listing price of Date
property
--------------------------------------------------------------------------------
Current List Price A Most recent listing price of property. Number
--------------------------------------------------------------------------------
Current List Date A Date of the most recent listing price Date
of property.
--------------------------------------------------------------------------------
Reason For Default A Servicer Code representing the Reason for
Default. See Enumerations worksheet.
--------------------------------------------------------------------------------
LIQUIDATED LOANS (Liquidated and Paid Off loans)
--------------------------------------------------------------------------------
Termination Type A Type of liquidation. See Enumerations Text
worksheet.
--------------------------------------------------------------------------------
Balance at A Actual Principal balance at time of Number
Termination termination.
--------------------------------------------------------------------------------
Scheduled Sale Date A Dates of planned sales for properties in Date
Foreclosure
--------------------------------------------------------------------------------
Property Sales Price A Sales price if liquidation was short sale or Number
REO sale.
--------------------------------------------------------------------------------
Liquidation Date A Date property liquidated. Date
--------------------------------------------------------------------------------
Gross Total Proceeds A Gross Total Proceeds. Number
--------------------------------------------------------------------------------
Net Total Proceeds A Gross total proceeds less expenses.
--------------------------------------------------------------------------------
Principal Advanced A Total of principal advanced at time of Number
liquidation.
--------------------------------------------------------------------------------
Interest Advanced A Total of interest advanced at time of Number
liquidation.
--------------------------------------------------------------------------------
Deferred Interest T Amount of deferred interest on the loan @ Number
liquidation
--------------------------------------------------------------------------------
Accrued Servicing T Servicing fee recovered at time of Number
Fee Recovered liquidation.
--------------------------------------------------------------------------------
Corporate Advances The amount of the Total Corporate Advance Number
Recovered at balance recovered at termination
Termination
A
--------------------------------------------------------------------------------
Escrow Advances The amount of the Total Escrow Advance Number
Recovered at balance recovered at termination
Termination
A
--------------------------------------------------------------------------------
Commission A The broker commission amount on liquidation Number
--------------------------------------------------------------------------------
Seller Concession A The dollar amt of seller concessions upon Number
liquidation.
--------------------------------------------------------------------------------
Taxes A Taxes paid on liquidation Number
--------------------------------------------------------------------------------
Repairs A Cost of Repairs to property Number
--------------------------------------------------------------------------------
Water and Sewer A Water & Sewer costs Number
--------------------------------------------------------------------------------
Expenses Recovered A The amount of the Total Expenses recovered Number
at Termination at termination
--------------------------------------------------------------------------------
Corporate Advances A Corporate advance balance at time of Number
at Termination liquidation.
--------------------------------------------------------------------------------
Escrow Advances at T Escrow advance balance at time of Number
Termination liquidation.
--------------------------------------------------------------------------------
Days from A Days from Acquisition to Close Number
Acquisition to Close
--------------------------------------------------------------------------------
Days from Possession A Days from Possession to Close Number
to Close
--------------------------------------------------------------------------------
Charge-off amount A Loss amount. Number
--------------------------------------------------------------------------------
Severity A Severity percentage.
--------------------------------------------------------------------------------
Severity Formula A Formula for calculating Severity percentage. Text
--------------------------------------------------------------------------------
Potential Deficiency N Flag indicating loan is referred for Text
Judgment Flag deficiency collections.
--------------------------------------------------------------------------------
Potential Deficiency N Deficiency balance reported to borrower/IRS. Number
Amount
--------------------------------------------------------------------------------
Deficiency Proceeds N Deficiency proceeds collected in current Number
(this period) month.
--------------------------------------------------------------------------------
Deficiency Proceeds N Deficiency proceeds collected to date. Number
Total (to date)
--------------------------------------------------------------------------------
Deficiency Vendor N Deficiency vendor out of pocket expenses. Number
Expense
--------------------------------------------------------------------------------
Deficiency Servicer N Deficiency vendor collection fee Number
Expense
--------------------------------------------------------------------------------
Hazard Insurance B Date hazard claim filed. Date
Claim Date
--------------------------------------------------------------------------------
Hazard Insurance B Date hazard claim due. Number
Claim Due Date
--------------------------------------------------------------------------------
Hazard Insurance B Amount of hazard claim. Date
Claim Amount
--------------------------------------------------------------------------------
Hazard Insurance Claim Amount of hazard claim paid to investor. Number
Paid
Amount
B
--------------------------------------------------------------------------------
MI Insurance Claim A Date MI claim filed.
Date
--------------------------------------------------------------------------------
MI Insurance Claim A Date MI claim is due to be paid.
Due Date
--------------------------------------------------------------------------------
MI Insurance Claim A Expected MI proceeds.
Amount
--------------------------------------------------------------------------------
MI Insurance Claim A Actual MI proceeds received.
Paid Amount
--------------------------------------------------------------------------------
Servicer Hold Back B Amount servicer withholds for future
Amount trailing expenses.
--------------------------------------------------------------------------------
------------------------------------------------------
Interest
Calculation Method
------------------------------------------------------
3360 30/360
A360 Actual/360
A365 Actual/365
AA Actual/Actual
------------------------------------------------------
------------------------------------------------------
Loan Type
------------------------------------------------------
COMI Conventional, with mi.
