EXECUTION COPY
EXHIBIT 4
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GS MORTGAGE SECURITIES CORP.,
Depositor,
XXXXXX LOAN SERVICING LP,
Servicer,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2002
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GSAMP TRUST 2002-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2002-HE2
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.......................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans......................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans...................
Section 2.03 Representations, Warranties and Covenants of the Servicer.........
Section 2.04 Execution and Delivery of Certificates............................
Section 2.05 REMIC Matters.....................................................
Section 2.06 Representations and Warranties of the Depositor...................
Section 2.07 Remedies for Breaches of Representations and Warranties
with Respect to the Mortgage Loans...............................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans................................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers.....................................................
Section 3.03 Successor Subservicers............................................
Section 3.04 Liability of the Servicer.........................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee..........................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee..........................................................
Section 3.07 Collection of Certain Mortgage Loan Payments......................
Section 3.08 Subservicing Accounts.............................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..................................................
Section 3.10 Collection Account................................................
Section 3.11 Withdrawals from the Collection Account...........................
Section 3.12 Investment of Funds in the Collection Account 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
Servicer 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 [Reserved]........................................................
Section 3.28 Excess Reserve Fund Account; Distribution Account.................
Section 3.29 Optional Purchase of Delinquent Mortgage Loans....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances..........................................................
Section 4.02 Priorities of Distribution........................................
Section 4.03 Monthly Statements to Certificateholders..........................
Section 4.04 Certain Matters Relating to the Determination of LIBOR............
Section 4.05 Allocation of Applied Realized Loss Amounts.......................
Section 4.06 The Class A Certificate Insurance Policy..........................
Section 4.07 Effect of Payments by the Class A Certificate Insurer;
Subrogation......................................................
Section 4.08 Allocation of the Class A Principal Parity Deficit................
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 Certificate Insurer to Exercise
Rights of Class A Certificateholders.............................
Section 5.08 Class A Certificate Insurer Default...............................
Section 5.09 Registration Rights...............................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer...........
Section 6.02 Merger or Consolidation of the Depositor or the Servicer...........
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others.......................................................
Section 6.04 Limitation on Resignation of the Servicer.........................
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims...........................................................
Section 6.06 Servicing Rights Pledge...........................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.................................................
Section 7.02 Trustee to Act; Appointment of Successor..........................
Section 7.03 Notification to Certificateholders................................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.............................................
Section 8.02 Certain Matters Affecting the Trustee.............................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.............
Section 8.04 Trustee May Own Certificates......................................
Section 8.05 Trustee's Fees and Expenses.......................................
Section 8.06 Eligibility Requirements for the Trustee..........................
Section 8.07 Resignation and Removal of the Trustee............................
Section 8.08 Successor Trustee.................................................
Section 8.09 Merger or Consolidation of the Trustee............................
Section 8.10 Appointment of Co-Trustee or Separate Trustee.....................
Section 8.11 Tax Matters.......................................................
Section 8.12 Periodic Filings..................................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account.............
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 The Class A Certificate Insurer Default...........................
Section 10.12 Third Party Beneficiary...........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties of the Depositor as to the
Mortgage Loans
EXHIBITS
Exhibit A Form of Class A and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided to Depositor
Exhibit N Household Sellers Purchase Agreements
THIS POOLING AND SERVICING AGREEMENT, dated as of December 1, 2002,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), XXXXXX LOAN SERVICING LP, a Delaware limited partnership, as
servicer (the "Servicer"), 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 five segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising five REMICs
(each, a "Trust REMIC" or, in the alternative, the Lower Tier REMIC, the Upper
Tier REMIC, the Class B-1 REMIC, the Class B-2 REMIC and the Class X REMIC,
respectively). As further described herein, the Class X Certificate and each
Class of LIBOR Certificates (other than the right of each Class of LIBOR
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-1 Certificate represents ownership of the sole class of residual interest in
each of the Lower Tier REMIC and the Upper Tier REMIC, and the Class R-2
Certificate represents ownership of the sole class of residual interest in each
of the Class B-1 REMIC, the Class B-2 REMIC and the Class X REMIC for purposes
of the REMIC Provisions. The Startup Day for each REMIC described herein is the
Closing Date. The latest possible maturity date for each Certificate is the
latest date referenced in Section 2.06. 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-3, Class LT-B-1 and Class LT-B-2 Interests are hereby
designated the LT-Accretion Directed Classes (the "LT-Accretion Directed
Classes"). The Class B-1 REMIC shall hold as an asset the Class B-1 Interest
issued by the Upper Tier REMIC, the Class B-1 Certificates shall represent
ownership of the regular interest issued by the Class B-1 REMIC and the Class
B1-R Interest shall represent the sole class residual interest in the Class B-1
REMIC. The Class B-2 REMIC shall hold as an asset the Class B-2 Interest issued
by the Upper Tier REMIC, the Class B-2 Certificates shall represent ownership of
the regular interest issued by the Class B-2 REMIC and the Class B2-R Interest
shall represent the sole class residual interest in the Class B-2 REMIC. The
Class X REMIC shall hold as an asset the Class X Interest issued by the Upper
Tier REMIC, the Class X Certificate shall represent ownership of the regular
interest issued by the Class X REMIC and the Class X-R Interest shall represent
the sole class residual interest in the Class X REMIC. The Class P Certificate
represents beneficial ownership of the Prepayment Premiums, each LIBOR
Certificate represents a beneficial ownership of a regular interest in a Trust
REMIC and the right to receive Basis Risk Carry Forward Amounts and the Class X
Certificate represents beneficial ownership of a regular interest in the Class X
REMIC and the Excess Reserve Fund Account, which portions of the Trust Fund
shall be treated as a grantor trust.
CORRESPONDING
LOWER TIER LOWER TIER INITIAL LOWER TIER PRINCIPAL UPPER TIER
CLASS DESIGNATION INTEREST RATE AMOUNT REMIC CLASS
------------------ ------------- ---------------------------- -----------
Class LT-A-1 (1) 1/2 initial Corresponding A-1
Upper Tier REMIC initial
principal balance
Class LT-A-2 (1) 1/2 initial Corresponding A-2
Upper Tier REMIC initial
principal balance
Class LT-A-3 (1) 1/2 initial Corresponding A-3
Upper Tier REMIC initial
principal balance
Class LT-B-1 (1) 1/2 initial Corresponding B-1
Upper Tier REMIC initial
principal balance
Class LT-B-2 (1) 1/2 initial Corresponding B-2
Upper Tier REMIC initial
principal balance
Class LT-Accrual (1) 1/2 Pool Stated Principal
Balance plus 1/2
Overcollateralized Amount,
less $2,000
Class LT-Group I (2) $1,202.83 (5)
Class LT-Group II (3) $627.14 (5)
Class LT-Group III (4) $170.02 (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 or the Excess Spread Reserve 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
(without reduction for the Premium Rate or the Excess Spread Reserve
Rate).
(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
(without reduction for the Premium Rate or the Excess Spread Reserve
Rate).
(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 (without reduction for the Premium Rate or the Excess Spread Reserve
Rate).
(5) On the Closing Date, the Initial Lower Tier Principal Amount of the Class
LT-Group I Interest shall be $1,202.83415969, the Initial Lower Tier
Principal Amount of the Class LT-Group II Interest shall be $627.14452974
and the Initial Lower Tier Principal Amount of the Class LT-Group III
Interest shall be $170.02131057. 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, the Upper Tier Regular Interests and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of the LT-Accretion Directed Classes (each such Class will be reduced
by an amount equal to 50% of any increase in the Overcollateralized Amount that
is attributable to a reduction in the principal balance of its Corresponding
Class) and will be accrued and added to the principal balance of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the principal
balance of the Class LT-Accrual Interest may not exceed interest accruals for
such Distribution Date for the Class LT-Accrual Interest. In the event that: (i)
50% of the increase in the Overcollateralized Amount exceeds (ii) interest
accruals on the Class LT-Accrual Interest for such Distribution Date, the excess
for such Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans or paid under the Policy shall be allocated 50% to (i) 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 between
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 balances 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 between these Lower Tier Regular Interests in the manner described
below) is equal to 50% of the aggregate 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 or paid under the Policy, and all
Realized Losses, allocable to such Lower Tier Regular Interests shall be
allocated (i) to the Class LT-Accrual Interest in the same proportion that the
then outstanding principal balance of such Lower Tier Regular Interest bears to
the then outstanding aggregate principal balance of the Class LT-Accrual
Interest, the Class LT-Group I Interest, the Class LT-Group II Interest and the
Class LT-Group III Interest and (ii) the remainder to each of the Class LT-Group
I Interest, the Class LT-Group II Interest and the Class LT-Group III Interest
in the same proportion that the then outstanding aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group bears to the then
outstanding aggregate Stated Principal Balance of the Mortgage Loans.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper Tier REMIC.
UPPER TIER INTEREST INITIAL UPPER TIER
RATE AND PRINCIPAL AMOUNT AND
UPPER TIER CORRESPONDING CLASS CORRESPONDING CLASS CORRESPONDING
CLASS DESIGNATION PASS-THROUGH RATE CERTIFICATE BALANCE CERTIFICATE
----------------- ------------------- -------------------- -------------
Class A-1 (1) $1,541,650,000 Class A-1(7)
Class A-2 (2) $803,799,000 Class A-2(7)
Class A-3 (3) $217,914,000 Class A-3(7)
Class B-1 (4) $43,332,000 Class B-1(7)
Class B-2 (4) $33,853,272 Class B-2(7)
Class X (5) (5) Class X(5)
Class UT-R (6) 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 0.52%, (ii) the Loan Group I
Cap and (iii) the WAC Cap or (b) after the Optional Termination Date, the
least of (i) LIBOR plus 1.04%, (ii) the Loan Group 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 0.52%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 1.04%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) The Class A-3 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 0.46%, (ii) the Loan Group
III Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.92%, (ii) the Loan Group III Cap and (iii)
the WAC Cap.
(4) The Class B-1 and Class B-2 Interests will bear interest during each
Interest Accrual Period at a per annum rate equal to (a) on or prior to
the Optional Termination Date, the least of (i) LIBOR plus 3.00% and
4.00%, respectively and (ii) the WAC Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus 4.50% and 6.00%,
respectively and (ii) the WAC Cap.
(5) The Class X Interest has an initial principal balance of $67,706,890, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Pass-Through Rate of the Lower Tier REMIC Interests,
where the interest rate on each of the Class LT-Accrual Interest, Class
LT-Group I Interest, Class LT-Group II Interest and the Class LT-Group III
Interest is subject to a cap equal to zero and each LT-Accretion Directed
Class is subject to a cap equal to the Pass-Through Rate on its
Corresponding Class; provided, however, if the Pass-Through Rate of any of
the Class A-1 Interest, the Class A-2 Interest or the Class A-3 Interest,
as applicable, is calculated by reference to clause (i) of its
Pass-Through Rate, the cap with respect to the Class LT-A-1 Interest,
Class LT-A-2 Interest or Class LT-A-3 Interest, as applicable, shall be
increased by the lesser of the Premium Rate and the amount by which the
amount in clause (ii) of such Class's Pass-Through Rate exceeds the amount
in clause (i) thereof for purposes of the calculation. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to
any increase in the Overcollateralized Amount on such Distribution Date.
Such deferred interest shall not itself bear interest. The Class X
Certificates will represent beneficial ownership of (a) the sole regular
interest issued by the Class X REMIC, which is entitled to 100% of the
Class X Interest, and (b) amounts in the Excess Reserve Fund Account,
subject to the obligation to make payments from the Excess Reserve Fund
Account in respect of Basis Risk Carry Forward Amounts. For federal income
tax purposes, the Trustee will treat a Class X Certificateholder's
obligation to make payments from the Excess Reserve Fund Account as
payments made pursuant to an interest rate cap contract written by the
Class X Certificateholders in favor of each Class of LIBOR Certificates.
Such rights of the Class X Certificateholders and LIBOR Certificateholders
shall be treated as held in a portion of the Trust Fund that is treated as
a grantor trust under subpart E, Part I of subchapter J of the Code.
(6) 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.
(7) The Class A-1, Class A-2 and Class A-3 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. Each of
the Class B-1 Interest, Class B-2 Interest and Class X Interest will be
contributed to the Class B-1 REMIC, the Class B-2 REMIC and the Class X
REMIC, respectively.
The Class B-1 REMIC shall issue the following classes of interests.
The Class B-1 Certificates shall represent the regular interest in the Class B-1
REMIC and the Class B-1-R Interest shall represent the sole class of residual
interest in the Class B-1 REMIC.
CLASS B-1 REMIC CLASS B-1 REMIC PRINCIPAL
DESIGNATION INTEREST RATE AMOUNT
---------------- ------------- -------------------------
Class B-1 REMIC (1) (1)
Regular Interest
Class B-1-R (2) (2)
(1) The Class B-1 REMIC shall issue one regular interest which shall be
represented by the Class B-1 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-1 Interest issued by the Upper-Tier
REMIC.
(2) The Class B-1-R Interest is the sole class of residual interest in the
Class B-1 REMIC. The Class B-1-R Interest does not have an interest rate
or a principal balance.
The Class B-2 REMIC shall issue the following classes of interests.
The Class B-2 Certificates shall represent the regular interest in the Class B-2
REMIC and the Class B-2-R Interest shall represent the sole class of residual
interest in the Class B-2 REMIC.
CLASS B-2 REMIC CLASS B-2 REMIC PRINCIPAL
DESIGNATION INTEREST RATE AMOUNT
---------------- ------------- -------------------------
Class B-2 REMIC (1) (1)
Regular Interest
Class B-2-R (2) (2)
(1) The Class B-2 REMIC shall issue one regular interest which shall be
represented by the Class B-2 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-2 Interest issued by the Upper-Tier
REMIC.
(2) The Class B-2-R Interest is the sole class of residual interest in the
Class B-2 REMIC. The Class B-2-R Interest does not have an interest rate
or a principal balance.
The Class X REMIC shall issue the following classes of interests.
The Class X Certificates shall represent the regular interest in the Class X
REMIC and the Class X-R Interest shall represent the sole class of residual
interest in the Class X REMIC.
CLASS X REMIC CLASS X REMIC PRINCIPAL
DESIGNATION INTEREST RATE AMOUNT
---------------- ------------- -----------------------
Class X REMIC (1) (1)
Regular Interest
Class X-R (2) (2)
(1) The Class X REMIC shall issue one regular interest which shall be
represented by the Class X Certificates and shall be entitled to 100% of
all amounts payable on the Class X Interest issued by the Upper-Tier
REMIC.
(2) The Class X-R Interest is the sole class of residual interest in the Class
X REMIC. The Class X-R Interest does not have an interest rate or a
principal balance.
The Class B-1, Class B-2 and Class X Certificates will represent not
only the ownership of the regular interest issued by the Class B-1 REMIC, the
Class B-2 REMIC and the Class X REMIC, respectively, but also the right to
receive payments from the Excess Reserve Fund Account in respect of any Basis
Risk Carry Forward Amounts. For federal income tax purposes, the Trustee will
treat a Certificateholder's right to receive payments from the Excess Reserve
Fund Account as payments made pursuant to an interest rate cap contract written
by the Class X Certificateholders.
The minimum denomination for each of the Class A Certificates and
the Subordinated Certificates, will be $25,000 and $250,000, respectively, with
integral multiples of $1 in excess thereof. The Class P, Class R-1, Class R-2
and the Class X Certificates will each represent a 100% Percentage Interest in
such class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates .... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates ....... Class A-1, Class A-2 and Class A-3 Certificates.
Delay Certificates ......... None.
ERISA-Restricted
Certificates ............. Class R Certificates, Class P Certificate and
Class X Certificate; any certificate with a rating
below the lowest applicable permitted rating under
the Underwriters' Exemption.
LIBOR Certificates ......... The Class A Certificates and the Subordinated
Certificates.
Non-Delay Certificates ..... Class A, Class X and Subordinated Certificates.
Offered Certificates ....... All Classes of Certificates other than the Private
Certificates.
Physical Certificates ...... Class P, Class X and Class R Certificates.
Private Certificates ....... Class A-1, Class A-2, Class P, Class X and Class R
Certificates.
Rating Agencies ............ Fitch, Xxxxx'x and Standard & Poor's.
Regular Certificates ....... All Classes of Certificates other than the Class P
and Class R Certificates.
Residual Certificates ...... Class R-1 and Class R-2 Certificates.
Subordinated Certificates .. Class B-1 and Class B-2 Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01 of this Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Excess Reserve Fund Account or the Policy Payment
Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to the Purchase Agreement.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Interest Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advance Facility Notice: As defined in Section 10.07.
Advance Financing Person: The Person to whom the 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.
Advance Reimbursement Amounts: As defined in Section 10.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Remittance Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon the appraisal made for the originator at
the time of origination of the Mortgage Loan or the 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 (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 the
Premium Amount, if payable, with respect to such Distribution Date) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received on or prior to the related Determination Date, together with any
P&I Advances in respect thereof; (ii) all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds during the related Prepayment Period (in each
case, net of unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial or full
prepayments on the Mortgage Loans received during the related Prepayment Period
together with all Compensating Interest thereon; and (iv) amounts received with
respect to such Distribution Date as the Substitution Adjustment Amount or
purchase price in respect of a Deleted Mortgage Loan or a Mortgage Loan
repurchased by the Responsible Party as of such Distribution Date; reduced by
(y) amounts in reimbursement for P&I Advances and Servicing Advances previously
made with respect to the Mortgage Loans and other amounts as to which the
Servicer, the Depositor or the Trustee (or co-trustee) are entitled to be paid
or reimbursed pursuant to this Agreement.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Overcollateralized Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates at (a) with respect to the Class A-1 Certificates, the lesser of
(y) the Loan Group I Cap or (z) the WAC Cap, (b) with respect to the Class A-2
Certificates, the lesser of (y) the Loan Group II Cap or (z) the WAC Cap, (c)
with respect to the Class A-3 Certificates, the lesser of (y) the Loan Group III
Cap or (z) the WAC Cap, and (d) with respect to each other Class of LIBOR
Certificates, the WAC Cap, as applicable, and (B) the Basis Risk Carry Forward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the aggregate of the Basis Risk Carry Forward Amounts for such Distribution
Date; provided, however, that with respect to any Distribution Date, the payment
cannot exceed the sum of the amounts otherwise distributable on the Class X
Interest.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York, California, Texas and Illinois, (b) the State in which the Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order to
be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class P or Class R Certificates, at any date, the maximum dollar
amount of principal to which the Holder thereof is then entitled hereunder, such
amount being equal to the Denomination thereof minus all distributions of
principal previously made with respect thereto and in the case of any
Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class 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).
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: The Class A-1, Class A-2 and Class A-3
Certificates.
Class A Certificate Deficiency Amount: With respect to any
Distribution Date and any Class of Class A Certificates, an amount equal to the
excess, if any, of (x) the Insured Amounts for such Class for such Distribution
Date over (y) the amount of Available Funds allocated to pay such Insured
Amounts pursuant to Section 4.02(a).
Class A Certificate Insurance Policy: The Financial Guaranty
Insurance Policy No. AB0639BE, and all endorsements thereto dated the Closing
Date, issued by the Class A Certificate Insurer for the benefit of the Class A
Certificateholders.
Class A Certificate Insurer: Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance corporation, and any successors thereto.
