Exhibit 4
---------
EXECUTION COPY
================================================================================
GS MORTGAGE SECURITIES CORP.,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
AMERIQUEST MORTGAGE COMPANY,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2005
------------------------------------------------
GSAA HOME EQUITY TRUST 2005-10
ASSET-BACKED CERTIFICATES,
SERIES 2005-10
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..................................................................................7
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans................................................................42
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.............................................45
Section 2.03 Representations, Warranties and Covenants of the Responsible Party and the Servicer.........46
Section 2.04 Non Qualified Mortgages.....................................................................48
Section 2.05 Execution and Delivery of Certificates......................................................48
Section 2.06 REMIC Matters...............................................................................48
Section 2.07 Representations and Warranties of the Depositor.............................................48
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans..........................................................50
Section 3.02 Subservicing Agreements between the Servicer and Subservicers...............................51
Section 3.03 Successor Subservicers......................................................................52
Section 3.04 Liability of the Servicer...................................................................53
Section 3.05 No Contractual Relationship between Subservicers and the Trustee............................53
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee.............................53
Section 3.07 Collection of Certain Mortgage Loan Payments................................................53
Section 3.08 Subservicing Accounts.......................................................................55
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow Accounts.........................55
Section 3.10 Collection Account..........................................................................56
Section 3.11 Withdrawals from the Collection Account.....................................................57
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account..................59
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions and Fidelity Coverage.................60
Section 3.14 Enforcement of Due on Sale Clauses; Assumption Agreements...................................62
Section 3.15 Realization upon Defaulted Mortgage Loans...................................................63
Section 3.16 Release of Mortgage Files...................................................................64
Section 3.17 Title, Conservation and Disposition of REO Property.........................................65
i
Section 3.18 Notification of Adjustments.................................................................67
Section 3.19 Access to Certain Documentation and Information Regarding the Mortgage Loans................67
Section 3.20 Documents, Records and Funds in Possession of the Servicer to Be Held for the Trustee.......68
Section 3.21 Servicing Compensation......................................................................68
Section 3.22 Annual Statement as to Compliance...........................................................69
Section 3.23 Annual Independent Public Accountants' Servicing Statement; Financial Statements............69
Section 3.24 Trustee to Act as Servicer..................................................................69
Section 3.25 Compensating Interest.......................................................................70
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act....................................................70
Section 3.27 Excess Reserve Fund Account; Distribution Account...........................................70
Section 3.28 Optional Purchase of Delinquent Mortgage Loans..............................................72
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01 Advances....................................................................................72
Section 4.02 Priorities of Distribution..................................................................73
Section 4.03 Monthly Statements to Certificateholders....................................................81
Section 4.04 Certain Matters Relating to the Determination of LIBOR......................................84
Section 4.05 Allocation of Applied Realized Loss Amounts.................................................85
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates............................................................................85
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates.................86
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........................................91
Section 5.04 Persons Deemed Owners.......................................................................91
Section 5.05 Access to List of Certificateholders' Names and Addresses...................................91
Section 5.06 Maintenance of Office or Agency.............................................................92
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer....................................92
Section 6.02 Merger or Consolidation of the Depositor or the Servicer....................................92
Section 6.03 Limitation on Liability of the Depositor, the Servicer and Others...........................92
Section 6.04 Limitation on Resignation of the Servicer...................................................93
Section 6.05 Additional Indemnification by the Servicer; Third Party Claims..............................93
ii
ARTICLE VII
DEFAULT
Section 7.01 Events of Default...........................................................................94
Section 7.02 Trustee to Act; Appointment of Successor....................................................96
Section 7.03 Notification to Certificateholders..........................................................98
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.......................................................................98
Section 8.02 Certain Matters Affecting the Trustee.......................................................99
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans......................................100
Section 8.04 Trustee May Own Certificates...............................................................100
Section 8.05 Trustee's Fees and Expenses................................................................101
Section 8.06 Eligibility Requirements for the Trustee...................................................101
Section 8.07 Resignation and Removal of the Trustee.....................................................102
Section 8.08 Successor Trustee..........................................................................103
Section 8.09 Merger or Consolidation of the Trustee.....................................................103
Section 8.10 Appointment of Co Trustee or Separate Trustee..............................................103
Section 8.11 Tax Matters................................................................................104
Section 8.12 Periodic Filings...........................................................................108
Section 8.13 Tax Classification of the Excess Reserve Fund Account and the Interest Rate Corridor
Agreement..................................................................................109
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.............................110
Section 9.02 Final Distribution on the Certificates.....................................................111
Section 9.03 Additional Termination Requirements........................................................112
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment..................................................................................113
Section 10.02 Recordation of Agreement; Counterparts.....................................................114
Section 10.03 Governing Law..............................................................................115
Section 10.04 Intention of Parties.......................................................................115
Section 10.05 Notices....................................................................................115
Section 10.06 Severability of Provisions.................................................................116
Section 10.07 Assignment; Sales; Advance Facilities......................................................116
Section 10.08 Limitation on Rights of Certificateholders.................................................118
iii
Section 10.09 Inspection and Audit Rights................................................................119
Section 10.10 Certificates Nonassessable and Fully Paid..................................................119
Section 10.11 Waiver of Jury Trial.......................................................................119
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Countrywide Home Loans Servicing LP
Schedule III Representations and Warranties of the Responsible Party as to the Mortgage Loans
Schedule IV Representations and Warranties of the Responsible Party
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class R-1 and Class R-2 Certificates
Exhibit C Form of Class P Certificates
Exhibit D Form of Class X Certificates
Exhibit E Form of Class C Certificates
Exhibit F Form of Initial Certification of Trustee
Exhibit G Form of Document Certification and Exception Report of Trustee
Exhibit H Form of Residual Transfer Affidavit
Exhibit I Form of Transferor Certificate
Exhibit J Form of Rule 144A Letter
Exhibit K Form of Request for Release
Exhibit L Form of Contents for Each Mortgage File
Exhibit M Countrywide Reporting Requirements
Exhibit N Form of Certification to be provided with Form 10-K
Exhibit O Form of Trustee Certification to be provided to Depositor
Exhibit P Form of Servicer Certification to be provided to Depositor
iv
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2005,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation (the "Depositor"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership (the
"Servicer"), AMERIQUEST MORTGAGE COMPANY, a Delaware corporation (the
"Responsible Party") and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national
banking association (the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising two REMICs
(each, a "Trust REMIC" or, in the alternative, the "Lower-Tier REMIC" and the
"Upper-Tier REMIC", respectively). The Class X Interest and each Class of
Principal Certificates (other than the right of each Class of Principal
Certificates to receive Basis Risk Carry Forward Amounts), represents
ownership of a regular interest in the Upper-Tier REMIC for purposes of the
REMIC Provisions. The Class R-1 Certificates represent ownership of the sole
class of residual interest in the Upper-Tier REMIC and the Class R-2
Certificates represent ownership of the sole class of residual interest in the
Lower-Tier REMIC for purposes of the REMIC Provisions. The Start-up Day for
each REMIC described herein is the Closing Date. The latest possible maturity
date for each Certificate is the latest date referenced in Section 2.06. The
Upper-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC shall hold
as assets the assets described in the definition of "Trust Fund" herein (other
than the Prepayment Premiums, the Interest Rate Corridor Agreement 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-1A1,
Class LT-2A1, Class LT-2A2, Class LT-2A3, Class LT-2A4, Class LT-2A5, Class
LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6,
Class LT-B-1, Class LT-B-2, Class LT-B-3 and Class LT-B-4 Interests are hereby
designated the LT Accretion Directed Classes (the "LT-Accretion Directed
Classes"). Each Class of Regular Certificates represents a beneficial
ownership of a regular interest in the Upper-Tier REMIC and the right to
receive Basis Risk Carry Forward Amounts, the Class P Certificates represent a
beneficial ownership of the Prepayment Premiums, the Class X Interest
represent beneficial ownership of a regular interest in the Upper-Tier REMIC,
the Interest Rate Corridor Agreement and the Excess Reserve Fund Account and
the Class C Certificates represent beneficial ownership of the right to
receive payment of the Fair Market Value Excess, on or after the Optional
Termination Date, by the Servicer of all of the Mortgage Loans (and REO
Properties).
1
Corresponding
Lower-Tier Interest Lower-Tier Upper-Tier
Designation Interest Rate Initial Lower-Tier Principal Amount REMIC Class
--------------------------- --------------- ---------------------------------------- --------------------
Class LT-1A1 (1) 1/2 initial Class Certificate Balance of 1A1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-2A1 (1) 1/2 initial Class Certificate Balance of 2A1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-2A2 (1) 1/2 initial Class Certificate Balance of 2A2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-2A3 (1) 1/2 initial Class Certificate Balance of 2A3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-2A4 (1) 1/2 initial Class Certificate Balance of 2A4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-2A5 (1) 1/2 initial Class Certificate Balance of 2A5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-6 (1) 1/2 initial Class Certificate Balance of M-6
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate Balance of B-4
Corresponding Upper-Tier REMIC Regular
Interest
2
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount, less aggregate
initial Lower-Tier Principal Amounts of Class
LT-Group I and Class LT-Group II Interests
Class LT-Group I (2) 0.001% aggregated Stated Principal Balance of
Group I Mortgage Loans (4)
Class LT-Group II (3) 0.001% aggregated Stated Principal Balance of
Group II Mortgage Loans (4)
-----------------------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I
Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group
II Cap.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal
places.
The Lower-Tier REMIC shall hold as assets all of the assets included
in the Trust Fund, other than the Prepayment Premiums, the Interest Rate
Corridor Agreement and the Excess Reserve Fund Account.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and will be accrued and added to the Lower-Tier
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower-Tier Principal Amount of the Class LT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class
LT-Accrual Interest for such Distribution Date, the excess for such
Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes
on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated (i) 50% to the Class
LT-Accrual Interest, the Class LT-Group I Interest and Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in
the manner described below) and (ii) 50% to the LT-Accretion Directed Classes
(principal payments shall be allocated among such LT-Accretion Directed
Classes in an amount equal to 50% of the principal amounts allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Overcollateralized Amount shall be allocated to the Class
LT-Accrual Interest (until paid in full). Realized Losses shall be applied so
that after all distributions have been made on each Distribution Date (i) the
Lower-Tier Principal Amount of each of the LT-Accretion Directed Classes is
equal to 50% of
3
the Class Certificate Balance of its Corresponding Class, and (ii) the Class
LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in
the manner described below) is equal to 50% of the aggregate Stated Principal
Balance of the Mortgage Loans plus 50% of the Overcollateralized Amount. As
among the Class LT-Accrual Interest, the Class LT-Group I Interest and the
Class LT-Group II Interest, all payments of scheduled principal and
prepayments of principal generated by the Mortgage Loans, and all Realized
Losses, allocable to such Lower-Tier Regular Interests shall be allocated (i)
to the Class LT-Group I Interest and the Class LT-Group II Interest, each from
the related Loan Group so that their respective Lower-Tier Principal Amounts
(computed to at least eight decimal places) are equal to 0.001% of the
aggregate Stated Principal Balance of the Mortgage Loans in the related Loan
Group and (ii) the remainder of such Realized Losses to the Class LT-Accrual
Interest.
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class R-2 Certificates, which shall be the
sole class of residual interests in the Lower-Tier REMIC. The Class R-2
Certificates will be issued as a single certificate in definitive form in a
principal amount of $100 and shall have no interest rate. Amounts received by
the Class R-2 Certificates shall be deemed paid from the Lower-Tier REMIC. The
Class LT R-2 Interest shall be deemed to receive amounts received by the Class
R-2 Certificates.
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 Class Corresponding Class Corresponding Class Corresponding Class
Designation Pass-Through Rate Certificate Balance of Certificates
-------------------------- ------------------- -------------------- --------------------
Class 1A1 (1) $ 149,186,000 Class 1A1(10)
Class 2A1 (2) $ 254,412,000 Class 2A1(10)
Class 2A2 (3) $ 57,699,000 Class 2A2(10)
Class 2A3 (4) $ 6,412,000 Class 2A3(10)
Class 2A4 (5) $ 36,079,000 Class 2A4(10)
Class 2A5 (6) $ 4,010,000 Class 2A5(10)
Class M-1 (7) $ 25,109,000 Class M-1(10)
Class M-2 (7) $ 23,457,000 Class M-2(10)
Class M-3 (7) $ 13,876,000 Class M-3(10)
Class M-4 (7) $ 12,224,000 Class M-4(10)
Class M-5 (7) $ 11,233,000 Class M-5(10)
Class M-6 (7) $ 10,241,000 Class M-6(10)
Class B-1 (7) $ 9,250,000 Class B-1(10)
Class B-2 (7) $ 8,259,000 Class B-2(10)
Class B-3 (7) $ 7,598,000 Class B-3(10)
Class B-4 (8) $ 15,197,000 Class B-4(10)
Class X (9) (9) Class X(9)
(1) The Class 1A1 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0.290%, (ii) the Loan Group I Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.580%, (ii) the Loan Group I Cap and (iii) the WAC Cap.
4
(2) The Class 2A1 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0.130%, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.260%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(3) The Class 2A2 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0.280%, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.560%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(4) The Class 2A3 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0.320%, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.640%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(5) The Class 2A4 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0370%, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.740%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(6) The Class 2A5 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the least of (i) LIBOR plus
0.400%, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after
the first possible Optional Termination Date, the least of (i) LIBOR
plus 0.800%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(7) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Interests will bear interest
during each Interest Accrual Period at a per annum rate equal to (a)
on or prior to the first possible Optional Termination Date, the
lesser of (i) LIBOR plus 0.500%, 0.530%, 0.550%, 0.650%, 0.710%,
0.770%, 1.350%, 1.450% and 1.900%, respectively, and (ii) the WAC Cap
or (b) after the first possible Optional Termination Date, the lesser
of (i) LIBOR plus 0.750%, 0.795%, 0.825%, 0.975%, 1.065%, 1.155%,
2.025%, 2.175% and 2.850%, respectively, and (ii) the WAC Cap.
(8) The Class B-4 Interests will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) 5.000%
and (ii) the weighted average of the interest rates for each mortgage
loan (in each case, less the applicable Expense Fee Rate) then in
effect at the beginning of the related Due Period on the mortgage
loans or (b) after the first possible Optional Termination Date, the
lesser of (i) 5.500% and (ii) the weighted average of the interest
rates for each mortgage loan (in each case, less the applicable
Expense Fee Rate) then in effect at the beginning of the related Due
Period on the mortgage loans.
(9) The Class X Interest will have a principal balance to the extent of
any Overcollateralized Amount. The Class X Interest will not accrue
interest on such balance but will accrue interest on a notional
principal balance. As of any Distribution Date, the Class X Interest
shall have a notional principal balance equal to the aggregate of the
principal balances of the Lower-Tier Regular Interests as of the
first day of the related Interest Accrual Period. With respect to any
Interest Accrual Period, the Class X Interest shall bear interest at
a rate equal to the excess, if any, of the WAC Cap over the product
of (i) 2 and (ii) the weighted average Lower-Tier Interest Rate of
the Lower-Tier Regular Interests, where the Lower-Tier Interest Rates
on the Class LT-Accrual, Class LT-Group I and Class LT-Group II
Interests are subject to a cap equal to zero and each LT-Accretion
Directed Class is subject to a cap equal to the Pass-Through Rate on
its Corresponding Class. With respect to any Distribution Date,
interest that so accrues on the notional principal balance of the
Class X Interest shall be deferred in an amount equal to any increase
in the Overcollateralized Amount on such Distribution Date. Such
deferred interest shall not itself bear interest. The Class X
Certificates will represent beneficial ownership of the Class X
Interest, the Interest Rate Corridor Agreement and amounts in the
Excess Reserve Fund Account, subject to the obligation to make
payments from the Excess Reserve Fund Account in respect of Basis
Risk Carry Forward Amounts. For federal income tax purposes, the
Trustee will treat the Class X Certificateholder's obligation to make
payments from the Excess Reserve Fund Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders in favor of each Class of Principal Certificates.
Such rights of the Class X Certificateholders and Principal
5
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.
(10) Each of these Certificates will represent not only the ownership of
the Corresponding Class of Upper-Tier Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account in
respect of any Basis Risk Carry Forward Amounts. For federal income
tax purposes, the Trustee will treat a Principal Certificateholder's
right to receive payments from the Excess Reserve Fund Account as
payments made pursuant to an interest rate cap contract written by
the Class X Certificateholders.
In addition to issuing the Upper-Tier Regular Interests, the
Upper-Tier REMIC shall issue the Class R-1 Certificates, which shall be the
sole class of residual interests in the Upper-Tier REMIC. The Class R-1
Certificates will be issued as a single certificate in definitive form in a
principal amount of $100 and shall have no interest rate. Amounts received by
the Class R-1 Certificates shall be deemed paid from the Upper-Tier REMIC.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC as cash flow
on a REMIC regular interest, without creating any shortfall--actual or
potential (other than for credit losses) to any REMIC regular interest. It is
not intended that the Class R-1 or Class R-2 Certificates be entitled to any
cash flow pursuant to this Agreement except as provided in Section
4.02(a)(ii)(A)(a) hereunder.
For any purpose for which the Pass-Through Rates are calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by the Lower-Tier REMIC such rates shall be
adjusted to equal a monthly day count convention based on a 30 day month for
each Due Period and a 360-day year so that the Mortgage Loans and all regular
interests will be using the same monthly day count convention.
The minimum denomination for each Class of Principal Certificates
will be $25,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for (a) the Class R-1 and Class R-2
Certificates will each be $100 and each will be a 100% Percentage Interest in
such Class and (b) the Class P, Class X and Class C Certificates will be a 1%
Percentage Interest in each 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.............................. The Class 1A1, Class 2A1, Class 2A2, Class 2A3, Class 2A4 and
Class 2A5 Certificates, collectively.
Class B Certificates.............................. The Class B-1, Class B-2, Class B-3 and Class B-4 Certificates,
collectively.
6
Class M Certificates.............................. The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6, collectively.
ERISA Restricted Certificates..................... The Class R, Class P and Class X Certificates; any Certificate
with a rating below the lowest applicable permitted rating
under the Underwriters' Exemption.
Fixed Rate Certificates........................... The Class B-4 Certificates.
LIBOR Certificates................................ The Offered Certificates (other than the Residual
Certificates).
Offered Certificates.............................. The Class 1A1, Class 2A1, Class 2A2, Class 2A3, Class 2A4,
Class 2A5, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class
M-5, Class M-6, Class R-1 and Class R-2 Certificates,
collectively.
Physical Certificates............................. The Class X, Class P, Class C, Class R-1 and Class R-2
Certificates.
Principal Certificates............................ The LIBOR Certificates and the Fixed Rate Certificates.
Private Certificates.............................. The Class B-4, Class X, Class P and Class C Certificates.
Rating Agencies................................... S&P and ▇▇▇▇▇'▇.
Regular Certificates.............................. All Classes of Certificates other than the Residual
Certificates.
Residual Certificates............................. Class R-1 and Class R-2 Certificates.
Subordinated Certificates......................... The Class M and Class B 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:
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
7
more past due (without giving effect to any grace period), each Mortgage Loan
in foreclosure, each REO Property and each Mortgage Loan for which the
Mortgagor has filed for bankruptcy.
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), including each Mortgage Loan in foreclosure, all REO Property and
each Mortgage Loan for which the Mortgagor has filed for bankruptcy.
Accepted Origination Practices: With respect to any Mortgage Loan
those reasonable and customary nonprime origination practices in the industry
for the same type of mortgage loans as the Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account, any
Escrow Account or the Excess Reserve Fund Account. Each Account shall be an
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to any
Distribution Date for each Class of Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior
to such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
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 Reimbursement Amounts: As defined in Section 10.07.
Advancing 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.
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,
8
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
Principal Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon either the appraisal made or Insured
AVM, if any, 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 or the
Insured AVM supplied, if any, 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 (without
duplication) (i) all scheduled installments of interest (net of the related
Expense Fees) and principal due on the Due Date on such Mortgage Loans in the
related Due Period and received on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received during the
related Prepayment Period (in each case, net of unreimbursed expenses incurred
in connection with a liquidation or foreclosure and unreimbursed Advances, if
any); (iii) all partial or full prepayments on the Mortgage Loans (excluding
Prepayment Premiums) received during the related Prepayment Period together
with all Compensating Interest paid by the Servicer in connection therewith;
(iv) all amounts received with respect to such Distribution Date as the
purchase price in respect of a Mortgage Loan repurchased by the Responsible
Party or the Depositor as of such Distribution Date; and (v) the proceeds
received with respect to the termination of the Trust Fund pursuant to clause
(a) of Section 9.01, reduced by (y) 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.