Collecting a premium from the
borrower for mortgage insurance
and is FHA and is VA
CONV Conventional, no mi
FHA FHA Mortgage
HEL Home Equity Line of credit
CC Credit Card
A Auto
B Boats
RV RV's
MFG Manufactured Housing
ATV ATV
VA VA Mortgage
OTH Other
------------------------------------------------------
------------------------------------------------------
Occupancy Type
------------------------------------------------------
2ND 2nd Home
NOO Non Owner Occupied
OO Owner Occupied
VA Vacant
------------------------------------------------------
------------------------------------------------------
Property Type
------------------------------------------------------
2F 2 Family
3F 3 Family
4F 4 Family
2-4F 2-4 Family
AUTO Automobile
BOAT Boat
COND Condominium
COOP Cooperative
HR-CONDO High Rise Condo
HVAC HVAC
MF Multi Family
MH Manufactured Housing
MX Mixed Use
OF Office
OTH Other
PUDA PUD - Attached
PUDD PUD - Detached
PWR PowerSports
RT Retail
RV Recreational Vehicle
SF Single Family
TH TownHouse
------------------------------------------------------
------------------------------------------------------
Purpose of Loan
------------------------------------------------------
PUR Purchase
RELO Relocation
REFI Rate/Term Refinance
CASH Cash Out Refinance
DEBT Cash Out Debt Consolidation
IMPR Cash Out Home Improvement
EDUC Cash Out Medical or Educational
Expense
TIT1 Title One Home Improvement
CONST New Construction
REO Facilitate REO
------------------------------------------------------
------------------------------------------------------
Status of Loan
------------------------------------------------------
BU Bankrupt - Unknown Status
C Current
DISP Dispute
F Foreclosure
NE Non Equity (NPV of current
balance < $7,500)
FB Forbearance
ID In Demand
LIT Litigation
NLS No Longer Serviced
PO Paid Off- Borrower paid down
entire balance
REO Real Estate Owned - MUST
Include a REO sub status
RSLD Resolved
LIQ Liquidated - MUST include a
Termination Type
U Unknown
------------------------------------------------------
------------------------------------------------------
Termination Type
------------------------------------------------------
CO Charge Off
COC Charge Off with cash possible
NLPO Negotiated Loan Payoff
NS Negotiated Sale
PO Paid Off
PPOC PPO with More Cash Possible
REOS REO Sale
TPPO Third Party Paid Off
------------------------------------------------------
------------------------------------------------------
Valuation Method
------------------------------------------------------
DB Drive By
WT Walk Through
OTH Other
APPR Appraisal
DD Due Diligence
PRFC Pre Foreclosure
SUPP Supplemental
RR Re-review
------------------------------------------------------
------------------------------------------------------
REO Sub Status
------------------------------------------------------
AC Acquired
PS Possession
EV Eviction
LS Listed
UC Under Contract
------------------------------------------------------
------------------------------------------------------
Reason For Default
------------------------------------------------------
ABP Abandonment of Property
BF Business Failure
CI Curtailment Of Income
D Death
EO Excessive Obligations
ILL Illness
ITR Inability To Rent
MD Marital Difficulties
MS Military Service
MI Mortgagor Incarcerated
N No Reason
PD Payment Dispute
PP Property Problem
SP Servicing Problems
TOP Transfer Of Ownership Pen
UC Unable To Contact
UEMP Unemployment
------------------------------------------------------
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K
Re: GSAMP Trust 2004-HE2 (the "Trust") Mortgage Pass-Through
Certificates, Series 2004-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as of July 1, 2004 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer
("Ocwen"), Chase Manhattan Mortgage Corporation, as servicer
("Chase"), Countrywide Home Loans Servicing LP, as Servicer,
Ameriquest Mortgage Company, as Responsible Party and Deutsche Bank
National Trust Company, 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 Servicers 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 Servicers have fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating to the
Servicers' 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,
Countrywide and Ocwen.
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT N
FORM OF TRUSTEE CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2004-HE2 (the "Trust") Mortgage Pass-Through
Certificates, Series 2004-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as of July 1, 2004 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer
("Ocwen"), Chase Manhattan Mortgage Corporation, as servicer
("Chase"), Countrywide Home Loans Servicing LP, as Servicer,
Ameriquest Mortgage Company, as Responsible Party and Deutsche Bank
National Trust Company, as trustee (the "Trustee")
I,[identify the certifying individual], a [title] of Deutsche Bank
National Trust Company 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: _________________________
DEUTSCHE BANK NATIONAL TRUST COMPANY
By: _______________________________
Name: _______________________________
Title: _______________________________
EXHIBIT O
FORM OF SERVICER CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2004-HE2 (the "Trust") Mortgage Pass-Through
Certificates, Series 2004-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as of July 1, 2004 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer
("Ocwen"), Chase Manhattan Mortgage Corporation, as servicer
("Chase"), Countrywide Home Loans Servicing LP, as Servicer,
Ameriquest Mortgage Company, as Responsible Party and Deutsche Bank
National Trust Company, as trustee (the "Trustee")
[Chase][Ocwen][Countrywide], certifies to the Depositor and the Trustee,
and their respective 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][Ocwen][Countrywide] and relating to the mortgage loans serviced by
[Chase][Ocwen][Countrywide] pursuant to the Pooling And Servicing
Agreement and provided by [Chase][Ocwen][Countrywide] 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][Ocwen][Countrywide] 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][Ocwen][Countrywide] 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][Ocwen][Countrywide] has disclosed to its independent auditor, who
issues the independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for [Chase][Ocwen][Countrywide], any
significant deficiencies relating to [Chase][Ocwen][Countrywide]'s
compliance with minimum servicing standards.
[CHASE MANHATTAN MORTGAGE CORPORATION][OCWEN FEDERAL BANK FSB][COUNTRYWIDE HOME
LOANS SERVICING LP]
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT P
FIRST NLC PURCHASE AGREEMENT
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------------------
XXXXXXX XXXXX MORTGAGE COMPANY,
Purchaser
and
FIRST NLC FINANCIAL SERVICES, LLC
Seller
Dated as of March 25, 2004
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...........................................
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.........................................
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; Third
Party Claims.....................................
Subsection 13.02 Merger or Consolidation of the Seller.............
SECTION 14. Financial Statements....................................
SECTION 15. Notices.................................................
SECTION 16. Severability Clause.....................................
SECTION 17. Counterparts............................................
SECTION 18. Governing Law...........................................
SECTION 19. Intention of the Parties................................
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement
SECTION 21. Waivers.................................................
SECTION 22. Exhibits................................................
SECTION 23. General Interpretive Principles.........................
SECTION 24. Reproduction of Documents...............................
SECTION 25. Further Agreements......................................
SECTION 26. Recordation of Assignments of Mortgage..................
SECTION 27. No Solicitation.........................................
SECTION 28. Waiver of Trial by Jury.................................
SECTION 29. Submission To Jurisdiction; Waivers.....................
SECTION 30. Confidential Information................................