Class A Certificate Insurer Default: The existence and continuance
of any of the following:
(a) the Class A Certificate Insurer shall have failed to make a
required payment when due under the Class A Certificate Insurance Policy
in accordance with its terms;
(b) the Class A 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 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 Certificate Insurer (or the taking of possession of all or any
material portion of property of the Class A Certificate Insurer).
Class A Principal Allocation Percentage: For any Distribution Date
is the percentage equivalent of a fraction, determined as follows: (A) with
respect to the Class A-1 Certificates, a fraction, the numerator of which is the
portion of the Principal Remittance Amount for that Distribution Date that is
attributable to the principal received or advanced on the Group I Mortgage Loans
and the denominator of which is the Principal Remittance Amount for that
Distribution Date; (B) with respect to the Class A-2 Certificates, a fraction,
the numerator of which is the portion of the Principal Remittance Amount for
that Distribution Date that is attributable to the principal received or
advanced on the Group II Mortgage Loans and the denominator of which is the
Principal Remittance Amount for that Distribution Date; and (C) with respect to
the Class A-3 Certificates, a fraction, the numerator of which is the portion of
the Principal Remittance Amount for that Distribution Date that is attributable
to the principal received or advanced on the Group III Mortgage Loans and the
denominator of which is the Principal Remittance Amount for that Distribution
Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 89.30% (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 Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class A Principal Parity Deficit: With respect to any Distribution
Date, the excess of (i) the aggregate of the Class Certificate Balances of the
Class A Certificates on such Distribution Date, after taking into account any
reduction from sources other than the Class A Certificate Insurance Policy of
such Class Certificate Balances on such Distribution Date, over (ii) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date. With respect to the Distribution Date occurring in January 2003, the Class
A Principal Parity Deficit shall equal zero.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1 Certificates."
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2 Certificates."
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3 Certificates."
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1 Certificates."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class B-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 92.50%
(rounded to two decimal places) of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class B-1 REMIC: As described in the Preliminary Statement.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-Certificates."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class B-1 Certificates (after
taking into account the distribution of the Class B-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class B-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 95.00% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class B-2 REMIC: As described in the Preliminary Statement.
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 P Certificates: All Certificates bearing the designation of
"Class P Certificates."
Class R Certificates: The Class R-1 and Class R-2 Certificates.
Class R-1 Certificates: All Certificates bearing the designation of
"Class R-1 Certificates."
Class R-2 Certificates: All Certificates bearing the designation of
"Class R-2 Certificates."
Class X Certificates: All Certificates bearing the designation of
"Class X Certificates."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect to interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus (ii) as a distribution in
respect of principal, any portion of the principal balance of the Class X
Interest which is distributable as an Overcollateralization Reduction Amount,
minus (iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Class X REMIC: As described in the Preliminary Statement.
Closing Date: December 30, 2002.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments in full by the Mortgagor (excluding
any payments made upon liquidation of the Mortgage Loan), and (b) one-half of
the Servicing Fee payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards of 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-GS02H2, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class and Corresponding REMIC: The class of interests
in any Trust REMIC created under this Agreement that correspond to the Class of
interests in another such Trust REMIC or to a Class of Certificates and the
Trust REMIC in which the corresponding Certificate represents the related
regular interest issued for such Trust REMIC in the manner set out below:
LOWER TIER UPPER TIER CORRESPONDING CORRESPONDING
CLASS DESIGNATION REGULAR INTEREST CERTIFICATE REMIC
----------------- ---------------- ------------- ----------------
Class LT-A-1 Class A-1 Class A-1 Upper Tier REMIC
Class LT-A-2 Class A-2 Class A-2 Upper Tier REMIC
Class LT-A-3 Class A-3 Class A-3 Upper Tier REMIC
Class LT-B-1 Class B-1 Class B-1 Class B-1 REMIC
Class LT-B-2 Class B-2 Class B-2 Class B-2 REMIC
N/A Class X Class X Class X REMIC
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 Mortgage Loans 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 Mortgage Loans as of the Cut-off Date.
Cumulative Loss Event: With respect to any Distribution Date, a
Cumulative Loss Event occurs if the Cumulative Loss Percentage exceeds the
applicable percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
------------------------------ ---------------
January 2003 through December 2004 3.50% of the Cut-Off Date Pool Principal
Balance
January 2005 through December 2005 4.50% of the Cut-Off Date Pool Principal
Balance
January 2006 through December 2006 6.00% of the Cut-Off Date Pool Principal
Balance
January 2007 through December 2007 7.50% of the Cut-Off Date Pool Principal
Balance
January 2008 and thereafter 8.50% of the Cut-Off Date Pool Principal
Balance
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: December 1, 2002.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date).
Data Tape Information: The information provided by the Household
Sellers as of the Cut-off Date to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Household Sellers'
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) the Loan-to-Value
Ratio at origination; (8) the Mortgage Interest Rate as of the Cut-off Date; (9)
the date on which the Scheduled Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (10) the stated maturity date; (11) the amount of the Scheduled Payment as
of the Cut-off Date; (12) the last payment date on which a Scheduled Payment was
actually applied to pay interest and the outstanding principal balance; (13) the
original principal amount of the Mortgage Loan; (14) the principal balance of
the Mortgage Loan as of the close of business on the Cut-off Date, after
deduction of payments of principal due and collected on or before the Cut-off
Date; (15) with respect to Adjustable Rate Mortgage Loans, the Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross Margin; (17) with
respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms
of the Mortgage Note; (18) with respect to Adjustable Rate Mortgage Loans, a
code indicating the type of Index; (19) with respect to Adjustable Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms of the Mortgage
Note; (20) the type of Mortgage Loan (i.e., fixed rate, adjustable rate, first
lien); (21) a code indicating the purpose of the loan (i.e., purchase, rate and
term refinance, equity take-out refinance); (22) a code indicating the
documentation style (i.e., full documentation, limited documentation or stated
income); (23) the loan credit classification (as described in the Underwriting
Guidelines); (24) whether such Mortgage Loan provides for a Prepayment Premium;
(25) the Prepayment Premium period of such Mortgage Loan, if applicable; (26) a
description of the Prepayment Premium, if applicable; (27) the Mortgage Interest
Rate as of origination; (28) the credit risk score (FICO score) at origination;
(29) the date of origination; (30) the Mortgage Interest Rate adjustment period;
(31) the Mortgage Interest Rate floor; (32) the Mortgage Interest Rate
calculation method (i.e., 30/360, simple interest, other); (33) a code
indicating whether the Mortgage Loan is a High Cost Mortgage Loan; (34) a code
indicating whether the Mortgage Loan has been modified; (35) the current
Loan-to-Value Ratio; (36) the one year payment history; (37) the Due Date for
the first Scheduled Payment; (38) the original Scheduled Payment due; (39) with
respect to the related Mortgagor, the debt-to-income ratio; (40) the Appraised
Value of the Mortgaged Property; (41) the sales price of the Mortgaged Property
if the Mortgage Loan was originated in connection with the purchase of the
Mortgaged Property; (42) the MERS identification number; and (43) a code
indicating whether the Mortgage Loan is a Group I Mortgage Loan, a Group II
Mortgage Loan or a Group III Mortgage Loan. With respect to the Mortgage Loans
in the aggregate: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except for such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan repurchased by the
Responsible Party pursuant to the terms of the Purchase Agreement or purchased
by the Depositor or the Servicer pursuant to Section 3.29.
Delinquency Event: With respect to any Distribution Date, a
Delinquency Event occurs if the Rolling Three Month Delinquency Rate exceeds the
applicable Delinquency Ratio set forth below with respect to such Distribution
Date:
DISTRIBUTION DATE OCCURRING IN DELINQUENCY RATIO
------------------------------ -----------------
June 2004 through December 2004 20.00% of the Pool Stated Principal
Balance
January 2005 through December 2005 22.50% of the Pool Stated Principal
Balance
January 2006 and thereafter 25.00% of the Pool Stated Principal
Balance
Delinquency Ratio: With respect to any Distribution Date, the
percentage equivalent to a fraction (a) the numerator of which equals the
aggregate Stated Principal Balances of all 90+ Day Delinquent Mortgage Loans and
(b) the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date. Solely for purposes of calculating
the Delinquency Ratio, 90+ Day Delinquent Mortgage Loans shall include Mortgage
Loans 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) and which are in foreclosure, converted to REO
property or for which the Mortgagor has filed for bankruptcy.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's, F1+ by Fitch and A-1 by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 12th
day of the calendar month in which such Distribution Date occurs, or if such
12th day is not a Business Day, the Business Day immediately preceding such 12th
day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.28(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 2002-HE2 Mortgage
Pass-Through Certificates, Series 2002-HE2." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Date: The 20th 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 January 2003.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due for Payment: (i) With respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable pursuant to the
terms hereof and (ii) with respect to a Preference Amount, the Business Day on
which the documentation required by the Class A Certificate Insurer has been
received by the Class A Certificate Insurer.
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 Servicer) at the time any amounts are
held on deposit therein, (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency
and the Class A 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 3.28(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 2002-HE2, Mortgage Pass-Through Certificates, Series 2002-HE2." Funds in
the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Spread Reserve Rate: As to any Distribution Date, 0.60% per
annum.
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.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
MONTH OF
FINAL SCHEDULED
DISTRIBUTION DATE
-----------------
Class A-1 Certificates.................................... October 2032
Class A-2 Certificates.................................... October 2032
Class A-3 Certificates.................................... October 2032
Class B-1 Certificates.................................... October 2032
Class B-2 Certificates.................................... October 2032
Class X Certificates...................................... October 2032
Class P Certificates...................................... October 2032
Class R Certificates...................................... October 2032
Fitch: Fitch Ratings, or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - GSAMP
Trust 2002-HE2, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicer.
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.
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," "predatory" or similar loan under any other applicable
state, federal or local law.
Household Sellers: Household Finance Corporation, Household Bank
F.S.B., Household Finance Corporation of Alabama, Household Finance Corporation
II, Household Realty Corporation, Household Financial Services, Inc., Household
Finance Corporation of California, Household Finance Corporation III, Beneficial
Hawaii, Inc., Household Finance Industrial Loan Company of Iowa, Mortgage One
Corporation dba HFC Mortgage Company, Household Finance Realty Corporation of
Nevada, Household Finance Realty Corporation of New York, Household Finance
Consumer Discount Company, Household Financial Center, Inc., Household Realty
Corporation dba Household Realty Corporation of Virginia, Beneficial West
Virginia, Inc., and Household Industrial Finance Company.
Household Sellers Purchase Agreements: The Purchase Agreement and
the Assignment and Recognition Agreement, dated as of December 30, 2002, among
the Purchaser, the Depositor and the Household Sellers, a copy of each of which,
without the mortgage loan schedule exhibits, is attached hereto as Exhibit N.
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.
Initial Investor: The initial purchaser of the Class A-1 and Class
A-2 Certificates from Xxxxxxx, Xxxxx & Co., as underwriter.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as
of December 30, 2002, among the Depositor, the Servicer, the Trustee and the
Class A 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.
Insured Amounts: With respect to any Class of Class A Certificates,
an amount equal to the sum of:
(i) for any Distribution Date, the sum of the Accrued Certificate
Interest Distribution Amount for such Class of Class A Certificates and
any Unpaid Interest Amounts, if any, allocable to such Class of Class A
Certificates on such Distribution Date; plus
(ii) for any Distribution Date prior to the Final Scheduled
Distribution Date, the Class A Principal Parity Deficit allocated to such
Class of Class A Certificates, if any, for such Distribution Date; and
(iii) on the Final Scheduled Distribution Date, the Class
Certificate Balance of such Class of Class A Certificates on the Final
Scheduled Distribution Date, after giving effect to distributions made on
such date from sources other than Class A Certificate Insurance Policy for
such Class of Class A Certificates.
Insured Payments: With respect to any Distribution Date, the
aggregate amount actually paid by the Class A Certificate Insurer to the Trustee
in respect of (i) Insured Amounts for any Distribution Date and (ii) Preference
Amounts for any given Business Day.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and each Class of Lower Tier Regular Interests and any Distribution
Date, the period commencing on the Distribution Date occurring in the month
preceding the month in which the current Distribution Date occurs and ending on
the day immediately preceding the current Distribution Date (or, in the case of
the first Distribution Date, the period from and including the Closing Date to
but excluding such first Distribution Date). For purposes of computing interest
accruals on each Class of Non-Delay Certificates, each Interest Accrual Period
has the actual number of days in such month and each year is assumed to have 360
days.
Investment Account: As defined in Section 3.12(a) herein.
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 greater of (i) the rate of interest, as it is
publicly announced by Citibank, N.A. at its principal office in New York, New
York as its prime rate (any change in such prime rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2% and
(ii) the then applicable highest Pass-Through Rate on the Class A Certificates.
The Late Payment Rate shall be computed on the basis of a year of 360 days and
the actual number of days elapsed. In no event shall the Late Payment Rate
exceed the maximum rate permissible under any applicable law limiting interest
rates.
Lender: As defined in Section 10.07.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
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 (i) the weighted average of the Adjusted
Net Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group I Mortgage Loans, less (A) the Excess Spread Reserve Rate
and (B) solely for the purposes of determining the Pass-Through Rates on the
Class A Certificates, the Premium Rate and (ii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
Interest Accrual Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group II Mortgage Loans, less (A) the Excess Spread Reserve Rate
and (B) solely for the purposes of determining the Pass-Through Rates on the
Class A Certificates, the Premium Rate and (ii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
Interest Accrual Period related to such Distribution Date.
Loan Group III Cap: With respect to the Group III Mortgage Loans as
of any Distribution Date, the product of (i) the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group III Mortgage Loans, less (A) the Excess Spread
Reserve Rate and (B) solely for the purposes of determining the Pass-Through
Rates on the Class A Certificates, the Premium Rate and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to
either (a) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the least of (i) the purchase price of the Mortgaged
Property, (ii) the Appraisal Value of the Mortgaged Property at origination, or
(iii) the Review Appraisal Value of the Mortgaged Property; or (b) if the
Mortgage Loan was a refinancing or modification, the Appraisal Value of the
Mortgaged Property at the time of the refinancing or modification.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class LT-A-2,
Class LT-A-3, Class LT-B-1, Class LT-B-2, Class LT-Group I, Class LT-Group II,
Class LT-Group III and Class LT-Accrual Interests as described in the
Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
MERS: As defined in Section 2.01.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Custodial File, the Servicing File,
the Scheduled Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, Prepayment
Premiums and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan, excluding replaced or repurchased
Mortgage Loans.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan as of the Cut-off Date: (1) the Household Sellers'
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) the Loan-to-Value
Ratio at origination; (8) the Mortgage Interest Rate as of the Cut-off Date; (9)
the date on which the Scheduled Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (10) the stated maturity date; (11) the amount of the Scheduled Payment as
of the Cut-off Date; (12) the last payment date on which a Scheduled Payment was
actually applied to pay interest and the outstanding principal balance; (13) the
original principal amount of the Mortgage Loan; (14) the principal balance of
the Mortgage Loan as of the close of business on the Cut-off Date, after
deduction of payments of principal due and collected on or before the Cut-off
Date; (15) with respect to Adjustable Rate Mortgage Loans, the Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross Margin; (17) with
respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms
of the Mortgage Note; (18) with respect to Adjustable Rate Mortgage Loans, a
code indicating the type of Index; (19) with respect to Adjustable Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms of the Mortgage
Note; (20) the type of Mortgage Loan (i.e., fixed rate, adjustable rate, first
lien); (21) a code indicating the purpose of the loan (i.e., purchase, rate and
term refinance, equity take-out refinance); (22) a code indicating the
documentation style (i.e., full documentation, limited documentation or stated
income); (23) the loan credit classification (as described in the Underwriting
Guidelines); (24) whether such Mortgage Loan provides for a Prepayment Premium;
(25) the Prepayment Premium period of such Mortgage Loan, if applicable; (26) a
description of the Prepayment Premium, if applicable; (27) the Mortgage Interest
Rate as of origination; (28) the credit risk score (FICO score) at origination;
(29) the date of origination; (30) the Mortgage Interest Rate adjustment period;
(31) the Mortgage Interest Rate floor; (32) the Mortgage Interest Rate
calculation method (i.e., 30/360, simple interest, other); (33) a code
indicating whether the Mortgage Loan is a High Cost Mortgage Loan; (34) a code
indicating whether the Mortgage Loan has been modified; (35) the current
Loan-to-Value Ratio; (36) the one year payment history; (37) the Due Date for
the first Scheduled Payment; (38) the original Scheduled Payment due; (39) with
respect to the related Mortgagor, the debt-to-income ratio; (40) the Appraised
Value of the Mortgaged Property; (41) the sales price of the Mortgaged Property
if the Mortgage Loan was originated in connection with the purchase of the
Mortgaged Property; (42) the MERS identification number; and (43) a code
indicating whether the Mortgage Loan is a Group I Mortgage Loan, a Group II
Mortgage Loan or a Group III Mortgage Loan. With respect to the Mortgage Loans
in the aggregate: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
NIM Trust: GSAMP NIM Trust 2002-HE2-N, a Delaware statutory trust.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, three months or more past due (without giving effect to any grace
period).
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer, will not or, in the
case of a proposed Servicing Advance, would not, be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee and the Class A Certificate Insurer pursuant
to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee and the Class A Certificate Insurer; provided, that any Opinion of
Counsel relating to (a) qualification of any Trust REMIC as a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: means:
(i) The Majority Class X Certificateholder (as evidenced on the
records of the Registrar) may cause the Optional Termination Date to occur
on the Distribution Date when the aggregate Stated Principal Balance of
the Mortgage Loans, as of the last day of the related Due Period, is equal
to 10.00% or less of the Cut-off Date Pool Principal Balance (provided,
that if the Depositor or an Affiliate of the Depositor is one of the
Holders constituting such majority, then there must be at least one other
unaffiliated Holder constituting such majority and the Class X
Certificates held by such Holder (or unaffiliated Holders in the
aggregate) must represent at least a 10% Percentage Interest in the Class
X Certificates); and
(ii) The Servicer may cause the Optional Termination Date to occur
on the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day of the related Due Period, is
equal to 5.00% or less of the Cut-off Date Pool Principal Balance.
In the event that both the Servicer and the Majority Class X
Certificateholder (or the Majority Class X Certificateholder and another Class X
Certificateholder) have the call rights described above, at such time as those
rights may be exercised, the first Person to provide notice to exercise the call
right will have the right to purchase the Mortgage Loans.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date; provided, however, that if a Delinquency Event or Cumulative Loss
Event is in effect, the Overcollateralization Floor shall increase to 0.75% 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 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, 0.52%; Class
A-2 Certificates, 0.52%; Class A-3 Certificates, 0.46%; Class B-1 Certificates,
3.00% and Class B-2 Certificates, 4.00%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall increase to: Class
A-1 Certificates, 1.04%; Class A-2 Certificates, 1.04%; Class A-3 Certificates,
0.92%; Class B-1 Certificates, 4.50% and Class B-2 Certificates, 6.00%.
Pass-Through Rate: For each Class of Certificates, each Upper Tier
Regular Interest 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: The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an 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: The provision of each
Mortgage Note related to an Adjustable Rate Mortgage Loan 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 the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by any Depository Institution and rated F1+ by Fitch, 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, "AAAm" or "AAAm-G" by Standard & Poor's and,
if rated by Fitch, at least "AA" by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies (without regard to
the Class A Certificate Insurance Policy) as a permitted investment of
funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause any Trust REMIC to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of Xxxxxxx Mac, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Policy Payment Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.06(c) in the name of the Trustee
for the benefit of the Class A Certificateholders and the Class A Certificate
Insurer, and designated "Deutsche Bank National Trust Company in trust for Ambac
Assurance Corporation and the registered holders of GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2, Class A-1, Class A-2 and
Class A-3".