9
Balloon Loan: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
Basic Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Excess Overcollateralized Amount, if any, for such
Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal
Certificates is based upon a Loan Group Cap or the WAC Cap, as applicable, the
excess of (i) the amount of interest such Class of Principal Certificates
would otherwise be entitled to receive on such Distribution Date had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin, in
the case of the LIBOR Certificates, or at the applicable Fixed Rate, in the
case of the Fixed Rate Certificates for such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates with respect to the Class 1A1 Certificates, the lesser of the
Loan Group I Cap or the WAC Cap, and with respect to the Class A-2
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and (B) the
Basis Risk Carry Forward Amount for such Class of Certificates for all
previous Distribution Dates not previously paid, together with interest
thereon at a rate equal to the sum of LIBOR and the applicable Pass-Through
Margin, in the case of the LIBOR Certificates, or at the applicable Fixed
Rate, in the case of the Fixed Rate Certificates for such Class of
Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to the
lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
BPO: A broker's price opinion.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
New York or California, (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 Principal
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
10
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class P, Class X and Class C 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 1A1 Certificates: All Certificates bearing the class
designation of "Class 1A1."
Class 2A1 Certificates: All Certificates bearing the class
designation of "Class 2A1."
Class 2A2 Certificates: All Certificates bearing the class
designation of "Class 2A2."
Class 2A3 Certificates: All Certificates bearing the class
designation of "Class 2A3."
Class 2A4 Certificates: All Certificates bearing the class
designation of "Class 2A4."
Class 2A5 Certificates: All Certificates bearing the class
designation of "Class 2A5."
11
Class A Certificate Group: Either the Class 1A1 Certificates or the
Class A-2 Certificates, as applicable.
Class A Certificates: The Class 1A1 Certificates and the Class A-2
Certificates.
Class A-2 Certificates: The Class 2A1, Class 2A2, Class 2A3, Class
2A4 and Class 2A5 Certificates, collectively.
Class A Principal Allocation Percentage: For any Distribution Date,
the percentage equivalent of a fraction, determined as follows: (A) with
respect to the Class 1A1 Certificates, a fraction, the numerator of which is
the portion of the Principal Remittance Amount for such Distribution Date that
is attributable to the principal received or advanced on the Group I Mortgage
Loans and the denominator of which is the Principal Remittance Amount for such
Distribution Date; and (B) with respect to the Class A-2 Certificates, a
fraction, the numerator of which is the portion of the Principal Remittance
Amount for such Distribution Date that is attributable to the principal
received or advanced on the Group II Mortgage Loans and the denominator of
which is the Principal Remittance Amount for such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance
of the Class A Certificates immediately prior to such Distribution Date over
(ii) the lesser of (A) 53.70% (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 Certificates: The B-1, Class B-2, Class B-3 and Class B-4
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date) and (H) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 85.60%
12
(rounded to two decimal places) of the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date and (B) the excess, if any, of
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date), (H) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date) and (I) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.10% (rounded to two decimal
places) of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M-6
13
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount on such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account
the distribution of the Class B-1 Principal Distribution Amount on such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount on such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 90.40% (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-4 Certificates: All Certificates bearing the class
designation of "Class B-4."
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date), (H) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account
the distribution of the Class B-2 Principal Distribution Amount on such
Distribution Date), (J) the Class Certificate Balance of the Class B-3
Certificates (after taking into account the distribution of the Class B-3
Principal Distribution Amount on such Distribution Date) and (K) the Class
Certificate Balance of the Class B-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 95.00% (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 C Certificates: All Certificates bearing the class designation
of "Class C."
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.
14
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), and (B) the Class Certificate Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 61.30% (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 aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (C) the Class
Certificate Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 68.40% (rounded to two decimal
places) of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Class Certificate Balance of the Class M-3
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 72.60% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over the Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
15
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the Class
Certificate Balance of the Class M-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 76.30% (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 aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5."
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (F) the Class Certificate Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 79.70% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over the Overcollateralization Floor.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6."
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution
16
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the
Class M-4 Principal Distribution Amount on such Distribution Date), (F) the
Class Certificate Balance of the Class M-5 Certificates (after taking into
account the distribution of the Class M-5 Principal Distribution Amount on
such Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 82.80% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class designation
of "Class P."
Class R Certificates: The Class R-1 and Class R-2 Certificates.
Class R-1 Certificates: All Certificates bearing the class
designation of "Class R-1."
Class R-2 Certificates: All Certificates bearing the class
designation of "Class R-2."
Class X Certificates: All Certificates bearing the class designation
of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued
on the Class X Interest and not applied as an Extra Principal Distribution
Amount on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus, without duplication, (ii)
as a distribution in respect of principal, any portion of the principal
balance of the Class X Interest which is distributable as an
Overcollateralization Reduction Amount, minus (iii) any amounts paid as a
Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement
and the related footnote thereto.
Closing Date: August 26, 2005.
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 or in part by the Mortgagor
(excluding any payments made upon liquidation of the Mortgage Loan), and (b)
the Servicing Fee payable to the Servicer for such Distribution Date.
17
Condemnation Proceeds: All awards, compensation and/or settlements in
respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust
business with respect to this Agreement is administered, which office at the
date of the execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Trust Administration - GS0510,
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇, and which is the address to which notices to and
correspondence with the Trustee should be directed.
Corresponding Class: The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of interests in the
other Trust REMIC or to a Class of Certificates in the manner set out below:
Corresponding
Lower-Tier Upper-Tier Class of
Regular Interest Regular Interest Certificates
------------------ ------------------ ----------------
Class LT-1A1 Class 1A1 Class 1A1
Class LT-2A1 Class 2A1 Class 2A1
Class LT-2A2 Class 2A2 Class 2A2
Class LT-2A3 Class 2A3 Class 2A3
Class LT-2A4 Class 2A4 Class 2A4
Class LT-2A5 Class 2A5 Class 2A5
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Class LT-B-4 Class B-4 Class B-4
N/A Class X Class X
Corridor Provider: ▇▇▇▇▇▇▇ Sachs Capital Markets, L.P., a Delaware
limited partnership, and its successors in interest.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in interest.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of S&P Glossary.
18
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the calendar month preceding the month in which such Distribution Date
occurs and the denominator of which is the Cut-off Date Pool Principal Balance
of the Mortgage Loans.
Custodial File: With respect to each Mortgage Loan, any Mortgage Loan
Document which is delivered to the Trustee or which at any time comes into the
possession of the Trustee.
Cut-off Date: August 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on that date, whether or not
received).
Data File: As defined in Section 4.03(e).
Data File Delivery Date: As defined in Section 4.03(e).
Data Tape Information: The information previously provided as of the
Cut-off Date to the Depositor setting forth the following information with
respect to each Mortgage Loan: (1) the Responsible Party's Mortgage Loan
identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code
indicating whether the Mortgaged Property is owner-occupied, a second home or
investment property (as indicated by the Mortgagor at the time of origination
of the Mortgage Loan); (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 Mortgage Loan origination date;
(7) the original months to maturity or the remaining months to maturity from
the related Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but
based on the actual amortization schedule; (8) the Loan-to-Value Ratio at
origination; (9) with respect to First Lien Loans, the LTV; (10) the Mortgage
Interest Rate as of the related Cut-off Date; (11) 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; (12) the
stated maturity date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date as of which a payment was actually
applied to the outstanding principal balance (i.e. the paid through date);
(15) the original principal amount of the Mortgage Loan; (16) the principal
balance of the Mortgage Loan as of the close of business on the related
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (17) the Interest Rate Adjustment Date; (18) the
Gross Margin; (19) the Lifetime Rate Cap under the terms of the Mortgage Note;
(20) a code indicating the type of Index; (21) the Mortgage Interest Rate as
of origination; (22) the type of Mortgage Loan (i.e., fixed-rate,
adjustable-rate); (23) the lien status of the Mortgage Loan; (24) a code
indicating the
19
purpose of the loan (i.e., purchase, refinance, cash-out refinance); (25) a
code indicating the documentation style (i.e., full, limited, or stated
income); (26) the credit risk classification (as described in the Underwriting
Guidelines); (27) the applicable Cut-off Date; (28) the applicable Closing
Date; (29) a code indicating whether the Mortgage Loan is a High Cost Loan or
Home Loan as such terms are defined in the then current S&P Glossary; (30) the
FICO score; (31) with respect to the related Mortgagor, the debt-to-income
ratio; (32) the Appraised Value of the Mortgaged Property; (33) the sale price
of the Mortgaged Property if the Mortgage Loan was originated in connection
with the purchase of the Mortgaged Property; (34) the Periodic Rate Cap under
the terms of the Mortgage Note; (35) the Periodic Rate Floor under the terms
of the Mortgage Note; (36) whether such Mortgage Loan provides for a
prepayment charge; (37) the prepayment charge period of such Mortgage Loan, if
applicable; (38) a description of the type of prepayment charge, if
applicable; (39) a code indicating if the Mortgage Loan is a Balloon Mortgage
Loan; (40) the initial and periodic mortgage interest rate adjustment period;
(41) mortgage interest rate adjustment percentage; (42) a code indicating
whether Mortgage Loan is assumable; (43) a code indicating whether Mortgage
Loan has been modified; (44) one year payment history; (45) due date for first
monthly payment; (46) original monthly payment due; (47) S&P doc type code;
(48) S&P appraisal type code; (49) escrow holdbacks, if any; and (50) total
points and fees paid by the Mortgagor. With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
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).
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
20
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 ▇▇▇▇▇'▇, A-1 by S&P and F1+ by Fitch (in each case, to the
extent they are designated as Rating Agencies in the Preliminary Statement).
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 18th
day of the calendar month in which such Distribution Date occurs, or if such
day is not a Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.27(b) in the name of the
Trustee for the benefit of the Certificateholders and designated "Deutsche
Bank National Trust Company in trust for registered holders of GSAA Home
Equity Trust 2005-10 Asset Backed Certificates, Series 2005-10." Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement and may be invested in Permitted
Investments.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day,
the next succeeding Business Day, commencing in September 2005.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in
which the Distribution Date occurs and ending on the first day of the calendar
month in which the Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is a subsidiary of a holding company, the
short term unsecured debt obligations of such holding company) are rated "A-1"
by S&P, "F-1" by Fitch and "P-1" by ▇▇▇▇▇'▇ (in each case, to the extent they
are designated as Rating Agencies in the Preliminary Statement) (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
21
account acceptable to each Rating Agency. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 --- (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this Agreement.
Event of Default: As defined in Section 7.01.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.27(a) in the name of the
Trustee for the benefit of the Regular Certificateholders and designated
"Deutsche Bank National Trust Company in trust for registered holders of GSAA
Home Equity Trust 2005-10, Asset Backed Certificates, Series 2005-10." Funds
in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal to
the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date, the
lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Overcollateralization Deficiency for such
Distribution Date.
Fair Market Value Excess: As defined in Section 9.01.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association and its
successors in interest.
22
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ Mae Seller's Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicer's Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, and its successors
in interest.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the 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 occurring in June
2035.
First Lien Mortgage Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest.
Fixed Rate: With respect to the Fixed Rate Certificates, 5.000% per
annum on or prior to the first possible Optional Termination Date, and 5.500%
per annum thereafter.
Fixed Rate Certificates: As specified in the Preliminary Statement.
Forbearance: As defined in Section 3.07(a).
▇▇▇▇▇▇▇ 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 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 II Sequential Trigger Event: If, (i) on any Distribution Date
before the 37th Distribution Date, (a) the rolling three month average of the
aggregate unpaid principal balances of 60+ Day Delinquent Mortgage Loans
equals or exceeds 34.00% of the Senior Enhancement Percentage as of the last
day of the prior Due Period or (b) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Principal
23
Prepayment Period divided by the Cut-off Date Pool Principal Balance exceeds
2.70%, or (ii) on any Distribution Date on or after the 37th Distribution
Date, a Trigger Event is in effect.
High-Cost Mortgage Loan: A Mortgage Loan (a) covered by the Home
Ownership and Equity Protection Act of 1994, (b) classified as "High-Cost,"
"threshold," "covered" or "predatory" loan under any other applicable state,
federal or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high interest rates,
points and/or fees), or (c) a Mortgage Loan categorized as High-Cost pursuant
to Appendix E of S&P Glossary.
Index: As to each Mortgage Loan, the index from time to time in
effect for the adjustment of the Mortgage Interest Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date, (i)
with respect to the LIBOR Certificates, the period commencing on the
immediately preceding Distribution Date (or commencing on the Closing Date in
the case of the first Distribution Date) and ending on the day immediately
preceding the current Distribution Date, and (ii) with respect to the Fixed
Rate Certificates, the calendar month immediately preceding the month which
such Distribution Date occurs. For purposes of computing interest accruals on
each Class of LIBOR Certificates, each Interest Accrual Period has the actual
number of days in such period and each year is assumed to have 360 days. For
purposes of computing interest accruals on each Class of Fixed Rate
Certificates, each Interest Accrual Period has 30 days in such period and each
year is assumed to have 360 days.
Interest Remittance Amount: With respect to any Distribution Date and
the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to the Mortgage Loans in such Loan Group.
Interest Rate Corridor Agreement: The interest rate corridor
agreement, dated August 10, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, L.P.
and the Corridor Provider, for the benefit of the LIBOR Certificates.
Interest Rate Corridor Payment: For the first 32 Distribution Dates,
the amount, if any, as calculated by the Corridor Provider and reported to the
Trustee, equal to the product of (a) the excess, if any, of one-month LIBOR
(as determined pursuant to the Interest Rate Corridor Agreement) as of the
related reset date over a cap strike rate set forth on the interest rate
corridor agreement schedule attached to the Interest Rate Corridor Agreement,
up to 9.69841% per annum, (b) the interest rate cap notional amount for such
date set forth on such schedule and (c) the actual number of days in the
applicable Interest Accrual Period divided by 360.
24
Investment Account: As defined in Section 3.12(a).
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Remittance Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously
recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate
Page 3750, the rate for such date will be determined on the basis of the rates
at which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the
London interbank market. In such event, the Trustee shall request the
principal London office of each of the Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that
date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two
quotations are provided as requested, the rate for that date will be the
arithmetic mean of the rates quoted by major banks in New York City, selected
by the Trustee (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one month U.S. dollar deposits of
leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual Period
for each Class of LIBOR Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note which provides
for an absolute maximum Mortgage Interest Rate thereunder. The Mortgage
Interest Rate during the term of each Mortgage Loan shall not at any time
exceed the Mortgage Interest Rate at the time of origination of such
Adjustable Rate Mortgage Loan by more than the amount per annum set forth on
the Mortgage Loan Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated or
charged off in the calendar month preceding the month of such Distribution
Date and as to which the Servicer has certified (in accordance with this
Agreement) that it has made a Final Recovery Determination.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from coverage under this Agreement by reason of its
being purchased, sold or replaced pursuant to or as contemplated by this
Agreement. With respect to any REO Property, either of the following events:
(i) a Final Recovery Determination is made as to such REO Property; or (ii)
such REO Property is removed
25
from coverage under this Agreement by reason of its being purchased pursuant
to this Agreement.
Liquidation Proceeds: The amounts, other than Insurance Proceeds,
Condemnation Proceeds or those received following the acquisition of REO
Property, received in connection with the liquidation of a defaulted Mortgage
Loan, whether through a trustee's sale, foreclosure sale or otherwise,
including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of the weighted average of the Adjusted Net
Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group I Mortgage Loans, multiplied by 30 and divided by the
actual number of days in the related Interest Accrual Period.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of the weighted average of the Adjusted Net
Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group II Mortgage Loans, multiplied by 30 and divided by the
actual number of days in the related Interest Accrual Period.
Loan-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
the lesser of (a) if the Mortgage Loan was made to finance the acquisition of
the related Mortgaged Property, the purchase price of the Mortgaged Property
and (ii) the Appraisal Value of the Mortgaged Property at origination.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-1A1, Class LT-2A1,
Class LT-2A2, Class LT-2A3, Class LT-2A4, Class LT-2A5, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6 Class LT-B-1,
Class LT-B-2, Class LT-B-3, Class LT-B-4, Class LT-Group I, Class LT-Group II
and Class LT-Accrual Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Market Value Change Report: A report setting forth changes in
property value of the Mortgaged Properties in a format agreed upon by the
Servicer and the Depositor.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
26
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ Investors Service, Inc.,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes, without limitation, the Mortgage File, the Custodial File, the
Servicing File, the Scheduled Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds,
Prepayment Premiums and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding 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 Responsible
Party's Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the
street address of the Mortgaged Property including the city, state and zip
code; (4) a code indicating whether the Mortgaged Property is owner-occupied,
a second home or investment property (as indicated by the Mortgagor at the
time of origination of the Mortgage Loan); (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 Mortgage Loan
origination date; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) the Loan-to-Value
Ratio at origination; (9) with respect to First Lien Loans, the LTV; (10) the
Mortgage Interest Rate as of the related Cut-off Date; (11) 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; (12) the
stated maturity date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date as of which a payment was actually
applied to the outstanding principal balance (i.e. the paid through date);
(15) the original principal amount of the Mortgage Loan; (16) the principal
balance of the Mortgage Loan as of the close of business on the related
Cut-off Date, after deduction of payments of principal due
27
and collected on or before the Cut-off Date; (17) the Interest Rate Adjustment
Date; (18) the Gross Margin; (19) the Lifetime Rate Cap under the terms of the
Mortgage Note; (20) a code indicating the type of Index; (21) the Mortgage
Interest Rate as of origination; (22) the type of Mortgage Loan (i.e.,
fixed-rate, adjustable-rate); (23) the lien status of the Mortgage Loan; (24)
a code indicating the purpose of the loan (i.e., purchase, refinance, cash-out
refinance); (25) a code indicating the documentation style (i.e., full,
limited, or stated income); (26) the credit risk classification (as described
in the Underwriting Guidelines); (27) the applicable Cut-off Date; (28) the
applicable Closing Date; (29) a code indicating whether the Mortgage Loan is a
High Cost Loan or Home Loan as such terms are defined in the then current S&P
Glossary; (30) the FICO score; (31) with respect to the related Mortgagor, the
debt-to-income ratio; (32) the Appraised Value of the Mortgaged Property; (33)
the sale price of the Mortgaged Property if the Mortgage Loan was originated
in connection with the purchase of the Mortgaged Property; (34) the Periodic
Rate Cap under the terms of the Mortgage Note; (35) the Periodic Rate Floor
under the terms of the Mortgage Note; (36) whether such Mortgage Loan provides
for a prepayment charge; (37) the prepayment charge period of such Mortgage
Loan, if applicable; (38) a description of the type of prepayment charge, if
applicable; (39) a code indicating if the Mortgage Loan is a Balloon Mortgage
Loan; (40) the initial and periodic mortgage interest rate adjustment period;
(41) mortgage interest rate adjustment percentage; (42) a code indicating
whether Mortgage Loan is assumable; (43) a code indicating whether Mortgage
Loan has been modified; (44) one year payment history; (45) due date for first
monthly payment; (46) original monthly payment due; (47) S&P doc type code;
(48) S&P appraisal type code; (49) escrow holdbacks, if any; and (50) total
points and fees paid by the Mortgagor. With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan, including all riders thereto.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to Section 4.02(a)(iii) (before giving
effect to distributions pursuant to such Section 4.02(a)(iii)).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made with respect to such Distribution
Date.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
28
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X, Class P and Class C Certificates.
NIM Trustee: The trustee for the NIM Securities.
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 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; provided, that any Opinion of Counsel relating to (a) qualification
of either Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of 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: The date determined as follows: the
Servicer shall cause the Optional Termination Date to occur on any
Distribution Date when the aggregate Stated Principal Balance of the Mortgage
Loans, as of the last day of the related Due Period, is equal to 10% or less
of the Cut-off Date Pool Principal Balance.
Original Sale Date: June 15, 2005.
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:
29
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the Principal Certificates as of such Distribution Date (after
giving effect to the payment of the Principal Remittance Amount on such
Certificates on such Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
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 LIBOR
Certificates, the following percentages: Class 1A1 Certificates, 0.290%; Class
2A1 Certificates, 0.130%; Class 2A2 Certificates, 0.280%; Class 2A3
Certificates, 0.320%; Class 2A4 Certificates, 0.370%; Class 2A5 Certificates,
0.400%; Class M-1 Certificates, 0.500%; Class M-2 Certificates, 0.530%; Class
M-3 Certificates, 0.550%; Class M-4 Certificates, 0.650%; Class M-5
Certificates, 0.710%; Class M-6 Certificates, 0.770%; Class B-1 Certificates,
1.350%; Class B-2 Certificates, 1.450%; and Class B-3 Certificates, 1.900%. On
the first Distribution Date after the first possible Optional Termination
Date, the Pass-Through Margins shall increase to: Class 1A1
30
Certificates, 0.580%; Class 2A1 Certificates, 0.260%; Class 2A2 Certificates,
0.560%; Class 2A3 Certificates, 0.640%; Class 2A4 Certificates, 0.740%; Class
2A5 Certificates, 0.800%; Class M-1 Certificates, 0.750%; Class M-2
Certificates, 0.795%; Class M-3 Certificates, 0.825%; Class M-4 Certificates,
0.975%; Class M-5 Certificates, 1.065%; Class M-6 Certificates, 1.155%; Class
B-1 Certificates, 2.025%; Class B-2 Certificates, 2.175% and Class B-3
Certificates, 2.850%.