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 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT I UNDERWRITING GUIDELINES
EXHIBIT J REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT K SERVICER ACKNOWLEDGMENT
EXHIBIT L ASSIGNMENT AND CONVEYANCE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------------------------------
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
March 25, 2004 ("Agreement"), by and between Xxxxxxx Sachs Mortgage Company, a
New York limited partnership, having an office at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Purchaser"), and First NLC Financial Services, LLC having an
office at 000 X. Xxxxxxxxx Xxxx, Xxxx 0, Xxxxxxxxx Xxxxx, XX 00000 (the
"Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, from time to time, the Seller desires to sell to the
Purchaser, and, from time to time, 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 whole loans on the dates as provided
herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser 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 at such time of
origination, whichever is less; provided, however, that in the case of a
refinanced Mortgage Loan, such value is based solely upon the appraisal made at
the time of origination of such refinanced Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
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 State of New
York, (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: The date or dates set forth on the related Purchase
Price and Terms Agreement on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell, the Mortgage Loans listed
on the related Mortgage Loan Schedule
CLTV: As of the date of origination and as to any Second Lien
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
outstanding principal balance of the Second Lien Mortgage Loan as of the date of
origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Mortgage Loan and which are secured by the same
Mortgaged Property to (b) the 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 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: The Custodian designated by the Purchaser or any
successor thereto under the Custodial Agreement.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage Loan
Package, the date set forth on the related Purchase Price and Terms Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Interim 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.
Escrow Payments: With respect to any Mortgage Loan for which the
related Mortgage requires an escrow, 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.
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.
High Cost 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", "predatory" or similar loan under any other applicable
state, federal or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high interest rates,
points and/or fees).
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.
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 Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan in Breach: Shall have the meaning set forth in Section 8.03
hereof.
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 date of origination (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.
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 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 Package: A pool of Mortgage Loans sold to the
Purchaser by the Seller on a Closing Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans, 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 counsel
for 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 related 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: With respect to each purchase of
a Mortgage Loan Package hereunder, that certain letter agreement setting forth
the general terms and conditions of such transaction consummated herein and
identifying the Mortgage Loans to be purchased hereunder, by and between the
Seller and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than, and not more than 1% greater than, the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than, and not more than one year less than, that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, and Index);
and (v) comply with each representation and warranty (respecting individual
Mortgage Loans) set forth in Section 9 hereof.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Date: As defined in Section 12.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus accrued interest thereon at the Mortgage Interest Rate from
the date on which interest had last been paid through the date of such
repurchase, plus the amount of any outstanding advances owed to any servicer,
and plus all costs and expenses incurred by the Purchaser or any servicer
arising out of or based upon such breach, including without limitation 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
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: First NLC Financial Services, LLC and its successors in
interest.
Servicer: Ocwen Federal Bank, FSB or its permitted successors and
assigns under the Servicing Agreement.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Servicer with respect to the servicing of the Mortgage Loans.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
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.
Stated Principal Balance: As to each Mortgage Loan, the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Sections 7 and 8.03 which is entitled to the benefits of the indemnifications
set forth in Sections 9.03 and 13.01.
Transaction Agreement: Shall have the meaning set forth in Section
13 hereof.
Transfer Date: (a) the earlier of (i) the date on which a Successor
Servicer assumes the servicing of the Mortgage Loans pursuant to the Servicing
Agreement pursuant to which the Successor Servicer shall service the Mortgage
Loans on behalf of the Purchaser and its assignees and (ii) the date 90 days
after the related Closing Date or (b) such other date as mutually agreed by the
Seller and the Purchaser.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit 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, on each related Closing Date, agrees to sell, and the
Purchaser agrees to purchase, Mortgage Loans having an aggregate principal
balance on the related Cut-off Date in an amount as set forth in the related
Purchase Price and Terms Agreement, or in such other amount as agreed by the
Purchaser and the Seller as evidenced by the aggregate scheduled principal
balance of the Mortgage Loans accepted by the Purchaser on the related Closing
Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
related Closing Date in accordance with the related Purchase Price and Terms
Agreement and this Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the related Closing Date to the Purchaser at least one
(1) Business Days prior to the related Closing Date. The Mortgage Loan Schedule
shall be the Preliminary Mortgage Schedule with those Mortgage Loans which have
not been funded prior to the related Closing Date deleted. 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 related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the Stated Principal Balance, as
of the related Cut-off Date, of the Mortgage Loans, after application of
payments of principal actually received on or before the related Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, on the related Closing Date, accrued interest on the
Stated Principal Balance of the related Mortgage Loans as of the related Cut-off
Date at the weighted average Mortgage Interest Rate of those Mortgage Loans from
the date interest was paid through on the Mortgage Loan through the day prior to
the related Closing Date, inclusive. The Purchase Price plus accrued interest as
set forth in the preceding paragraph shall be paid to the Seller by wire
transfer of immediately available funds to an account designated by the Seller
in writing.
The Purchaser shall be entitled to (1) all principal received after
the related Cut-off Date, (2) all other recoveries of late charges, prepayment
penalties, assumption fees or other charges collected after the related Cut-off
Date, and (3) all payments of interest on the Mortgage Loans at the Mortgage
Interest Rate.
SECTION 5. Examination of Mortgage Files.