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 payments of principal or interest on a Class
A Certificate which has become Due for Payment and which is made to a Holder of
a Class A Certificate by or on behalf of the Trustee which has been deemed a
preferential transfer and was previously recovered from such Holder 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 Holder.
Preference Claim: As defined in Section 4.06(f).
Premium Amount: With respect to any Distribution Date, the product
of the Premium Rate and the aggregate Class Certificate Balances of the Class A
Certificates immediately prior to such Distribution Date.
Premium Rate: The "Premium Percentage" as defined in the Insurance
Agreement.
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 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 Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
Prepayment Premium: Any prepayment premium, penalty or charge
collected by the 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 Servicer on or
prior to the Determination Date or advanced by the Servicer prior to the related
Remittance Date (including the portion of Insurance Proceeds or Condemnation
Proceeds allocable to principal), and all Principal Prepayments received during
the related Prepayment Period, (ii) the Liquidation Proceeds on the Mortgage
Loans allocable to principal actually collected by the Servicer during the
related Prepayment Period, (iii) the portion of the purchase price allocable to
principal with respect to each Deleted Mortgage Loan, the repurchase obligation
for which arose during the related Prepayment Period, that was repurchased
during the period from the prior Distribution Date through the Remittance Date
for the current Distribution Date, (iv) the principal portion of all
Substitution Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur during the calendar month in which such Distribution Date
occurs, and (v) the allocable portion of the proceeds received with respect to
the termination of the Trust Fund (to the extent such proceeds relate to
principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated December 24,
2002, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Mortgage Loan Purchase and Agreement, dated
as of November 30, 2002, among the Purchaser and the Household Sellers.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, as purchaser of the Mortgage Loans under the Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in the connection with the liquidation
of such Liquidated Mortgage Loan and net of any amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last day of the month
immediately preceding the related Distribution Date (or if such day is not a
Business Day, on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amount: As of any Distribution Date, the sum of (x)
(i) all Insured Payments paid by the Class A Certificate Insurer, but for which
the Class A Certificate Insurer has not been reimbursed prior to such
Distribution Date pursuant to Section 4.02, plus (ii) interest accrued on such
Insured Payments not previously repaid calculated at the Late Payment Rate from
the date the Trustee received the related Insured Payments or the date such
Insured Payments were made, and (y) without duplication (i) any amounts then due
and owing to the Class A Certificate Insurer under the Insurance Agreement, as
certified to the Trustee by the Class A Certificate Insurer plus (ii) interest
on such amounts at the Late Payment Rate.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
or any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than 12:30 PM, Central Time on the Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage 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 14th day of each calendar month or the
immediately following Business Day if the 14th is not a Business Day.
Repurchase Price: As defined in the Purchase Agreement.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Party: Household Finance Corporation, a Delaware
corporation, and its successors and assigns.
Review Appraisal Value: As defined in the Underwriting Guidelines.
Rolling Three Month Delinquency Rate: With respect to any
Distribution Date, a fraction, expressed as a percentage, equal to the average
of the Delinquency Ratio for each of the three (1 or 2 in the case of the first
three Distribution Dates, as the case may be) immediately preceding Due Periods.
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.
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, 10.70%.
Servicer: Xxxxxx Loan Servicing LP, a Delaware limited partnership,
and its successors and assigns, in its capacity as servicer hereunder.
Servicer's Assignee: As defined in Section 10.07.
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 Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15. The Servicer shall not be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan. 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 the 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 the 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 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 the 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 the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to which the Servicer may pledge, with the prior written consent of
the Class A Certificate Insurer, and assign all of its right, title and interest
in, to and under Section 6.06 of this Agreement.
Similar Law: As defined in Section 5.02(b).
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).
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 2.50% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to the lesser of (i) an amount equal to 2.50%
of the Cut-off Date Pool Principal Balance and (ii) an amount equal to 5.00% of
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, subject, until the Class Certificate Balance of each Class of
LIBOR Certificates has been reduced to zero, to a minimum amount equal to the
Overcollateralization Floor; provided, however, that if, on any Distribution
Date, a Trigger Event has occurred, the Specified Overcollateralized Amount
shall not be reduced to the applicable percentage of the then current aggregate
Stated Principal Balance of the Mortgage Loans until the Distribution Date on
which a Trigger Event is no longer occurring.
SPV: As defined in Section 10.07.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - GSAMP Trust 2002-HE2, or such other address as Standard & Poor's may
hereafter furnish to the Depositor and the Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the Servicer on
or prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related Prepayment Period.
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
January 2006, and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan under the terms of the Purchase
Agreement.
Substitution Adjustment Amount: Any amounts paid by the Responsible
Party pursuant to the terms of the Purchase Agreement with respect to a
Substitute Mortgage Loan.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest 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
and the Premium Amount) over (ii) the sum of the interest payable to the Classes
of Certificates and amounts payable to the Class A 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 16.00% for such Distribution Date or (ii) the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related 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
------------------------------ ---------------
January 2006 through December 2006 3.500% for the first month, plus an
additional 1/12th of 1.650% for each
month thereafter (e.g., approximately
3.638% in February 2006)
January 2007 through December 2007 5.150% for the first month, plus an
additional 1/12th of 1.350% for each
month thereafter (e.g., approximately
5.263% in February 2007)
January 2008 through December 2008 6.500% for the first month, plus an
additional 1/12th of 0.900% for each
month thereafter (e.g., approximately
6.575% in February 2008)
January 2009 through December 2009 7.400% for the first month, plus an
additional 1/12th of 0.100% for each
month thereafter (e.g., approximately
7.408% in February 2009)
January 2010 and thereafter 7.500%
In the event a 90+ Day Delinquent Mortgage Loan is purchased by the
Depositor or the Servicer pursuant to Section 3.29, after the aggregate unpaid
principal balance of the 90+ Day Delinquent Mortgage Loans that have been so
purchased pursuant to Section 3.29 exceeds $54,000,000, the amount of any losses
suffered by the Servicer or the Depositor upon sale or other disposition of such
Mortgage Loan or the related Mortgage Property shall be included in Realized
Losses for purposes of the Trigger Event referred to in clause (ii) above.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) with respect to the
Class A Certificates only, the rights of the Trustee under the Class A
Certificate Insurance Policy; and (v) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
Trust REMIC: Any of the Lower Tier REMIC, the Upper Tier REMIC, the
Class B-1 REMIC, the Class B-2 REMIC and Class X REMIC.
Trustee: Deutsche Bank National Trust Company and its successors
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, 0.00343% per
annum.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any state
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002),
or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to the
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, the product of (i) the weighted average of the Adjusted Net Mortgage
Interest Rates then in effect on the beginning of the related Due Period on the
Mortgage Loans, less (A) the Excess Spread Reserve Rate and (B) solely for the
purposes of determining the Pass-Through Rates on the Class A Certificates, the
Premium Rate and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the Interest Accrual Period
related to such Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders and the Class A Certificate Insurer, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund,
together with all rights of the Depositor under the Household Sellers Purchase
Agreements (solely insofar as the Household Sellers Purchase Agreements relate
to the Mortgage Loans).
(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 Certificate Insurer the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note (except for up to 1.00% of the
Mortgage Notes for which there is a lost note affidavit and the copy of
the Mortgage Note) bearing all intervening endorsements showing a complete
chain of endorsement from the originator to the last endorsee, endorsed
"Pay to the order of _____________, without recourse" and signed in the
name of the last endorsee by an authorized officer. To the extent that
there is no room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows and the
Trustee is so advised by the Depositor that state law so allows;
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, the applicable Household Seller
cannot deliver or cause to be delivered the original Mortgage with
evidence of recording thereon on or prior to the Closing Date because of a
delay caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or
because such public recording office retains the original recorded
Mortgage, pursuant to the Purchase Agreement, the applicable Household
Seller 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 the applicable
Household 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 Trustee upon receipt thereof by
the applicable Household 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;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(v) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in recordable
form;
(vi) the originals of all intervening Assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
Household 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, pursuant to the
Purchase Agreement, the applicable Household Seller shall deliver or cause
to be delivered to the Trustee, a photocopy of such intervening
assignment, together with (A) in the case of a delay caused by the public
recording office, an Officer's Certificate of the applicable Household
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 Trustee upon receipt thereof by the Household Sellers; 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;
(viii) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage (if provided); and
(ix) original powers of attorney, if applicable, with evidence of
recording thereon, if required.
The Depositor shall use its reasonable efforts to assist the Trustee
and the Servicer in enforcing the obligations of the Household Sellers under the
Household Sellers Purchase 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, for purposes of the Closing Date, one or more lost note
affidavits are provided to cover multiple missing Mortgage Notes, the Depositor
shall use its reasonable efforts to cause the Household Sellers to deliver to
the Trustee the applicable individual lost note affidavits within ten (10)
Business Days of the Closing Date. If the Household Sellers fail to deliver the
required individual lost note affidavits within the specified period of time,
the Trustee shall notify the Depositor and the Depositor shall take or cause to
be taken such remedial actions under the Household Sellers Purchase Agreements
against the Household Sellers as may be permitted to be taken thereunder,
including, without limitation, the repurchase by the Responsible Party of such
Mortgage Loan within 30 days of the Closing Date.
The Depositor shall deliver to the Trustee the applicable recorded
document promptly upon receipt from the respective recording office but in no
event later than 120 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 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, the Purchaser 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. Pursuant to the Household Sellers Purchase Agreement, the
Household Sellers have a similar obligation to forward additional documents. All
such mortgage documents held by the Trustee as to each Mortgage Loan shall
constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee Assignments of Mortgages, in blank, for each Mortgage Loan. The
Depositor shall cause the Assignments of Mortgage with completed recording
information to be provided to the Servicer in a reasonably acceptable manner. No
later than thirty (30) Business Days following the later of the Closing Date and
the date of receipt by the Servicer of the fully completed Assignments of
Mortgages in recordable form, the Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the Depositor, at no expense to the
Trust Fund or the Trustee 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, each Rating Agency and the Class A
Certificate Insurer have each received an opinion of counsel, satisfactory in
form and substance to the Trustee, each Rating Agency and the Class A
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 at the Depositor's expense to "Deutsche
Bank National Trust Company as trustee under the Pooling and Servicing Agreement
dated as of December 1, 2002, GSAMP Trust 2002-HE2." If there is such a defect
with respect to any Mortgage Loan, the Trustee shall take such actions, with the
Depositor's consent, to enforce the rights of the Trust as "Purchaser" under
Subsection 6.03 of the Purchase Agreement.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee a copy of the Data Tape Information in electronic, machine readable
medium in a form mutually acceptable to the Depositor 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.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within the time period and in the manner specified in the
Household Sellers Purchase Agreements, the Trustee shall notify the Depositor
and the Depositor shall take or cause to be taken such remedial actions under
the Household Sellers Purchase Agreements against the Household Sellers as may
be permitted to be taken thereunder, including, without limitation, if
applicable, the repurchase by the Responsible Party of such Mortgage Loan. The
foregoing repurchase remedy shall not apply in the event that the Household
Sellers cannot deliver such original or copy of any document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that the Household Sellers shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of an officer of the Household Sellers
confirming that such document has been accepted for recording.
(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 2002-HE2" and
Deutsche Bank National Trust Company is hereby appointed as Trustee in
accordance with the provisions of this Agreement.
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 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 and the Class A 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.
The Trustee shall not be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
On the Closing Date, the Trustee shall ascertain that all documents
required to be reviewed by it are in its possession, and shall deliver to the
Depositor and the Class A Certificate Insurer an Initial Certification, in the
form annexed hereto as Exhibit E, and shall deliver to the Depositor a Document
Certification and Exception Report, in the form annexed hereto as Exhibit F,
within 90 days after the Closing Date to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents required to
be delivered to it are in its possession; (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan; (iii)
based on its examination and only as to the foregoing documents, the information
set forth in items (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. The 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 the Servicer from
time to time.
Section 2.03 Representations, Warranties and Covenants of the
Servicer. (a) The Servicer hereby makes the representations and warranties set
forth in Schedule II hereto to the Depositor, the Trustee and the Class A
Certificate Insurer as of the Closing Date.
(b) It is understood and agreed by the Servicer 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 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 the Depositor, the Trustee, the Class A
Certificate Insurer or the Servicer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other.
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 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 Certificate Insurer (and all references in this
Agreement for the benefit of or actions on behalf of the Class A
Certificateholders, individually or collectively, shall be deemed to include the
Class A Certificate Insurer). The Trustee shall cooperate with all reasonable
requests by the Class A Certificate Insurer regarding action to preserve or
enforce the Class A Certificate Insurer's rights or interests under this
Agreement and the Class A Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is October 20, 2032, which is the
Distribution Date following the latest Mortgage Loan maturity date.
Amounts payable to the Class B-1 Certificates (other than any Basis
Risk Carry Forward Amounts) shall be deemed paid from the Upper Tier REMIC in
respect of the Class B-1 Interest to the Class B-1 REMIC as holder of the Class
B-1 Interest. Amounts payable to the Class B-2 Certificates (other than any
Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper Tier REMIC
in respect of the Class B-2 Interest to the Class B-2 REMIC as holder of the
Class B-2 Interest. Amounts 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 Class X REMIC as holder of the
Class X Interest.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the Servicer
and the Class A Certificate Insurer that as of the date of this Agreement or as
of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
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;
(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 the Mortgage Note and the 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
the Class A 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 the Class A Certificate Insurer, the
security interest referred to in Section 10.04; and
(i) the Depositor hereby makes the representations and warranties
set forth in Schedule III hereto to Trustee and the Class A Certificate Insurer.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 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) or (i) above that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee, the Certificateholders or the
Class A Certificate Insurer therein, the Depositor shall use its best efforts to
promptly cure such breach in all material respects and if such defect or breach
cannot be remedied, the Depositor shall repurchase such Mortgage Loan at the
Repurchase Price. In the event that the Trustee receives notice of a breach by
the Depositor of the representation and warranty set forth in clause (i) of
Schedule III, the Trustee shall give notice of such breach to the Depositor and
request the Depositor to repurchase the Mortgage Loan at the Repurchase Price
within thirty (30) days of the Depositor receipt of such notice. The Depositor
shall repurchase each such Deleted Mortgage Loan within 30 days of the earlier
of discovery or receipt of notice with respect to each such Deleted Mortgage
Loan. Any such repurchase shall be conducted in the same manner as set forth in
Section 2.07. The obligations of the Depositor to cure such breach 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 2.07 Remedies for Breaches of Representations and Warranties
with Respect to the Mortgage Loans. (a) Upon discovery by any of the parties
hereto of a breach of a representation or warranty made by the Household Sellers
under Household Sellers Purchase Agreements, the party discovering such breach
shall give prompt written notice thereof to the other parties and the Household
Sellers. The Trustee shall take such action, with the Depositor's consent (such
consent not to be unreasonably withheld), with respect to such breach under the
Household Sellers Purchase Agreements as may be necessary or appropriate to
enforce the rights of the Trust with respect thereto.
(b) In the event that a Mortgage Loan shall have been repurchased
pursuant to the Household Sellers Purchase Agreements, the proceeds from such
repurchase shall be deposited by the Servicer in the Collection Account 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 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 or the Trustee on
their behalf.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders and the Class A Certificate Insurer, the
Servicer shall service and administer the Mortgage Loans in accordance with the
terms of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for (A) a reduction of interest payments resulting
from the application of the Soldiers' and Sailors' Relief Act of 1940, as
amended, or any similar state statutes or (B) as provided in Section 3.07, the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the 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 any Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions, or (iii)
except as provided in Section 3.07(a), waive any Prepayment Premiums.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the 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.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee and the Class A
Certificate Insurer, without the consent of the Trustee and the Class A
Certificate Insurer. Any variation without the consent of the Trustee and the
Class A 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 the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee, the Depositor and the Class A Certificate Insurer copies
of all Subservicing Agreements, and any amendments or modifications thereof,
promptly upon the Servicer's execution and delivery of such instruments. Unless
a Class A Certificate Insurer Default exists, the Servicer shall not terminate
any Subservicing Agreement without the prior written consent of the Class A
Certificate Insurer.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement. In the event of termination of
any Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the Servicer without any act or deed on the part of such
Subservicer or the Servicer, and the Servicer either shall service directly the
related Mortgage Loans or shall enter into a Subservicing Agreement with a
successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee and the Class A Certificate
Insurer for the servicing and administering of the Mortgage Loans in accordance
with the provisions of Section 3.01 without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
any agreement with a Subservicer for indemnification of the Servicer by such
Subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor Servicer is
not the Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee 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 the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
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 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 the terms of any Mortgage Loan may only
be waived, modified or varied once while the Mortgage Loan remains outstanding;
provided, further, that the final maturity date of any Mortgage Loan may not be
extended beyond the Final Scheduled Distribution Date for the LIBOR
Certificates. The 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 Servicing File. In addition, notwithstanding the
foregoing, the Servicer may also waive, in whole or in part, a Prepayment
Premium if such Prepayment Premium is (i) not permitted to be collected by
applicable law, or (ii) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership or other similar laws relating to
creditor's rights or (2) due to acceleration in connection with a foreclosure or
other involuntary payment. If a Prepayment Premium is waived other than as
permitted above, then the 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 Collection Account together with and at the
time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account; provided, however, that the Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Premium if the failure to collect such amount is in the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect at
such time.
(b) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account 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 Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Servicer for
deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract in
effect with respect to each Mortgage Loan (each, a "Tax Service Contract"). Each
Tax Service Contract shall be assigned to the Trustee, or its designee, at the
Servicer's expense in the event that the Servicer is terminated as Servicer of
the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of the Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement; or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that is necessary to avoid the loss
of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien. If any such payment has not been made and the Servicer receives notice
of a tax lien with respect to the Mortgage Loan being imposed, the Servicer
will, promptly and to the extent required to avoid loss of the Mortgaged
Property, advance or cause to be advanced funds necessary to discharge such lien
on the Mortgaged Property. The Servicer assumes full responsibility for the
payment of all such bills within such time and shall effect payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make advances from its own
funds to effect such payments; provided, however, that such advances are deemed
to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more Eligible Accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee. On behalf
of the Trustee, the 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 the Servicer's receipt thereof, and shall
thereafter deposit in the 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 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 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 Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Premiums collected by the 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 the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to the Remittance Date, to remit to the Trustee (A)
the Trustee Fee with respect to such Distribution Date, (B) the Premium
Amount with respect to such Distribution Date, for payment to the Class A
Certificate Insurer and (C) 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 the 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 the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may be collected by the Servicer from a Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each Mortgage
Loan that has previously been repurchased or replaced pursuant to this
Agreement all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03 or Section 8.05;
(ix) to reimburse the Servicer, the Trustee or the Class A
Certificate Insurer, as the case may be, for expenses reasonably incurred
in respect of the breach or defect giving rise to the repurchase
obligation under Section 2.07 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 Collection Account in
error;
(xi) to withdraw any amounts held in the 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 the Collection Account,
to reimburse the Servicer for xxxxxxxxxxxx X&X Advances; and
(xii) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (iv), (v), (vi), (vii), (viii) and
(ix) above. The Servicer shall provide written notification to the Depositor, on
or prior to the next succeeding Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account. (a) The Servicer may invest the funds in the related
Collection Account and the Trustee may invest funds in the Distribution Account
during the Trustee Float Period, and shall (except during the Trustee Float
Period), invest such funds in the Distribution Account at the direction of the
Depositor (for purposes of this Section 3.12, such Accounts are referred to as
an "Investment Account"), in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the 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 Collection Account held by or on behalf of the Servicer, shall
be for the benefit of the Servicer and shall be subject to its withdrawal in the
manner set forth in Section 3.11. The Servicer shall deposit in the Collection
Account 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 so 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.