Pass-Through Rate: For each Class of Certificates and each Lower-Tier
Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Interest Rate Cap: With respect to each Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Cap for each
Mortgage Loan is the rate set forth on the Mortgage Loan Schedule.
Periodic Mortgage Interest Rate Floor: With respect to each Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
minimum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Floor for each
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 P-1 by Moody's and "F1+"
by Fitch;
(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
31
thereof and that are rated by each Rating Agency that rates such
securities in its highest long term unsecured rating categories at the
time of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non interest bearing discount
obligations and interest bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities
in its highest short term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or the Trustee or an Affiliate thereof, that
have been rated "Aaa" by Moody's and "AAAm," "AAAm-G" by S&P and at least
"AA" by Fitch (in each case, to the extent they are designated as Rating
Agencies in the Preliminary Statement); and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security
or investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence
either the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations. For investments in the Distribution Account (except during the
Trustee Float Period), only the obligations or securities (or instruments
which invest in the obligations or securities) specified in clause (i) above
shall constitute Permitted Investments.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, international organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in Section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of such Person or any other U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate to such Person
may cause either the Lower-Tier REMIC or the Upper-Tier 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
32
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
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 pursuant to the terms of
the related Mortgage Note.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage
Loan) which is received in advance of its scheduled Due Date, excluding any
Prepayment 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
33
Period and received by the Servicer on or prior to the related Determination
Date or advanced by the Servicer prior to the related Remittance Date, (ii)
all Principal Prepayments received during the related Prepayment Period, (iii)
all Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds on the
Mortgage Loans allocable to principal actually collected by the Servicer
during the related Prepayment Period, (iv) the portion of the Repurchase Price
allocable to principal with respect to each Mortgage Loan, the repurchase
obligation for which arose during the related Prepayment Period, that was
repurchased during the period from the Remittance Date prior to the prior
Distribution Date (or from the Closing Date in the case of the first
Distribution Date) through the Remittance Date for the current Distribution
Date and (v) the allocable portion of the proceeds received with respect to
the termination of the Trust Fund pursuant to clause (a) of Section 9.01 (to
the extent such proceeds relate to principal).
Privacy Laws: Title V of the Gramm ▇▇▇▇▇ ▇▇▇▇▇▇ Act of 1999, as
amended, and all applicable regulations promulgated thereunder.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated August 22,
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Amended and Restated Flow Mortgage Loan
Purchase and Warranties Agreement, dated as of June 1, 2005, between the
Purchaser and the Responsible Party.
Purchaser: ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited
partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating or rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers. For
purposes of Section 10.05(b), the addresses for notices to each Rating Agency
shall be the address specified therefor in the definition corresponding to the
name of such Rating Agency, or such other address as either such Rating Agency
may hereafter furnish to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
34
Record Date: With respect to any Distribution Date, the close of
business on the last day of the related Interest Accrual Period; provided,
however, that for any Certificate issued in definitive form, the Record Date
shall be the close of business on the last Business Day of the month preceding
the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Opinion: As defined in Section 9.03.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later than
12:30 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 18th day of each calendar month or the
immediately following Business Day if the 18th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Interest Rate from the last date through which
interest has been paid and distributed to the Trustee to the date of
repurchase, (iii) all unreimbursed Servicing Advances and (iv) all expenses
incurred by the
35
Servicer, the Trust or the Trustee, as the case may be, in respect of a breach
or defect, including, without limitation, expenses arising out of the
Servicer's or Trustee's, as the case may be, enforcement of the Responsible
Party's repurchase obligation, to the extent not included in clause (iii) and
(v) any costs and damages incurred by the Trust in connection with any
violation by such Mortgage Loan of any predatory lending law or abusive
lending law.
Request for Release: The Request for Release submitted by 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: Ameriquest Mortgage Company, a Delaware
corporation, and its successors in interest.
Review Appraisal Value: As defined in the Underwriting Guidelines.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc, and its successors in interest. If S&P is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to S&P shall be Standard & Poor's, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Surveillance Group - GSAA Home Equity Trust 2005-10, or such other address as
S&P may hereafter furnish to the Depositor, the Servicer and the Trustee.
S&P Glossary: Version 5.6 of the Standard & Poor's LEVELS(R)
Glossary.
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.
36
Senior Specified Enhancement Percentage: As of any date of
determination, 46.30%.
Servicer: Countrywide Servicing and if a successor servicer is
appointed hereunder, such successor servicer.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out of pocket" costs and expenses
(including legal fees) incurred by the Servicer in the performance of its
servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property, (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15. Servicing Advances also include any reasonable "out of pocket"
costs and expenses (including legal fees) incurred by the Servicer in
connection with executing and recording instruments of satisfaction, deeds of
reconveyance or Assignments of Mortgage in connection with any satisfaction or
foreclosures in respect of any Mortgage Loan to the extent not recovered from
the Mortgagor or otherwise payable under this Agreement and (v) obtaining or
correcting any legal documentation required to be included in the Mortgage
Files and necessary for the Servicer to perform its obligations under this
Agreement. The Servicer shall not be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and any
Distribution Date, an amount equal to the product of (i) one twelfth of the
Servicing Fee Rate, and (ii) the Stated Principal Balance of such Mortgage
Loan as of the first day of the calendar month preceding the month in which
such Distribution Date occurs. 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.
Similar Law: As defined in Section 5.02(b).
37
Six-Month LIBOR Index: With respect to each Mortgage Loan, the rate
as determined on the basis of rates at which six-month U.S. dollar deposits
are offered to prime banks in the London interbank market on such date as
provided in the related Mortgage Note.
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 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 Principal Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance
of the Mortgage Loans but instead will remain the same as the prior period's
Specified Overcollateralized Amount until the Distribution Date on which a
Trigger Event is no longer occurring. When the Class Certificate Balance of
each class of Principal Certificates has been reduced to zero, the Specified
Overcollateralized Amount will thereafter be equal to zero.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of any date
of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such date, minus (ii) all amounts previously remitted to the Trustee with
respect to the related Mortgage Loan representing payments or recoveries of
principal including advances in respect of scheduled payments of principal.
For purposes of any Distribution Date, the Stated Principal Balance of any
Mortgage Loan will give effect to any scheduled payments of principal received
by the Servicer on or prior to the related Determination Date or advanced by
the Servicer for the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the
related Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
the related Prepayment Period shall be zero.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balances of the Class A Certificates have been
reduced to zero, and (b) the later to occur of (i) the Distribution Date in
September 2008, and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
38
Tax Matters Person: The Holder of the Class R-1 and Class R-2
Certificates is designated as "tax matters person" of the Lower-Tier REMIC and
the Upper-Tier REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.806F-4(d) and Treasury Regulations Section
301.6234(a)(7)-1.
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 over (ii) the sum of amounts payable to the Principal Certificates on
such Distribution Date pursuant to Section 4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger Event
exists if (i) the quotient (expressed as a percentage) of (1) the rolling
three month average of the aggregate unpaid principal balance of 60+ Day
Delinquent Mortgage Loans, divided by (2) the aggregate unpaid principal
balance of the Mortgage Loans as of the last day of the related Due Period,
equals or exceeds 34.00% of the Senior Enhancement Percentage as of the last
day of the prior Due Period or (ii) the quotient (expressed as a percentage)
of (x) the aggregate amount of Realized Losses incurred since the Cut-off Date
through the last day of the related Prepayment Period divided by (y) the
Cut-off Date Pool Principal Balance exceeds the applicable percentages set
forth below with respect to such Distribution Date:
--------------------------------------------------------------------------------------------------------------------------
Distribution Date Occurring In Cumulative Realized Loss Percentage
--------------------------------------------------------------------------------------------------------------------------
September 2007 through August 2008 1.200% for the first month, plus an additional 1/12th of
1.500% for each month thereafter (e.g., approximately
1.325% in October 2007)
--------------------------------------------------------------------------------------------------------------------------
September 2008 through August 2009 2.700% for the first month, plus an additional 1/12th of
1.550% for each month thereafter (e.g., approximately
2.829% in October 2008)
--------------------------------------------------------------------------------------------------------------------------
September 2009 through August 2010 4.250% for the first month, plus an additional
--------------------------------------------------------------------------------------------------------------------------
39
--------------------------------------------------------------------------------------------------------------------------
1/12th of 1.250% for each month thereafter (e.g.,
approximately 4.354% in October 2009)
---------------------------------------------------------------------------------------------------------------------------
September 2010 through August 2011 5.500% for the first month, plus an additional 1/12th of
0.650% for each month thereafter (e.g., approximately
5.554% in October 2010)
---------------------------------------------------------------------------------------------------------------------------
September 2011 and thereafter 6.150%
--------------------------------------------------------------------------------------------------------------------------
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Interest Rate Corridor Agreement and all amounts received thereunder; (iii)
the Collection Account, Excess Reserve Fund Account, the Distribution Account,
and all amounts deposited therein pursuant to the applicable provisions of
this Agreement; (iv) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed in lieu of foreclosure or otherwise; and (v) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing.
Trust REMIC: Either the Lower-Tier REMIC or the Upper-Tier REMIC, as
applicable.
Trustee: Deutsche Bank National Trust Company, and its successors in
interest and, if a successor trustee is appointed hereunder, such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the related Trustee Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date) or, in the event of any payment of interest which
accompanies a Principal Prepayment in Full made by the Mortgagor, interest at
the Trustee Fee Rate on the Stated Principal Balance of such Mortgage Loan for
the period covered by such payment of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0070% per
annum.
Trustee Float Period: With respect to any Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
40
Underwriting Guidelines: The underwriting guidelines attached to the
Purchase Agreement.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and
(b) interest on the amount in clause (a) above at the applicable Pass-Through
Rate (to the extent permitted by applicable law).
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate
whose income is includible in gross income for United States income tax
purposes regardless of its source; or (v) a trust, if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more U.S. Persons have authority to control 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.
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 (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (c) 1% of all Voting Rights shall be allocated to the Class C
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (d) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, a per annum rate equal to (a) the weighted average of the Mortgage
Interest Rates for each Mortgage Loan (in each case, less the applicable
Expense Fee Rate) on the beginning of the related Due Period on the Mortgage
Loans, multiplied by (b) 30 divided by the actual number of days in the
related Interest Accrual Period, in the case of the LIBOR Certificates, and 30
divided by 360, in the case of the Fixed Rate Certificates.
41
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) either (a) the original Mortgage Note bearing all intervening
endorsements, evidencing a complete chain of assignments from the
originator to the last endorsee, endorsed "Pay to the order of
_____________, without recourse" and signed in the name of the last
endorsee. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge
and the Trustee is so advised that state law does not allow. If the
Mortgage Loan was acquired by the last endorsee 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]" or (b) with
respect to not more than 1% of the Mortgage Loans, a lost note affidavit
acceptable in form and substance to the Trustee;
(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 Depositor cannot deliver or cause
to be delivered the original Mortgage with evidence of recording thereon
on or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Depositor shall
deliver or cause to be delivered to the Trustee, a photocopy of such
Mortgage, together with (A) in the case of a delay caused by the public
recording office, an Officer's Certificate (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 or caused to be delivered to the Trustee upon receipt thereof
by the Depositor; or (B) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a
42
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) 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 as
provided in this Agreement. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned to the Trustee. 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
last endorsee in a merger, the Assignment of Mortgage must be made 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 Assignment of Mortgage must be by "[last
endorsee], formerly known as [previous name]";
(vi) the originals of all intervening Assignments of Mortgage,
evidencing a complete chain of assignment from the originator to the last
endorsee, either unrecorded or 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 Depositor
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 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 or caused to
be delivered to the Trustee upon receipt thereof by the Depositor; 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 mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true
and complete by the title insurance company; and
(viii) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage (if provided).
43
The Depositor shall deliver or cause to be delivered 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.
From time to time, the Depositor shall cause to be forwarded, with
respect to the Mortgage Loans, to the Trustee additional original documents,
additional documents evidencing an assumption, modification, consolidation or
extension of a Mortgage Loan approved by the Responsible Party, in accordance
with the terms of this Agreement. All such mortgage documents held by the
Trustee as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver or cause
to be delivered 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, the Servicer 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 and each Rating Agency has received an opinion of counsel,
satisfactory in form and substance to the Trustee and each Rating Agency, to
the effect that the recordation of such Assignments of Mortgage in any
specific jurisdiction is not necessary to protect the Trustee's interest in
the related Mortgage Note. If the Assignment of Mortgage is to be recorded,
the Depositor shall cause the Mortgage to be assigned at its expense to
"Deutsche Bank National Trust Company as trustee under the Pooling and
Servicing Agreement dated as of August 1, 2005, GSAA Home Equity Trust
2005-10." In the event that any such assignment is lost or returned unrecorded
because of a defect therein, the Depositor shall promptly cause to be prepared
a substitute assignment to cure such defect and thereafter cause each such
assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee 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, with respect to each Mortgage Loan, that such original
or copy of any document submitted for recordation to the appropriate public
recording office is not so delivered to the Trustee within 90 days following
the Closing Date, and in the event that the Depositor does not cure or cause
to be cured such failure within 30 days of discovery or receipt of written
notification of such failure, the Responsible Party shall repurchase such
Mortgage Loan pursuant to its obligations under the Purchase Agreement at the
price and in the manner specified in Section 2.03. The foregoing repurchase
obligation shall not apply in the event that the Responsible Party cannot
deliver such original or copy of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable
44
jurisdiction; provided, that the Responsible Party shall instead deliver a
recording receipt of such recording office or, if such recording receipt is
not available, an officer's certificate of an officer of the Responsible Party
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses
the original Mortgage or assignment after it has been recorded, the
obligations of the Depositor shall be deemed to have been satisfied upon the
Depositor delivering or causing to be delivered to the Trustee prior to the
Closing Date a copy of such Mortgage or assignment, as the case may be,
certified (such certification to be an original thereof) by the public
recording office to be a true and complete copy of the recorded original
thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAA Home Equity Trust
2005-10" and Deutsche Bank National Trust Company is hereby appointed as
Trustee in accordance with the provisions of this Agreement. The parties
hereto acknowledge and agree that it is the policy and intention of the Trust
to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties
set forth in paragraph (49) of Schedule III to this Agreement.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section
2.01(a).
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit E, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. The Trustee acknowledges that it
will maintain possession of the related Mortgage Notes in the State of
California, unless otherwise permitted by the Rating Agencies.
Prior to and as a condition to the Closing Date, the Trustee shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor and the Servicer an Initial Certification prior to the Closing Date,
or as the Depositor agrees to, on the Closing Date, certifying receipt of a
Mortgage Note and Assignment of Mortgage for each Mortgage Loan with any
exceptions thereon. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
On the Closing Date, the Trustee shall ascertain that all documents
required to be reviewed by it are in its possession, and shall deliver to the
Depositor and the Servicer an Initial Certification, in the form annexed
hereto as Exhibit E, and shall deliver to the Depositor and the Servicer a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit
45
F, within 90 days after the Closing Date to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such
certification as an exception and not covered by such certification): (i) all
documents required to be reviewed by it are in its possession; (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan; (iii) based on its examination and only as to the
foregoing documents, the information set forth in items (1), (2), (3), (7)
(solely with respect to the original months to maturity), (10) (solely as of
origination, not as of the Cut-off Date) and (15) of the Mortgage Loan
Schedule and items (1), (2), (3), (7) (solely with respect to the original
months to maturity), (10) (solely as of origination, not as of the Cut-off
Date) and (15) 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.
The Depositor shall cause to be delivered to the Servicer copies of
all trailing documents required to be included in the Custodial File at the
same time the original or certified copies thereof are delivered to the
Trustee, including but not limited to such documents as the title insurance
policy and any other Mortgage Loan documents upon return from the public
recording office. The Depositor, at its expense, shall cause the documents to
be delivered to the Servicer.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer. (a) Countrywide Servicing hereby makes the
representations and warranties set forth in Schedule II hereto, respectively,
to the Depositor, the Responsible Party and the Trustee as of the Closing
Date.
(b) The Responsible Party hereby makes the representations and
warranties set forth in Schedule III and Schedule IV hereto to the Depositor,
Countrywide Servicing and the Trustee.
(c) It is understood and agreed by the Countrywide Servicing and the
Responsible Party that the representations and warranties set forth in this
Section 2.03 shall survive the transfer of the Mortgage Loans by the Depositor
to the Trustee, and shall inure to the benefit of the Depositor and the
Trustee notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Upon discovery by any of the Responsible Party, the
Depositor, the Trustee 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 others.
(d) Within 30 days of the earlier of either discovery by or notice to
the Responsible Party that any Mortgage Loan does not conform to the
requirements as determined
46
in the Trustee's review of the related Custodial File or within 60 days of the
earlier of either discovery by or notice to the Responsible Party of any
breach of a representation or warranty set forth in Section 2.03(b) that
materially and adversely affects the value of any Mortgage Loan or the
interest of the Trustee or the Certificateholders therein, the Responsible
Party shall use its best efforts to cause to be remedied a material defect in
a document constituting part of a Mortgage File or promptly to cure such
breach in all material respects and, if such defect or breach cannot be
remedied, the Responsible Party shall repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach which materially and adversely
affects the value of the related Mortgage Loan or Mortgage Loans, as the case
may be, or the interests of the Trustee or the Certificateholders therein,
shall involve any representation or warranty set forth in Schedule III, and
such breach cannot be cured within 60 days of the earlier of either discovery
by or notice to the Responsible Party of such breach, all of the Mortgage
Loans shall, at the Depositor's option, be repurchased by the Responsible
Party at the Repurchase Price. Notwithstanding the foregoing, a breach by the
Responsible Party of any of the representations and warranties set forth in
paragraphs (39), (45), (46), (47), (49) or (56) of Schedule III, in each case,
will be deemed automatically to materially and adversely affect the value of
such Mortgage Loan and the interests of the Trustee and Certificateholders in
such Mortgage Loan. In the event that the Trustee receives notice of a breach
by the Responsible Party of any of the representations and warranties set
forth in paragraphs (39), (45), (46), (47), (49) or (56) of Schedule III, the
Trustee shall give notice of such breach to the Responsible Party and request
the Responsible Party to repurchase the Mortgage Loan at the Repurchase Price
within sixty (60) days of the Responsible Party's receipt of such notice. In
addition, in the event of a breach of the representation and warranty set
forth in paragraph (m) of Schedule IV, the Responsible Party shall repurchase
the Mortgage Loans such that the aggregate principal balance of the Mortgage
Loans with lost note affidavits shall not be in excess of 1.0% of the total
aggregate principal balance of all the Mortgage Loans.
(e) In connection with any repurchase of a Mortgage Loan pursuant to
this Section 2.03, the Servicer shall, based on information provided by the
Responsible Party, amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Mortgage Loan and the
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
(f) In addition to such repurchase obligation, the Responsible Party
shall indemnify the Depositor, any of its Affiliates, the Servicer and the
Trustee and hold such parties harmless against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach by
the Responsible Party of any of its representations and warranties contained
in the Purchase Agreement or this Agreement.
(g) In the event that the Responsible Party shall have repurchased a
Mortgage Loan, the Repurchase Price therefor shall be deposited 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
47
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 shall constitute the sole remedy against such
Persons respecting such breach available to Certificateholders, the Depositor,
the Servicer or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Custodial Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04 [Reserved.]
Section 2.05 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to
or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Start-up Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date in June
2035, which is the Distribution Date following the latest Mortgage Loan
maturity date. Amounts paid to the Class X Certificates (prior to any
reduction for any Basis Risk Payment) shall be deemed paid from the Upper-Tier
REMIC in respect of the Class X Interest to the holders of the Class X
Certificates prior to distribution of Basis Risk Payments to the Principal
Certificates.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the
Servicer and the Responsible Party that as of the date of this Agreement or as
of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law);
48
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound;
(ii) results or will result in a violation of any law, rule, regulation,
order, judgment or decree applicable to the Depositor of any court or
governmental authority having jurisdiction over the Depositor or its
subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's
reasonable judgment, might materially and adversely affect the performance by
the Depositor of its obligations under this Agreement, or the validity or
enforceability of this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the Depositor
to the Trustee on the Closing Date, the Depositor had good title to, and was
the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in
each Mortgage Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated by this Agreement is sufficient
either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may
be, and shall inure to the benefit of the Trustee.