Prior to the related Closing Date, the Seller shall (i) 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 and (ii) deliver to the
Purchaser copies of the Servicing Files and Credit Files. Such examination of
the Mortgage Files may be made by the Purchaser or its designee at any
reasonable time before or after the related Closing Date. If the Purchaser makes
such examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the Mortgage Loan Schedule,
and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not impair in any way the Purchaser's
(or any of its successor's) rights to demand repurchase, substitution or other
remedy for any breach of a representation or warranty or missing or defective
document that cannot be cured to the Purchaser's satisfaction, or as otherwise
provided in this Agreement. In the event that the Seller fails to deliver the
Credit Files with respect to any Mortgage Loan, the Seller shall, upon the
request of the Purchaser, repurchase or substitute for such Mortgage Loan at the
price and in the manner specified in Subsection 8.04.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, on each related Closing Date, does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse, but
subject to the terms of this Agreement, all right, title and interest of the
Seller in and to the Mortgage Loans 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 related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller after the related Cut-off Date
on or in connection with a Mortgage Loan shall be vested in the Purchaser or one
or more designees of the Purchaser; provided, however, that all funds received
on or in connection with a Mortgage Loan shall be received and held by the
Seller 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, which
marking may be evidenced by a designation of electronic files or records
maintained by the Seller in connection with each Mortgage Loan. In particular,
to the extent required by applicable law, the Seller shall maintain in its
possession, available for inspection by the Purchaser, and shall deliver to the
Purchaser upon demand, evidence of compliance with all federal, state and local
laws, rules and regulations. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Seller may be in the form of microfilm or
microfiche.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
five (5) Business Days prior to the related Closing Date the documents and
instruments in the Mortgage File for each Mortgage Loan in the related Mortgage
Loan Package.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay all
fees and expenses charged by the Custodian associated with the initial inventory
and maintenance of the Mortgage Loan Documents.
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 180 days
of the related Closing Date.
In the event any document required to be delivered to the Custodian
pursuant to the preceding paragraph, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, within 180 days following the related Closing Date
(other than with respect to the Assignments of Mortgage which shall be delivered
to the Custodian in blank on or prior to the related Closing Date and recorded
subsequently by the Purchaser or its designee), and in the event that the Seller
does not cure such failure within 30 days of discovery or receipt of written
notification of such failure from the Purchaser, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by the Seller at the
price and in the manner specified in Subsection 8.04. 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 twelve (12) months
of the related Closing Date.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 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 that the Seller maintain for
other mortgage loans purchased, originated and serviced by the Seller. The
program includes 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, guards against dishonest,
fraudulent, or negligent acts; and guards against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans in each Mortgage Loan Package shall be sold by
the Seller to the Purchaser on a servicing released basis. Subject to, and upon
the terms and conditions of this Agreement, with respect to the Mortgage Loans
in each Mortgage Loan Package, the Seller hereby sells, transfers, assigns and
delivers to the Purchaser, on the related Closing Date, the Servicing Rights.
Pursuant to the Servicing Agreement, on the related Closing Date, the Servicer
shall begin servicing the Mortgage Loans on behalf of the Purchaser in
accordance with the Servicing Agreement. The Seller shall take any actions
necessary to cause the Servicer to terminate servicing the Mortgage Loans on
behalf of the Seller. The Purchaser agrees to cause or permit the Servicer to
continue to provide performance data to the Seller with respect to the Mortgage
Loans following each Closing Date. The Seller shall be responsible for all
servicing fees with respect to the Mortgage Loans accruing through each Closing
Date.
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 each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of 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; 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, to the best of the Seller's knowledge, 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, (iii)
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)
relating to fraud, predatory lending, or the Seller's origination, servicing or
closing practices;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency is required for the execution, delivery and performance by the Seller of
or compliance by the Seller with this Agreement or the Mortgage Loans, the
delivery of a portion of the Mortgage Files to the Custodian or the sale of the
Mortgage Loans or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;
(g) Selection Process. The Mortgage Loans were not intentionally
selected from among the outstanding one- to four-family mortgage loans in the
Seller's portfolio at the related Closing Date as to which the representations
and warranties set forth in Subsection 8.02 could not be made;
(h) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans in the form attached as Exhibit J hereto;
(i) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished by the Seller pursuant to this Agreement or any
Transaction Agreement or in connection with the transactions contemplated hereby
contains or will contain any material untrue statement of fact or omits or will
omit to state a 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 to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability to
perform its obligations under this Agreement;
(k) Loan Experience. The Seller has delivered information as to its
loan charge-off or loan loss experience, its loan delinquency experience for the
immediately preceding three-year period, prepayment speed and delinquency
histories for at least the immediately preceding year, 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 has been advised by its independent
certified public accountants 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) 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;
(o) Seller's Purchase or Origination. The Seller's decision to
purchase or 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;
(p) Ability to Service. The Seller has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, and is in good standing to enforce, originate, sell
mortgage loans to, and service mortgage loans in each jurisdiction wherein the
Mortgaged Properties are located;
Subsection 8.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, its
assignees and the Successor Servicer that, as to each Mortgage Loan, as of the
related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments 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 date 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. 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, if applicable. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the issuer
of the title insurer, 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 originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan 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 with a generally acceptable
insurance carrier rated A:VI or better in Best's in an amount representing
coverage equal to the lesser of (i) the minimum amount required, under the terms
of coverage, to compensate for any damage or loss on a replacement cost basis
(or the unpaid balance of the mortgage if replacement cost coverage is not
available for the type of building insured) and (ii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973, as
amended. 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. The Seller
has not engaged in, and has no knowledge of the Mortgagor's or any servicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of such policy, 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, disclosure 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. 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 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 low-rise condominium project, or an individual
unit in a planned unit development and that no residence or dwelling is (i) a
mobile home or (ii) a manufactured home. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First or Second Lien. Each Mortgage is a valid and
subsisting first or second lien (as applicable) 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 related Mortgage Loan, which exceptions are generally
acceptable to prudent mortgage lending companies, and such other exceptions to
which similar properties are commonly subject and which do not individually, or
in the aggregate, materially and adversely affect the benefits of the security
intended to be provided by such Mortgage. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal;
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property; and
(4) with respect to Second Lien Mortgage Loans, the lien
of the first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each first lien mortgage loan, or (B) second lien and
second priority security interest with respect to each Second Lien Mortgage
Loan, in either case, on the property described therein and the 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. 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, any
builder or developer, or any other party involved in the origination or
servicing of the Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof 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 the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. 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, and each such title insurance policy is issued by a title
insurer 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 transactions contemplated by this Agreement. No claims are pending under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything 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. There is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration. With respect to each
Second Lien Mortgage Loan, (i) the prior mortgage is in full force and effect,
(ii) there is no default, breach, violation or event of acceleration existing
under such prior mortgage or the related mortgage note, (iii) no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap are as set forth on