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage. (a) The Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, 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. The
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Interest Rate and related Servicing Advances. The 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 the
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 the
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 Collection Account, subject to withdrawal pursuant to Section
3.11. Any cost incurred by the 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 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 unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of B:VI 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 the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with 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 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, the 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) The 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 the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee and the Class A
Certificate Insurer upon request with copies of any such insurance policies and
fidelity bond. The Servicer shall be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the 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. The 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. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the 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 the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will 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, the Servicer has the prior
consent of the primary mortgage guaranty insurer, if any, and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. The
Servicer is also authorized to enter into a substitution of liability agreement
with such person, pursuant to which the original Mortgagor is released from
liability and such person is substituted as the Mortgagor and becomes liable
under the Mortgage Note; provided, that no such substitution shall be effective
unless such person satisfies the underwriting criteria of the Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption, modification or substitution, the 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. The Servicer shall not 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 the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Interest Rate
and the amount of the Scheduled Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with customary servicing practices as
described in Section 3.01, 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. The Servicer shall use
reasonable efforts to realize upon such defaulted Mortgage Loans in such manner
as will maximize the receipt of principal and interest by the Trustee, taking
into account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which a Mortgaged
Property shall have suffered damage from an uninsured cause, the 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 the Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.
The proceeds of any Liquidation Event or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the 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
the 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 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 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 the 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, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Depositor directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, (i) the 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 the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Collection
Account pursuant to Section 3.11 and (ii) the Depositor shall notify the Class A
Certificate Insurer that the environmental inspection report indicates that the
Mortgaged Property is contaminated by toxic substances or waste. In the event
the Depositor directs the Servicer not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the 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.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, 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 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. Upon receipt of such certification
and request, the Trustee shall promptly release the related Custodial File to
the 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 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 the Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee 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 written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(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
Servicer shall cause the deed or certificate of sale to be issued in the name of
the Trustee, on behalf of the Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
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. The 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
the Servicer deems to be in the best interest of the Trustee. The Servicer shall
notify the Trustee from time to time as to the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Trustee as to the progress being made in selling such REO
Property. Notwithstanding its veto rights, the Trustee has no obligation with
respect to REO Dispositions.
(d) The 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
Collection Account.
(e) The 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) The 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 Servicer as additional servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the 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) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee, the
Servicer and the Class A Certificate Insurer, 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 any Trust REMIC to fail to qualify as a REMIC
under the REMIC Provisions or comparable provisions of relevant state laws at
any time. The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) or result in the
receipt by the Lower Tier REMIC of any "income from non-permitted assets" within
the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under Section 860G(a)(1) of
the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the 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 and the Class A Certificate Insurer, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of the Trustee on
behalf of the Certificateholders and the Class A Certificate Insurer for the
period prior to the sale of such REO Property; provided, however, that any rent
received or accrued with respect to such REO Property qualifies as "rents from
real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Mortgage Loan, the 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. The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and Scheduled Payment adjustments. The 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 the Servicer or the receipt of notice from the Trustee that the Servicer has
failed to adjust a Mortgage Interest Rate or Scheduled Payment in accordance
with the terms of the related Mortgage Note, the Servicer shall deposit in the
Collection Account from its own funds the amount of any interest loss caused as
such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event the Servicer reasonably believes that
compliance with this Section will make the Mortgage Loans legal for investment
by federally insured savings and loan associations, the Servicer shall provide,
or cause the Subservicer to provide, to the Depositor, the Trustee, the Class A
Certificate Insurer, the OTS or the FDIC and the examiners and supervisory
agents thereof access to the documentation regarding the Mortgage Loans in its
possession required by applicable regulations of the OTS. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices of the Servicer, the Depositor, the
Trustee or any Subservicer. Nothing in this Section shall derogate from the
obligation of such party to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of such party to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds collected
or held by, or under the control of, the 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 the 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. The Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Collection Account, the 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 and the Class A Certificate
Insurer, 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 the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Insurance Proceeds and REO Proceeds related to such Mortgage Loan, the
Servicing Fee with respect to each Mortgage Loan (less any portion of such
amounts retained by any Subservicer). In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of related late collections to the
extent 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 6.06 or in
connection with the transfer of all of the Servicer's responsibilities and
obligations under this Agreement; provided, however, that the Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Premiums) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies, the
Class A Certificate Insurer and the Trustee on or before March 15th of each
calendar year, commencing in 2003, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the 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, the 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 Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
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 2003, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Servicer, the Rating Agencies, the Class A Certificate Insurer
and the Trustee a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year 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 Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
Servicer's obligations.
Section 3.24 Trustee to Act as Servicer. (a) In the event that the
Servicer shall for any reason no longer be the Servicer hereunder (including by
reason of an Event of Default), the Trustee or its successor shall thereupon
assume all of the rights and obligations of the Servicer hereunder arising
thereafter (except that the Trustee shall not be (i) liable for losses of the
predecessor Servicer pursuant to Section 3.10 or any acts or omissions of the
predecessor Servicer hereunder, (ii) obligated to 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 2.07, (iv)
responsible for expenses of the Servicer pursuant to Section 2.07 or (v) deemed
to have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to
Compensating Interest payable by the Servicer for such Remittance Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer shall fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on the related
Mortgagor credit files to Equifax, Experian, and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
Section 3.27 [Reserved]
Section 3.28 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 to pay to the LIBOR Certificateholders Basis Risk Carry Forward Amounts.
On each Distribution Date, the Trustee shall deposit the amount of any Basis
Risk Payment for such date into the Excess Reserve Fund Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class of 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)(D), the lesser of the Class X Distributable Amount
(without regard to the reduction in the definition thereof with respect to the
Basis Risk Payments) (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(C)) and the aggregate Basis Risk Carry Forward
Amount and (2) withdraw from the Excess Reserve Fund Account amounts necessary
to pay to such Class or Classes of Certificates the applicable Basis Risk Carry
Forward Amounts. Such payments shall be allocated to those Classes based upon
the amount of Basis Risk Carry Forward Amount owed to each such Class and shall
be paid in the priority set forth in Section 4.02(a)(iii)(E).
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 any Trust REMIC created pursuant to this
Agreement. The beneficial owner of the Excess Reserve Fund Account is the Class
X Certificateholder. For all federal income tax purposes, amounts transferred by
the Class X REMIC to the Excess Reserve Fund Account shall be treated as
distributions by the Trustee to the Class X Certificateholder.
Any Basis Risk Carry Forward Amounts paid by the Trustee to the
LIBOR Certificateholders shall be accounted for by the Trustee as amounts paid
first to the Holders of the Class X Certificate (as recipient of 100% of amounts
payable in respect of the Class X Interest) and then to the respective Class or
Classes of LIBOR Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of LIBOR Certificates to receive payments of
Basis Risk Carry Forward Amounts as rights in a separate limited recourse
interest rate cap contract written by the Class X Certificateholders in favor of
Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve Fund
Account except as expressly set forth in this Section 3.28(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 the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02.
Section 3.29 Optional Purchase of Delinquent Mortgage Loans. (a)
Each of the Depositor and the Servicer, in each case in its sole discretion,
shall have the option, but shall not be obligated, to purchase any 90+
Delinquent Mortgage Loans from the Trust Fund. During the first ten (10) days
after a Mortgage Loan becomes a 90+ Delinquent Mortgage Loan, the Depositor
shall have the exclusive option to purchase such 90+ Delinquent Mortgage Loan.
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 Servicer. Upon receipt of
such purchase price, the Servicer shall provide to the Trustee a Request for
Release and the Trustee shall promptly release to the Depositor or the Servicer,
as applicable, the Mortgage File relating to the Mortgage Loan being
repurchased.
(b) After the Depositor or the Servicer have purchased any 90+ Day
Delinquent Mortgage Loans from the Trust Fund pursuant to this Section 3.29 in
an aggregate unpaid principal amount equal to or in excess of $54,000,000, any
further 90+ Day Delinquent Mortgage Loans purchased by either the Depositor or
the Servicer shall (i) be included by the Servicer in calculating (1) the
Cumulative Loss Percentage and (2) whether a Trigger Event has occurred and (ii)
be included by the Servicer in the delinquency information required to be
included in the Servicer Remittance Report pursuant to Section 4.03(d)(vi).
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
related Determination Date, plus (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Prepayment Period and
as to which such REO Property an REO Disposition did not occur during the
related Prepayment Period, an amount equal to the excess, if any, of the
Scheduled Payments (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date in respect of
the related Mortgage Loans, over the net income from such REO Property
transferred to the Collection Account for distribution on such Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held for Future Distribution have been, as
permitted by this Section 4.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. Any Amounts Held for Future Distribution and
so used shall be appropriately reflected in the Servicer's records and replaced
by the Servicer by deposit in the Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Trustee and the Class A
Certificate Insurer.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall pay the Premium Amount for such Distribution Date to the
Class A Certificate Insurer from amounts withdrawn from the Collection Account
pursuant to Section 3.11(a)(i)(B) and, from funds on deposit in the Distribution
Account, make the disbursements and transfers from amounts then on deposit in
the Distribution Account in the following order of priority and to the extent of
the Available Funds remaining:
(i) to the holders of each Class of LIBOR Certificates and to the
Class A Certificate Insurer in the following order of priority:
(A) to the Class A-1 Certificates, Class A-2 Certificates and
Class A-3 Certificates, the related Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for such
Distribution Date, in each case, pursuant to the allocation set
forth in clauses (iv), (v) and (vi) of this Section 4.02(a);
(B) to the Class A Certificate Insurer, any Reimbursement
Amount;
(C) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date; and
(D) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (a) before the related Stepdown
Date or (b) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distributions of principal and to the Class A 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 A 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 Certificate Insurer, the amount of any
remaining Reimbursement Amount; and
(c) sequentially to the Class B-1 and Class B-2 Certificates,
in that order, until the respective Class Certificate Balances are
reduced to zero;
(B) on each Distribution Date (a) on and after the 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 LIBOR Certificates then entitled to
distribution of principal and to the Class A 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) the lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount to the Class A
Certificates, allocated as described in Section 4.02(c), until the
respective Class Certificate Balances thereof are reduced to zero;
(b) to the Class A Certificate Insurer, the amount of any
remaining Reimbursement Amount;
(c) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificates in clause (ii)(B)(a) above, to the Class A Certificate
Insurer in clause (ii)(B)(b) above and (y) the Class B-1 Principal
Distribution Amount to the Class B-1 Certificates, until the Class
Certificate Balance thereof has been reduced to zero;
(d) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificates in clause (ii)(B)(a) above, to the Class A Certificate
Insurer in clause (ii)(B)(b) above, to the Class B-1 Certificates in
clause (ii)(B)(c) above and (y) the Class B-2 Principal Distribution
Amount to the Class B-2 Certificates, until the Class Certificate
Balance thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of priority:
(A) to the Class A Certificate Insurer, to the extent of any
remaining Reimbursement Amount;
(B) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(C) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(D) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(E) from funds on deposit in the Excess Reserve Fund Account,
an amount equal to any Basis Risk Carry Forward Amount with respect
to any LIBOR Certificate for such Distribution Date to the LIBOR
Certificates in the same order and priority in which Accrued
Certificate Interest Distribution Amount is allocated among those
Classes of Certificates with the allocation to the Class A-1, Class
A-2 and Class A-3 Certificates being pro rata based on their
respective Basis Risk Carry Forward Amounts;
(F) 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)-(H); and
(G) to the holders of the Class R-1 Certificates, any
remaining amount in respect of the Lower Tier REMIC and Upper Tier
REMIC and to the Class R-2 Certificates any remaining amount in
respect of the Class B-1 REMIC, Class B-2 REMIC and Class X REMIC;
(iv) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
I Mortgage Loans will be allocated:
(a) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-1 Certificates;
(b) second, to the Class A-2 and Class A-3 Certificates, pro
rata, the Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amounts for the Class A-2 and Class A-3
Certificates, respectively, to the extent not otherwise previously
paid from the interest component of Available Funds attributable to
the Group II Mortgage Loans (in the case of the Class A-2
Certificates) or attributable to the Group III Mortgage Loans (in
the case of the Class A-3 Certificates);
(v) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
II Mortgage Loans will be allocated:
(a) first, to the Class A-2 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-2 Certificates;
(b) second, to the Class A-1 and Class A-3 Certificates, pro
rata, the Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amounts for the Class A-1 and Class A-3
Certificates, respectively, to the extent not otherwise previously
paid from the interest component of Available Funds attributable to
the Group I Mortgage Loans (in the case of the Class A-1
Certificates) or attributable to the Group III Mortgage Loans (in
the case of the Class A-3 Certificates); and
(vi) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
III Mortgage Loans will be allocated:
(a) first, to the Class A-3 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-3 Certificates;
(b) second, to the Class A-1 and Class A-2 Certificates, pro
rata, the Accrued Certificate Interest Distribution Amount and any
Unpaid Interest Amounts for the Class A-1 and Class A-2
Certificates, respectively, to the extent not otherwise previously
paid from the interest component of Available Funds attributable to
the Group I Mortgage Loans (in the case of the Class A-1
Certificates) or attributable to the Group II Mortgage Loans (in the
case of the Class A-2 Certificates).
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest Amounts,
if any, then that unpaid amount will be recoverable by the holders of those
Classes, with interest thereon, on future Distribution Dates, as Unpaid Interest
Amounts, subject to the priorities described above.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
will be 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 Certificates on a pro
rata basis based on the Class A Principal Allocation Percentage for each of
those Classes for such Distribution Date; provided, however, that (a) if the
Class Certificate Balance of the Class A-1 Certificates is reduced to zero, then
the remaining amount of principal distributions distributable to the Class A-1
Certificates on such Distribution Date, and the amount of those principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A-2 Certificates and the Class A-3
Certificates remaining outstanding on a pro rata basis, based on their
respective Class Certificate Balances as of such Distribution Date, until the
Class Certificate Balances of the Class A-2 Certificates and Class A-3
Certificates have been reduced to zero, (b) if the Class Certificate Balance of
the Class A-2 Certificates is reduced to zero, then the remaining amount of
principal distributions distributable to the Class A-2 Certificates on such
Distribution Date, and the amount of those principal distributions distributable
on all subsequent Distribution Dates, shall be distributed to the holders of the
Class A-1 Certificates and the Class A-3 Certificates remaining outstanding on a
pro rata basis, based on their respective Class Certificate Balances as of such
Distribution Date, until the Class Certificate Balances of the Class A-1
Certificates and Class A-3 Certificates have been reduced to zero and (c) if the
Class Certificate Balance of the Class A-3 Certificates is reduced to zero, then
the remaining amount of principal distributions distributable to the Class A-3
Certificates on such Distribution Date, and the amount of those principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A-1 Certificates and the Class A-2
Certificates remaining outstanding on a pro rata basis, based on their
respective Class Certificate Balances as of such Distribution Date, until the
Class Certificate Balances of the Class A-1 Certificates and Class A-2
Certificates have been reduced to zero. Any payments of principal to the Class
A-1 Certificates shall be made first from Available Funds relating to the Group
I Mortgage Loans. Any payments of principal to the Class A-2 Certificates shall
be made first from Available Funds relating to the Group II Mortgage Loans. Any
payments of principal to the Class A-3 Certificates shall be made first from
Available Funds relating to the Group III Mortgage Loans.
(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 and
Class B Certificates, based on the amount of interest to which such classes
would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor, each Rating Agency and the Class
A Certificate Insurer 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 any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan 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) 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 Servicer;
(xix) the Reimbursement Amount immediately prior to such
Distribution Date, and the amount of any payments to the Class A
Certificate Insurer on account thereof on such Distribution Date; and
(xx) the Cumulative Loss Percentage.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Servicer, the Depositor and
the Class A Certificate Insurer is limited to the availability, timeliness and
accuracy of the information derived from the Servicer. The Trustee will provide
the above statement via the Trustee's internet website. The Trustee's website
will initially be located at https:\\xxx.xxxxxxxxxxxxxx.xx.xxx 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.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) 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, the Servicer shall furnish to
the Trustee a monthly remittance advice statement (in a format mutually agreed
upon by the Servicer and the Trustee) containing such information as shall be
reasonably requested by the Trustee to 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").
The 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 the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Sections 2.07 and 3.07;
(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) with respect to each Mortgage Loan which has been altered,
modified or varied, the reason for such modification (i.e. extension of
maturity date, Mortgage Interest Rate);
(viii) with respect to each Mortgage Loan which has been altered,
modified or varied, the number and aggregate outstanding principal
balances of such 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;
(ix) with respect to each Mortgage Loan, the amount of any
charge-offs for such Mortgage Loan; and
(x) with respect to each Mortgage Loan, the capitalized amount for
such Mortgage Loan.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
Until all of the LIBOR Certificates are paid in full, the Trustee will at all
times retain at least four Reference Banks for the purpose of determining LIBOR
with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(i) The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each
LIBOR Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a
good-faith reasonable effort, to obtain quotations from the Reference
Banks or to determine the arithmetic mean referred to in the definition of
LIBOR, all as provided for in this Section 4.04 and the definition of
LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the
Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinate Certificates then outstanding in reduction of the Class Certificate
Balance thereof. In the event Applied Realized Loss Amounts are allocated to any
Class of Certificates, their Class Principal Balances shall be permanently
reduced by the amount so allocated, and no funds will be distributable with
respect to the written down 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.
Section 4.06 The Class A Certificate Insurance Policy. (a) Not later
than two (2) Business Days prior to each Distribution Date, the Trustee shall
determine with respect to such Distribution Date, the amount to be on deposit in
the Distribution Account on such Distribution Date to the extent of Available
Funds, excluding the amount of any Insured Amounts and Preference Amounts.
(b) If on any Distribution Date there is a Class A Certificate
Deficiency Amount, the Trustee shall complete a notice in the form of Exhibit A
to the Class A Certificate Insurance Policy and submit such notice to the Class
A Certificate Insurer no later than 12:00 noon New York City time on the second
Business Day preceding such Distribution Date as a claim for an Insured Amount
in an amount equal to such Class A Certificate Deficiency Amount.
(c) The Trustee shall establish a separate Eligible Account for the
benefit of Holders of the Class A Certificates and the Class A Certificate
Insurer (the "Policy Payment Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Trustee shall deposit upon
receipt any amount paid under the Class A Certificate Insurance Policy in the
Policy Payment Account and distribute such amount only for purposes of payment
to the Class A Certificateholders of the Insured Amount for which a claim was
made and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Trustee or the Trust Fund or to pay any other
Class of Certificates. Amounts paid under the Class A Certificate Insurance
Policy, to the extent needed to pay the Class A Certificate Deficiency Amount,
shall be transferred to the Distribution Account on the related Distribution
Date and disbursed by the Trustee to the Class A Certificateholders in
accordance with Section 4.02. 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 other distributions to the Class A Certificateholders with other funds
available to make such payment. However, the amount of any payment of principal
or of interest on the Class A Certificates to be paid from funds transferred
from the Policy Payment Account shall be noted as provided in paragraph (d)
below and in the statement to be furnished to Holders of the Class A
Certificates pursuant to Section 4.03(a). Funds held in the Policy Payment
Account shall not be invested. Any funds remaining in the Policy Payment Account
on the first Business Day following a Distribution Date shall be returned to the
Class A Certificate Insurer pursuant to the written instructions of the Class A
Certificate Insurer by the end of such Business Day.