49
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer
the Mortgage Loans in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in
compliance with all applicable federal, state and local laws, and in the same
manner in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that 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 Accepted Servicing Practices 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 and in
the name of the Trust. 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
50
out such duties including a power of attorney to take title to Mortgaged
Properties after foreclosure on behalf of the Trustee and in the name of the
Trust. The Trustee shall execute a 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 Servicemembers Civil Relief Act or any
similar state statutes or (B) as provided in Section 3.07, if the Mortgagor is
in default with respect to the Mortgage Loan or such default is, in the
judgment of the Servicer, reasonably foreseeable or (ii) permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause either Trust REMIC to fail to qualify as
a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the Start-up day" under the REMIC
Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Premiums.
(d) 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 ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing
51
Agreement must impose on the Subservicer requirements conforming to the
provisions set forth in Section 3.08 and provide for servicing of the Mortgage
Loans consistent with the terms of this Agreement. The Servicer will examine
each Subservicing Agreement and will be familiar with the terms thereof. The
terms of any Subservicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different
forms of Subservicing Agreements; provided, however, that any such amendments
or different forms shall be consistent with and not violate the provisions of
this Agreement, and that no such amendment or different form shall be made or
entered into which could be reasonably expected to be materially adverse to
the interests of the Trustee, without the consent of the Trustee. Any
variation without the consent of the Trustee from the provisions set forth in
Section 3.08 relating to insurance or priority requirements of Subservicing
Accounts, or credits and charges to the Subservicing Accounts or the timing
and amount of remittances by the Subservicers to the Servicer, are
conclusively deemed to be inconsistent with this Agreement and therefore
prohibited. The Servicer shall deliver to the Trustee and the Depositor copies
of all Subservicing Agreements, and any amendments or modifications thereof,
promptly upon the Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer
under the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
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).
52
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of
Section 3.01 without diminution of such obligation or liability by virtue of
such Subservicing Agreements or arrangements or by virtue of indemnification
from the Subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering such
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
53
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 Interest
Rate, forgive the payment of principal or interest, extend the final maturity
date of such Mortgage Loan or waive, in whole or in part, a Prepayment
Premium), accept payment from the related Mortgagor of an amount less than the
Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or
otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as "Forbearance"); provided,
however, that the Servicer's approval of a modification of a Due Date shall
not be considered a modification for purposes of this sentence; provided,
further, that the final maturity date of any Mortgage Loan may not be extended
beyond the Final Scheduled Distribution Date for the Principal Certificates.
The 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 or on the Servicer's servicing records. In addition,
notwithstanding the foregoing, the Servicer may also waive (or permit a
Subservicer to waive), in whole or in part, a Prepayment Premium if such
waiver would, in the reasonable judgment of the Servicer, maximize recovery on
the related Mortgage Loan, or if such Prepayment Premium is (i) not permitted
to be collected by applicable law or the collection thereof would be
considered "predatory" pursuant to written guidance published by any
applicable federal, state or local regulatory authority having jurisdiction
over such matters, or (ii) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership or other similar laws
relating to creditor's rights or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If a Prepayment Premium is waived
other than as permitted in this Section 3.07(a), then the 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.
54
(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");
provided, that the Responsible Party transferred a Tax Service Contract to the
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. To
the extent the related Mortgage Loan provides for Escrow Payments, 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,
fire and hazard insurance premiums, condominium charges 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
55
advances made pursuant to Section 3.01 (with respect to taxes and assessments)
and Section 3.13 (with respect to hazard insurance); (iii) refund to
Mortgagors any sums as may be determined to be overages; (iv) apply to the
restoration or repair of the Mortgaged Property in accordance with the Section
3.13; (v) transfer to the Collection Account an application to reduce the
principal balance of the Mortgage Loan in accordance with the terms of the
related Mortgage and Mortgage Note; (vi) pay interest to the Servicer and, if
required and as described below, to Mortgagors on balances in the Escrow
Account; (vii) clear and terminate the Escrow Account at the termination of
the Servicer's obligations and responsibilities in respect of the Mortgage
Loans under this Agreement; or (viii) recover amounts deposited in error or
for which amounts previously deposited are returned due to a "not sufficient
funds" or other denial of payment by the related Mortgagor's banking
institution. As part of its servicing duties, the Servicer or Subservicers
shall pay to the Mortgagors interest on funds in Escrow Accounts, to the
extent required by law and, to the extent that interest earned on funds in the
Escrow Accounts is insufficient, to pay such interest from its or their own
funds, without any reimbursement therefor. To the extent that a Mortgage does
not provide for Escrow Payments, the Servicer shall use commercially
reasonable efforts consistent with Accepted Servicing Practices to determine
whether any such payments are made by the Mortgagor in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien. 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 for the benefit of the
Certificateholders, 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
56
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 Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
NSF fees, reconveyance fees, assumption fees and other similar fees and
charges need not be deposited by the Servicer in the Collection Account and
shall, upon collection, belong to the Servicer as additional compensation for
its servicing activities. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(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 and (B) all
Available Funds in respect of the related Distribution Date together with
all amounts representing Prepayment Premiums from the Mortgage Loans
received during the related Prepayment Period;
(ii) to reimburse 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
57
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 pursuant to this Agreement all
amounts received thereon subsequent to the date of purchase;
(vi) to reimburse the Servicer for (A) 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 and (B) any unpaid
Servicing Fees to the extent not recoverable from Liquidation Proceeds,
Insurance Proceeds or other amounts received with respect to the related
Mortgage Loan under Section 3.11(a)(iii);
(vii) to pay, or to reimburse 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, Section 7.02
or Section 8.05;
(ix) to reimburse the Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect
giving rise to the repurchase obligation under Section 2.03 of this
Agreement that were included in the Repurchase Price of the Mortgage
Loan, including any expenses arising out of the enforcement of the
repurchase obligation, to the extent not otherwise paid pursuant to the
terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error or for which amounts previously deposited are returned due to a
"not sufficient funds" or other denial of payment by the related
Mortgagor's banking institution;
(xi) to withdraw any amounts held in the 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 ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the Collection Account upon termination
of this Agreement.
(xiv) to the extent that the Servicer does not timely make the
remittance referred to in clause (i) above, the Servicer shall pay the
Trustee for the account of the Trustee
58
interest on any amount not timely remitted at the prime rate, from and
including the applicable Remittance Date to but excluding the date such
remittance is actually made.
(b) 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 Collection
Account and the Trustee may invest funds in the Distribution Account during
the Trustee Float Period, and shall (except during the Trustee Float Period),
invest such funds in the Distribution Account at the direction of the
Depositor (for purposes of this Section 3.12, each of the Collection Account
and Distribution Account are referred to as an "Investment Account"), in one
or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand no later than the Business Day on which
such funds are required to be withdrawn from such account pursuant to this
Agreement (except for investments made at the Depositor's direction, which
shall mature no later than the Business Day immediately preceding the date of
the required withdrawal). All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the related Account and any income and gain realized thereon in
any Account other than the Distribution Account during the Trustee Float
Period) over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Trustee or
its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable
on demand, the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and Escrow 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. Any other benefit
derived from the Collection Account and Escrow Account associated with the
receipt, disbursement and accumulation of principal, interest, taxes, hazard
insurance, mortgage blanket insurance, and like sources, shall accrue to the
benefit of the Servicer, except that the Servicer shall not realize any
economic benefit from any forced charging of services.
59
The Servicer shall deposit in the Collection Account and the Escrow Account
the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of
such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Depositor (except for any income or gain realized from the
investment of funds on deposit in the Distribution Account during the Trustee
Float Period, which shall be for the benefit of the Trustee). The Depositor
shall deposit in the Distribution Account (except with respect to the Trustee
Float Period, in which case the Trustee shall 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.
(e) The Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Trustee's economic self
interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments.
(f) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment (except that during the Trustee Float
Period, it will be responsible for reimbursing the Trust for such loss) or
lack of investment of funds held in any Investment Account or the Distribution
Account if made in accordance with this Section 3.12.
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage. (a) 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
outstanding principal balance of such Mortgage Loan, (ii) the amount necessary
to fully compensate for any damage or loss to the improvements that are a part
of such property on a replacement cost basis, (iii) the maximum insurable
value of the improvements which are a part of such Mortgaged Property and (iv)
the amount determined by applicable federal or state law, in each case in an
amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. 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
60
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. If the
Mortgagor fails to provide Mortgage Loan hazard insurance coverage after
thirty (30) days of Servicer's written notification, the Servicer shall put in
place such hazard insurance coverage on the Mortgagor's behalf. Any out of
pocket expense or advance made by the Servicer on such force placed hazard
insurance coverage shall be deemed a Servicing Advance. Any cost incurred by
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 minimum amount
required, under the terms of coverage, to compensate for any damage or loss on
a replacement cost basis (or the unpaid principal balance of the related
Mortgage Loan if replacement cost coverage is not available for the type of
building insured) and (ii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the Mortgage Loan, the Servicer determines in accordance
with applicable law and pursuant to the Federal Emergency Management Agency
Guides that a Mortgaged Property is located in a special flood hazard area and
is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Servicer shall notify the related Mortgagor to obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty five (45) days after such notification, the Servicer
shall immediately force place the required flood insurance on the Mortgagor's
behalf. Any out of pocket expense or advance made by the Servicer on such
force placed flood insurance coverage shall be deemed a Servicing Advance.
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, or
(ii) 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.
61
(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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall provide the Trustee 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, 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 such substitution is
in the best interest of the Certificateholders as determined by the Servicer.
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
62
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 Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert (which may include an
acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. 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 reimburse the
Servicer for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11,
third, 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; 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
63
(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 and the Depositor with a
written report of the environmental inspection.
After reviewing the environmental inspection report, the Servicer
shall determine consistent with Accepted Servicing Practices, to proceed with
respect to the Mortgaged Property. In the event (a) the environmental
inspection report indicates that the Mortgaged Property is contaminated by
hazardous or toxic substances or wastes and (b) the Servicer determines,
consistent with Accepted Servicing Practices, to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, 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. In the event the Servicer determines 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. The Trustee shall not be responsible for any determination
made by the Servicer pursuant to this paragraph or otherwise.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by 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 by completing a
Request for Release. Upon receipt of such certification and a Request for
Release, 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
64
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 provided to it as shall be necessary to the
prosecution of any such proceedings and the Servicer shall retain the Mortgage
File in trust for the benefit of the Trustee. Such Request for Release shall
obligate the 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 receipt of a certificate of a Servicing Officer stating
that such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the related Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the Trustee to the Servicer or its designee. Upon receipt
of a Request for Release under this Section 3.16, the Trustee shall deliver
the related Custodial File to the Servicer by regular mail, unless the
Servicer requests that the Trustee deliver such Custodial File to the Servicer
by overnight courier (in which case such delivery shall be at the Servicer's
expense); provided, however, that in the event the Servicer has not previously
received copies of the relevant Mortgage Loan Documents necessary to service
the related Mortgage Loan in accordance with Accepted Servicing Practices, the
Depositor shall reimburse or cause the Servicer to be reimbursed for any
overnight courier charges incurred for the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to 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.
65
(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.
(c) The Servicer shall use Accepted Servicing Practices to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within the time specified in Section 3.17(h) after title has been taken
to such REO Property, unless such Servicer determines, and gives an
appropriate notice to the Trustee to such effect, that a longer period is
necessary for the orderly liquidation of such REO Property. The Trustee has no
obligation with respect to REO Dispositions.
(d) 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 Accepted Servicing Practices to sell, or
cause the Subservicer to sell, in accordance with Accepted Servicing
Practices, any REO Property as soon as possible, but in no event later than
the conclusion of the third calendar year beginning after the year of its
acquisition by the REMIC unless (i) 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 and the
Servicer, to the effect that the holding by the Lower-Tier REMIC of such REO
Property subsequent to such period will not result in the imposition of taxes
on "prohibited transactions" as defined in Section 860F of the Code or cause
either Trust REMIC to
66
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, 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 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. In
the event that an Index becomes unavailable or otherwise unpublished, the
Servicer shall select a comparable alternative index over which it has no
direct control and which is readily verifiable. The Servicer shall execute and
deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage
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. The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC and
the examiners and supervisory agents thereof access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon 15 days (or if an Event of Default has occurred and is continuing, 3
Business Days) prior written request and during normal business hours at the
offices of the Servicer. 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.
Nothing in Section 3.19 shall require the Servicer to collect,
create, collate or otherwise generate any information that it does not
generate in its usual course of business. The Servicer shall not be required
to make copies of or to ship documents to any Person who is not a
67
party to this Agreement, and then only if provisions have been made for the
reimbursement of the costs thereof.
Section 3.20 Documents, Records and Funds in Possession of the
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, 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 Condemnation Proceeds related to
such Mortgage Loan, the Servicing Fee with respect to each Mortgage Loan (less
any portion of such amounts retained by any Subservicer). In addition, 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 10.07 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 3.09(b)(vi)
and 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.
68
Section 3.22 Annual Statement as to Compliance. The Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies and the
Trustee on or before March 15th of each calendar year, commencing in 2006, an
Officer's 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. The
obligations of the Servicer under this Section apply to each Servicer that
serviced during the applicable period, whether or not such Servicer is acting
as the Servicer at the time such Officer's Certificate is required to be
delivered.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar
year commencing in 2006, the Servicer, at its expense, shall cause a
nationally recognized firm of independent certified public accountants to
furnish to the Depositor, the Rating Agencies 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 calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted
in accordance with the same standards (rendered within one year of such
report) with respect to those Subservicers. Promptly after receipt of such
report, the Depositor shall review such report and, if applicable, consult
with the Servicer as to the nature of any defaults by the Servicer in the
fulfillment of any of the Servicer's obligations. The obligations of the
Servicer under this Section apply to each Servicer that serviced during the
applicable period, whether or not such Servicer is acting as the Servicer at
the time such report is required to be delivered.
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 of Mortgage Loans hereunder, including but not limited to
repurchases pursuant to Section 2.03, (iv) responsible for expenses of the
69
Servicer pursuant to Section 2.03 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,
provided, however, the Servicer is not required to pay Compensating Interest
during September 2005.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 the three national credit repositories, on a monthly
basis.
(b) The Servicer shall comply with all provisions of the Privacy
Laws, relating to the Mortgage Loans, the related borrowers and any "nonpublic
personal information" (as defined in the Privacy Laws) received by the
Servicer incidental to the performance of its obligations under this
Agreement, including, maintaining adequate information security procedures to
protect such nonpublic personal information and providing all privacy notices
required by the Privacy Laws.
Section 3.27 Excess Reserve Fund Account; Distribution Account. (a)
The Trustee shall establish and maintain the Excess Reserve Fund Account to
receive any Basis Risk Payment and any Interest Rate Corridor Payment and to
secure their limited recourse obligation to pay the Principal
Certificateholders any Basis Risk Carry Forward Amounts.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class of Principal Certificates, the Trustee shall (1)
withdraw from the
70
Distribution Account and deposit in the Excess Reserve Fund Account, as set
forth in Section 4.02(a)(iii)(K), the lesser of the Class X Distributable
Amount (to the extent remaining after the distributions specified in Sections
4.02(a)(iii)(A)-(J)) and the aggregate Basis Risk Carry Forward Amount and (2)
withdraw from the Excess Reserve Fund Account amounts necessary to pay to such
Class or Classes of Principal Certificates the applicable Basis Risk Carry
Forward Amounts. Such payments shall be allocated to those Classes based upon
the amount of Basis Risk Carry Forward Amount owed to each such Class and
shall be paid in the priority set forth in Section 4.02(a)(iii)(L). In the
event that the Class Certificate Balance of any Class of Certificates is
reduced because of Applied Realized Loss Amounts, the applicable
Certificateholders will not be entitled to receive Basis Risk Carry Forward
Amounts on the written down amounts on such Distribution Date or any future
Distribution Dates (except to the extent such Class Certificate Balance is
increased as a result of any Subsequent Recoveries), even if funds are
otherwise available for distribution.
The Trustee shall account for the Excess Reserve Fund Account as an
asset of a grantor trust under subpart E, Part I of subchapter J of the Code
and not as an asset of either Trust REMIC created pursuant to this Agreement.
For all federal income tax purposes, amounts transferred by the Upper-Tier
REMIC to the Excess Reserve Fund Account shall be treated as distributions by
the Trustee to the Class X Certificateholders in respect of the Class X
Interest and then contributed by the Class X Certificateholders to the Excess
Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Trustee to
the Principal Certificateholders shall be accounted for by the Trustee, for
federal income tax purposes, as amounts paid first to the Holders of the Class
X Certificates (in respect of the Class X Interest) and then to the respective
Class or Classes of Principal Certificates. In addition, the Trustee shall
account for the rights of Holders of each Class of Principal Certificates to
receive payments of Basis Risk Carry Forward Amounts as rights in a separate
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.27(a).
(b) The Trustee shall establish and maintain the Distribution Account
on behalf of the Certificateholders. The Trustee shall, promptly upon receipt
on the Business Day received, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section 3.12(b)
in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
71
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.
(c) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee shall obtain and verify certain information and
documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address, and other identifying
information.
Section 3.28 Optional Purchase of Delinquent Mortgage Loans. The
Depositor, in its sole discretion, shall have the option, but shall not be
obligated, to purchase any 90+ Delinquent Mortgage Loans from the Trust Fund.
The purchase price for any such Mortgage Loan shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued and unpaid interest on
the related Mortgage Loan at the applicable Mortgage Interest Rate, plus the
amount of any unreimbursed Servicing Advances made by the 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
the Mortgage File relating to the Mortgage Loan being repurchased.
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 REO Imputed Interest) that would have been due on the
related Due Date in respect of the related Mortgage Loan, over the net income
from such REO Property transferred to the 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
72
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.
(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 make the disbursements and transfers from amounts then
on deposit in the Distribution Account in the following order of priority and
to the extent of the Available Funds remaining:
(i) to the holders of each Class of Principal Certificates in the
following order of priority:
(A) concurrently:
(1) from the Interest Remittance Amount related to
the Group I Mortgage Loans, to the Class 1A1
Certificates, the related Accrued Certificate
Interest Distribution Amounts and Unpaid Interest
Amounts for the Class 1A1 Certificates, allocated
in accordance with clauses (iv) and (v) of this
Section 4.02(a), and
(2) from the Interest Remittance Amount related to
the Group II Mortgage Loans, to the Class 2A1,
Class 2A2, Class 2A3, Class 2A4 and Class 2A5
Certificates, the related Accrued Certificate
Interest Distribution Amounts and Unpaid Interest
Amounts for
73
those Classes, allocated in accordance with clauses
(iv) and (v) of this Section 4.02(a);
provided, that if the Interest Remittance Amount
for either Loan Group is insufficient to make the
related payments set forth in clause (1) or (2)
above, any Interest Remittance Amount relating to
the other Loan Group remaining after payment of the
related Accrued Certificate Interest Distribution
Amounts and Unpaid Interest Amounts will be
available to cover such shortfall;
(B) from any remaining Interest Remittance Amount, to the
Class M-1 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(C) from any remaining Interest Remittance Amount, to the
Class M-2 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(D) from any remaining Interest Remittance Amount, to the
Class M-3 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(E) from any remaining Interest Remittance Amount, to the
Class M-4 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(F) from any remaining Interest Remittance Amount, to the
Class M-5 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(G) from any remaining Interest Remittance Amount, to the
Class M-6 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(H) from any remaining Interest Remittance Amount, to the
Class B-1 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(I) from any remaining Interest Remittance Amount, to the
Class B-2 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class;
(J) from any remaining Interest Remittance Amount, to the
Class B-3 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class; and
(K) from any remaining Interest Remittance Amount, to the
Class B-4 Certificates, the Accrued Certificate Interest Distribution
Amount for such Class.