the Mortgage Loan Schedule. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note. No Mortgage Loan is a simple interest
mortgage loan;
(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 in effect as of the
date of origination of such Mortgage Loan (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. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a reconveyance of
the deed of trust or a trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing (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 and any other documents required to be
delivered under the Custodial 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 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 is not subject to the bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. The Mortgage contains an enforceable provision
(except as such enforcement may be effected by bankruptcy and insolvency laws or
by general principals of equity) for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent of the
mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence. 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. As of the related Closing Date, 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 inhabitable under
applicable state and local laws;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller 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 Seller and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law and the provisions
of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments due
the Seller have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage and Mortgage Note on
the related Interest Rate Adjustment Date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage Interest
Rate, the same index was used with respect to each Mortgage Note which required
a new index to be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) No Violation of Environmental Laws. To the best of the Seller's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. 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; to the best of the Seller's
knowledge, 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, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(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, duly appointed by the related originator,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and appraiser
both satisfy the requirements of 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 in connection with 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 reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(qq) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the related Closing Date (whether or not
known to the Seller on or prior to such date) which has resulted or will result
in an exclusion from, denial of, or defense to coverage under any 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 with an Escrow
Account, the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(ss) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Seller has reported or caused to be reported, the Mortgagor credit files to each
of the three primary credit repositories monthly in a timely manner;
(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, Seller has full right and authority
and is not precluded by law or contract from furnishing such information to the
Purchaser;
(uu) 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;
(vv) Prepayment Penalty. The Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note except as set forth
on Exhibit B to each related Assignment and Conveyance Agreement. With respect
to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and will be enforced by the Seller for the
benefit of the Purchaser, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment penalty is in an amount equal
to the maximum amount permitted under applicable law and no such prepayment
penalty may be imposed for a term in excess of five (5) years with respect to
Mortgage Loans originated prior to October, 1, 2002. With respect to Mortgage
Loans originated on or after October 1, 2002, unless indicated otherwise in the
Mortgage Loan Schedule, no such prepayment penalty may be imposed for a term in
excess of three (3) years;
(ww) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan;
(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 or acquire 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 an obligation
(including any participation or certificate of beneficial ownership therein)
which is principally secured by an interest in real property;
(aaa) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust;
(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. Each Mortgage Loan has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500 as of the
related origination date;
(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"); to the extent applicable to the Seller as of the
related Closing Date, the Seller has established an anti-money laundering
compliance program as required by the Anti-Money Laundering Laws, has conducted
the requisite due diligence in connection with the origination of each Mortgage
Loan for purposes of the Anti-Money Laundering Laws, including with respect to
the legitimacy of the applicable Mortgagor and the origin of the assets used by
the said Mortgagor to purchase the property in question, and maintains, and will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws;
(eee) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated on or after March 7, 2003 that is a "high cost home
loan" as defined under the Georgia Fair Lending Act;
(fff) New York State Banking Law. There is no Mortgage Loan that (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 loan equal or exceed either the annual
percentage rate or the points and fees threshold for "high cost home loans," as
defined in Section 6-L of the New York State Banking Law.
(ggg) New Jersey Mortgage Loans. All Mortgage Loans originated in
New Jersey are ratable by Standard & Poor's, Fitch Ratings and Xxxxx'x.
(hhh) MERS Designations. With respect to each MERS Designated
Mortgage Loan, the Seller has designated the Custodian as the Investor and no
Person is listed as Interim Funder on the MERS(R) System;
(iii) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the 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;
(jjj) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, 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.
(kkk) Reports. On or prior to the related Closing Date, the Seller
has provided the Custodian and the Purchaser with a MERS Report listing the
Custodian as the Investor with respect to each MERS Designated Mortgage Loan.
(lll) Payoffs. No Mortgage Loans prepaid in full prior to the
related Closing Date.
(mmm) Consent. Either (a) no consent for the Second Lien Mortgage
Loan is required by the holder of the related first lien or (b) such consent has
been obtained and is contained in the Mortgage File;
(nnn) CLTV. No Second Lien Mortgage Loan has a CLTV in excess of
100%.
(ooo) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages. The Seller has or has caused the related servicer to, for each
Mortgage Loan, fully furnish, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian and
Trans Union Credit Information Company (three of the credit repositories), on a
monthly basis.
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 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);
(provided, with respect to any representations and warranties which are made to
the best of the Seller's knowledge, if it is discovered by the Seller or the
Purchaser that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan or the interest of the Purchaser or which materially and adversely
affects the value of a Mortgage Loan or the interests of the Purchaser in the
related Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty, such inaccuracy
shall be deemed a breach of the applicable representation and warranty) (a "Loan
In Breach"), the Seller shall use its best efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the Seller shall,
at the Purchaser's option, repurchase such Mortgage Loan at the Repurchase
Price, together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, 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 (tt), (vv), (ww), (xx), (eee)
and (fff) of Subsection 8.02, the Seller shall repurchase such Mortgage Loan at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. In the event that a Loan in 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 shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty
set forth in Subsections 8.02 (other than the representations and warranties set
forth in clauses (tt), (vv), (ww) or (eee) or (fff) of Subsection 8.02) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, the Seller shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Subsection 8.04 shall be accomplished by direct remittance of
the Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution, whether or not such substitution date is after the related
Transfer Date. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing for
such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 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 initial Determination Date for such month. The Seller
shall remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment 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 Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser 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 reasonable
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Seller's representations
and warranties contained in this Agreement or any Transaction Agreement. It is
understood and agreed that the obligations of the Seller 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 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 L 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 or
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, repurchase such Mortgage Loan or substitute a
Qualified Substitute 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 First Payment
Defaults.
With respect to any Mortgage Loan, if the related Mortgagor fails to
make the Monthly Payment to be made on the first Due Date after the related
Closing Date within 30 days of such Monthly Payment's Due Date (such date, the
"First Payment Default Date", such failure to pay, a "First Payment Default"),
the Seller shall, within five Business Days of receipt of notice from the
Purchaser, promptly repurchase such Mortgage Loan (a "First Payment Default
Mortgage Loan") from the Purchaser at the Purchase Price plus accrued interest
thereon at the Mortgage Interest Rate from the date on which interest had last
been paid through the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred
by the Purchaser or any servicer arising out of or based upon such breach,
including, without limitation, costs and expenses incurred in the enforcement of
the Seller's repurchase obligation hereunder; provided that with respect to
First Payment Defaults which occur solely due to operational errors of the
Seller, the Seller shall not be required to repurchase such Mortgage Loan if
such First Payment Default is cured within 30 days of receipt of notice of such
First Payment Default from the Purchase.