(d) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A Certificate from
moneys received under the Class A Certificate Insurance Policy. The Class A
Certificate Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon one Business Day's prior notice to the
Trustee.
(e) In the event that the Trustee has received a certified copy of
an order of the appropriate court that any Insured Amount has been voided in
whole or in part as a preference payment under applicable bankruptcy law, the
Trustee shall so notify the Class A Certificate Insurer, shall comply with the
provisions of the Class A Certificate Insurance Policy to obtain payment by the
Class A Certificate Insurer of such Preference Amount in the amount of such
voided Insured Amount, and shall, at the time it provides notice to the Class A
Certificate Insurer, notify, by mail to the Class A Certificateholders of the
affected Certificates that, in the event any Class A Certificateholder's Insured
Amount is so recovered, such Class A Certificateholder will be entitled to
payment pursuant to the Class A Certificate Insurance Policy, a copy of which
shall be made available through the Trustee, the Class A Certificate Insurer or
the Class A Certificate Insurer's fiscal agent, if any, and the Trustee shall
furnish to the Class A Certificate Insurer or its fiscal agent, if any, its
records evidencing the payments which have been made by the Trustee and
subsequently recovered from the Class A Certificateholders, and dates on which
such payments were made.
(f) The Trustee shall promptly notify the Class A 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 distribution made with
respect to the Class A Certificates. Each Class A Certificateholder, by its
purchase of Class A Certificates, the Servicer, the Depositor and the Trustee
agree that, the Class A Certificate Insurer (so long as no Class A Certificate
Insurer Default exists) 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, supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Class A Certificate Insurer shall be
subrogated to, and each Class A Certificateholder and the Trustee hereby
delegates and assigns to the Class A Certificate Insurer, to the fullest extent
permitted by law, the rights of the Trustee and each Class A Certificateholder
in the conduct of any such Preference Claim, including, without limitation, all
rights of any party to any adversary proceeding or action with respect to any
court order issued in connection with any such Preference Claim.
(g) The Trustee shall, upon retirement of the Class A Certificates,
furnish to the Class A Certificate Insurer a notice of such retirement, and,
upon retirement of the Class A Certificates and the expiration of the term of
the Class A Certificate Insurance Policy, surrender the Class A Certificate
Insurance Policy to the Class A Certificate Insurer for cancellation.
(h) The Trustee will hold the Class A Certificate Insurance Policy
in trust as agent for the Holders of the Class A Certificates for the purpose of
making claims thereon and distributing the proceeds thereof. Neither the Class A
Certificate Insurance Policy nor the amounts paid on the Class A Certificate
Insurance Policy will constitute part of the Trust Fund created by this
Agreement. Each Holder of Class A Certificates, by accepting its Class A
Certificates, appoints the Trustee as attorney-in-fact for the purpose of making
claims on the Class A Certificate Insurance Policy.
Section 4.07 Effect of Payments by the Class A Certificate Insurer;
Subrogation. Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Class A Certificates which is made
with moneys received pursuant to the terms of the Class A Certificate Insurance
Policy shall not be considered payment of the Class A Certificates from the
Trust Fund. The Depositor, the Servicer and the Trustee acknowledge, and each
Holder by its acceptance of a Class A Certificate agrees, that without the need
for any further action on the part of the Class A Certificate Insurer, the
Depositor, the Servicer, the Trustee or the Certificate Registrar (a) to the
extent the Class A Certificate Insurer makes payments, directly or indirectly,
on account of principal of or interest on the Class A Certificates to the
Holders of such Class A Certificates, the Class A Certificate Insurer will be
fully subrogated to, and each Class A Certificateholder, the Servicer and the
Trustee hereby delegate and assign to the Class A Certificate Insurer, to the
fullest extent permitted by law, the rights of such Holders to receive such
principal and interest from the Trust Fund, including, without limitation, any
amounts due to the Class A Certificateholders in respect of securities law
violations arising from the offer and sale of the Class A Certificates, and (b)
the Class A Certificate Insurer shall be paid such amounts from the sources and
in the manner provided herein for the payment of such amounts and as provided in
this Agreement. The Trustee and the Servicer shall cooperate in all respects
with any reasonable request by the Class A Certificate Insurer for action to
preserve or enforce the Class A 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 4.08 Allocation of the Class A Principal Parity Deficit.
Insured Amounts paid on any Distribution Date in respect of a Class A Principal
Parity Deficit shall be allocated to each Class of Class A Certificates based on
the respective amounts, if any, by which the Class Certificate Balance of each
such Class exceeds the aggregate Stated Principal Balance of the Mortgage Loans
in the related Loan Group. Such allocation shall be made pro rata to each such
Class of Class A Certificates based on the respective amounts, if any, of such
excesses related to such Class.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount which must be in excess of the applicable minimum denomination)
and aggregate denominations per Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
Certificates and the Class P Certificates in the name of the Depositor or its
designee. On January 30, 2003, or such other date as to which the Depositor
notifies the Trustee, the Depositor hereby directs the Trustee to transfer the
Class X Certificates and the Class P Certificates (or a portion thereof, if so
directed by the Depositor) as follows: "Deutsche Bank National Trust Company, as
Indenture Trustee on behalf of the Noteholders of the GSAMP NIM Trust
2002-HE2-N," and to deliver such Class X Certificates and Class P Certificates
to Deutsche Bank National Trust Company, as indenture trustee.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor as directed by that
Certificateholder by written wire instructions provided to the Trustee or (y),
in the event that no wire instructions are provided to the Trustee, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing. In the event, the
Depositor or an Affiliate transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the Trustee in writing of the
affiliated status of the transferee. The Trustee shall have no liability
regarding the lack of notice with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the transfer of the Class X and Class P Certificates to the NIM
Trust, in the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Trustee in writing the facts surrounding the transfer in substantially the
form set forth in Exhibit H (the "Transferor Certificate") and either (i) there
shall be delivered to the Trustee a letter in substantially the form of Exhibit
I (the "Rule 144A Letter") or (ii) in the case of the Class X Certificates,
there shall be delivered to the Trustee at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and 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 the transfer of the Class X and Class P
Certificates to the NIM Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("Similar Law") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, (ii) in the case of an ERISA-Restricted
Certificate other than a Residual Certificate or a Class P Certificate that has
been the subject of an ERISA-Qualifying Underwriting and the purchaser is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) in the case of any such ERISA-Restricted Certificate other than a
Residual Certificate or Class P Certificate presented for registration in the
name of an employee benefit plan subject to Title I of ERISA, a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and the Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code or similar violation of Similar Law and will not subject the Trustee or
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. In the event that
such representation is violated, or any attempt to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
without such Opinion of Counsel, such attempted transfer or acquisition shall be
void and of no effect.
Neither the Class R Certificates nor the Class P Certificate may be
sold to any employee benefit plan subject to Title I of ERISA, any plan subject
to Section 4975 of the Code, or any plan subject to any Similar Law or any
person investing on behalf of or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee or the
Servicer, to the effect that the elimination of such restrictions will not cause
either the Lower Tier REMIC or Upper Tier REMIC to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer, the Class
A 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, countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Class A
Certificate Insurer, the Trustee, the Depositor and any agent of the Servicer,
the Class A Certificate Insurer, the Depositor or the Trustee may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Class A Certificate Insurer, the Trustee, the Depositor nor any agent of the
Servicer, the Class A Certificate Insurer, the Depositor or the Trustee shall be
affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies 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. As of the Closing Date, the Trustee
designates the office of its agent located c/o DTC Transfer Agent Services, 00
Xxxxx Xxxxxx, Xxxxxxxx Xxxx Entrance, Xxx Xxxx, Xxx Xxxx 00000 for purposes of
transfers, exchanges or surrenders.
Section 5.07 Rights of the Class A Certificate Insurer to Exercise
Rights of Class A Certificateholders. (a) By accepting its Class A Certificate,
each Class A Certificateholder agrees that, unless a Class A Certificate Insurer
Default exists, the Class A Certificate Insurer shall be deemed to be the Class
A Certificateholders for all purposes (other than with respect to the receipt of
payment on the Class A Certificates) and shall have the right to exercise all
rights of the Class A Certificateholders under this Agreement and under the
Class A Certificates without any further consent of the Class A
Certificateholders.
(b) All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Class A Certificateholder shall
also be sent to the Class A Certificate Insurer.
Section 5.08 Class A Certificate Insurer Default. Notwithstanding
anything elsewhere in this Agreement or in the Certificates to the contrary, if
a Class A Certificate Insurer Default exists, or if and to the extent the Class
A 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 Certificate Insurer to exercise rights of the Class A
Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicer or the Trustee to act without the consent or approval of the Class A
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Class A Certificate Insurer, (d) permit the Class A
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
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 Class A 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 Certificate Insurer from any
obligation or liability it may have to any party or to the Class A
Certificateholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Class A Certificate Insurance Policy) or
under applicable law. At such time as the Class A Certificates are no longer
outstanding hereunder, and no amounts owed to the Class A Certificate Insurer
hereunder remain unpaid, the Class A Certificate Insurer's rights hereunder
shall terminate.
Section 5.09 Registration Rights. The Depositor agrees that the
Initial Investor in the Class A-1 and Class A-2 Certificates will have a
one-time non-transferable right, at any time after June 30, 2003 and prior to
December 30, 2005, to request in writing that the Depositor register the Initial
Investor's sale of the Class A-1 and Class A-2 Certificates to a third party
purchaser. Upon receipt of such written request, the Depositor shall use its
reasonable best efforts to cause the Class A-1 and Class A-2 Certificates to be
registered under the Securities Act within 180 days after receipt of such
written request. The Initial Investor will be required to reasonably cooperate
with the Depositor in connection with such registration, and provide such
information regarding the Initial Investor and the principal amount of Class A-1
and Class A-2 Certificates to be registered as may be required by the Securities
Act and the rules and regulations of the Securities and Exchange Commission. The
Initial Investor will be required to abide by such reasonable offering
restrictions as may be requested by the Depositor in connection with such
registration. The Depositor agrees to bear the costs of such registration.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx or
Xxxxxxx Mac, and provided, further, that such merger, consolidation or
succession does not adversely affect the then current rating or ratings on the
LIBOR Certificates.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor or the
Servicer and any director, officer, employee or agent of the Depositor and the
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, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or 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 the 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 the Servicer may in its discretion
undertake any such action (or direct the Trustee to undertake such actions
pursuant to Section 2.07 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, the Servicer shall be entitled
to be reimbursed therefor out of the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. The Servicer
shall not assign this Agreement or resign from the obligations and duties hereby
imposed on it except (i) by mutual consent of the Servicer, the Depositor, the
Trustee and the Class A Certificate Insurer or (ii) upon the determination that
its duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer under clause (ii) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Depositor, the Trustee and
the Class A Certificate Insurer which Opinion of Counsel shall be in form and
substance acceptable to the Depositor, the Trustee and the Class A Certificate
Insurer. No such resignation shall become effective until a successor shall have
assumed the Servicer's responsibilities and obligations hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Depositor, the Trustee and the Class A
Certificate Insurer and hold them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain in any way related to any breach by the 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 the Servicer, or (iii) the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Servicer immediately shall
notify the Depositor, the Trustee and the Class A Certificate Insurer 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, the Trustee and
the Class A Certificate Insurer) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Class A Certificate Insurer or the Trustee in
respect of such claim.
Section 6.06 Servicing Rights Pledge. Notwithstanding Sections 6.04,
7.02 and 10.07, the Servicer shall have the right, subject to the succeeding
sentence, to pledge and assign all of the Servicer's right, title and interest
in, to and under this Agreement to the Servicing Rights Pledgee, for the benefit
of certain lenders. If, as a result of a default by the Servicer under any such
financing arrangement, the lenders acquire these servicing rights and appoint a
successor Servicer under this Agreement, any such successor Servicer must be
approved by the Class A Certificate Insurer and must meet all requirements for
successor Servicers under Section 7.02. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor Servicer, the entire
amount of the Servicing Fee and other compensation payable to the Servicer
pursuant hereto shall thereafter be payable to such successor Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor, or by the Trustee, or to the Servicer, the Depositor
and the Trustee by Certificateholders evidencing percentage interests of at
least 25% in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of thirty days (except that such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor, the Class A Certificate Insurer or
by the Trustee, or to the Servicer, the Depositor and the Trustee by
Certificateholders of Certificates evidencing percentage interests of at least
25% in the Certificates 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
the Servicer, the cure period may be extended for an additional 30 days upon
delivery by the Servicer to the Trustee of a certificate to the effect that the
Servicer believes in good faith that the failure or breach can be cured within
such additional time period and the Servicer is diligently pursuing remedial
action; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(g) if a Cumulative Loss Event or Delinquency Event occurs; or
(h) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders or the Class A Certificate Insurer and which
continues unremedied for a period of thirty days after the date upon which
written notice of such breach is given to the Servicer by the Trustee, the Class
A Certificate Insurer or by the Depositor, or to the Servicer, the Trustee, the
Depositor or the Class A Certificate Insurer by Certificateholders entitled to
at least 25% of the Voting Rights in the Certificates.
If an Event of Default described in clause (a), (b), (c), (d), (e),
(f) or (h) of this Section 7.01 shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, with the consent of the Class A Certificate Insurer, or at the direction of
the Class A Certificate Insurer (or, if a Class A Certificate Insurer Default
exists, at the direction of 51% of the Voting Rights), and in the case of an
Event of Default described in clause (g) of this Section 7.01, solely at the
direction of the Class A Certificate Insurer, the Trustee shall, by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Trustee shall not be
required to give written notice to the Servicer of the occurrence of an Event of
Default described in clauses (b) through (h) 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 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. On and after the receipt by the Servicer of such written
notice, all authority and power of the 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 the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid 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 in accordance with the terms of this Agreement.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.06, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances or Servicing Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans that the Servicer would have been entitled
to charge to the Collection Account if the Servicer had continued to act
hereunder including, if the Servicer was receiving the Servicing Fee, the
Servicing Fee and the income on investments or gain related to the Collection
Account (in addition to income on investments or gain related to the
Distribution Account for the benefit of the Trustee). Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with this Section 7.02, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making P&I Advances and
Servicing Advances pursuant to Section 4.01 or if it is otherwise unable to so
act or if the Class A Certificate Insurer (or, if a Class A Certificate Insurer
Default exists, the Holders of 51% of the Voting Rights) so requests, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which (i) is acceptable
to the Class A Certificate Insurer and (ii) does not adversely affect the then
current rating of the Certificates by each Rating Agency, as the successor to
the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
to the Servicer shall be an institution which is a Xxxxxx Xxx- and Xxxxxxx
Mac-approved seller/servicer in good standing, which has a net worth of at least
$30,000,000, which is willing to service the Mortgage Loans and which executes
and delivers to the Depositor, the Trustee and the Class A Certificate Insurer
an agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; provided,
that each Rating Agency acknowledges that its rating of the Certificates
(without taking into account the Class A 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 the 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, the Class A
Certificate Insurer, and such successor shall agree; provided, however, that no
such compensation shall be in excess of the Servicing Fee Rate and amounts paid
to the Servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor to the Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of Servicer, in accordance with applicable federal and
state law, and shall, during the term of its service as Servicer, maintain in
force the policy or policies that the Servicer is required to maintain pursuant
to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders, the Class A
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
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 of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
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 so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates or the Class A Certificate Insurer;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and except with respect to the investment of funds in the Distribution
Account not made at the direction of the Depositor during the Trustee Float
Period);
(h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof except as otherwise provided in Section 7.01; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and,
during the Trustee Float Period, any interest or investment income earned on
funds deposited in the Distribution Account. The Trustee and any director,
officer, employee, or agent of the Trustee shall be indemnified by the Trust
Fund and held harmless against any loss, liability, or expense (including
reasonable attorney's fees) incurred in connection with any claim or legal
action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05
or (ii) 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.
Notwithstanding any to the contrary contained herein, any amounts
payable to the Trustee pursuant to Section 8.05 shall be reimbursable by the
Trust Fund in an amount equal to $250,000 in the aggregate per calendar year as
a first priority expense and all other amounts in excess of $250,000 per
calendar year shall be reimbursable to the Trustee from the Trust Fund on each
Distribution Date after payment of all amounts owed to the Class A
Certificateholders and to the Class A Certificate Insurer on such Distribution
Date.
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 (without
regard to the Class A Certificate Insurance Policy) of the Certificates (or
having provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor or the Servicer other than the Trustee in its role as
successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer, each Rating Agency
and the Class A Certificate Insurer 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 (which successor shall be acceptable to the Class A
Certificate Insurer) by written instrument, in triplicate, one copy of which
shall be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06, the Class A Certificate Insurer has consented to
such appointment 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 Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The 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
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC 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 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, the Upper
Tier REMIC, the Class B-1 REMIC, the Class B-2 REMIC and the Class X REMIC be
treated as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non-Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or 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 any Trust REMIC
in any administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative adjustment
as to any taxable year of any Trust REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of any Trust REMIC, and otherwise act on behalf of each Trust REMIC
in relation to any tax matter or controversy involving it.
The Trustee shall treat (i) the rights of the Class P
Certificateholders to Prepayment Premiums as the beneficial ownership of
interests in a grantor trust, and (ii) the rights of the LIBOR
Certificateholders to receive Basis Risk Carry Forward Amounts as the beneficial
ownership interest in a grantor trust and not as an obligations of any Trust
REMIC created hereunder, for federal income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Certificates of the right to receive Basis Risk Carry Forward Amounts
from the Excess Reserve Fund Account. Thereafter, the Depositor shall provide to
the Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including any
minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the Servicer, in the case of any such
minimum tax, and otherwise if such tax arises out of or results from a breach by
the Servicer of any of its obligations under this Agreement or (iii) in all
other cases, or if the Trustee or the Servicer fails to honor its obligations
under the preceding clause (i), (ii), or (iii), any such tax will be paid with
amounts otherwise to be distributed to the Certificateholders, as provided in
Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Trustee shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission thereunder, and the Trustee shall sign and
file (via the Securities and Exchange Commission's Electronic Data Gathering and
Retrieval System) such Forms on behalf of the Depositor, if an officer of the
Depositor signs the Certification pursuant to paragraph (b) of this Section
8.12, or otherwise on behalf of the Trust. In the event the Trustee is signing
on behalf of the Depositor pursuant to the preceding sentence, the Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of either (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding the foregoing, the Trustee shall
prepare such Form 10-K to be signed by the Depositor and the Depositor shall
sign such form unless the Securities and Exchange Commission has indicated that
it will accept a Certification signed by the Depositor where the related Form
10-K is signed by the Trustee on behalf of the Depositor.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. 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 the Servicer's annual statement of
compliance described under Section 3.22 and the accountant's report described
under Section 3.23, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit L (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 Servicer shall cause the senior officer in charge of servicing at the
Servicer to sign the Certification in respect of items 4 and 5 thereof, and the
Trustee may rely on the Certification signed by the 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 O) 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 the Servicer
shall sign a certification (in the form attached hereto as Exhibit O) for the
benefit of the Depositor, the Trustee and their officers, directors and
Affiliates in respect of items 4 and 5 of the Certification. Each such
certification shall be delivered to the Depositor and the Trustee by March 20th
of each year (or if not a Business Day, the immediately preceding Business Day).