74
(ii) (A) on each Distribution Date (a) prior to the Stepdown Date or
(b) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of Principal Certificates and Residual
Certificates then entitled to distributions of principal as set forth
below, from Available Funds remaining after making distributions pursuant
to clause (i) above, an amount equal to the Principal Distribution Amount
in the following order of priority:
(a) concurrently, to the Class R-1 and Class R-2 Certificates,
pro rata, from payments related to the Group II Mortgage Loans,
until their respective Class Certificate Balances have been reduced
to zero;
(b) to the Class A Certificates, allocated as described in
Section 4.02(d), until their respective Class Certificate Balances
have been reduced to zero;
(c) sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates, in that order, until their respective Class
Certificate Balances thereof have been reduced to zero;
(B) on each Distribution Date (a) on and after the Stepdown
Date and (b) as long as a Trigger Event is not in effect, to the
holders of the Class or Classes of Principal Certificates then
entitled to distribution of principal, from amounts remaining on
deposit in the Distribution Account after making distributions
pursuant to clause (i) above, an amount equal to the Principal
Distribution Amount in the following amounts and order of priority:
(a) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(d),
until their respective Class Certificate Balances have been reduced
to zero;
(b) to the Class M-1 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above
and (y) the Class M-1 Principal Distribution Amount to the Class M-1
Certificates, until the Class Certificate Balance thereof has been
reduced to zero;
(c) to the Class M-2 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above
and to the Class M-1 Certificates in clause (ii)(B)(b) above and (y)
the Class M-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(d) to the Class M-3 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above and to the
Class M-2 Certificates in clause (ii)(B)(c) above and
75
(y) the Class M-3 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(e) to the Class M-4 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above and (y) the Class M-4
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(f) to the Class M-5 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above and to the Class M-4
Certificates in clause (ii)(B)(e) above and (y) the Class M-5
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(g) to the Class M-6 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above and to the Class M-5
Certificates in clause (ii)(B)(f) above and (y) the Class M-6
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(h) to the Class B-1 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above and to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(i) to the Class B-2 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
76
(j) to the Class B-3 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above, to the Class B-2
Certificates in clause (ii)(B)(i) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(k) to the Class B-4 Certificates, the lesser of (x) the excess
of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause (ii)(B)(a) above,
to the Class M-1 Certificates in clause (ii)(B)(b) above, to the
Class M-2 Certificates in clause (ii)(B)(c) above, to the Class M-3
Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above, to the Class B-2
Certificates in clause (ii)(B)(i) above, to the Class B-3
Certificates in clause (ii)(B)(j) above and (y) the Class B-4
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero.
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Account, shall be distributed in the
following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(B) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M-6 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
77
(H) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the holders of the Class B-4 Certificates, any Unpaid
Interest Amount for such Class;
(K) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment for such Distribution Date;
(L) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date (not including any Interest
Rate Corridor Payments), an amount equal to any Basis Risk Carry
Forward Amount with respect to the Principal Certificates for that
Distribution Date, first, concurrently to the Class A Certificates,
pro rata, based on their respective Class Certificate Balances
immediately prior to that Distribution Date, up to their respective
unpaid remaining Basis Risk Carry Forward Amounts (provided that, if
for any Distribution Date, after the allocation of the remaining
unpaid Basis Risk Carry Forward Amounts to the Class A Certificates,
the remaining unpaid Basis Risk Carry Forward Amounts for any of the
Class A Certificates is reduced to zero, any amount of remaining
unpaid Basis Risk Carry Forward Amounts that would have been
allocated to that Class A Certificate for that Distribution Date
will instead be allocated, pro rata, based on their respective
remaining unpaid Basis Risk Carry Forward Amounts, to the other
Class A Certificates to the extent the other Class A Certificates
have any remaining unpaid Basis Risk Carry Forward Amounts), and
second, sequentially to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class
B-4 Certificates, in that order, in each case up to their respective
unpaid remaining Basis Risk Carry Forward Amounts;
(M) from any Interest Rate Corridor Payments from the Interest
Rate Corridor Agreement on deposit in the Excess Reserve Fund
Account with respect to that Distribution Date, first, concurrently
to the Class A Certificates, pro rata, based on their respective
Class Certificate Balances immediately prior to that Distribution
Date, up to their respective unpaid remaining Basis Risk Carry
Forward Amounts (provided that, if for any Distribution Date, after
the allocation of the remaining unpaid Basis Risk Carry Forward
Amounts to the Class A Certificates, the remaining unpaid Basis Risk
Carry Forward Amounts for any of the Class A Certificates is reduced
to zero, any amount of remaining unpaid Basis Risk Carry Forward
Amounts that would have been allocated to that Class A Certificate
for that Distribution Date will instead be allocated, pro rata,
based on their respective remaining unpaid Basis Risk Carry Forward
Amounts, to the other Class A Certificates to the extent the other
Class A Certificates have any remaining unpaid Basis Risk Carry
Forward Amounts), second, from any remaining Interest Rate Corridor
Payments from the Interest Rate Corridor
78
Agreement sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, in each case up to their respective
unpaid remaining Basis Risk Carry Forward Amounts, and third, from
any remaining Interest Rate Corridor Payments from the Interest Rate
Corridor Agreement, after the distributions to the Certificates in
this paragraph, such remaining amount to be paid to or at the
written direction of the Depositor;
(N) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(K); and
(O) to the holders of the Class R-1 and Class R-2 Certificates,
pro rata, any remaining amount.
(iv) Solely for purposes of interest allocation calculations, the
portion of the interest component attributable to the Group I Mortgage
Loans will be allocated:
(A) first, to the Class 1A1 Certificates (based on the accrued
and unpaid interest distributable pursuant to Section
4.02(a)(i)(A)(1)), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for such Class; and
(B) second, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A)(2)), to the Class
2A1, Class 2A2, Class 2A3, Class 2A4 and Class 2A5 Certificates, the
Accrued Certificate Interest Distribution Amount and any Unpaid
Interest Amount for each such Class, to the extent not otherwise
previously paid from the Interest Remittance Amount attributable to
the Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
portion of the interest component attributable to the Group II Mortgage
Loans will be allocated:
(A) first, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A)(2)), to the Class
2A1, Class 2A2, Class 2A3, Class 2A4 and Class 2A5 Certificates, the
Accrued Certificate Interest Distribution Amount and any Unpaid
Interest Amount for each such Class; and
(B) second, to the Class 1A1 Certificates (based on the accrued
and unpaid interest distributable pursuant to Section
4.02(a)(i)(A)(1)), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for such Class, to the extent
not otherwise previously paid from the Interest Remittance Amount
attributable to the Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then that unpaid amount will be recoverable by the holders of
those Classes, with interest thereon, on future Distribution Dates,
79
as an Unpaid Interest Amount, subject to the priorities described above. In
the event the Class Certificate Balance of any Class of Principal Certificates
has been reduced to zero, that Class of Certificates shall no longer be
entitled to receive any related unpaid Basis Risk Carry Forward Amounts except
to the extent the Class Certificate Balance is increased as a result of any
Subsequent Recovery.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
shall be distributed by the Trustee 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 between the Class 1A1
Certificates and the Class A-2 Certificates based on the Class A Principal
Allocation Percentage for the Class 1A1 Certificates or the Class A-2
Certificates, as applicable; provided, however, that if the aggregate Class
Certificate Balance of either Class A Certificate Group is reduced to zero,
then the remaining amount of principal distributions distributable to the
Class A Certificates on such Distribution Date, and the amount of such
principal distributions distributable on all subsequent Distribution Dates,
shall be distributed to the Class A Certificates remaining outstanding in
accordance with the principal distribution allocations set forth in this
Section 4.02(c), until their respective Class Certificate Balances have been
reduced to zero. Any payments of principal to the Class 1A1 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 principal distributions allocated to the Class A-2 Certificates
shall be distributed sequentially, as follows: (x) to the Class 2A1
Certificates until its Class Certificate Balance has been reduced to zero; (y)
concurrently, to the Class 2A2 and Class 2A3 Certificates, pro rata based on
their respective Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero; and then (z) concurrently, to
the Class 2A4 and Class 2A5 Certificates, pro rata based on their respective
Class Certificate Balances, until their respective Class Certificate Balances
have been reduced to zero. However, so long as a Group II Sequential Trigger
Event is in effect, (i) principal distributions to the Class 2A2 and Class 2A3
Certificates shall be allocated sequentially, to the Class 2A2 and Class 2A3
Certificates, in that order, until their respective Class Certificate Balances
have been reduced to zero and (ii) principal distributions to the Class 2A4
and Class 2A5 Certificates shall be allocated sequentially, to the Class 2A4
and Class 2A5 Certificates, in that order, until their respective Class
Certificate Balances have been reduced to zero.
(d) Notwithstanding the allocation of principal to the Class A
Certificates described in the preceding paragraph, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Subordinated Certificates and the principal balance of the Class X
Certificates have been reduced to zero, any principal distributions allocated
to the Class A Certificates shall be allocated pro rata to the Class 1A1
Certificates and the Class 2A Certificates, based on their respective Class
Certificate Balances, except that so long as a Group II Sequential Trigger
Event is in effect, (i) principal distributions to the Class 2A2 and Class 2A3
Certificates shall be allocated sequentially, to the Class 2A2 and Class 2A3
Certificates, in that order, until their respective Class Certificate Balances
have been reduced to zero and (ii)
80
principal distributions to the Class 2A4 and Class 2A5 Certificates shall be
allocated sequentially, to the Class 2A4 and Class 2A5 Certificates, in that
order, until their respective Class Certificate Balances have been reduced to
zero.
(e) 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
Distribution Amount for the Class A, Class M and Class B Certificates, based
on the Accrued Certificate Interest Distribution Amount to which such Classes
would otherwise be entitled on such Distribution Date.
(f) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
shall be distributed by the Trustee to the holders of the Class P
Certificates.
(g) Upon any exercise of the purchase option set forth in clause (a)
of Section 9.01, the Trustee shall distribute to the holders of the Class C
Certificates any amounts required to be distributed on the Class C
Certificates pursuant to Section 9.01.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments, Insurance
Proceeds, Condemnation Proceeds and Liquidation Proceeds included
therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis
Risk Carry Forward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk Carry Forward Amount not covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Expense Fees paid to or retained by the
Servicer or the Trustee with respect to such Distribution Date, in the
aggregate and separately stated;
81
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicer as outstanding as of the close of business on the Determination
Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xi) with respect to all Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such
Mortgage Loans and the aggregate Stated Principal Balance of such
Mortgage Loans as of the close of business on the Determination Date
preceding such Distribution Date and the date of acquisition thereof;
(xii) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) Prepayment Premiums collected by the Servicer;
82
(xix) the Cumulative Loss Percentage;
(xx) the amount distributed on the Class X, Class P, Class R-1 and
Class R-2 Certificates; and
(xxi) the amount of any Subsequent Recoveries for such Distribution
Date;
(b) The Trustee's responsibility for providing the above statement to
the Certificateholders, each Rating Agency, the Servicer, the Responsible
Party and the Depositor is limited to the availability, timeliness and
accuracy of the information derived from the Servicer. The Trustee will
provide the above statement via the Trustee's internet website. The Trustee's
website will initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇.▇▇.▇▇▇/▇▇▇▇ and
assistance in using the website can be obtained by calling the Trustee's
investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. 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)(vi) of this Section
4.03 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall 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;
83
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Section 3.11;
(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, the amount of any Realized
Losses for such Mortgage Loan; and
(viii) any other information reasonably required by the Trustee to
enable it to prepare the monthly statement referred to in Section
4.03(a).
(e) On the 7th Business Day of each month (the "Data File Delivery
Date"), the Servicer shall deliver to the Trustee and (subject to the terms of
that certain confidentiality agreement, dated as of the Closing Date, among
the Depositor, the Purchaser and the Servicer) to the Depositor a Market Value
Change Report and a data file incorporating the fields set forth in the data
file layout set forth on Exhibit L hereto (the "Data File").
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
"LIBOR." Until all of the LIBOR Certificates are paid in full, the Trustee
will at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each LIBOR Determination Date. The Trustee
initially shall designate the Reference Banks (after consultation with the
Depositor). Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Trustee
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank (after consultation
with the Depositor). The Trustee shall have no liability or responsibility to
any Person for (i) the selection of any Reference Bank for purposes of
determining LIBOR or (ii) any inability to retain at least four Reference
Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a good
faith reasonable effort, to obtain quotations from the Reference Banks or to
determine the arithmetic mean referred to in the definition of LIBOR, all as
provided for in this Section 4.04 and the definition of LIBOR. The
establishment of LIBOR and each Pass-Through Rate for the LIBOR Certificates
by the Trustee
84
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. Applied
Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event Applied Realized Loss Amounts are
allocated to any Class of Principal Certificates, their Class Principal
Balances shall be reduced by the amount so allocated, and no funds will be
distributable with respect to the written down amounts (including without
limitation Basis Risk Carry Forward Amounts) or with respect to interest on
the written down amounts on that Distribution Date or any future Distribution
Dates, even if funds are otherwise available for distribution. Notwithstanding
the foregoing, the Class Certificate Balance of each Class of Certificates
that has been previously reduced by Applied Realized Loss Amounts will be
increased, in order of seniority, by the amount of the Subsequent Recoveries
(but not in excess of the Applied Realized Loss Amount allocated to the
applicable Class of Certificates).
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X,
Class P and Class C Certificates in the name of the Depositor or its designee.
On a date as to which the Depositor notifies the Trustee, the Depositor hereby
directs the Trustee to transfer the Class X and Class P Certificates in the
name of the NIM Trustee, or such other name or names as the Depositor shall
request, and to deliver the Class X, Class P and Class C Certificates to
Deutsche Bank National Trust Company, as NIM Trustee, or to such other Person
or Persons as the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor as directed by
that Certificateholder by written wire instructions provided to the Trustee or
(y), in the event that no wire instructions are provided to the Trustee, by
check mailed by first class mail to such Certificateholder at the address of
such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of any
such Certificates or did
85
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless authenticated by the Trustee by manual signature, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication.
On the Closing Date, the Trustee shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Trustee shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing. In
the event, the Depositor or an Affiliate transfers the Class X Certificates,
or a portion thereof, to another Affiliate, it shall notify the Trustee in
writing of the affiliated status of the transferee. The Trustee shall have no
liability regarding the lack of notice with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except with respect to (i) the initial transfer of the Class X, Class R-1 and
Class R-2 Certificates on the Closing Date, (ii) the transfer of the Class X,
Class P or Class C Certificates to the NIM Issuer or the NIM Trustee, or (iii)
a transfer of the Class X, Class P or Class C Certificates from the NIM Issuer
or the NIM Trustee to the Depositor or an Affiliate of
86
the Depositor, in the event that a transfer of a Private Certificate which is
a Physical Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer shall certify to the Trustee in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit H (the "Transferor
Certificate") and either (i) there shall be delivered to the Trustee a letter
in substantially the form of Exhibit I (the "Rule 144A Letter") or (ii) there
shall be delivered to the Trustee at the expense of the transferor an Opinion
of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is
a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer will be deemed to have made as of the transfer date each of the
certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Letter in respect
of such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicer
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor
such information regarding the Certificates, the Mortgage Loans and other
matters regarding the Trust Fund as the Depositor shall reasonably request to
meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
Except with respect to (i) the initial transfer of the Class X, Class
R-1 or Class R-2 Certificates on the Closing Date, (ii) the transfer of the
Class X, Class P or Class C Certificates to the NIM Issuer or the NIM Trustee,
or (iii) a transfer of the Class X, Class P or Class C Certificates to the
Depositor or an Affiliate of the Depositor, no transfer of an ERISA Restricted
Certificate shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Trustee (in the event such Certificate
is a Private Certificate or a Residual Certificate, such requirement is
satisfied only by the Trustee's receipt of a representation letter from the
transferee substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA, a plan subject to Section 4975 of the Code or a plan subject to
any Federal, state or local law ("Similar Law") materially similar to the
foregoing provisions of ERISA or the Code, nor a person acting on behalf of
any such plan or arrangement or 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 C Certificate) that
has been the subject of an ERISA-Qualifying Underwriting, a representation
that the purchaser is an insurance company that is purchasing such
Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates satisfy the requirements for exemptive relief under Sections I
and III
87
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
Title I of ERISA, a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee and the Depositor,
which Opinion of Counsel shall not be an expense of the Trustee, the
Depositor, the Servicer or the Trust Fund, addressed to the Trustee, to the
effect that the purchase and holding of such ERISA-Restricted Certificate will
not constitute or result in a non exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee or the 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.
None of the Class R-1, Class R-2 or Class C Certificates may be sold
to any employee benefit plan subject to Title I of ERISA, any plan subject to
Section 4975 of the Code, or any plan subject to any Similar Law or any person
investing on behalf of or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee
under subparagraph (b) above, the Trustee shall have been furnished with
an
88
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, the
Responsible Party or the Servicer, to the effect that the elimination of such
restrictions will not cause either Trust REMIC to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition
of any tax on the Trust Fund, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
hereby consents to any amendment of this Agreement which, based on an Opinion
of Counsel furnished to the Trustee, is reasonably necessary (a) to ensure
that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to
89
a Person that is not a Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that
is not a Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by
the Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and persons shown on the books of
such indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. None of the
Servicer, the Depositor or the Trustee shall be liable for any delay in
delivery of such instruction and each may conclusively rely on, and shall be
protected in relying on, such instructions. The Depositor shall provide the
Trustee with an adequate inventory of Certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be
90
deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates and the Trustee shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder; provided, that the Trustee shall not by virtue of its assumption of
such obligations become liable to any party for any act or failure to act of
the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee and
the Certificate Registrar, duly executed by the Certificateholder or his
attorney duly authorized in writing. Each Certificate presented or surrendered
for registration of transfer or exchange shall be canceled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice. No service charge shall be made for any registration of transfer or
exchange of Private Certificates, but the Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor and any agent of the Servicer, the Depositor or the Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in
this Agreement and for all other purposes whatsoever, and none of the
Servicer, the Trustee, the Depositor or any agent of the Servicer, the
Depositor or the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or the 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
91
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 agents for such purposes located at DB Services Tennessee, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Transfer
Unit, for purposes of certificate transfers, and DB Services Tennessee, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Securities
Payment Unit, for purposes of the surrender of certificates for the final
distribution. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or
agency.
ARTICLE VI
THE DEPOSITOR AND THE 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 limited partnership, as
the case may be, under the laws of the United States or under the laws of one
of the states thereof and will each obtain and preserve its qualification to
do business as a foreign corporation 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, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, and provided, further, that such merger,
consolidation or succession does not adversely affect the then current rating
or ratings on the Principal 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
92
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, Affiliate 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 or any
other unanticipated or extraordinary expense, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
(or gross negligence in the case of the Depositor) in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither the Depositor nor 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 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, and the 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 and the Trustee or (ii) upon the determination that its duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by 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 and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor and the Trustee. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Responsible Party, the Depositor (and
any Affiliate, director, officer, employee or agent of the Depositor), the
Trustee and the Servicer that did not service during the applicable period,
and hold each of them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any breach by 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
93
Trustee and the Servicer that did not service during the applicable period if
such claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Depositor and
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the
Responsible Party, the Depositor or the Trustee in respect of such claim.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by 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 earlier of the date upon
which the Servicer obtains actual knowledge of such failure and the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Depositor, or by the Trustee, or to the
Servicer, the Depositor and the Trustee by Certificateholders entitled to at
least 25% of the Voting Rights; 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 or by the
Trustee, or to the Servicer, the Depositor and the Trustee by
Certificateholders of Certificates entitled to at least 25% of the Voting
Rights and (ii) actual knowledge of such failure by a Servicing Officer of the
Servicer; provided, however, that in the case of a failure or breach that
cannot be cured within 30 days after notice or actual knowledge by 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) the failure by the Servicer in any month, (i) to deliver to the
Trustee and the Depositor the Data File and the Market Value Change Report on
the Data File Delivery Date, or (ii) to deliver the Servicer Remittance Report
to the Trustee, and in each case such failure continues uncured for more than
30 days after the earlier of the date upon which the Servicer obtains actual
knowledge of such failure and the date upon which written notice of such
failure shall have been given to the Servicer.
(d) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or
94
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
(e) 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
(f) 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
(g) 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
(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 and which continues unremedied for a
period of thirty days after the earlier of the date upon which the Servicer
obtains actual knowledge of such failure and the date upon which written
notice of such breach is given to the Servicer by the Trustee, by the
Depositor, or to the Servicer, the Trustee and the Depositor by
Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or
(i) any reduction, withdrawal or qualification of the servicer rating
of a Servicer by any Rating Agency which results in the inability of a
Servicer to act as a primary or special servicer for or any mortgage backed or
asset backed transaction rated or to be rated by any rating agency.