Subsection 8.05 Purchaser's Right to Review.
Prior to the related 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
Mortgage Files and the Credit Files, together with any payment histories,
collection histories, bankruptcy histories, broker's price opinions, 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 related Closing Date. The Purchaser shall have
the right, at its own expense, 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 Mortgage File documentation is missing or defective in whole or in
part, (b) for which (i) the related broker's price opinion is below the
appraisal provided in connection with the origination of the related Mortgage
Loan, (c) which does not conform to the Seller's Underwriting Guidelines, (d)
which does not conform to the terms of the related Purchase Price and Terms
Letter or is in breach of the representations and warranties set forth herein,
(e) for which the credit or compliance characteristics are unacceptable to the
Purchaser, and (f) that is not securitizable in the reasonable opinion of the
Purchaser.
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 has conducted or failed to
conduct any partial or complete examination of the files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase or other
relief for breach of Mortgage Loan representations and warranties, missing or
defective documents or as otherwise provided in this Agreement.
SECTION 9. Closing.
Each closing for the purchase and sale of the Mortgage Loans shall
take place on the related Closing Date. At the Purchaser's option, each closing
shall be either: by telephone, confirmed by letter or wire as the parties shall
agree, or conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) prior to the related Closing Date, the Seller shall deliver to
the Purchaser via electronic medium acceptable to the
Purchaser, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage
Loans delivered on the related Closing Date (including accrued
interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 10 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 10. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
initial Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Custodial Agreement, dated as of the related Cut-off Date;
3. the related Mortgage Loan Schedule, one copy to be attached hereto, and
one copy to be attached to the Custodian's counterpart of the Custodial
Agreement;
4. a Custodian's Certification, as required under the Custodial Agreement, in
the form of Exhibit 2 to the Custodial Agreement;
5. an Officer's Certificate, in the form of Exhibit E hereto with respect to
each Seller, including all attachments thereto;
6. an Opinion of Counsel of the Seller (who may be an employee of the
Seller), in form and substance acceptable to the Purchaser ("Opinion of
Counsel of the Seller");
7. 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;
8. a Security Release Certification, 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;
9. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the related Seller by merger or acquired or
originated by the Seller while conducting business under a name other than
its present name, if applicable; and
10. a MERS Report reflecting the Custodian as Investor and no Person as
Interim Funder for each MERS Designated Mortgage Loan.
The Closing Documents to be delivered on each Closing Date shall
consist of fully executed originals of the following documents:
1. an Assignment and Conveyance in the form of Exhibit L hereto, including
all exhibits;
2. the related Mortgage Loan Schedule, with one copy to be attached to the
related Assignment and Conveyance;
3. each of the documents required to be delivered by the Seller pursuant to
Section 6.03 hereof;
4. the initial certification of the Custodian with respect to the related
Mortgage Loan Package;
5. a Security Release Certification, substantially in the form of Exhibit H,
hereto executed by any person, as requested by the Purchaser, if any of
the Mortgage Loans have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
6. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present
name, if applicable; and
7. if requested, by the Purchaser in connection with a material change in
Seller's financial condition or corporate structure, an updated Officer's
Certificate, in the form of Exhibit E hereto, including all attachments
thereto and an updated Opinion of Counsel of the Seller, in the form of
Exhibit F hereto.
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 related
Closing Date, and all costs and expenses incurred in connection with the
transfer of the Mortgage Loans, fees to transfer files and prepare
assignments/endorsements, all initial recording fees, if any, for the
assignments of mortgage for all Mortgage Loans not recorded in the name of MERS,
all fees, if any, for transferring record ownership on the MERS system of
Mortgage Loans recorded in the name of MERS, custodial fees, including the costs
associated with clearing exceptions, (including costs to record intervening
assignments and any existing assumption and modification agreements), together
with the fees and expenses of Seller's counsel, shall be payable by the Seller.
SECTION 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 related Closing Date, on one or more dates
(each a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of 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 cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to restate the representations and
warranties set forth in this Agreement as of the related Transfer Date, but
modified, if necessary, to reflect changes due to events that may have occurred
after the related Closing Date, in connection with such Reconstitution and (3)
to enter into an assignment and recognition agreement or other agreement in
connection with such Transaction (the "Transaction Agreement") setting forth
such restated representations and warranties as of the related Transfer Date and
the remedies for breach of same (which remedies will be the same as those set
forth in this Agreement). The Seller shall use its reasonable best efforts to
assist the Purchaser, and any prospective purchaser, if the Purchaser or such
prospective purchaser so requests, in connection with each Transaction, which
assistance shall include, but not be limited to, (i) providing any information
relating to the Mortgage Loans necessary to assist in the preparation of any
disclosure documents, (ii) restating as of the related Transfer Date, for the
benefit of the Purchaser, its assignees and the Successor Servicer, the same
representations and warranties as to the Mortgage Loans as will be set forth in
the Purchase Agreement, but modified, if necessary, to reflect changes due to
events that may have occurred since the related Closing Date, and (iii) an
opinion of counsel (which may be from in-house counsel), if requested by the
Purchaser, in form and substance satisfactory to the Purchaser. The Seller
agrees to enter into (a) an assignment, assumption and recognition agreement
pursuant to which the Seller assigns the restated representations and warranties
and remedies to the Transaction or (b) other agreement in connection with such
Transaction setting forth such restated representations and warranties and the
remedies for breach of same (which remedies will be the same as those set forth
in the Purchase Agreement). If a Transaction occurs during an Interim Period,
the Seller agrees to enter into a sub-servicing agreement with the Purchaser and
the related successor servicer. Moreover, the Seller agrees to cooperate with
all reasonable requests made by the Purchaser to effect such Transaction
Agreements and Reconstitutions. The Seller shall indemnify the Purchaser, each
Affiliate designated by the Purchaser, each Person who controls the Purchaser or
such Affiliate, and any 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 reasonable
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
Seller'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 Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute each
Assignment of Mortgage, (except with respect to each MERS Designated Mortgage
Loan), track such Assignments of Mortgage to ensure they have been recorded and
deliver them as required by the prospective purchaser or trustee, as applicable,
upon the Seller's receipt thereof. Additionally, the Seller shall prepare and
execute, 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 with respect thereto
this Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01 Additional Indemnification by the Seller; Third
Party Claims.