The Certification attached hereto as Exhibit M shall be delivered to the Trustee
for filing by March 25th 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) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Servicer's obligations
under this Section 8.12(c) or the 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) the 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 the Servicer on the other in connection
with a breach of the Servicer's obligations under this Section 8.12(c) or the
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.
For federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account as beneficially owned by the holder of the Class X Certificate and shall
treat such portion of the Trust Fund as a grantor trust under subpart E, Part I
of subchapter J of the Code. The Trustee shall treat the rights that each Class
of LIBOR Certificates has to receive payments of Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account as rights to receive payments under
an interest rate cap contract written by the Class X Certificateholder in favor
of each Class. Accordingly, each Class of Certificates (excluding the Class X,
Class P and Class R Certificates) will comprise two components - a regular
interest in the Corresponding REMIC and an interest in a cap contract, and the
Class X Certificates will comprise two components - a regular interest in the
Corresponding REMIC and the Excess Reserve Fund Account, subject to an
obligation to pay Basis Risk Carry Forward Amounts. The Trustee shall allocate
the issue price for a Class of Certificates between two components for purposes
of determining the issue price of the Upper Tier Regular Interest component
based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by the Majority Class X Certificateholder or the
Servicer, of all Mortgage Loans (and REO Properties) at the price equal to the
sum of (i) 100% of the unpaid principal balance of each Mortgage Loan (other
than in respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Interest Rate and (ii) the lesser of (x) the appraised value
of any REO Property as determined by the higher of two appraisals completed by
two independent appraisers selected by the Person seeking to purchase such
Mortgage Loans, at the expense of such Person, plus accrued and unpaid interest
on the related Mortgage Loan at the applicable Mortgage Interest Rates and (y)
the unpaid principal balance of each Mortgage Loan related to any REO Property,
in each case plus accrued and unpaid interest thereon at the applicable Mortgage
Interest Rate ("Termination Price") and (b) the later of (i) the maturity or
other Liquidation Event (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the expiration of 21 years from the death
of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.
No such purchase will be permitted without the consent of the Class
A Certificate Insurer, if such purchase would result in a draw on the Class A
Certificate Insurance Policy or would cause any previous draws or other amounts
owing to the Class A Certificate Insurer hereunder or under the Insurance
Agreement to remain unpaid.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder. If the Majority Class X
Certificateholder or the Servicer 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 to the affected Certificateholders, the
Depositor shall notify the Servicer, the Trustee and the Class A Certificate
Insurer of the date the Depositor intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not later than the 15th day of the month of
such final distribution. Any such Notice of Final Distribution shall specify (a)
the Distribution Date upon which final distribution on the Certificates will be
made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Depositor or its designee the Custodial
Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due the Servicer, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount up to an amount
equal to (i) as to each Class of Regular Certificates (except the Class X
Certificate), the Certificate Balance thereof plus for each such Class and the
Class X Certificate accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02, (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Majority Class X Certificateholder or the Servicer exercises its purchase option
with respect to the Mortgage Loans as provided in Section 9.01, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Depositor, to the effect that the failure to comply with the requirements
of this Section 9.03 will not (i) result in the imposition of taxes on
"prohibited transactions" on either REMIC as defined in Section 860F of the
Code, or (ii) cause any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Depositor, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Trust REMICs; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Trust REMICs stating that pursuant to Treasury
Regulations Section ss. 1.860F-1, the first day of the 90-day liquidation period
for each such Trust REMIC was the date on which the Trustee sold the assets of
the Trust Fund to the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicer and the Trustee without the consent of any
of the Certificateholders but with the consent of the Class A Certificate
Insurer (i) to cure any ambiguity or mistake, (ii) to correct any defective
provision herein or to supplement any provision herein which may be inconsistent
with any other provision herein, (iii) to add to the duties of the Depositor or
the Servicer, (iv) to add any other provisions with respect to matters or
questions arising hereunder or (v) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; provided, that any
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 (which in the case of the Class A Certificates, will be without
regard to the Class A Certificate Insurance Policy); it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor and the 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 any
Trust REMIC pursuant to the Code that would be a claim at any time prior to the
final redemption of the Certificates or (iii) comply with any other requirements
of the Code; provided, that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Trustee and the Class A Certificate Insurer 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 66 2/3%, 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 any Trust REMIC or the Certificateholders or
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such notice
to the Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
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, in the event any Class A Certificates
remain outstanding, any amendment to this Agreement shall require the prior
written consent of the Class A Certificate Insurer if such amendment adversely
affects in any respect the rights or interest of the Class A Certificate Insurer
or of the Class A Certificateholders (without regard to the Class A Certificate
Insurance Policy). The Trustee may conclusively rely on an Opinion of Counsel to
the effect that the rights or interests of the Class A Certificate Insurer will
not be adversely affected.
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 the 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 and the
Class A Certificate Insurer shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Trust Fund, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.07; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
2. [Reserved];
3. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.07 or 3.29.
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 the Servicer, Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Secretary, or such other address as may
be hereafter furnished to the Depositor and the Trustee by the Servicer in
writing, (c) in the case of the Trustee to the Corporate Trust Office, Deutsche
Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000-0000, Attention: Trust Administration-GS02H2, or such other address as the
Trustee may hereafter furnish to the Depositor or Servicer, (d) in the case of
the Class A Certificate Insurer, Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention Risk Management Consumer Asset-Backed
Certificates and (e) in the case of each of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities. (a) The
Servicer is hereby authorized to enter into a financing or other facility (any
such arrangement, an "Advance Facility"), the documentation for which complies
with Section 10.07(e) below, under which (1) the Servicer assigns or pledges its
rights under this Agreement to be reimbursed for any or all Advances to (i) a
special-purpose bankruptcy-remote entity (an "SPV") (or to a Person, who
simultaneously assigns or pledges such rights to an SPV) or (ii) a lender (a
"Lender"), which, in the case of an SPV, in turn, directly or through other
assignees and/or pledgees, assigns or pledges such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund some or all Advances required to be made by the
Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders or any other party shall be required before the Servicer may
enter into an Advance Facility nor shall the Trustee or the Certificateholders
be a third party beneficiary of any obligation of an Advance Financing Person to
the Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances, the Servicer shall remain
obligated pursuant to this Agreement to make Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility. If a Servicer enters into an Advance Facility,
and for so long as an Advance Financing Person remains entitled to receive
reimbursement for any Advances outstanding and previously unreimbursed pursuant
to this Agreement, then, to the extent prohibited under such Advance Facility,
such Servicer shall not be permitted to reimburse itself for Advances pursuant
to Section 3.11(a) of this Agreement, but instead such Servicer's assignee and
designee (the "Servicer's Assignee") shall have the right to receive from the
Collection Account collections that such Servicer would otherwise have the right
to receive from the Collection Account pursuant to said Section 3.11(a) of this
Agreement, amounts available to reimburse previously unreimbursed Advances
("Advance Reimbursement Amounts"). Amounts reimbursable to the Servicer's
Assignee from the Collection Account pursuant to Section 3.11(a) shall be
remitted by the Trustee to the Servicer's Assignee, upon receipt of a written
notice identifying the Servicer's Assignee and a related Officer's Certificate,
and the Servicer's Assignee shall have no right to withdraw funds directly from
the Collection Account. The Servicer shall provide an Officer's Certificate to
the Trustee stating the amount of reimbursements the Servicer's Assignee is
entitled to receive pursuant to Section 3.11(a).
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee and the
Class A Certificate Insurer a written notice of the existence of such Advance
Facility (an "Advance Facility Notice"), stating the identity of the Advance
Financing Person and the Servicer's Assignee, and specifying what Advances are
covered by the Advance Facility. An Advance Facility may be terminated by the
joint written direction of the Servicer and the related Advance Financing
Person.
(c) Advance Reimbursement Amounts (i) shall consist solely of
amounts in respect of Advances for which the Servicer would be permitted to
reimburse itself in accordance with Section 3.11(a), assuming the Servicer had
made the related Advance(s) and (ii) shall not consist of amounts payable to a
successor Servicer in accordance with Section 3.11(a) to the extent permitted
under Section 10.07(e) below.
(d) An Advance Financing Person who receives an assignment or pledge
of rights to receive Advance Reimbursement Amounts and/or whose obligations are
limited to the funding of Advances pursuant to an Advance Facility shall not be
required to meet the criteria for qualification as a Subservicer.
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
shall have been made and be outstanding shall be allocated on a "first-in, first
out" ("FIFO") basis. In the event that some or all of an Advance Reimbursement
Amount related to Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person shall have been
paid in error to the Servicer's Assignee related to such predecessor Servicer,
then such Servicer's Assignee shall be required to remit any portion of such
Advance Reimbursement Amount to each Person entitled to such portion of such
Advance Reimbursement Amount. At any time when an Advance Financing Person shall
have ceased funding Advances, including without limitation due to a servicing
transfer pursuant to Article VII, and the Servicer's Assignee shall have
received from the Collection Account Advance Reimbursement Amounts sufficient to
reimburse all Advances, the right to reimbursement for which were assigned to
the Servicer's Assignee, then the Servicer's Assignee and the Advance Financing
Person and the Servicer related to such Servicer's Assignee and Advance
Financing Person shall deliver a written notice to the Trustee terminating the
Advance Facility. Without limiting the generality of the foregoing, the Servicer
shall remain entitled to be reimbursed by the Advance Financing Person for all
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.
(f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01(d), any Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance theretofore
made has become a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance, the Servicer shall apply the same criteria in making such determination
regardless of whether such P&I Advance or Servicing Advance shall have been made
by the Servicer or any predecessor Servicer.
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. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor,
the Class A 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 Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor, the Class A Certificate Insurer or the Trustee
of any right under this Section 10.09 shall be borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificate holders 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 The Class A Certificate Insurer Default. Any right
conferred to Class A Certificate Insurer shall be suspended during any period in
which a Class A Certificate Insurer Default exists. At such time as the Class A
Certificates are no longer outstanding hereunder, and no amounts owed to the
Class A Certificate Insurer hereunder remain unpaid, the Class A Certificate
Insurer's rights hereunder shall terminate.
Section 10.12 Third Party Beneficiary. The parties agree that the
Class A Certificate Insurer is an intended third party beneficiary to this
Agreement and shall be entitled to rely upon and directly enforce the rights
granted to it under this Agreement.
* * * * * * *
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
GS MORTGAGE SECURITIES CORP.,
as Depositor
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: CEO
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Associate
XXXXXX LOAN SERVICING LP,
as Servicer
By: /s/ Xxxxxx XxXxxxx
------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Trustee at Closing)
SCHEDULE II
GSAMP Mortgage Lean Trust 2002-HE2,
Mortgage Pass-Through Certificates
Representations and Warranties of the Servicer
XXXXXX LOAN SERVICING LP (the "Servicer") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor,
the Trustee and the Class A Certificate Insurer, as of the Closing Date, or if
so specified herein, as of the Cut-off Date.
(1) The Servicer is a Delaware limited partnership, validly existing
and in good standing under the laws of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this Pooling
and Servicing Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the extent
necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling
and Servicing Agreement;
(2) The Servicer has the full power and authority to service each
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
the Servicer 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 and
the Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer 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 the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer 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 the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer 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 the
Servicer's knowledge, would in the future materially and adversely affect,
(x) the ability of the Servicer to perform its obligations under this
Pooling and Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Servicer taken as a whole;
(4) the Servicer is an approved seller/servicer for Xxxxxx Mae and
an approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or the ability of the Servicer to
service the 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 the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer 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) The Servicer covenants that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided
monthly reports to the three credit repositories, the Servicer 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
Representations and Warranties of Depositor as to the Mortgage Loans
The Depositor hereby makes the representations and warranties set
forth in this Schedule III as to the Mortgage Loans only to the Trustee and the
Class A Certificate Insurer as of the Closing Date.
(i) Each Group I Mortgage Loan and Group II Mortgage Loan was
originated in compliance with the Xxxxxxx Mac requirements for original
principal balance in effect as of the Closing Date.
EXHIBIT A
FORM OF CLASS A AND CLASS B CERTIFICATES
[To be added to the Class A-1 and Class A-2 Certificates while they remain
Private Certificates. [IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. :
Cut-off Date : December 1, 2002
First Distribution Date : January 20, 2003
Initial Certificate Balance
of this Certificate
("Denomination") :
Initial Certificate
Balances of all
Certificates of this Class : CLASS PRINCIPAL AMOUNT
CLASS A-1 $1,541,650,000
CLASS A-2 $ 803,799,000
CLASS A-3 $ 217,914,000
CLASS B-1 $ 43,332,000
CLASS B-2 $ 33,853,272
CUSIP : CLASS CUSIP NO.
CLASS A-1 [36228F KY1]
CLASS A-2 [36228F KZ8]
CLASS A-3 [36228F LA2]
CLASS B-1 [36228F LB0]
CLASS B-2 [36228F LC8]
ISIN : CLASS A-1 [US36228FKY15]
CLASS A-2 [US36228FKZ89]
CLASS A-3 [US36228FLA20]
CLASS B-1 [US36228FLC85]
CLASS B-2 [US63228FLE42]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
[Class A-] [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 Servicer or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated December 1,
2002 (the "Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), 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 countersigned 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: ____________________________________
Countersigned:
By: -------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-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 20th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Trustee and the Class A Certificate Insurer
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 Servicer 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.
[If this is a Class A Certificate:] [So long as no Class A
Certificate Insurer Default has occurred and is continuing, the Voting Rights to
which this Certificate are entitled will be exercisable solely by the Class A
Certificate Insurer.]
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 : December 1, 2002
First Distribution Date : January 20, 2003
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP : 36228F LF1
ISIN : [US63228FLF17]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-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 Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan
Servicing LP, as servicer (the "Servicer"), 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, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By: ____________________________________
Countersigned:
By: -------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-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 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Trustee and the Class A Certificate Insurer
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, 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 Servicer 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-1
FORM OF CLASS R-1 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 : December 1, 2002
First Distribution Date : January 20, 2003
Percentage Interest of :
this Certificate
("Denomination") 100%
CUSIP : 36228F LG9
ISIN : [US63228FLG99]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class R-1
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-1 Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer 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-1 Certificates pursuant to a Pooling and Servicing Agreement dated
as of December 1, 2002 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), 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-1
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York.
No transfer of a Class R-1 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-1 Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-1 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-1 Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-1 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-1 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-1 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-1 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-1 Certificate, (C) not to cause income with respect to the Class R-1
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-1 Certificate or to cause the Transfer of the Ownership Interest in this
Class R-1 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-1 Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By: ____________________________________
Countersigned:
By: -------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-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 20th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Trustee and the Class A Certificate Insurer
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, 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 Servicer 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-2
FORM OF CLASS R-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN THREE "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 : December 1, 2002
First Distribution Date : January 20, 2003
Percentage Interest of :
this Certificate
("Denomination") 100%
CUSIP : 36228F LH7
ISIN : US63228FLH72
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class R-2
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-2 Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer 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-2 Certificates pursuant to a Pooling and Servicing Agreement dated
as of December 1, 2002 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), 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-2
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York.
No transfer of a Class R-2 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-2 Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-2 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-2 Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-2 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-2 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-2 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-2 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-2 Certificate, (C) not to cause income with respect to the Class R-2
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-2 Certificate or to cause the Transfer of the Ownership Interest in this
Class R-2 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-2 Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By: ____________________________________
Countersigned:
By: -------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-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 20th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Trustee and the Class A Certificate Insurer
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, 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 Servicer and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ______________, or, if mailed by check, to _____________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE OR SIMILAR VIOLATION OF SIMILAR LAW AND WILL
NOT SUBJECT THE TRUSTEE OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE
EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE
TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE
WITHOUT THE REPRESENTATION LETTER AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. :
Cut-off Date : December 1, 2002
First Distribution Date : January 20, 2003
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : 36228F LE4
ISIN: : US63228FLE42
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer 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 December 1, 2002 (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), 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 will be entitled to distributions only to the
extent set forth in the Agreement. In addition, any distribution of the proceeds
of any remaining assets of the Trust will be made only upon presentment and
surrender of this Certificate at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee and the Servicer, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such Certificate will not result in the assets of the Trust Fund being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By: ____________________________________
Countersigned:
By: -------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-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 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Trustee and the Class A Certificate Insurer
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, 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 Servicer 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]
[Class A Certificate Insurer]
_____________________________
_____________________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Xxxxxx Loan Servicing LP, as Servicer,
and Deutsche Bank National Trust Company, as Trustee, GSAMP
Trust, 2002-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), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed Assignment of Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or the perfection or priority of any Mortgage.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT F
[to update]
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Class A Certificate Insurer]
_____________________________
_____________________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Xxxxxx Loan Servicing LP, as Servicer,
and Deutsche Bank National Trust Company, as Trustee, GSAMP
Trust, 2002-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 applicable
Household Seller has certified or the Trustee otherwise knows that the
related Mortgage has not been returned from the applicable recording
office, a copy of the Assignment of Mortgage (excluding information to be
provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2) and (13) of
the Mortgage Loan Schedule and the Data Tape Information accurately reflects
information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability, recordability or genuineness of any of the documents contained
in each Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan or the perfection or priority of any
Mortgage. Notwithstanding anything herein to the contrary, the Trustee has made
no determination and makes no representations as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2002-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 (the
"Agreement"), by and among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP, as servicer, and Deutsche Bank National
Trust Company, as Trustee. Capitalized terms used, but not defined herein or in
Exhibit 1 hereto, shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash flow
with respect thereto in some or all periods and intends to pay such taxes as
they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other U.S.
person.
12. Check one of the following:
[_] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[_] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
[_] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of __________________, 20__.
________________________________________
Print Name of Transferee
By:_____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
________________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________ , 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
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 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 2002-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 purchasing a Class A-1 Certificate
or Class A-2 Certificate or we are not an employee benefit plan that is subject
to Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a plan subject to any
Federal, state or local law materially similar to the foregoing provisions of
ERISA or the Code, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition
or, with respect to a Class X Certificate, the purchaser is an insurance company
that is purchasing this certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase and holding
of such Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
----------
(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.
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:
Send Custodial File to:
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 2.07 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.
XXXXXX LOAN SERVICING LP
By:_____________________________________
Name:
Title:
Date:
EXHIBIT K
FORM OF CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The original Mortgage Note bearing all intervening
endorsements, showing a complete chain of endorsement from the
originator to the last endorsee endorsed "Pay to the order of
_________________ without recourse" and signed (which may be
by facsimile signature) in the name of the last endorsee by an
authorized officer. To the extent that there is no room on the
face of the Mortgage Notes for endorsements, the endorsement
may be contained on an allonge, if state law so allows and the
Trustee is so advised by the applicable Household Seller 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, the applicable Household
Seller cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage,
pursuant to the Purchase Agreement, the applicable Household
Seller 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 the applicable Household 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 Trustee upon receipt thereof by the
applicable Household 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. If the Assignment of Mortgage
is to be recorded, the Mortgage shall be assigned to the
Trust. If the Assignment of Mortgage is not to be recorded,
the Assignment of Mortgage shall be delivered in blank.