If an Event of Default described in clauses (a) through (i) of this
Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, or at the
direction of Certificateholders entitled to a majority of the Voting Rights
the Trustee shall, by notice in writing to the 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; provided that
failure to give such notice shall not constitute a waiver of such Event of
Default. The Trustee, upon a Responsible Officer having actual knowledge of
such default, shall deliver a written notice to the Servicer of the
95
default on any Remittance Date on which a Servicer fails to make any deposit
or payment required pursuant to this Agreement (including, but not limited to
Advances, to the extent required by this Agreement); provided, however, that
if an Event of Default occurs due to the failure of a Servicer to make an
Advance to the extent required, the Trustee, as successor Servicer, or another
successor Servicer shall, prior to the next Distribution Date, immediately
make such Advance. Any such notice to a Servicer shall also be given to each
Rating Agency and the Depositor. Notwithstanding any other provision of this
Agreement, any remedy with respect to clauses (a) or (g) of this Section 7.01
shall be effective only if taken no later than 8:00 AM Eastern time on the
Business Day immediately following (i) with respect to clause (a) of this
Section 7.01, the date of written notice to the Servicer, or (ii) with respect
to clause (g) of this Section 7.01, the related Remittance Date. 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 of such predecessor Servicer, 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, including Servicing Advances
incurred prior to but not invoiced until after the date of termination, in
accordance with the terms of this Agreement. In addition, the Servicer shall
continue to be entitled to the benefits of Section 6.03, notwithstanding any
termination hereunder, with respect to events occurring prior to such
termination.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Trustee gives, and the Servicer receives a notice of termination
pursuant to Section 7.01, the Trustee shall, subject to and to the extent
provided in Sections 3.06 and 7.03, and subject to the rights of the Trustee
to appoint a successor Servicer, 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 immediately assume all of the obligations of the
Servicer to make P&I Advances and Servicing Advances as successor Servicer and
shall assume and be subject to all the other responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law as soon as practicable but in no event
later than 90 days after the receipt by the Servicer of the notice of
termination pursuant to Section 7.01. As compensation therefor, the Trustee
shall be entitled to all funds relating to the Mortgage Loans that 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
96
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 as provided herein).
Notwithstanding the foregoing, if the Trustee has become the successor to the
Servicer in accordance with this Section 7.02, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from
making P&I Advances and Servicing Advances pursuant to Section 4.01 or if it
is otherwise unable to so act, or, at the written request of
Certificateholders entitled to a majority of the Voting Rights, appoint, or
petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not
adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer. No
such appointment of a successor to the Servicer hereunder shall be effective
until the Depositor shall have consented thereto. Any successor to the
Servicer shall be an institution which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
approved seller/servicer in good standing, which has a net worth of at least
$30,000,000, which is willing to service the Mortgage Loans and which executes
and delivers to the Depositor and the Trustee an agreement accepting such
delegation and assignment, containing an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 incurred
prior to termination of the Servicer under Section 7.01), with like effect as
if originally named as a party to this Agreement; provided, that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced, as a
result of such assignment and delegation. Pending appointment of a successor
to the Servicer hereunder, the Trustee, unless the Trustee is prohibited by
law from so acting, shall, subject to Section 3.05, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it, the Depositor and such successor shall
agree; provided, however, that no such compensation shall be in excess of the
Servicing Fee and amounts paid to the Servicer from investments. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. Neither the Trustee nor
any other successor Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the Servicer to deliver or provide, or any delay in delivering
or providing, any cash, information, documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall provide notices to the Mortgagors,
transfer the Servicing Files to a successor Servicer and pay all of its own
out-of-pocket costs and expenses related to such obligations. In addition, all
Servicing Transfer Costs incurred by parties other than the terminated
Servicer shall be paid by the terminated Servicer promptly upon presentation
of reasonable documentation of such costs. If such predecessor Servicer
defaults in its obligations to pay such costs, such costs shall be paid by the
successor Servicer (in which case the successor Servicer, shall be entitled to
reimbursement therefor from the Trust Fund, or if the successor Servicer fails
to pay, the Trustee pays such amounts from the Trust Fund). If the Trustee is
the predecessor Servicer (except in the case where the Trustee in its role as
successor Servicer is being terminated pursuant to Section 7.01 by reason of
an Event of Default caused solely by the
97
Trustee as the successor Servicer and not by the predecessor Servicer's
actions or omissions), such costs shall be paid by the prior terminated
Servicer promptly upon presentation of reasonable documentation of such costs.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of Servicer, in accordance with applicable federal
and state law, and shall, during the term of its service as Servicer, maintain
in force the policy or policies that the Servicer is required to maintain
pursuant to Section 3.13.
Any such successor Servicer shall be required to satisfy the
requirements of a successor Servicer under this Section 7.02.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders and to each
Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform such duties and
only such duties as are specifically set forth in this Agreement. In case an
Event of Default has occurred and remains uncured, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that are specifically required to be furnished
pursuant to any provision of this Agreement shall examine them to determine
whether they are in the form required by this Agreement. The Trustee shall not
be responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order, or other instrument.
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
98
of the duties and obligations specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee, and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine
and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
99
(f) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security and except with respect to the investment of funds in the
Distribution Account not made at the direction of the Depositor during the
Trustee Float Period);
(h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof except as otherwise provided in Section 7.01; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan
or related document other than with respect to the Trustee's execution and
authentication of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to
the Depositor or the Servicer in respect of the Mortgage Loans or deposited in
or withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended
not as a personal undertaking or agreement by the Trustee but is made and
intended for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Trustee.
100
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the
Distribution Account on each Distribution Date the Trustee Fee for the
Distribution Date and, during the Trustee Float Period, any interest or
investment income earned on funds deposited in the Distribution Account. The
Trustee and any director, officer, employee, or agent of the Trustee shall be
indemnified by the Trust Fund and held harmless against any loss, liability,
or expense (including reasonable attorneys' fees) incurred in connection with
any claim or legal action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of
the Servicer's obligations in connection with this Agreement for which the
Servicer has performed its obligation to indemnify the Trustee pursuant to
Section 6.05, (ii) resulting from any breach of the Responsible Party's
obligations in connection with this Agreement for which the Responsible Party
has performed its obligation to indemnify the Trustee pursuant to Section
2.03(h), or (iii) incurred because of willful misfeasance, bad faith, or
negligence in the performance of any of the Trustee's duties under this
Agreement. This indemnity shall survive the termination of this Agreement or
the resignation or removal of the Trustee under this Agreement. Without
limiting the foregoing, except as otherwise agreed upon in writing by the
Depositor and the Trustee, and except for any expense, disbursement, or
advance arising from the Trustee's negligence, bad faith, or willful
misfeasance, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the
Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the Certificates;
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement; and
(C) printing and engraving expenses in connection with preparing any
Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and
doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to supervision
or
101
examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to
time as is sufficient to avoid such reduction) as evidenced in writing by each
Rating Agency. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with this Section 8.06,
the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor or the Servicer other than the Trustee in its role
as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by
a successor trustee in accordance with Section 8.08 meeting the qualifications
set forth in Section 8.06. If no successor trustee meeting such qualifications
shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice or resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by
the Depositor, or if at any time the Trustee shall become incapable of acting,
or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is
located and the imposition of such tax would be avoided by the appointment of
a different trustee, then the Depositor or the Servicer may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one copy
of which shall be delivered to the Trustee, one copy to the Servicer and one
copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.08.
102
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 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.
103
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
104
Statement, shall constitute, and that the conduct of matters relating to such
assets shall be such as to qualify such assets as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of each Trust REMIC described in the Preliminary Statement and that in
such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form-1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each Trust
REMIC described in the Preliminary Statement containing such information and
at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish to Certificateholders the
schedules, statements or information at such times and in such manner as may
be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the
Code;
(c) make an election that each of the Lower-Tier REMIC and the
Upper-Tier REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including the calculation of any original issue
discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non-Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either
Trust REMIC created hereunder;
105
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on either Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign
such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the fair market value and adjusted
basis of the assets determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
(k) as and when necessary and appropriate, represent either Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of either Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of either Trust REMIC, and otherwise act
on behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for the Lower-Tier REMIC and the
Upper-Tier REMIC, respectively, within the meaning of Treasury Regulations
Section 1.860F-4(d), and the Trustee is hereby designated as agent of such
Certificateholder for such purpose (or if the Trustee is not so permitted,
such Holder shall be the Tax Matters Person in accordance with the REMIC
Provisions). In such capacity, the Trustee shall, as and when necessary and
appropriate, represent each Trust REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of each
Trust REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of either
Trust REMIC, and otherwise act on behalf of each Trust REMIC in relation to
any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to receive Prepayment Premiums, the rights of the Class C Certificateholders
to receive payment from the Servicer of the Fair Market Value Excess, on or
after the Optional Termination Date, by the Servicer of all Mortgage Loans
(and REO Properties) and payment in full of the other Clases of Certificates,
the rights of the Class X Certificateholders to receive amounts from the
Excess Reserve Fund Account (subject to the obligation to pay Basis Risk Carry
Forward Amounts) and the rights of the Principal Certificateholders to receive
Basis Risk Carry Forward Amounts as the beneficial ownership of interests in a
grantor trust and not as obligations of any Trust REMIC created hereunder, for
federal income tax purposes. The Trustee shall file or cause to be filed
106
with the Internal Revenue Service Form 1041 or such other form as may be
applicable and shall furnish or cause to be furnished, to the Class P
Certificateholders, Class X Certificateholders and the Principal
Certificateholders, the respective amounts described above that are received,
in the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement, the
Depositor shall provide to the Trustee within ten days after the Closing Date
all information or data that the Trustee requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Principal Certificates of the right to receive Basis Risk Carry
Forward Amounts from the Excess Reserve Fund Account. Unless otherwise advised
by the Depositor in writing, for federal income tax purposes, the Trustee is
hereby directed to assign a value of zero to the right of each Holder of a
Principal Certificate to receive the related Basis Risk Carry Forward Amount
for purposes of allocating the purchase price of a Principal Certificate
acquired by an initial Holder thereof between such right and the related
Upper-Tier Regular Interest. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of either Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to either Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including, if applicable, any minimum tax imposed on either Trust REMIC
pursuant to Sections 23153 and 24874 of the California Revenue and Taxation
Code, if not paid as otherwise provided for herein, the tax shall be paid by
(i) the Trustee if such tax arises out of or results from negligence of the
Trustee in the performance of any of its obligations under this Agreement,
(ii) the 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, (iii) the Responsible Party if such tax
arises out of or results from the Responsible Party's obligation to repurchase
a Mortgage Loan pursuant to Section 2.03, or (iv) in all other cases, or if
the Trustee, the Servicer or the Responsible Party fails to honor its
obligations under the preceding clause (i), (ii), or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 4.02(a).
For as long as each Trust REMIC shall exist, the Trustee shall act in
accordance with this Agreement and shall comply with any directions of the
Depositor or a Servicer as provided herein so as to assure such continuing
treatment. The Trustee shall not (a) sell or permit the sale of all or any
portion of the Mortgage Loans unless pursuant to a repurchase in accordance
with this Agreement, or of any investment of deposits in an Account, and (b)
accept any contribution to either Trust REMIC after the Start-up Day without
receipt of a REMIC Opinion.
107
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. Except as
provided for in Section 8.12(b), the Trustee shall prepare on behalf of the
Trust any Forms 8-K and 10-K customary for similar securities as required by
the Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission thereunder, and the Trustee shall sign and file (via the Securities
and Exchange Commission's Electronic Data Gathering and Retrieval System) such
Forms on behalf of the Depositor, if an officer of the Depositor signs the
Certification pursuant to paragraph (b) of this Section 8.12, or otherwise on
behalf of the Trust. In the event the Trustee is signing on behalf of the
Depositor pursuant to the preceding sentence, the Depositor hereby grants to
the Trustee a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until the
earlier of either (i) receipt by the Trustee from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust.
Notwithstanding the foregoing, the Trustee shall prepare such Form 10-K to be
signed by the Depositor and the Depositor shall sign such form unless the
Securities and Exchange Commission has indicated that it will accept a
Certification signed by the Depositor where the related Form 10-K is signed by
the Trustee on behalf of the Depositor.
(b) The Depositor shall prepare or cause to be prepared and file the
current Report on Form 8-K attaching this Agreement as an exhibit and,
thereafter, each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. On or
prior to March 30th of each year (or such earlier date as may be required by
the Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission), the Trustee shall file a Form 10-K, in substance as required by
applicable law or applicable Securities and Exchange Commission staff's
interpretations. Such Form 10-K shall include as exhibits 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 (and upon which the Trustee may
rely in delivering its certification hereunder). If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such
documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to
the Trustee's inability or failure to obtain any information not resulting
from its own negligence, willful misconduct or bad faith. The Form 10-K shall
also include a certification in the form attached hereto as Exhibit M (the
"Certification"), which shall, except as described below, be signed by the
senior officer of the Depositor in charge of securitization. Notwithstanding
the foregoing, if it is determined by the Depositor that the Certification may
be executed by multiple persons, the Trustee shall sign the Certification in
respect of items 1 through 3 thereof and the 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 N) for the benefit of the Depositor and its officers,
directors and Affiliates in respect of items 1 through 3 of the Certification
(provided, however, that the Trustee shall not undertake an analysis of the
108
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 by March 25 for filing by March 30th of each year (or
if not a Business Day, the immediately preceding Business Day). In addition,
(i) the Trustee shall indemnify and hold harmless the Depositor and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 8.12(c) or the
Trustee's negligence, bad faith or willful misconduct in connection therewith,
and (ii) 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
and the Interest Rate Corridor Agreement. For federal income tax purposes, the
Trustee shall treat the Excess Reserve Fund Account and the Interest Rate
Corridor Agreement as beneficially owned by the holders of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust
under subpart E, Part I of subchapter J of the Code. The Trustee shall treat
the rights that each Class of Principal Certificates has to receive payments
of Basis Risk Carry Forward Amounts from the Excess Reserve Fund Account as
rights to receive payments under an interest rate cap contract written by the
Class X Certificateholders in favor of each Class. Accordingly, each Class of
Principal Certificates will comprise of two components - an Upper-
109
Tier Regular Interest and an interest in an interest rate cap contract, and
the Class X Certificates will be comprised of three components - an Upper-Tier
Regular Interest, an interest in the Interest Rate Corridor Agreement and
ownership of the Excess Reserve Fund Account, subject to an obligation to pay
Basis Risk Carry Forward Amounts. The Trustee shall allocate the issue price
for a Class of Certificates among the respective components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Trustee is hereby
directed to assign an aggregate value of $5,000 to the rights of all Holders
of Principal Certificates to receive the related Basis Risk Carry Forward
Amount for purposes of allocating the purchase price of an initial Principal
Certificateholder between such right and the related Upper-Tier Regular
Interest.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans. Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the 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 Servicer of all Mortgage Loans (and REO
Properties) at the price (the "Termination Price") equal to the greater of (1)
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 Servicer at
its expense, plus accrued and unpaid interest on the related Mortgage Loan at
the applicable Mortgage Interest Rate and (y) the unpaid principal balance of
each Mortgage Loan related to any REO Property, in each case plus accrued and
unpaid interest thereon at the applicable Mortgage Interest Rate and (2) the
aggregate fair market value of each Mortgage Loan and any REO Property, as
determined by the highest bid received by the Trustee from closed bids
solicited by the Depositor or its designee from at least three recognized
broker/dealers (one of which may be an affiliate of the Depositor) as of the
close of business on the third Business Day preceding the date upon which a
Notice of Final Distribution is furnished to Certificateholders pursuant to
Section 9.02, plus accrued and unpaid interest on the Mortgage Loans at the
applicable Mortgage Interest Rate; 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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
The proceeds of the sale of such assets of the Trust (other than,
with respect to any Mortgage Loan and the related property, an amount equal to
the excess, if any, of the amount in Section 9.01(a)(2) over the sum of the
amount in Section 9.01(a)(1) (such excess, the "Fair Market Value Excess"))
will be distributed to the holders of the Certificates in accordance with
Section 4.01. Any Fair Market Value Excess received in connection with the
purchase of the
110
Mortgage Loans and REO Properties will be distributed to the holders of the
Class C Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class C Certificates, the
proceeds of such a purchase will be treated as a prepayment of the Mortgage
Loans for purposes of distributions to Certificateholders. Accordingly, the
exercise by the Servicer of its option to purchase the Mortgage Loans and REO
Properties will result in the final distribution on the Certificates on that
Distribution Date.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer notifies the Trustee that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Trustee shall promptly
send a Notice of Final Distribution to each Certificateholder. If the Servicer
elects to terminate the Trust Fund pursuant to clause (a) of Section 9.01, it
shall notify the Depositor and the Trustee of the final Distribution Date and
of the applicable repurchase price of the Mortgage Loans and REO Properties by
no later than the 10th day of the month of the final distribution.
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 remit the applicable Termination Price in immediately available funds at
least two Business Days prior to the applicable Distribution Date and 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. During the time such funds are held in such
Collection Account, such funds shall be invested, at the direction of the
Servicer, in Permitted Investments, and the Servicer shall be entitled to all
income from such investments, and shall be responsible for all losses from
such investments. In connection with any such termination of the Trust Fund,
the Servicer shall cause all funds in Collection Account, including the
applicable Termination Price for the Mortgage Loans and REO Properties, to be
remitted to the Trustee for deposit in the Distribution Account on the
Business Day prior to the applicable Distribution Date. Upon such final
deposit with respect to the Trust Fund and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the
Servicer or its designee the Custodial Files for the Mortgage Loans.
111
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 Certificates), the Certificate Balance thereof plus for each such Class and
the Class X Certificates accrued interest thereon in the case of an interest
bearing Certificate and all other amounts to which such Classes are entitled
pursuant to Section 4.02, (ii) as to the Class C Certificates, upon any
exercise of the purchase option set forth in clause (a) of Section 9.01, held
by the Trust after the distribution pursuant to clause (i) above and (iii) as
to the Residual Certificates, the amount, if any, which remains on deposit in
the Distribution Account after application pursuant to clause (i) above (other
than the amounts retained to meet claims, which retained amounts shall also be
released to the Class C Certificates or the Residual Certificates, as
applicable, as and to the extent such amounts shall no longer be required to
be so retained). The foregoing provisions are intended to distribute to each
Class of Regular Certificates any accrued and unpaid interest and principal to
which they are entitled based on the Pass-Through Rates and actual Class
Certificate Balances set forth in the Preliminary Statement upon liquidation
of the Trust).
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
purchase option described in clause (a) of Section 9.01 is exercised, the
Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel
(a "REMIC Opinion"), at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i)
result in the imposition of taxes on "prohibited transactions" on either Trust
REMIC as defined in Section 860F of the Code, or (ii) cause either Trust REMIC
to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to the
Servicer or its designee, and, by the next Distribution Date after such sale,
shall distribute to the Certificateholders the proceeds of such sale in
complete liquidation of each of the Trust REMICs; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Trust REMICs stating that pursuant to Treasury
Regulations Section 1.860F 1, the
112
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 pursuant to
Section 9.01(a).
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Responsible Party, the Servicer and the Trustee by
written agreement and without the consent of any of the Certificateholders (i)
to cure any ambiguity or mistake, (ii) to correct any defective provision
herein or to supplement any provision herein which may be inconsistent with
any other provision hereof, (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 herein; provided, that any such
amendment made 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 qualification, downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the
materiality of any such amendment and will represent a determination only as
to the credit issues affecting any such rating. The Trustee, the Depositor,
the Responsible Party and the Servicer also may at any time and from time to
time amend this Agreement by written agreement and without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the
risk of the imposition of any tax on either Trust REMIC pursuant to the Code
that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code;
provided, that the Trustee has been provided an Opinion of Counsel, which
opinion shall be an expense of the party requesting such opinion but in any
case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% 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)
113
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless (i) it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either Trust REMIC or the
Certificateholders or cause either Trust REMIC to fail to qualify as a REMIC
or the grantor trust portion of the Trust Fund as a grantor trust at any time
that any Certificates are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a
copy of such notice to the Trustee) of such amendment, stating the provisions
of the Agreement to be amended.
The Responsible Party shall be obligated to execute any amendment to
this Agreement, unless such amendment would adversely affect in any material
respect the right or obligation of the Responsible Party.
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.
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
114
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, shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
(iv) The repurchase of Mortgage Loans pursuant to Sections 2.03 or
2.07; and
115
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly make available on its
internet website to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to
Sections 2.07 or 3.28.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor or GS Mortgage Securities Corp. or ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance
Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Asset Management Group/Senior Asset Manager,
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 Responsible
Party, to Ameriquest Mortgage Company, ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or such other address as
may be hereafter furnished to the Depositor and the Trustee by the Responsible
Party in writing, (c) in the case of the Countrywide Servicing, to Countrywide
Home Loans Servicing LP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇, or such other address as may be hereafter furnished to
the Depositor and Trustee by the Servicer in writing, (d) in the case of the
Trustee to the Corporate Trust Office, Deutsche Bank National Trust Company,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust
Administration - GS0510, or such other address as the Trustee may hereafter
furnish to the Depositor or Servicer, 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)
Notwithstanding anything to the contrary contained herein, except as provided
in Section 6.02, this Agreement may not be assigned by the Servicer without
the prior written consent of the Depositor and the Trustee. In addition, for
so long as a Servicer is acting as a Servicer hereunder (i) such Servicer is
hereby authorized to enter into an advance facility ("Advance Facility") under
which (A) such Servicer sells, assigns or pledges to an Advancing Person such
Servicer's rights under this Agreement to be reimbursed for any P&I Advances
or Servicing Advances and/or (B) an Advancing Person agrees to fund some or
all P&I Advances or Servicing Advances required to be made by such Servicer
pursuant to this Agreement and (ii) such Servicer is hereby authorized to
assign its rights to the Servicing Fee; it being understood neither the Trust
Fund nor any party hereto shall have a right or claim (including without
limitation any right of offset) to an Advance
116
Reimbursement Amount so assigned or to the portion of the Servicing Fee so
assigned; it being further understood that upon resignation or termination of
such Servicer and reimbursement of all amounts due to the Servicer hereunder,
the assignment of further Advance reimbursement rights to such Advance
Facility (in the case of clause (i)) and such assignment (in the case of
clause (ii)) shall be terminated with respect to amounts due related to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees
to fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility.