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 costs, judgments, and any
other reasonable costs, fees and expenses that the Purchaser or the Successor
Servicer have incurred as a result of (a) the failure of the Seller to perform
its duties under this Agreement or (b) any breach of any of Seller's
representations, warranties or covenants set forth in this Agreement, or (c) any
breach of any of Seller's representations, warranties or covenants set forth in
Transaction Agreement entered into pursuant to Section 12. The Seller
immediately shall notify the Purchaser if a claim is made by a third party
against the Seller with respect to this Agreement or any Transaction Agreement
or the Mortgage Loans, assume (with the prior written consent of the Purchaser)
the defense (provided, that if the Purchaser does not consent, the Purchaser
shall assume the defense) of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim.
With respect to any third party claim or defense which Purchase is
defending which relates to an allegation that Seller failed to originate or
service a Mortgage Loan in accordance with any federal, state or local law, in
the event that the Seller does not possess, and/or fails to deliver to the
Purchaser upon demand, evidence of Seller's compliance with all such
requirements of applicable law, Seller shall (a) repurchase such Mortgage Loan
at the Repurchase Price and (b) indemnify the Purchaser for all expenses in
connection with the Purchaser's defense of such claim, including legal fees, and
(c) assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim.
The Purchaser promptly shall reimburse the Seller for all reasonable
amounts advanced by it pursuant to the preceding sentence, except when the claim
is in any way related to the Servicer's indemnification pursuant to Section
8.04, or is in any way related to the failure of the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Transaction Agreement.
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 three (3) years following the related
Closing Date; provided, however, that such information will be limited to the
audited financial statements of the Seller for the three (3) years preceding
such disclosure; and such information may only be provided if the prospective
purchaser has executed a written confidentiality agreement, addressed to the
Seller, stating that all non-public information will be used only for the
purposes of evaluating the proposed investment and that the prospective
purchaser has required such information as integral to its decision-making
process. Copies of any such confidentiality agreements must be delivered by the
Purchaser to the Seller within five (5) Business Days of receipt thereof by the
Purchaser.
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. 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 a Seller:
First NLC Financial Services, LLC
000 X. Xxxxxxxxx Xxxx
Xxxxx 000, Xxxxxxxx 0
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
President, CEO
(ii) if to the Purchaser:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx
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 16. 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 17. 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 18. 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 19. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller are selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller; provided that Seller shall not be required to recognize
more than (a) three transferees of the Purchaser pursuant to Securitization
Transfers and (b) one transferee of the Purchaser pursuant to a Whole Loan
Transfer. In the event the Purchaser assigns this Agreement, and the assignee
assumes any of the Purchaser's obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto. 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 21. 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 22. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 23. 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 24. 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 25. 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 26. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option (except
with respect to any MERS Designated Mortgage Loan).
SECTION 27. No Solicitation.
From and after the related 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 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 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 related Closing Date and the Seller shall take no
action to undermine these rights and benefits. Notwithstanding the foregoing, it
is understood and agreed that promotions undertaken by the Seller or any
affiliate of the Seller which are directed to the general public at large,
including, without limitation, mass mailing, internet, and email solicitations
based, in all instances, on commercially acquired mailing lists (which may not
be targeted at the Mortgagors,) and newspaper, radio and television
advertisements shall not constitute solicitation under this Section 27.
SECTION 28. 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 29. Submission To Jurisdiction; Waivers.
Each party hereto hereby irrevocably and unconditionally:
(A) SUBMITS ITSELF 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 PARTIES HERETO 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. Confidential Information
The Seller understands and agrees that this Agreement, the Side
Letter, each Purchase Price and Terms Agreement, and any other agreements
executed in connection with the sale contemplated hereunder, any agreements
executed in connection with the securitization of the Mortgage Loans, and any
offering circulars or other disclosure documents produced in connection with
such securitization (the "Agreements") are confidential and proprietary to the
Purchaser, and the Seller agrees to hold such documents confidential and not to
divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under the related Purchase
Price and Terms Agreement or the Agreements, (b) to the extent such information
enters into the public domain other than through the wrongful act of the Seller,
(c) as is necessary in working with legal counsel, auditors, agents, rating
agencies, 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. The Seller understands and
agrees that the Agreements, any other agreements executed in connection with the
sale contemplated hereunder, any agreements executed in connection with the
securitization of the Mortgage Loans, and any offering circulars or other
disclosure documents produced in connection with such securitization are
confidential and proprietary to the Purchaser, and the Seller agrees to hold
such documents confidential and not to divulge such documents to anyone except
(a) to the extent required by law or judicial order or to enforce its rights or
remedies under this letter agreement or the Agreements, (b) to the extent such
information enters into the public domain other than through the wrongful act of
the Seller, or (c) as is necessary in working with legal counsel, auditors,
agents, rating agencies, taxing authorities or other governmental agencies.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX XXXXX MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
FIRST NLC FINANCIAL SERVICES, LLC
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the related Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller (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 Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or attorney's
opinion of title accompanied by a title abstract or, in the event such original
title policy is unavailable, a certified true copy of the related policy binder
or commitment for title certified to be true and complete by the title insurance
company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage;
(i) original powers of attorney, if applicable, with evidence of
recording thereon, if required;
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(b) The original hazard insurance policy and, if required by law,
flood insurance policy.
(c) Residential loan application.
(d) Mortgage Loan closing statement.
(e) 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.
(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.
(m) If available, termite report, structural engineer's report,
water potability and septic certification.
(n) Sales contract.
(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) Amortization schedule.