(f) The originals of all intervening Assignments of Mortgage (if
any) evidencing a complete chain of assignment from the
applicable Household 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, pursuant to the
Purchase Agreement, the applicable Household Seller 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 Household 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 Trustee upon receipt thereof by the
Household Sellers; 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.
(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.
(j) The original mortgagee policy of title insurance.
(k) Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
(l) The original hazard insurance policy and, if required by law,
flood insurance policy.
(m) Residential loan application.
(n) Mortgage Loan closing statement.
(o) Verification of employment and income except for Mortgage
Loans originated under a limited documentation program.
(p) Verification of acceptable evidence of source and amount of
down payment.
(q) Credit report on the Mortgagor.
(r) Residential appraisal report.
(s) Photograph of the Mortgaged Property.
(t) Survey of the Mortgaged Property, if any.
(u) 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.
(v) All required disclosure statements.
(w) If available, termite report, structural engineer's report,
water potability and septic certification.
(x) Sales contract.
(y) 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.
(z) Amortization schedule.
EXHIBIT L
FORM CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
GSAMP Trust 2002-HE2 (the "Trust")
Mortgage Pass-Through Certificates
Series 2002-HE2
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing distribution date 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 these 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 servicing information required to be provided
to the trustee by the servicer under the pooling and servicing agreement
is included in these reports;
4. I am responsible for reviewing the activities performed by the servicer
under the pooling and servicing agreement and based upon the review
required under the pooling and servicing agreement, and except as
disclosed in the report, the servicer has fulfilled its obligations under
the pooling and servicing agreement; and
5. I have disclosed to the servicer's certified public accountants all
significant deficiencies relating to the servicer's compliance with the
minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the pooling and servicing
agreement.
Date: _____________________________
___________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED TO DEPOSITOR
GSAMP Trust 2002-HE2 (the "Trust")
Mortgage Pass-Through Certificates
Series 2002-HE2
I, [identify the certifying individual], certify to GS Mortgage
Securities Corp. [and Deutsche Bank National Trust Company, as trustee] [add for
certifications signed by an officer of the Servicer], and [its][their] [add for
certifications signed by an officer of the Servicer] officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. [To be certified by the Trustee] [I have reviewed the annual
report on Form 10-K for the fiscal year [___], and all reports
on Form 8-K containing distribution date reports filed in
respect of periods included in the year covered by that annual
report, of the Trust;]
2. [To be certified by the Trustee] [Based on my knowledge, the
information in these 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 that annual report;]
3. [To be certified by the Trustee] [Based on my knowledge, the
servicing information required to be provided to the trustee
by the servicer under the pooling and servicing agreement is
included in these reports;]
4. [To be certified by the Servicer] [I am responsible for
reviewing the activities performed by the servicer under the
pooling and servicing agreement and based upon the review
required under the pooling and servicing agreement, and except
as disclosed in the report, the servicer has fulfilled its
obligations under the pooling and servicing agreement; and]
5. [To be certified by the Servicer] [I have disclosed to the
servicer's certified public accountants all significant
deficiencies relating to the servicer's compliance with the
minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth
in the pooling and servicing agreement.]
Date: _____________________________
___________________________________
[Signature]
[Title]
EXHIBIT N
Household Sellers PURCHASE AGREEMENTS
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
---------------------
XXXXXXX XXXXX MORTGAGE COMPANY,
Purchaser
HOUSEHOLD FINANCE CORPORATION
Seller
HOUSEHOLD BANK F.S.B.
Seller
EACH SELLER LISTED ON EXHIBIT K HERETO,
Sellers
Dated as of November 30, 2002
Conventional,
Adjustable and Fixed Rate, Subprime and
Alt-A Residential Mortgage Loans
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLERS TO PURCHASER.........................
Subsection 6.01 Conveyance of Mortgage Loans...........................
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. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................
Subsection 9.01 Representations and Warranties Regarding the Seller....
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans..............................
Subsection 9.03 General Representations and Warranties of Purchaser.
As of the Closing Date, Purchaser represents and
warrants as follows:...................................
Subsection 9.04 Remedies for Breach of Representations and Warranties..
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults...............................................
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay
in Full................................................
Subsection 9.07 Purchaser's Right to Review............................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by Household;
Third Party Claims.....................................
Subsection 14.02 Merger or Consolidation of Household...................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. NOTICES......................................................
SECTION 17. SEVERABILITY CLAUSE..........................................
SECTION 18. COUNTERPARTS.................................................
SECTION 19. GOVERNING LAW................................................
SECTION 20. INTENTION OF THE PARTIES.....................................
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 22. WAIVERS......................................................
SECTION 23. EXHIBITS.....................................................
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 25. REPRODUCTION OF DOCUMENTS....................................
SECTION 26. FURTHER AGREEMENTS...........................................
SECTION 27. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 28. NO SOLICITATION..............................................
SECTION 29. WAIVER OF TRIAL BY JURY......................................
SECTION 30. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 31. 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 SELLERS
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
November 30, 2002 ("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"), Household Finance Corporation having an office
at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (a "Seller"), Household
Bank f.s.b., having an office at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx
00000 and the sellers listed on Exhibit K hereto (each a "Seller", collectively,
the "Sellers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sellers desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Sellers, certain first lien, adjustable
and fixed rate, subprime and Alt-A residential mortgage loans (the "Mortgage
Loans") on a servicing released basis as described herein, and which shall be
delivered as a pool of whole loans on the date as provided herein (the "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner
of the conveyance, servicing by the Servicer and control of the Mortgage Loans;
and
WHEREAS, following its purchase of the Mortgage Loans from the
Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass- through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Sellers agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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: December 5, 2002, or such other date as is mutually
agreed upon by the parties.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Credit File pursuant to this Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Custodial Agreement: That certain Custodial Agreement, by and
between the Purchaser and the Custodian governing the retention of the originals
of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, dated as of the date hereof, by and between the Purchaser and the
Custodian.
Custodian: Deutsche Bank National Trust Company, or any successor
thereto under the Custodial Agreement.
Cut-off Date: November 30, 2002.
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 Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Escrow Payments: With respect to any Mortgage Loan with an Escrow
Account, 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.
Household: Household Finance Corporation.
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.
Interim Servicing Agreement: That certain Interim Servicing
Agreement, dated as of December 5, 2002, by and between the Purchaser and
Household Finance Corporation.
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
Sellers generally purchase or originate 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 9.04
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 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 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 Sellers, reasonably acceptable to the Purchaser.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint- stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Sellers in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Sellers 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 Sellers for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Sellers in the month of substitution); (ii) have a
Mortgage Interest Rate not less than, and not more than 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 13.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found a price
equal to the 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 Sellers' repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
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: Household Finance Corporation, Household Bank f.s.b. and the
sellers listed on Exhibit K hereto and their respective successors in interest.
Servicer: Household Finance Corporation, and its successors in
interest, or any successor to such servicer under the Interim Servicing
Agreement, as therein provided.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the successor servicer, providing for such successor servicer to
service the Mortgage Loans.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
as of the beginning of the month of such Mortgage Loan. Such fee shall be
payable monthly and shall be pro-rated for any portion of a month during which
the Mortgage Loan is serviced by the Servicer under the Interim Servicing
Agreement. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds, to the extent permitted by this
Agreement) of such Monthly Payment collected by the Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in 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 Sellers 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 Sellers thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Sellers 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 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.
Subservicer: A servicer acting as a subservicer for the Servicer
under the Interim Servicing Agreement. The use by the Servicer of any
Subservicer shall not release the Servicer from any of its obligations under the
Interim Servicing Agreement and the Servicer shall remain responsible hereunder
for all acts and omissions of the subservicer as fully as if such acts and
omissions were those of the Servicer.
Successor Servicer: A servicer designated by the Purchaser pursuant to
Sections 8 and 9.03 which is entitled to the benefits of the indemnifications
set forth in Sections 9.03 and 14.01.
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) January 1, 2003 or
(b) such other date as mutually agreed by the Seller and the Purchaser.
Underwriting Guidelines: The underwriting guidelines of Household
Finance Corporation, 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 Sellers agree to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Sellers as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Sellers shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Sellers shall deliver the Mortgage Loan Schedule for the
Mortgage Loans to be purchased on the Closing Date to the Purchaser at least one
(1) Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be
the Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the 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 Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the Stated Principal Balance, as of the
Cut-off Date, of the Mortgage Loans, after application of payments of principal
actually received on or before the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Sellers, at closing, accrued interest on the Stated Principal
Balance of the related Mortgage Loans as of the 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 Closing Date,
inclusive. The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid to the Sellers by wire transfer of immediately
available funds to an account designated by the Sellers in writing.
The Purchaser shall be entitled to (1) all principal received after
the Cut-off Date, (2) all other recoveries of late charges, prepayment
penalties, assumption fees or other charges collected after the 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 Closing Date, the Sellers 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 Closing Date. If the Purchaser makes such examination prior to the
Closing Date and determines, in its sole discretion, that any Mortgage Loans are
unacceptable to the Purchaser for any reason, such Mortgage Loans shall be
deleted from the Mortgage Loan Schedule, and may be replaced by a Qualified
Substitute Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser
may, at its option and without notice to the Sellers, 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 Sellers fail to deliver the Credit Files with respect to any
Mortgage Loan, the Sellers shall, upon the request of the Purchaser, repurchase
or substitute for such Mortgage Loan at the price and in the manner specified in
Subsection 9.04.
SECTION 6. Conveyance from Sellers to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Sellers, simultaneously with the execution and delivery of this
Agreement, do 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 Sellers in and to the Mortgage Loans and the
Mortgage Files and all rights and obligations arising under the documents
contained therein. The Sellers shall cause the Servicing File retained by the
Servicer pursuant to this Agreement to be appropriately identified in the
Servicer's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Sellers
shall cause the Servicer to release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement or the
Interim Servicing Agreement, except when such release is required in connection
with a repurchase of any such Mortgage Loan pursuant to Subsection 9.04.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Sellers, an Affiliate of the Sellers, 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 Sellers after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Sellers in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the related
Seller's balance sheet and other financial statements as a sale of assets by
such Seller.
The Sellers shall or shall cause the Servicer to 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 Sellers in connection with each
Mortgage Loan. In particular, to the extent required by applicable law, the
Sellers shall or shall cause the Servicer to 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 or the Servicer may be in the form of
microfilm or microfiche.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Sellers shall deliver and release to the Custodian those
documents and instruments in the Mortgage File for each Mortgage Loan that are
required to be delivered to the Custodian pursuant to the Custodial Agreement in
5 or 6 approximately equal shipments, to be delivered to the Custodian on
November 11, 2002, November 14, 2002, November 18, 2002, November 21, 2002,
November 25, 2002 and, if necessary, November 27, 2002. The Sellers shall use
their best efforts to deliver the legal documents by November 25, 2002, but in
no event shall the Sellers deliver any legal documents later than November 27,
2002. The Sellers shall not deliver the legal documents for more than 4500
Mortgage Loans on November 27, 2002.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Sellers 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 Sellers 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 Sellers 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 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 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 Closing Date and recorded subsequently by
the Purchaser or its designee), and in the event that the Sellers do 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 Sellers at the price and in the
manner specified in Subsection 9.04. The foregoing repurchase obligation shall
not apply in the event that the Sellers 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 Sellers,
confirming that such documents have been accepted for recording (upon request of
the Purchaser and delivery by the Purchaser to the Sellers of a schedule of the
related Mortgage Loans, the Sellers 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
Closing Date.
The Sellers 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 Sellers for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Sellers shall, or shall cause the Servicer to, maintain the same
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 Sellers maintain for other mortgage loans purchased,
originated and serviced by the Sellers. The program includes evaluating and
monitoring the overall quality of the Sellers' loan production and the servicing
activities of the Sellers. 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 have been sold by the Sellers to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement, the Sellers hereby sell, transfer, assign, convey and deliver to the
Purchaser the Servicing Rights.
The Purchaser shall retain the Servicer as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). Pursuant to
the Interim Servicing Agreement, the Servicer shall begin servicing the Mortgage
Loans on behalf of the Purchaser and shall be entitled to the Servicing Fee with
respect to such Mortgage Loans from the Closing Date until the termination of
the Interim Servicing Agreement as set forth therein.
SECTION 8. Transfer of Servicing.
On the Transfer Date, the Servicer shall cease all servicing
responsibilities under the Interim Servicing Agreement related to the Mortgage
Loans and the Successor Servicer shall service the Mortgage Loans for the
benefit of the Purchaser pursuant to the Servicing Agreement.
On or prior to the Transfer Date, the Sellers shall, at its sole
cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Sellers shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Sellers shall provide the Purchaser with copies
of all such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The
Sellers shall transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if applicable)
and/or agents, notification of the transfer of the servicing to the Purchaser,
or its designee, and instructions to deliver all notices, tax bills and
insurance statements, as the case may be, to the Purchaser from and after the
Transfer Date. The Sellers shall provide the Purchaser with copies of all such
notices no later than the Transfer Date.
(c) Delivery of Servicing Records. The Sellers shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Sellers' possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Sellers shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Sellers shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Sellers shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Sellers.
(e) Payoffs and Assumptions. The Sellers shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Sellers on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Sellers (a) during the first 30
days after the Transfer Date shall be forwarded to the Purchaser by overnight
mail on the date of receipt and (b) after the date which is 30 days after the
Transfer Date shall be forwarded to the Purchaser by overnight mail twice
weekly. The Sellers shall notify the Purchaser of the particulars of the
payment, which notification requirement shall be satisfied if the Sellers
forward with their payment sufficient information to permit appropriate
processing of the payment by the Purchaser. The Sellers shall assume full
responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Sellers after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Sellers shall comply with the foregoing requirements with respect to all
Monthly Payments received by it after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the Transfer Date and discovered after the
Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Reconciliation. The Sellers shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(j) IRS Forms. The Sellers shall file all IRS Forms 1099, 1099A,
1098 or 1041 and K-1 which are required to be filed on or before the Transfer
Date in relation to the servicing and ownership of the related Mortgage Loans.
The Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
Each Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in each state wherein it owns or leases any material properties or
where a Mortgaged Property is located, if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Seller, and in any event the Seller is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan in accordance with the terms of this Agreement; the Seller has the
full corporate power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(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 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 Closing Date as to which the representations and
warranties set forth in Subsection 9.02 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 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. Household 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 Household 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 Household since the date of Household'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 Servicer has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Servicer or the applicable Subservicer
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;
(q) Insured Depository Institution Representations. If the Seller is
an Insured Depository Institution, and accordingly, such Seller makes the
following additional representations and warranties:
(i) This Agreement conforms to all statutory and regulatory
requirements applicable to such Seller. This Agreement is (a)
executed contemporaneously with the agreement reached by such Seller
and the Purchaser, (b) approved by a specific corporate or banking
association resolution by the board of directors of such Seller,
which approval shall be reflected in the minutes of said board, and
(c) continuously, from the time of its execution, an official record
of such Seller;
(ii) This Agreement has been duly and validly authorized by a
specific corporate or banking association resolution by the board of
directors of such Seller. A copy of such resolution, certified by
the corporate secretary of such Seller or attested to by a vice
president or higher officer of such Seller has been provided to the
Purchaser; and
(iii) The Seller will maintain a copy of this Agreement in its
official books and records.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the last day of the month preceding the
Closing Date, no Mortgage Loan has missed a Monthly Payment for any calendar
month preceding such month for the calendar year of 2002. (i.e., as of November
30, 2002, all Mortgage Loans will have made their payments for any Due Date
prior to November 1, 2002);
(c) No Outstanding Charges. The Sellers have not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest. There are no defaults in complying
with the terms of the Mortgage, and
(1) With respect to each Mortgage Loan which provides for
Escrow Payments, 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;
(2) With respect to each Mortgage Loan which does not provide
for Escrow Payments, to the best of the Sellers' knowledge, 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;
(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,
as well as all additional requirements set forth in the Interim Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect, as well as all additional requirements set forth in the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the related 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 Sellers have 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 Sellers;
(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, and the Sellers shall maintain in their possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
any evidence of compliance with all such requirements required by applicable law
to be maintained with respect to the Mortgage Loan;
(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 Sellers have 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 have the
Sellers 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 Lien. Each Mortgage is a valid and subsisting 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 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;
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 the related Seller has full right
to sell and assign the same to Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. 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 Sellers have 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 related 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 Sellers will
retain the Mortgage Files or any part thereof with respect thereto not delivered
to the Custodian, the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the related 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 related Seller intends to relinquish all rights to
possess, control and monitor the Mortgage Loan. After the Closing Date, the
Sellers will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Sellers will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(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 of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), (3)
of paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The title policy does not contain any special exceptions (other than the
standard exclusions) for zoning and uses and has been marked to delete the
standard survey exception or to replace the standard survey exception with a
specific survey reading. The related Seller, its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including any 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 any
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;
(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 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). Each Mortgage Loan was originated by one of the Sellers' approved
correspondents or brokers. 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 Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) 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 Sellers are 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;
(aa) Condominiums/Planned Unit Developments. Condominiums are
acceptable where the project is complete with no additional phasing or
annexation, at least 90% sold and closed, at least 60% owner occupied; control
of Homeowners Association (HOA) turned over to individual unit owners for at
least one year; no more than 10% of units can be owned by a single entity.
Planned Unit Developments (PUDs) are acceptable if at least 90% sold and closed,
and control of HOA turned over to unit owners. Single family detached residences
located in a PUD are not subject to the above restrictions provided the HOA
monthly assessment is minimal and the only common elements are greenbelts,
berms, and similar types of minor improvements.
(bb) 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 Sellers are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(cc) 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 to the best of the Sellers' knowledge, such provision
is enforceable;
(dd) Assumability. The Mortgage Loan Documents provide that the
Mortgage Loan may not be assumed;
(ee) 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 Sellers, 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;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first 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;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is inhabitable under applicable state and local
laws;
(hh) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
related 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 Sellers 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 Sellers 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 Sellers
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;
(ii) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(jj) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Sellers, and the Sellers have no knowledge of any relief requested
or allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(ll) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, 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;
(mm) 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;
(nn) Value of Mortgaged Property. The Sellers have 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 Sellers generally secured by properties
in the same geographic area as the related Mortgaged Property;
(oo) No Defense to Insurance Coverage. The Sellers have caused or
will cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Sellers on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable, 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 Sellers, the related Mortgagor or any party involved
in the application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of such
insurer's breach of such insurance policy or such insurer's financial inability
to pay;
(pp) Escrow Analysis. With respect to each Mortgage with an Escrow
Account, the Sellers have 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;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories monthly in a timely manner;
(rr) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Sellers 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;
(ss) Leaseholds. No Mortgage Loan is secured by leasehold estates in
the related Mortgaged Property;
(tt) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise as
set forth on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(uu) High Cost Loans. No Mortgage Loans are classified as (a) Shigh
cost" loans under the Home Ownership and Equity Protection Act of 1994 or (b) a
"high cost" loan under any other applicable state, federal or local law.
(vv) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(ww) 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;
(xx) 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;
(yy) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust. No Mortgagor is a trustee
under a "living trust";
(zz) 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;
(aaa) 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;
(bbb) Compliance with Anti-Money Laundering Laws. The Sellers have
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 Sellers as of the
Closing Date, the Sellers have 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;
(ccc) Origination Date. No Mortgage Loan was originated after
September 30, 2002;
(ddd) MERS Designations. With respect to each MERS Designated
Mortgage Loan, the related Seller has designated the Custodian as the Investor
and no Person is listed as Interim Funder on the MERS(R)System;
(eee) 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;
(fff) 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.