(b) Advance reimbursement amounts ("Advance Reimbursement Amounts")
shall consist solely of amounts in respect of P&I Advances and/or Servicing
Advances made with respect to the Mortgage Loans for which the Servicer would
be permitted to reimburse itself in accordance with this Agreement, assuming
the Servicer had made the related P&I Advance(s) and/or Servicing Advance(s).
(c) The Servicer shall maintain and provide to any successor Servicer
a detailed accounting on a loan by loan basis as to amounts advanced by,
pledged or assigned to, and reimbursed to any Advancing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
(d) An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
(e) Advance Reimbursement Amounts distributed with respect to each
Mortgage Loan shall be allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or
Servicing Advances (as the case may be) made with respect to that Mortgage
Loan on a "first-in, first out" (FIFO) basis. Such documentation shall also
require the Servicer to provide to the related Advancing Person or its
designee loan-by-loan information with respect to each such Advance
Reimbursement Amount distributed to such Advancing Person or Advance Facility
trustee on each Distribution Date, to enable the Advancing Person or Advance
Facility trustee to make the FIFO allocation of each such Advance
Reimbursement Amount with respect to each Mortgage Loan. The Servicer shall
remain entitled to be reimbursed by the Advancing Person or Advance Facility
trustee for all P&I Advances and Servicing Advances funded by the Servicer to
the extent the related rights to be reimbursed therefor have not been sold,
assigned or pledged to an Advancing Person.
(f) Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor and the Servicer without
117
the consent of any Certificateholder, notwithstanding anything to the contrary
in this Agreement, provided, that the Trustee has been provided an Opinion of
Counsel that such amendment has no material adverse effect on the
Certificateholders which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund; provided, further, that the amendment shall not be deemed to
adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency (instead of obtaining an Opinion of Counsel) stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such rating letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. Prior to
entering into an Advance Facility, the Servicer shall notify the lender under
such facility in writing that: (a) the Advances financed by and/or pledged to
the lender are obligations owed to the Servicer on a non recourse basis
payable only from the cash flows and proceeds received under this Agreement
for reimbursement of Advances only to the extent provided herein, and the
Trustee and the Trust are not otherwise obligated or liable to repay any
Advances financed by the lender; (b) the Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as
reimbursement for Advances funded by the lender, subject to the restrictions
and priorities created in this Agreement; and (c) the Trustee shall not have
any responsibility to track or monitor the administration of the financing
arrangement between the Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by
118
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
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 reasonable out-of-pocket expense of the Servicer incident to
the exercise by the Depositor or the Trustee of any right under this Section
10.09 shall be borne by the Servicer. The Servicer may impose commercially
reasonable restrictions on the dissemination of information the Servicer
defines as confidential.
Nothing in this Section 10.09 shall limit the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section. Nothing in this Section 10.09 shall require the
Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. The Servicer shall
not be required to make copies of or to ship documents to any Person who is
not a party to this Agreement, and then only if provisions have been made for
the reimbursement of the costs thereof.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
* * * * * * *
119
IN WITNESS WHEREOF, the Depositor, the Trustee, Countrywide Servicing
and the Responsible Party have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
GS MORTGAGE SECURITIES CORP.
By:___________________________________
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
By: COUNTRYWIDE GP, INC.
By:_____________________________
Name:
Title:
Pooling and Servicing Agreement
AMERIQUEST MORTGAGE COMPANY
By:___________________________________
Name:
Title:
Pooling and Servicing Agreement
Schedule I
Mortgage Loan Schedule
[On File with the Trustee]
S-I-1
Schedule II
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
Representations and Warranties of Countrywide Home Loans Servicing LP,
----------------------------------------------------------------------
as Servicer
-----------
COUNTRYWIDE HOME LOANS SERVICING LP ("Countrywide") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date.
(1) Countrywide is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the State of
Texas, and is duly authorized and qualified to transact any and all
business contemplated by this Pooling and Servicing Agreement to be
conducted by Countrywide in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loan
in accordance with the terms of this Pooling and Servicing Agreement;
(2) Countrywide 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 Countrywide the execution, delivery and performance of this
Pooling and Servicing Agreement; and this Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the Depositor, the Servicer and the Trustee, constitutes a
legal, valid and binding obligation of Countrywide, enforceable against
Countrywide in accordance with its terms, except to the extent that (a)
the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Countrywide, the servicing of the Mortgage Loans by
Countrywide hereunder, the consummation by Countrywide of any other of
the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of Countrywide and will not (A) result in a breach of any term or
provision of the organizational documents of Countrywide or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which Countrywide is a party or by which it may be bound, or any
statute, order or regulation applicable to Countrywide of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Countrywide; and Countrywide is not a party to, bound
by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
S-II-1
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to Countrywide's knowledge, would in the future
materially and adversely affect, (x) the ability of Countrywide to
perform its obligations under this Pooling and Servicing Agreement or
(y) the business, operations, financial condition, properties or assets
of Countrywide taken as a whole;
(4) Countrywide is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ and
an approved servicer for ▇▇▇▇▇▇▇ Mac in good standing;
(5) No litigation is pending against Countrywide that would
materially and adversely affect the execution, delivery or
enforceability of this Pooling and Servicing Agreement or the ability of
Countrywide to service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide of, or compliance by Countrywide with, this
Pooling and Servicing Agreement or the consummation by Countrywide of
the transactions contemplated by this Pooling and Servicing Agreement,
except for such consents, approvals, authorizations or orders, if any,
that have been obtained prior to the Closing Date;
(7) Countrywide covenants that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that
Countrywide can service the Mortgage Loans in accordance with the terms
of this Pooling and Servicing Agreement; and
With respect to each Mortgage Loan, to the extent Countrywide serviced
such Mortgage Loan and to the extent Countrywide provided monthly reports to
the three credit repositories, Countrywide has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit Information Company
(three of the credit repositories), on a monthly basis.
S-II-2
Schedule III
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
Representations and Warranties of Ameriquest Mortgage Company, as the
---------------------------------------------------------------------
Responsible Party, as to the Mortgage Loans
-------------------------------------------
The Responsible Party hereby makes the representations and warranties
set forth in this Schedule III as to the Mortgage Loans only to the Depositor,
Countrywide and the Trustee as of the Closing Date (or such other date as may
be expressly set forth below):
(1) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct as of the Cut-off
Date;
(2) Payments Current. As of the Original Sale Date, all payments
required to be made for the Mortgage Loan under the terms of the
Mortgage Note, other than payments for which the due date was not 30 or
more days prior to the Original Sale Date, had been made and credited.
No Mortgage Loan has been delinquent for 30 or more days at any time
since the origination of the Mortgage Loan;
(3) No Outstanding Charges. As of the Original ▇▇▇▇ Date, all real
estate taxes, insurance premiums, which previously became due and owing
have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due and payable. All governmental
assessments, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid on or
prior to the date on which such charges would constitute a lien on the
related Mortgaged Property. Except for (A) payments in the nature of
escrow payments and (B) interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier to the day which precedes by one month the Due Date of the first
installment of principal and interest, including, without limitation,
taxes and insurance payments, the Responsible Party has not advanced
funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required under the Mortgage Loan;
(4) Original Terms Unmodified. As of the Original Sale Date, the
terms of the Mortgage Note and Mortgage had 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 GSMC or its assignee, and which has been delivered
or caused to be delivered to the Trustee or the Custodian by the
Depositor, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification
had been approved by the title insurer, if any, to the extent required
by the policy, and its terms are reflected on the Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage Loan File delivered to
S-III-1
the Trustee pursuant to the Pooling and Servicing Agreement and the
terms of which are reflected in the related Mortgage Loan Schedule;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto,
and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, as of
the Cut-off Date all buildings or other improvements upon the Mortgaged
Property were insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage meeting Accepted Origination
Practices, as well as the additional requirements set forth in Section
3.13 of the Pooling and Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration. All individual
insurance policies contain a standard mortgagee clause naming the
Responsible Party 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 such
mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain
the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an
opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy covering
the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is
in full force and effect, and will be in full force and effect and inure
to the benefit of the Trustee upon the consummation of the transactions
contemplated by the Pooling and Servicing Agreement. The Responsible
Party has not engaged in, and has no knowledge of, any mortgagors' or
any servicers' having engaged in any act or omission which would impair
the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of such policy,
without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by
the Responsible Party;
(7) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws or all
applicable predatory and abusive lending laws applicable to the
S-III-2
Mortgage Loans, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Responsible Party shall maintain in
its possession, available for GSMC's or the Trustee's inspection, and
shall deliver to the GSMC upon demand, evidence of compliance with all
such requirements;
(8) No Satisfaction of Mortgage. As of the Cut-off Date, 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. Except for the acceptance of a payment on a
day other than the Due Date, the Responsible Party has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure
to perform such action would cause the Mortgage Loan to be in default,
nor has the Responsible Party waived any default resulting from any
action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged
Property is located in the state identified in the Mortgage Loan
Schedule (except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential
properties is a generally-accepted practice, the Mortgaged Property may
be a leasehold estate provided such leasehold meets the standards set
forth in the ▇▇▇▇▇▇ ▇▇▇ Seller's Guide). The Mortgaged Property consists
of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development or a manufactured home,
provided, however, that no Mortgage Loan is a cooperative home. Any
condominium unit or planned unit development shall not fall within any
of the "Ineligible Projects" of part XII, Section 102 of the ▇▇▇▇▇▇ Mae
Selling Guide and shall conform with the Underwriting Guidelines. With
respect to any Mortgage Loan secured by a Mortgaged Property improved by
manufactured housing, (i) such manufactured dwelling shall conform with
the applicable ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements regarding such
dwellings, (ii) the related manufactured housing unit is permanently
affixed to the land, (iii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming the Responsible Party as mortgagee
and (iv) the related Mortgaged Property is not located in the state of
New Jersey. As of the date of origination, no portion of the Mortgaged
Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a
home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair, maintenance and/or
household purposes;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien, with respect to the Mortgage
Loans, of record on a single parcel of real estate constituting the
Mortgaged Property, including all buildings and improvements
S-III-3
on the Mortgaged Property and all additions, alterations and
replacements made at any time. The lien of the Mortgage is subject only
to:
(i) the lien of current real property taxes and assessments not
yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (a) specifically
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal;
and
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
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 with respect to each Mortgage Loan on the property described
therein and Responsible Party has full right to sell and assign the same to
GSMC;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor
or guarantor, if applicable, in connection with a Mortgage Loan are
genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions relating to Prepayment Premiums). All
parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any 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.
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder, and any and
all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;
(13) Ownership. Excluding any pledge obligation pursuant to the
Responsible Party's warehouse lending agreements (which obligation shall
be released on or before the Original Sale Date), the Responsible Party
is the sole owner of record and holder of
S-III-4
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to GSMC, the Responsible Party
will retain the Mortgage Files or any part thereof with respect thereto
not delivered to the Trustee, the Custodian, GSMC or GSMC'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 Responsible Party has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to
GSMC free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with,
any other party, to sell and assign each Mortgage Loan pursuant to the
Pooling and Servicing Agreement and following the sale of each Mortgage
Loan, GSMC will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. The Responsible Party intends to relinquish all
rights to possess, control and monitor the Mortgage Loan. After the
Original Sale Date, the Responsible Party will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Responsible
Party will have no obligation or right to repurchase the Mortgage Loan,
except as provided in the Pooling and Servicing Agreement;
(14) Doing Business. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located, and (2) either (i) organized under the laws of such state, or
(ii) qualified to do business in such state, or (iii) a federal savings
and loan association, a savings bank or a national bank having a
principal office in such state, or (3) not doing business in such state;
(15) LTV; FICO SCORE. As of the Original Sale Date, no Mortgage
Loan has an LTV greater than 100%. At origination of the Mortgage Loan,
the Qualifying FICO Score was not less than 500;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan
for which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable to ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac that was issued by a title insurer licensed and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Responsible Party, 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 (i), (ii), and (iii) of representation 10 of this
Schedule III, and, in the case of adjustable-rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Scheduled Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by
or upon the Mortgaged Property or any interest therein. The title policy
does not contain any special exceptions (other than the standard
exclusions) for
S-III-5
zoning and uses and has been marked to delete the standard survey
exceptions or to replace the standard survey exception with a specific
survey reading. The Responsible Party, its successors and assigns, are
the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect on the Closing Date. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Responsible Party, has
done, by act or omission, anything which would impair the coverage of
such lender's title insurance policy, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be received, retained or realized by
any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by the Responsible Party;
(17) No Defaults. As of the Original Sale Date, there is no
default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event
which would permit acceleration, and neither the Responsible Party nor
any of its Affiliates nor any of their respective predecessors have
waived any default, breach, violation or event which would permit
acceleration;
(18) No Mechanics' Liens. There are no mechanics' or similar liens
or claims which have been filed for work, labor or material (and no
rights are outstanding that under the law could give rise to such liens)
affecting the related Mortgaged Property which are or may be liens prior
to, or equal or coordinate with, the lien of the related Mortgage;
(19) Location of Improvements; No Encroachments. As of the
Original Sale Date, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. The Mortgaged Property and all improvements located
on or being part of the Mortgaged Property are in compliance with all
applicable zoning and building laws or regulations;
(20) Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing
Act, a savings and loan association, a savings bank, a commercial bank,
credit union, insurance company or other similar institution which is
supervised and examined by a federal or state authority. No Mortgage
Loan contains terms or provisions which would result in negative
amortization. The Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with respect
to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Adjustment Date, with
interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (unless the Mortgage
Loan is identified on the related Mortgage Loan Schedule as a Balloon
Mortgage Loan, over an
S-III-6
original term of not more than thirty years from commencement of
amortization. Each Mortgage Loan is payable on the first day of each
month. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. There are
no convertible Mortgage Loans.
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including,
(i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. Upon default
by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale
of, the Mortgaged Property pursuant to the proper procedures, the holder
of the Mortgage Loan will be able to deliver good and merchantable title
to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption or similar
law;
(22) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms generally
acceptable in the secondary market and the Responsible Party has not
made any representations to a Mortgagor that are inconsistent with the
mortgage instruments used;
(23) Occupancy of the Mortgaged Property. As of the Original Sale
Date, the Mortgaged Property is lawfully occupied under applicable law.
All inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property, have
been made or obtained from the appropriate authorities. The Responsible
Party has not received notification from any Governmental Authority that
the Mortgaged Property is in material non-compliance with such laws or
regulation, is being used, operated or occupied unlawfully or has failed
to have or obtain such inspection, licenses or certificates, as the case
may be. The Responsible Party has not received notice of any violation
or failure to conform with any such law, ordinance, regulation,
standard, license or certificate. Except as indicated on the Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of
the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property
as the Mortgagor's primary residence;
(24) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement
or chattel mortgage referred to in clause (10) above;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law
to serve as such, has been properly designated and currently so serves
and is named in the Mortgage (or in the case of a substitution of
trustee, is named in a properly recorded substitution of trustee), and
S-III-7
no fees or expenses are or will become payable by GSMC to the trustee
under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents
constituting the Mortgage File for each Mortgage Loan have been
delivered to GSMC, or its designee;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located (excepting
therefrom mortgage recordation information where such has not been
returned by the applicable county recorder's office and the name of the
assignee). The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Responsible Party are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(28) Due-On-Sale. With respect to each fixed rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in the
event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and such provision is
enforceable. None of the Mortgage Loans are, by their terms, assumable;
(29) No Buydown Provisions, No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to
which Scheduled Payments are paid or partially paid with funds deposited
in any separate account established by the Responsible Party, the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source
other than the Mortgagor nor does it contain any other similar
provisions which may constitute a "buydown" provision. The Mortgage Loan
is not a graduated payment mortgage loan and the Mortgage Loan does not
have a shared appreciation or other contingent interest feature. The
indebtedness evidenced by the Mortgage Note is not convertible to an
ownership interest in the Mortgaged Property or the Mortgager and the
Responsible Party has not financed nor does it own directly or
indirectly, any equity of any form in the Mortgagee or the Mortgagor;
(30) Fraud. As of the Original Sale Date, no fraud was committed
in connection with the origination of any Mortgage Loan. The Responsible
Party does not represent or warrant the accuracy of the qualifying
income stated by the borrower(s) in connection with a Mortgage Loan that
does not require income verification as defined in the Responsible
Party's underwriting guidelines attached hereto as Exhibit I;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Closing have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and
single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first lien
priority by a title insurance policy, an endorsement to the policy
insuring the mortgagee's consolidated interest or by other title
evidence in accordance with Accepted Origination Practices.
S-III-8
The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings. To
the best of the Responsible Party's knowledge, as of the Original Sale
Date, there is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended and each Mortgaged Property is in good
repair. There have not been any condemnation proceedings with respect to
the Mortgaged Property and the Responsible Party has no knowledge of any
such proceedings in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. As of the Cut-off Date, the origination, servicing and
collection practices utilized with respect to the Mortgage Loan have
been in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. With respect to escrow deposits and Escrow Payments, all such
payments are in the possession of the Responsible Party and there exist
no deficiencies in connection therewith for which customary arrangements
for repayment thereof have not been made. Each Mortgage Loan is covered
by a paid in full life of loan, tax service contract and each of these
contracts is assignable to GSMC. All Escrow Payments have been collected
in full compliance with state and federal law and the provisions of the
related voluntary escrow agreement. An escrow of funds is not prohibited
by applicable law and, where requested by the Mortgagor, 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
Responsible Party have been capitalized under the Mortgage or the
Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the
related Mortgage and Mortgage Note on the related Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected
for determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related
Mortgage Note. Any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Scheduled Payment adjustments have been delivered.
Any interest required to be paid pursuant to state, federal and local
law has been properly paid and credited;
(34) HELOC. No Mortgage Loan is an open-ended loan;
(35) No Violation of Environmental Laws. As of the Cut-off Date,
the Mortgaged Property is free from any and all toxic or hazardous
substances, other than those commonly used for homeowner repair
maintenance and/or household purposes, and there exists no pending
action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
S-III-9
(36) Servicemembers Civil Relief Act. As of the Original Sale
Date, the Mortgagor has not notified the Responsible Party, and the
Responsible Party has no knowledge of any relief requested or allowed to
the Mortgagor under the Servicemembers Civil Relief Act of 2003, as
amended, or any similar state statute;
(37) Appraisal. Except with respect to Mortgage Loan's which have
Insured AVM Premiums, the Responsible Party has delivered to GSMC an
appraisal of the Mortgaged Property signed prior to the approval of the
Mortgage application by an appraiser qualified under applicable law who
(i) is licensed in the state where the Mortgaged Property is located,
(ii) has no interest, direct or indirect, in the Mortgaged Property or
in any Loan or the security therefor, and (iii) does not receive
compensation that is affected by the approval or disapproval of the
Mortgage Loan. Each appraisal and appraiser both satisfy the
requirements of Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated. The
appraisal shall have been made within one hundred and eighty (180) days
of the origination of the Mortgage Loan and shall be completed in
compliance with the Uniform Standards of Professional Appraisal
Practice, and all applicable Federal and state laws and regulations. If
an appraisal was made more than one hundred and twenty (120) days before
the origination of the Mortgage Loan, the Responsible Party shall have
received and delivered to GSMC a recertification of the appraisal;
(38) Consent. As of the Cut-off Date, either (a) no consent for
the Mortgage Loan is required by any holder of a superior priority lien
or (b) such consent has been obtained and is contained in the Mortgage
File;
(39) Credit Reporting. The Responsible Party, in its capacity as
initial servicer, for each Mortgage Loan, has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company or their successors on a monthly basis;
(40) Fees Disclosed. All fees and charges (including finance
charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan has been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation;
(41) Insured AVM Premiums. All Insured AVM Premiums have been paid
and the insurance benefits are transferable.