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) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule;
(7) the LTV at the origination;
(8) the Mortgage Interest Rate as of the related Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the related Cut-off
Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
due and collected on or before the related Cut-off Date;
(15) With respect to the Adjustable Rate Mortgage Loans, the first
Interest Rate Adjustment Date and the first principal and interest payment
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) 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,
alternative or reduced);
(23) the loan credit classification (as described in the
Underwriting Guidelines);
(24) whether such Mortgage Loan provides for a Prepayment Penalty;
(25) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(26) a description of the Prepayment Penalty, 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 Section 32
Mortgage Loan;
(34) the Due Date for the first Monthly Payment;
(35) the original Monthly Payment due;
(36) with respect to the related Mortgagor, the debt-to-income
ratio;
(37) the Appraised Value of the Mortgaged Property;
(38) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(39) Scheduled Principal Balance;
(40) balloon flag;
(41) balloon term;
(42) lien position;
(43) senior loan amount (if 2nd lien);
(44) combined LTV;
(45) junior lien amount ($);
(46) With respect to the Adjustable Rate Mortgage Loans, the
Periodic Rate Cap for the initial interest rate adjustment;
(47) original principal and interest payment;
(48) with respect to the Adjustable Rate Mortgage Loans, the first
Mortgage Interest Rate change period and the first principal and interest
payment change period;
(49) leasehold (yes or no).
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
MORTGAGE LOAN SCHEDULE
----------------------
EXHIBIT E
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of First NLC Financial Services, LLC], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of
good standing of the Company issued within ten days of the date hereof,
and no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage Loan
Purchase and Warranties Agreement, dated as of March 25, 2004, 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 sale of the mortgage loans or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the 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. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the 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 the Purchase Agreement,
and any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
EXHIBIT G
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that First NLC Financial Services, LLC
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to Xxxxxxx Sachs Mortgage
Company under a Mortgage Loan Purchase and Warranties Agreement, dated as of
March 25, 2004, certain mortgage loans originated by the Association. The
Company warrants that the mortgage loans to be sold to Xxxxxxx Xxxxx Mortgage
Company are in addition to and beyond any collateral required to secure advances
made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxxx Sachs Mortgage Company shall not be used as additional or substitute
collateral for advances made by the Association. Xxxxxxx Xxxxx Mortgage Company
understands that the balance of the Company's mortgage loan portfolio may be
used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxxx Sachs
Mortgage Company.
Very truly yours,
_______________________________
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
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I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to Xxxxxxx Xxxxx Mortgage Company from the Company named below pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement, dated as of March
25, 2004, 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 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
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT J
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
--------------------------------------------------------------------------
THE MORTGAGE LOANS
------------------
Pool Characteristics of the Mortgage Loans as delivered on the
related Closing Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than ___%
are secured by real property improved by individual condominium units, (c) no
more than ___% are secured by real property improved by an individual unit in a
planned unit development, and (d) at least ___% are secured by real property
with a detached one family residence erected thereon. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (a) no more than ____%
are "cash-out" refinance mortgage loans, (b) no more than ____% are rate and
term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, the weighted average
FICO Score shall be at least _______. No Mortgage Loan shall have a FICO Score
less than ___ as of the origination date. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, (i) no more than __% of the Mortgage
Loans were originated under a `stated documentation' program, (ii) no more than
__% of the Mortgage Loans were originated under a documentation program which is
lacking ratio verification, (iii) no more than __% of the Mortgage Loans have no
documentation and (iv) at least _________% of the Mortgage Loan were originated
under a `full documentation' program. The maximum Mortgage Interest Rate on the
Mortgage Loans as of the related Cut-off Date was ____%. The minimum Mortgage
Interest Rate on the Mortgage Loans as of the related Cut-off Date was ____%.
The Mortgage Loans have a weighted average remaining term of ___ months. The
maximum original principal balance of the Mortgage Loans is $_______________.
The minimum original principal balance of the Mortgage Loans is $______________.
The average original principal balance of the Mortgage Loans is $
_______________. With respect to the aggregate unpaid principal balance of the
Mortgage Loans: (a) __% of the Mortgaged Properties will be located in
[_______]; (b) __% of the Mortgaged Properties will be located in [______] and
(c) not more than __% of the Mortgaged Properties will be located in any other
single state. The Mortgage Loan, as of the date of its origination, has an LTV
equal to or less than ___%. The weighted average LTV of all the Mortgage Loans
as of their respective dates of origination was not greater than ____%
EXHIBIT K
SERVICER ACKNOWLEDGMENT
-----------------------
As of [_________]
First NLC Financial Services, LLC
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: Letter Agreement in connection with the purchase by Xxxxxxx
Sachs Mortgage Company (the "Purchaser") and the sale by First
NLC Financial Services, LLC (the "Company") of mortgage loans
pursuant to that certain Mortgage Loan Purchase and Warranties
Agreement (the "Agreement"), dated as of March 25, 2004, 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:
FIRST NLC FINANCIAL SERVICES, LLC
(Seller)
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT L
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ASSIGNMENT AND CONVEYANCE
-------------------------
On this __ day of _________, 200_, First NLC Financial Services,
LLC, as the Seller, under that certain Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of March 25, 2004 (the "Agreement") does hereby
sell, transfer, assign, set over and convey to Xxxxxxx Sachs Mortgage Company,
as Purchaser under the Agreement all rights, title and interest of the Seller in
and to (a) the Mortgage Loans listed on the related Mortgage Loan Schedule
attached as Exhibit 1 hereto, and (b) the Servicing Rights, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Section 2 of the Agreement, the Seller
has delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The ownership of each Mortgage Note,
Mortgage, and the contents of each Mortgage File is vested in the Purchaser and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be delivered promptly by the Seller
to the Purchaser.
The Seller confirms to the Purchaser that, unless otherwise agreed
upon in writing by the Seller and the Purchaser, the representations and
warranties set forth in Section 7 of the Agreement with respect to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto, and the
representations and warranties in Section 6 of the Agreement with respect to the
Seller are true and correct as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
FIRST NLC FINANCIAL SERVICES, LLC
. (Seller)
By:__________________________
Name:________________________
Title:_______________________