(ggg) Reports. On or prior to the Closing Date, the Sellers 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.
(hhh) Payoffs. No Mortgage Loans prepaid in full prior to the
Closing Date.
Subsection 9.03 General Representations and Warranties of Purchaser.
As of the Closing Date, Purchaser represents and warrants as follows:
(a) Organization. Purchaser is a corporation, duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation, and is qualified and authorized to transact business in, and is
in good standing under the laws of, each jurisdiction in which any Mortgaged
Property is located or is otherwise exempt under applicable law from such
qualification. Purchaser has the requisite corporate power and authority to own
and operate its properties, to carry on its business as it is now being
conducted, and to consummate the transactions contemplated by this Agreement.
(b) Authorization of this Agreement. Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporation action, and no other corporate proceedings on the part of Purchaser
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and constitutes a legal, valid, and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except that such
enforcement may be affected by bankruptcy, by other insolvency laws, or by
general principles of equity.
(c) No Conflict or Violation. The execution and delivery of this
Agreement by Purchaser does not, and the performance of this Agreement by
Purchaser will not, (i) result in a violation of or conflict with any provisions
of the charter or by-laws or equivalent governing instruments of Purchaser, (ii)
violate any law, rule, regulation, code, ordinance, judgment, injunction, order,
writ, decree, or ruling applicable to Purchaser, or (iii) conflict with or
violate any agreement, permit, concession, grant, franchise, license, or other
governmental authorization or approval necessary for purchase of the Mortgage
Loans by Purchaser. No regulatory approvals or consents are required with
respect to Purchaser's consummation of the transactions contemplated by this
Agreement.
(d) No Litigation Pending. There is no action, suit, proceeding or
governmental investigation or inquiry is pending or, to the knowledge of Seller,
threatened against Seller, before any court, administrative agency or other
tribunal asserting the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or which,
if adversely determined, either in any one instance or in the aggregate, would
have a material adverse effect on the Mortgage Loans or 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;
(e) Financial Condition. If requested in writing by Seller prior to
the date hereof, Purchaser has previously furnished Seller with Purchaser's most
recent audited financial statements, together with the respective reports
thereon of the Purchaser's independent public accountants, and Purchaser's most
recent unaudited financial statements, each of which has been prepared in
accordance with generally accepted accounting principles. Each of the balance
sheets included in the financial statements set forth Purchaser's financial
condition as of the date thereof, and there have been no material adverse
changes in Purchaser's business or financial condition since that date.
(f) Accuracy of Statements. Neither this Agreement, nor any
statement, report, or other document furnished or to be furnished pursuant to
this Agreement, or in connection with the transaction contemplated hereby,
contains any untrue statement of fact by Purchaser or omits to state a fact
necessary to make the statements of Purchaser contained therein not misleading.
(g) Ability to Perform; Solvency. Purchaser 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. Purchaser is solvent and the
purchase of the Mortgage Loans will not cause Purchaser to become insolvent.
(h) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the execution,
delivery and performance by Purchaser of or compliance by Purchaser with this
Agreement or the Mortgage Loans, or the purchase of the Mortgage Loans by
Purchaser or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the Closing
Date.
(i) No Commissions to Third Parties. Purchaser has not dealt with
any broker or agent or other Person who might be entitled to a fee, commission,
or compensation in connection with this transaction other than Seller's
financial advisor, who shall be compensated solely by Seller, pursuant to a
separate agreement.
Subsection 9.04 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01, 9.02 and 9.08 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 any 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 Sellers 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 the representations and warranties set forth in
Subsection 9.02(c) which are made to the best of the Sellers' knowledge, if it
is discovered by the Sellers 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 Sellers
shall use their best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, Household 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 Sellers of any breach of the
representations or warranties set forth in clauses (tt), (uu), (vv) or (xx) of
Subsection 9.02, Household 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 9.01, and such breach cannot be cured within
60 days of the earlier of either discovery by or notice to the Sellers of such
breach, all of the Mortgage Loans shall, at the Purchaser's option, be
repurchased by Household at the Repurchase Price; provided that in the event a
Loan in Breach shall involve the representations and warranties set forth in
clauses (h) or (i) of Subsection 9.01 and the Purchaser reasonably determines,
at the Purchaser's option, that such breach may be cured through repurchase, or
if within 120 days of the Closing Date, substitution of a Qualified Substitute
Mortgage Loan in accordance with the succeeding sentences, Household shall
repurchase or substitute any selected Loans in Breach.
However, if the breach shall involve a representation or warranty
set forth in Subsections 9.02 or 9.08 (other than the representations and
warranties set forth in clauses (tt), (uu), (vv) or (xx) of Subsection 9.02) and
the Sellers discover or receive notice of any such breach within 120 days of the
Closing Date, the Sellers shall, at the Purchaser's option and provided that a
Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 120
days after the Closing Date. If the Sellers have no Qualified Substitute
Mortgage Loan, Household shall repurchase the deficient Mortgage Loan. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Subsection 9.04 shall be accomplished by either (a) if the Interim
Servicing Agreement has been entered into and is in effect, deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to the
Purchaser on the next scheduled Remittance Date, after deducting therefrom any
amount received in respect of such repurchased Mortgage Loan or Loans and being
held in the Custodial Account for future distribution or (b) if the Interim
Servicing Agreement is no longer in effect, by direct remittance of the
Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Sellers shall arrange for the reassignment of the Deleted Mortgage Loan to the
Sellers and the delivery to the Sellers of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Sellers 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
Transfer Date. The Sellers 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 Sellers
shall or shall cause the Servicer to 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 Sellers. 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 Sellers shall
thereafter be entitled to retain all amounts subsequently received by the
Sellers 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, Household
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 Sellers' representations and
warranties contained in this Agreement or any Transaction Agreement. It is
understood and agreed that the obligations of the Sellers set forth in this
Subsection 9.04 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser as provided in this Subsection 9.04 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 Sellers hereby agree 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 Sellers relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01,
9.02 or 9.08 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Sellers to the Purchaser, (ii)
failure by the Sellers to cure such breach, repurchase such Mortgage Loan or
substitute a Qualified Substitute Mortgage Loan as specified above, and (iii)
demand upon the Sellers by the Purchaser for compliance with this Agreement.
Subsection 9.05 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 Closing Date
within 30 days of such Monthly Payment's Due Date ("First Due Date") and such
Mortgage Loan is more than 29 days delinquent on the date 90 days after the
related First Due Date (a "First Payment Default"), the Seller shall, upon
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 Sellers' repurchase obligation hereunder.
Subsection 9.06 Mortgage Loans That Prepay in Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan is prepaid in full on or before the date which
is 90 days after the Closing Date, Household shall pay the Purchaser, within
three (3) Business Days of such prepayment in full, the difference between (a)
the Purchase Price for such Mortgage Loan and (b) the outstanding principal
balance of such Mortgage Loan as of the Cut- off Date.
Subsection 9.07 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
perform on-site due diligence at the premises of the Sellers with respect to the
Mortgage Loans. The Sellers 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 Sellers 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 Sellers' offices for review by Purchaser or its agents during
normal business hours before the 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 more than 15%
below the appraisal provided in connection with the origination of the related
Mortgage Loan or (ii) the loan to value ratio calculated based upon the broker's
price opinion is greater than 100%, (c) which does not conform to the Seller's
Underwriting Guidelines, or (d) which does not conform to the terms of the
Purchase Price and Terms Letter or is in breach of the representations and
warranties set forth herein. Purchaser shall notify the Sellers of any such
rejected Mortgage Loans as such Mortgage Loans are discovered on a daily basis;
provided that if the Sellers address such issue to Purchaser's satisfaction in
Purchaser's sole discretion on or prior to the Closing Date such Mortgage Loan
shall be purchased by the Purchaser. The final list of any such rejected
Mortgage Loans shall be provided by the Purchaser to the Sellers no later than
November 27, 2002, and the final list of Mortgage Loans to be purchased shall be
provided by the Purchaser to the Sellers no later than December 3, 2002.
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.
Subsection 9.08 Additional Mortgage Loan Schedule Fields.
On or prior to December 11, 2002, the Sellers shall deliver to the
Purchaser a supplemental Mortgage Loan Schedule providing the following fields
with respect to the Mortgage Loans: (1) with respect to Adjustable Rate Mortgage
Loans, the first Interest Rate Adjustment Date; (2) lookback period and rounding
percentage; (3) balloon flag; (4) with respect to Adjustable Rate Mortgage
Loans, the initial Periodic Rate Cap under the terms of the Mortgage Note. The
Sellers represent and warrant that as of the date of delivery of such schedule,
such supplemental schedule shall be complete, true and correct.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) prior to the Closing Date, the Sellers 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 Closing Date (including accrued interest), and prepare a
Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Sellers under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement or an Event of Default under the Interim Servicing
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Sellers shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Sellers on the Closing Date the Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Interim Servicing Agreement, dated as of the Cut-off Date;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the Mortgage Loan Schedule, one copy to be attached hereto, and one copy
to be attached to the Custodian's counterpart of the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial Agreement, in
the form of Exhibit 2 to the Custodial Agreement;
6. a Custodial Account Letter Agreement or a Custodial Account Certification,
as applicable, as required under the Interim Servicing Agreement;
7. an Escrow Account Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Interim Servicing Agreement;
8. an Officer's Certificate, in the form of Exhibit E hereto with respect to
each Seller, including all attachments thereto;
9. an Opinion of Counsel of the Sellers (who may be an employee of a Seller),
in form and substance acceptable to the Purchaser ("Opinion of Counsel of
the Seller");
10. an Opinion of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial Agreement;
11. a Security Release Certification, in the form of Exhibit 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;
12. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the related Seller by merger or acquired or
originated by the related Seller while conducting business under a name
other than its present name, if applicable; and
13. a MERS Report reflecting the Custodian as Investor and no Person as
Interim Funder for each MERS Designated Mortgage Loan.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees and the fees and
expenses of its counsel. All servicing fees incurred prior to the Closing Date,
and all costs and expenses incurred in connection with the transfer of the
Mortgage Loans, fees to transfer files and prepare assignments/endorsements, all
initial recording fees, if any, for the assignments of mortgage for all Mortgage
Loans not recorded in the name of MERS, all fees, if any, for transferring
record ownership on the MERS system of Mortgage Loans recorded in the name of
MERS, custodial fees, including the costs associated with clearing exceptions,
(including costs to record intervening assignments and any existing assumption
and modification agreements), together with the fees and expenses of Sellers'
counsel, shall be payable by the Sellers.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Sellers and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) one or more third party purchasers in one or more Whole Loan
Transfers; or
(ii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers;
provided that Sellers 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.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Sellers agree (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 and the Interim Servicing Agreement as of
the Transfer Date, but modified, if necessary, to reflect changes due to events
that may have occurred after the 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
Transfer Date and the remedies for breach of same (which remedies will be the
same as those set forth in this Agreement). The Sellers 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 Transfer
Date, 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 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, relating to the
following matters relating to the Sellers: (a) due organization, valid existence
and good standing, (b) power, authority and legal right, (c) the due
authorization, execution, delivery and enforceability of the Transaction
Agreement, (d) no required consent, approval, authorization or order, (e) no
conflict with the charter or by-laws or other agreements (f) no violation with
statutes, orders, rules, regulations, writs, injunctions, or decrees, and (g) no
action, suit, proceeding or investigation is pending or threatened that would
have a material adverse effect on the Mortgage Loans, the business, operations,
financial condition, properties or assets of the Seller or which would draw into
question the validity of this Agreement or the ability of the Seller to perform
under the terms of this Agreement. Moreover, the Sellers agree to cooperate with
all reasonable requests made by the Purchaser to effect such Transaction
Agreements and Reconstitutions. Household 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 Sellers regarding the Sellers, the
Sellers' servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
In the event the Purchaser has elected to have the Sellers hold
record title to the Mortgages, prior to the Reconstitution Date, the Sellers
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Sellers, 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 Sellers 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 Sellers' receipt thereof. Additionally, the Sellers shall prepare and
execute, at the direction of the Purchaser, any note endorsement in connection
with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the Mortgage Loans,
shall continue to be serviced in accordance with the terms of this Agreement and
the Interim Servicing Agreement and with respect thereto this Agreement shall
remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by Household; Third
Party Claims.
Household 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 Household's indemnification
obligation under this Subsection 14.01) and related costs, judgments, and any
other reasonable costs, fees and expenses that the Purchaser or the Successor
Servicer may sustain in any way related to (a) the failure of any Seller to
perform its duties under this Agreement or (b) any breach of any of Sellers'
representations, warranties or covenants set forth in this Agreement, (c) any
failure to service the Mortgage Loans in strict compliance with the terms of the
Interim Servicing Agreement or (d) any breach of any of Sellers'
representations, warranties or covenants set forth in Transaction Agreement
entered into pursuant to Section 13. The Sellers immediately shall notify the
Purchaser if a claim is made by a third party against the Sellers 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. The Purchaser
promptly shall reimburse the Sellers 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 9.04 or the Interim
Servicing Agreement, or is in any way related to the failure of the Sellers to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement or any Transaction Agreement.
Subsection 14.02 Merger or Consolidation of Household.
Household 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 Household may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
Household shall be a party, or any Person succeeding to the business of
Household, shall be the successor of Household hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person shall have a net worth of at least
$25,000,000.
SECTION 15. Financial Statements.
Household understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of Household for the most
recently completed three fiscal years respecting which such statements are
available. Household shall also make available any comparable interim statements
to the extent any such statements have been prepared by Household (and are
available upon request to members or stockholders of Household or the public at
large). Household, if it has not already done so, agrees to furnish promptly to
the Purchaser copies of the statements specified above. Household shall also
make available information on its servicing performance consistent with the
information delivered pursuant to Section 9.01(k).
During the period prior to the earlier of (a) 180 days after the
Closing Date, and (b) the related Reconstitution Date, Household also agrees to
allow reasonable access to a knowledgeable financial or accounting officer
during normal business hours for the purpose of answering questions asked by any
prospective purchaser regarding recent developments affecting Household or the
financial statements of Household.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to a Seller:
Household Finance Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
With a copy to:
Household Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: General Counsel
(ii) if to the Purchaser:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good- faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Sellers are selling the Mortgage Loans and not a debt instrument of the
Sellers or another security. Accordingly, the parties hereto each intend to
treat the transaction for Federal income tax purposes as a sale by the Sellers,
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 Sellers
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Sellers and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Sellers to a third party without the 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 Sellers; provided that Sellers 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 Sellers acknowledge
and agree 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 Sellers 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 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Sellers and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. 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 Sellers' expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 28. No Solicitation.
From and after the Closing Date, each Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Sellers' behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan to refinance a Mortgage Loan, in whole or in part, without the
prior written consent of the Purchaser. 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 Closing Date and each 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 28.
SECTION 29. Waiver of Trial by Jury.
EACH SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 30. Submission To Jurisdiction; Waivers.
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 31. Confidential Information
The Sellers understand and agree that this Agreement, the Side
Letter, the Purchase Price and Terms Letter, the Interim Servicing 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 Sellers agree to hold
such documents confidential and not to divulge such documents to anyone except
(a) to the extent required by law or judicial order or to enforce its rights or
remedies under the 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 Sellers, 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 Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX XXXXX MORTGAGE COMPANY,
a New York limited partnership
(Purchaser)
By: XXXXXXX SACHS REAL
ESTATE FUNDING CORP., a New York
corporation, as General Partner
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
HOUSEHOLD FINANCE CORPORATION
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD BANK F.S.B.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE CORPORATION OF ALABAMA
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE CORPORATION II
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD REALTY CORPORATION
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCIAL SERVICES, INC.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE CORPORATION III
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
BENEFICIAL HAWAII, INC.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY
OF IOWA
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
MORTGAGE ONE CORPORATION DBA HFC
MORTGAGE COMPANY
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCIAL CENTER, INC.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD REALTY CORPORATION
DBA HOUSEHOLD REALTY
CORPORATION OF VIRGINIA
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
BENEFICIAL WEST VIRGINIA, INC.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD FINANCIAL SERVICES, INC.
(Seller)
By:___________________________________________
Name:_________________________________________
Title:________________________________________
HOUSEHOLD INDUSTRIAL FINANCE COMPANY
(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 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 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) The original mortgagee policy of title insurance.
(b) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(c) The original hazard insurance policy and, if required by law,
flood insurance policy.
(d) Residential loan application.
(e) Mortgage Loan closing statement.
(f) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(g) Verification of acceptable evidence of source and amount of
downpayment.
(h) Credit report on the Mortgagor.
(i) Residential appraisal report.
(j) Photograph of the Mortgaged Property.
(k) Survey of the Mortgaged Property, if any.
(l) 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.
(m) All required disclosure statements.
(n) If available, termite report, structural engineer's report,
water potability and septic certification.
(o) Sales contract.
(p) 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.
(q) 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 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 Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut- off Date;
(12) the last payment date on which a 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 Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) 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) a code indicating whether the Mortgage Loan has been modified;
(35) the Current CLTV;
(36) the one year payment history;
(37) the Due Date for the first Monthly Payment;
(38) the original Monthly Payment due;
(39) with respect to the related Mortgagor, the debt-to- income
ratio;
(40) the Appraised Value of the Mortgaged Property;
(41) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(42) the MERS Identification Number
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 ________________[COMPANY], 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 November 30, 2002, by and
between Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"), and the Interim Servicing Agreement, dated as
of December 5, 2002, by and between the Company and the Purchaser (the
"Interim Servicing Agreement") and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Interim Servicing Agreement, 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 and the Interim
Servicing 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 and the Interim Servicing 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 and the Interim Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) the Interim Servicing Agreement, (and (c) 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 and the Interim
Servicing 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 ________________________[COMPANY]
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
November 30, 2002, 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
--------------------------------------
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
November 30, 2002, 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
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Pool Characteristics of the Mortgage Loans as delivered on the 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 Cut-off Date was ____%. The minimum Mortgage Interest
Rate on the Mortgage Loans as of the 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
SELLERS
Household Finance Corporation of Alabama
Household Finance Corporation II
Household Realty Corporation
Household Financial Services, Inc.
Household Finance Corporation of California
Household Finance Corporation III
Beneficial Hawaii, Inc.
Household Finance Industrial Loan Company of Iowa
Mortgage One Corporation dba HFC Mortgage Company
Household Finance Realty Corporation of Nevada
Household Finance Realty Corporation of New York
Household Finance Consumer Discount Company
Household Financial Center, Inc.
Household Realty Corporation dba Household Realty Corporation
of Virginia
Beneficial West Virginia, Inc.
Household Industrial Finance Company
EXHIBIT L
SERVICER ACKNOWLEDGMENT
-----------------------
As of [_________]
Household Finance Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Re: Letter Agreement in connection with the purchase by Xxxxxxx Sachs
Mortgage Company (the "Purchaser") and the sale by Household Finance
Corporation, Household Bank f.s.b., and the sellers listed on Exhibit
K to the Purchase Agreement (collectively, the "Company") of mortgage
loans pursuant to that certain Mortgage Loan Purchase and Warranties
Agreement (the "Agreement"), dated as of November 30 2002, 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:
HOUSEHOLD FINANCE CORPORATION
(Seller)
By:______________________________
Name:____________________________
Title:___________________________
HOUSEHOLD BANK F.S.B.
(Seller)
By:______________________________
Name:____________________________
Title:___________________________