(42) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade in or
exchange of a Mortgaged Property, except for any Mortgage Loans
identified in the related Mortgage Loan Schedule as being subject to an
escrow holdback;
S-III-10
(43) Prior Servicing. Each Mortgage Loan has been serviced in
strict compliance with Accepted Servicing Practices;
(44) Leaseholds. If a Mortgage Loan is secured by a long term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage
of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and an opportunity
to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in
a jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a widely accepted practice;
(45) Prepayment Premium. The Mortgage Loan is subject to a
Prepayment Premium as provided in the related Mortgage Note except as
set forth on the related Mortgage Loan Schedule. With respect to each
Mortgage Loan that has a prepayment fee charge, each such prepayment
penalty is enforceable and has been enforced by the Responsible Party,
and each prepayment fee is enforceable and will be enforced by the
Responsible Party for the benefit of GSMC upon the full and voluntary
principal prepayment, and each Prepayment Premium permitted pursuant to
federal, state and local law and is only payable during the first 3
years of the term of the Mortgage Loan. Each such Prepayment Premium is
in an amount equal to the maximum amount permitted under applicable law;
(46) Predatory Lending Regulations. The Mortgage Loans are not
subject to the requirement of the Home Ownership and Equity Protection
Act of 1994 ("HOEPA") and no Mortgage Loan is subject to, or in
violation of, any applicable federal, state or local law, ordinance or
regulation similar to HOEPA and (2) (i) no Mortgage Loan is a "high
cost" loan as defined by HOEPA or any other applicable predatory or
abusive lending laws and (ii) no Mortgage Loan is a "high cost home",
"covered" (excluding home loans defined as "covered home loans" pursuant
to clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home", "threshold",
"predatory" or similarly classified loan under any other applicable
state, federal or local law (or similarly classified loan using
different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for resident mortgage loans
having high interest rates, points and/or fees). No Mortgage Loan is a
"High Cost Loan" or "Covered Loan", as applicable (as such terms are
defined in the then current Standard & Poor's LEVELS(R) Version 5.6(b),
Appendix E). No Mortgage Loan is a "covered home loan" pursuant to the
New Jersey Home Ownership Security Act of 2002.
S-III-11
There is no Mortgage Loan that was originated on or after October 1,
2002 and before March 7, 2003 which is secured by property located in
the State of Georgia;
(47) Single-premium credit life insurance policy. No Mortgagor was
required to purchase any single premium credit insurance policy (e.g.,
life, disability, accident, unemployment, or health insurance product)
or debt cancellation agreement as a condition of obtaining the extension
of credit. No Mortgagor obtained a prepaid single premium credit
insurance policy (e.g., life, disability, accident, unemployment,
mortgage, or health insurance) in connection with the origination of the
Mortgage Loan; no proceeds from any Mortgage Loan were used to purchase
single premium credit insurance policies or debt cancellation agreements
as part of the origination of, or as a condition to, closing such
Mortgage Loan;
(48) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service
contract and a paid in full, life of loan, flood certification contract
and each of these contracts is assignable to GSMC;
(49) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(50) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with the ▇▇▇▇▇▇
▇▇▇ guidelines for such trusts;
(51) Recordation. Each original Mortgage was recorded, or has been
delivered to the appropriate public recording office for recordation,
and, except for those Mortgage Loans subject to the MERS identification
system, all subsequent assignments of the original Mortgage (other than
the assignment to the GSMC) have been delivered to the Responsible Party
in recordable form, other than the insertion of any necessary Mortgage
recording information;
(52) Compliance with Anti-Money Laundering Laws. The Responsible
Party has materially complied with all applicable anti-money laundering
laws and regulations, including without limitation the USA Patriot Act
of 2001;
(53) No Balloon Mortgage Loans. The Mortgage Loan is not a Balloon
Mortgage Loan unless specifically listed on the related Mortgage Loan
Schedule;
(54) Litigation. No Mortgage Loan is subject to any outstanding
litigation for fraud, origination, predatory lending, servicing or
closing practices;
(55) Origination Practices. No borrower was encouraged or required
to select a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination, such
borrower did not qualify taking into account credit history and
debt-to-income ratios for a lower-cost credit product then offered by
the Mortgage Loan's originator or any affiliate of the Mortgage Loan's
originator; and
S-III-12
(56) Arbitration. With respect to any Mortgage Loan originated on
or after August 1, 2004, neither the related Mortgage nor the related
Mortgage Note requires the Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
S-III-13
Schedule IV
Representations and Warranties of Ameriquest Mortgage Company,
--------------------------------------------------------------
as Responsible Party
--------------------
Ameriquest Mortgage Company, (the "Responsible Party") hereby makes the
representations and warranties set forth in this Schedule IV to the Depositor,
Countrywide Servicing and the Trustee, as of the Closing Date, or if so
specified herein, as of the Cut-off Date. Capitalized terms used but not
otherwise defined in this Schedule IV shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series.
(a) Due Organization and Authority. As of the Cut-off Date, the
Responsible Party is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware and has all licenses necessary to carry on its business
as now being conducted and is licensed, qualified and in good
standing in each state wherein it owns or leases any material
properties or where a Mortgaged Property is located, if the laws
of such state require licensing or qualification in order to
conduct business of the type conducted by the Responsible Party,
and in any event the Responsible Party is in compliance with the
laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan; the Responsible Party
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 by the
Responsible Party 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 Responsible Party, regardless
of whether such enforcement is sought in a proceeding in equity or
at law; and all requisite corporate or other action has been taken
by the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party
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 Responsible Party, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by the
Responsible Party 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 Responsible Party, the sale of the Mortgage Loans to GSMC, 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 Responsible Party's
charter, by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which the
Responsible Party is now a party or by which it is bound,
S-IV-1
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 Responsible
Party 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 GSMC to realize the full amount of any
insurance benefits accruing pursuant to the Pooling and Servicing
Agreement;
(d) Ability to Perform; Solvency. As of the Cut-off Date, the
Responsible Party 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 Responsible Party is solvent and
the sale of the Mortgage Loans will not cause the Responsible
Party to become insolvent. The sale of the Mortgage Loans was not
undertaken with the intent to hinder, delay or defraud any of
Responsible Party's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party,
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, is reasonably likely to result in any material adverse
change in the business, operations, financial condition,
properties or assets of the Responsible Party, or in any material
impairment of the right or ability of the Responsible Party to
carry on its business substantially as now conducted, or in any
material liability on the part of the Responsible Party, 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 Responsible Party contemplated herein,
or which would be likely to impair the ability of the Responsible
Party to perform under the terms of this Agreement. There is no
action, suit, proceeding or investigation pending against the
Responsible Party with respect to the Mortgage Loans relating to
fraud, predatory lending, servicing or closing practices;
(f) No Consent Required. As of the Cut-off Date, no consent, approval,
authorization or order of, or registration or filing with, or
notice to any court or governmental agency or body is required for
the execution, delivery and performance by the Responsible Party
of or compliance by the Responsible Party with this Agreement or
the Mortgage Loans, the delivery of the Mortgage Files to GSMC or
its designee 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 selected from among the
outstanding one- to four-family mortgage loans in the Responsible
Party's portfolio at the Original Sale Date as to which the
representations and warranties set forth in Schedule III hereto
could be made and such selection was not made in a manner so as to
affect adversely the interests of GSMC;
S-IV-2
(h) Sale Treatment. The Responsible Party 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
Responsible Party and the Responsible Party has determined that
the disposition of the Mortgage Loans will be afforded sale
treatment for tax and accounting purposes;
(i) No Untrue Information. Neither this Agreement nor any information,
statement, tape, diskette, report, form, or other document
furnished by or on behalf of the Responsible Party or to be
furnished by or on behalf of the Responsible Party pursuant to
this Agreement contains 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. The Responsible Party has delivered to GSMC
financial statements as to its last three complete fiscal years
and any later quarter ended more than 60 days prior to the
execution of this Agreement. All such financial statements fairly
present the pertinent results of operations and changes in
financial position for each of such periods and the financial
position at the end of each such period of the Responsible Party
and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles of the United States
consistently applied throughout the periods involved, except as
set forth in the notes thereto. In addition, the Responsible Party
has delivered information as to its loan gain and loss experience
in respect of foreclosures and its loan delinquency experience for
the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and mortgage loans serviced
for others during such period, and all such information so
delivered shall be true and correct in all material respects.
There has been no change in the business, operations, financial
condition, properties or assets of the Responsible Party since the
date of the Responsible Party's financial statements that would
have an adverse effect on its ability to perform its obligations
under this Agreement. The Responsible Party has completed any
forms requested by GSMC in a timely manner and in accordance with
the provided instructions;
(k) No Brokers. The Responsible Party 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;
(l) Responsible Party's Origination. The Responsible Party's decision
to originate or to deny any mortgage loan or to deny any mortgage
loan application is an independent decision based upon the
Responsible Party's underwriting guidelines, and is in no way made
as a result of GSMC's decision to purchase, or not to purchase, or
the price GSMC may offer to pay for, any such mortgage loan, if
originated; and
(m) Lost Note Affidavit. No more than 1% of the Mortgage Loans in a
Mortgage Loan Package shall have a lost note affidavit in lieu of
an original Mortgage Note.
S-IV-3
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[To be added to the Class B-4 Certificates: IF THIS CERTIFICATE IS A PHYSICAL
CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A
TRANSFEROR CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE
144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT J 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.
[To be added to the Class B-4 Certificates while they remain non-investment
grade Certificates: NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE,
OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A
PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE
TRANSFEREE IS AN INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING
THE ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY
SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR, THE TRUSTEE OR THE SERVICER TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR
A-1
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE
VOID AND OF NO EFFECT.]
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 the Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
[To be added to the Class B-4 Certificates: 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, 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.]
Certificate No. :
Cut-off Date : August 1, 2005
First Distribution Date : September 25, 2005
Initial Certificate Balance of this
Certificate ("Denomination") :
------------
A-2
Initial Certificate Balances of all
Certificates of this Class : ________________ _____________
CUSIP
ISIN
A-3
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates, Series 2005-10
[Class A-] [Class M-] [Class B-]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above referenced Class.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Responsible Party, the Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination
of this Certificate by the aggregate of the denominations of all Certificates
of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of
August 1, 2005 (the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as servicer
(the "Servicer"), Ameriquest Mortgage Company, as responsible party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Authenticated:
By:
------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
A-5
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name
this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to
each Distribution Date is the close of business on the last day of the
Interest Accrual Period immediately preceding such Distribution Date;
provided, however, that for any Definitive Certificates, the Record Date shall
be the last Business Day of the month preceding the month in which such
Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five 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 Responsible Party, the Servicer and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any
A-6
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, the Responsible Party 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.
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_________________________________________
Signature by or on behalf of assignor
A-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ,__________________________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number __________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________________________,
as its agent.
A-9
EXHIBIT B
FORM OF CLASS R-1 AND CLASS R-2 CERTIFICATES
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. : [R-1][R-2]
Cut-off Date : August 1, 2005
First Distribution Date : September 25, 2005
Initial Certificate Balance of this : $100
Certificate ("Denomination")
Initial Certificate Balance of all $100
Certificates of this Class
CUSIP :
ISIN :
B-1
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates, Series 2005-10
Class [R-1][R-2]
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, the Responsible Party or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [_____________________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to
the Class R Certificates pursuant to a Pooling and Servicing Agreement dated
as of August 1, 2005 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as servicer
(the "Servicer"), Ameriquest Mortgage Company, as responsible party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class [R-1][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.
B-2
Each Holder of this Class [R-1][R-2] Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class [R-1][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-1][R-2] Certificate are expressly subject to the following provisions: (i)
each Person holding or acquiring any Ownership Interest in this Class
[R-1][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-1][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-1][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-1][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-1][R-2] Certificate, (C) not to cause income with respect to the Class
[R-1][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-1][R-2] Certificate or to cause the Transfer of the Ownership
Interest in this Class [R-1][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-1][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 authenticated by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Authenticated:
By:
------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
B-4
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name
this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to
each Distribution Date is the last Business Day of the month preceding the
month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five 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 Responsible Party and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the
B-5
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 such
other location specified in the notice to Certificateholders, 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, the Responsible Party 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.
B-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
-------------------------------------
Signature by or on behalf of assignor
B-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ____________, or, if mailed by check, to ______________________.
_______________. Applicable statements should be mailed to ___________________,
______________________________________________________________________________.
This information is provided by ________________________________________,
the assignee named above, or _________________________________________________,
as its agent.
B-8
EXHIBIT C
CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE
FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT J 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, OR IF THE TRANSFEREE IS AN INSURANCE
COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE SATISFY
THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN
THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT
SUBJECT THE TRUSTEE, THE SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN
ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER
OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE
REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE
VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : August 1, 2005
First Distribution Date : September 25, 2005
Percentage Interest of this Certificate
("Denomination") : [_____]%
------------
CUSIP :
C-1
ISIN :
C-2
GS MORTGAGE SECURITIES CORP.,
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates, Series 2005-10
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Responsible Party,
the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [__________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as
of August 1, 2005 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as servicer
(the "Servicer"), Ameriquest Mortgage Company, as responsible party (the
"Responsible Party"), 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 purposes, or such other location specified
in the notice to Certificateholders.
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.
C-3
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement)
and deliver either (i) a Rule 144A Letter, in 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 and the
certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60, or (iii) in the case of a Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments) or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel
satisfactory to the Trustee, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Trust Fund, addressed to the Trustee and
the Depositor to the effect that the purchase and holding of such Certificate
will not constitute or result in a non-exempt prohibited transaction within
the meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
C-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Authenticated:
By:
---------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
C-5
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
applicable to each Distribution Date is the last Business Day of the month
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five 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 Responsible Party and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the
C-6
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 such
other location specified in the notice to Certificateholders in the United
States, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney
duly authorized in writing, and thereupon one or more new Certificates of the
same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party 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.
C-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated:
________________________________________
Signature by or on behalf of assignor
C-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number __________, or, if mailed by check, to ________________________,
______________________________________________________________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or _________________________________________________,
as its agent.
C-9
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE
FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT J 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, OR IF THE TRANSFEREE IS AN INSURANCE
COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE SATISFY
THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE
WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN
THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT
SUBJECT THE TRUSTEE, SERVICER OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION
TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER
OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE
REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
D-1
Certificate No. :
Cut-off Date : August 1, 2005
First Distribution Date : September 25, 2005
Percentage Interest of this
Certificate ("Denomination") : [_____]%
------------
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates, Series 2005-10
Class X
evidencing a percentage interest in the distributions allocable to the
Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Servicer the
Responsible Party or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as
of August 1, 2005 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Ameriquest Mortgage Company, as responsible party
(the "Responsible Party"), Countrywide Home Loans 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 such other location specified in the notice to
Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement)
and deliver either (i) a Rule 144A Letter, in 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
D-3
materially similar provisions of applicable federal, state or local law
("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company and the certificate
has been the subject of an ERISA-Qualifying Underwriting, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, or
(iii) in the case of a Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments) or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using
such plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of the Trustee, the
Depositor or the Trust Fund, addressed to the Trustee and the Depositor to the
effect that the purchase and holding of such Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
D-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Authenticated:
By:
---------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
D-5
GS MORTGAGE SECURITIES CORP.
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
applicable to each Distribution Date is the last Business Day of the month
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five 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 Responsible Party and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the
D-6
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 such
other location specified in the notice to Certificateholders, 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, the Responsible Party 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.
D-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address: .
Dated:
_____________________________________
Signature by or on behalf of assignor
D-8
EXHIBIT E
FORM OF CLASS C CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE
FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT J 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 THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH
PLAN ASSETS OF SUCH A PLAN, OR AN OPINION OF COUNSEL AS DESCRIBED IN THE
AGREEMENT. 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 AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : August 1, 2005
First Distribution Date : September 25, 2005
Percentage Interest of this
Certificate
("Denomination") : [_____]%
------------
CUSIP :
ISIN :
E-1
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-10
Asset-Backed Certificates, Series 2005-10
Class C
evidencing a percentage interest in the distributions allocable
to the Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable as set
forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Servicer the
Responsible Party or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
distributions pursuant to a Pooling and Servicing Agreement dated as of August
1, 2005 (the "Agreement") among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Countrywide Home Loans Servicing LP, as servicer (the
"Servicer"), Ameriquest Mortgage Company, as responsible party (the
"Responsible Party"), 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 such other location specified in the notice to
Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement)
and deliver either (i) a Rule 144A Letter, in 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
E-2
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, or an
opinion of counsel as described in the Agreement, which representation letter
or opinion of counsel shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
E-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
not in its individual capacity,
but solely as Trustee
By:
----------------------------------
Authenticated:
By:
---------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Trustee
E-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2005-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2005-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
applicable to each Distribution Date is the last Business Day of the month
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five 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 Responsible Party and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the
E-5
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 such other location specified in the notice to Certificateholders
in the United States, accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party 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.
E-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
E-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number __________, or, if mailed by check, to ________________________,
______________________________________________________________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ____,
the assignee named above, or ,
as its agent.
E-8
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
___________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Countrywide Home Loans Servicing LP, as
servicer, Ameriquest Mortgage Company, as responsible party,
and Deutsche Bank National Trust Company, as Trustee, GSAA
Trust, 2005-10
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, for each Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan listed in the attached schedule of exceptions)
certifies that it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed Assignment of Mortgage (which may be included
in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to
such Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Trustee has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
F-1
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:____________________________________
F-2
EXHIBIT G
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Responsible Party]
________________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Countrywide Home Loans Servicing LP, as
servicer, Ameriquest Mortgage Company, as responsible party,
and Deutsche Bank National Trust Company, as Trustee
-------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form
provided in Section 2.01 of the Pooling and Servicing Agreement, with
all intervening endorsements showing a complete chain of endorsement
from the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed Assignment of Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or,
if the Responsible Party has certified or the Trustee otherwise knows
that the related Mortgage has not been returned from the applicable
recording office, a copy of the Assignment of Mortgage (excluding
information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment
or assignments of the Mortgage showing a complete chain of assignment
from the originator to the last endorsee.
(v) The original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment, or
a copy thereof certified by the title company.
G-1
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (7)
(solely with respect to original months to maturity), (10) (solely as of
origination, not as of the Cut-off Date) and (15) 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:_________________________________
G-2
EXHIBIT H
RESIDUAL TRANSFER AFFIDAVIT
GSAA HOME EQUITY TRUST 2005-10
Asset-Backed 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 Class [R-1][R-2] Certificate
(the "Certificate") issued pursuant to the Pooling and Servicing Agreement
dated as of August 1, 2005 (the "Agreement"), among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Countrywide Home Loans Servicing, as
servicer, Ameriquest Mortgage Company, as responsible party (the "Responsible
Party"), and Deutsche Bank National Trust Company, as trustee (the "Trustee").
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
H-1
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:
H-2
|_| 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.
H-3
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.
H-4
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__
_____________________________________
H-5
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4934
Re: GSAA Home Equity Trust 2005-10, Asset-Backed
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, (B) after conducting a reasonable investigation of the
financial condition of the Transferee, we have no knowledge and no reason to
believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (C) we have no reason to believe
that the statements made in paragraphs 7, 10 and 11 of the Transferee's
Residual Transfer Affidavit are false.
Very truly yours,
___________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
I-1
EXHIBIT J
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4934
Re: GSAA Home Equity Trust 2005-10, Asset-Backed
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
1A1 Certificate, Class 2A1 Certificate, Class 2A2 Certificate, Class 2A3
Certificate, Class 2A4 Certificate, Class 2A5 Certificate, Class M-1
Certificate, Class M-2 Certificate, Class M-3 Certificate, Class M-4
Certificate, Class M-5 Certificate, Class M-6 Certificate, Class B-1
Certificate, Class B-2 Certificate or a Class B-3 Certificate, or we are not
an employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or a plan subject to any Federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code, nor are
we acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such acquisition, or, with respect to a
Class B-4, Class X or Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, the purchaser is an insurance company that is
purchasing this certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase and holding
of such Certificates satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting on
our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer,
J-1
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, we understand that such Certificates may be resold, pledged
or transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
J-2
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A and (ii) the Buyer satisfies the criteria in the category
marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which
is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
_________________________
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
J-3
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of a State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
J-4
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
__________________________________
Print Name of Transferee
By: __________________________________
Name:
Title:
Date:__________________________________
J-5
ANNEX 2 TO EXHIBIT J
--------------------
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.
J-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
_________________________________
Print Name of Transferee
By: _________________________________
Name:
Title:
IF AN ADVISER:
_________________________________
Print Name of Buyer
Date:_________________________________
J-7
EXHIBIT K
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 2.03 of the
Pooling and Servicing Agreement. (The Company hereby
certifies that the repurchase price has been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Company
hereby certifies that all proceeds of foreclosure,
insurance, condemnation or other liquidation have been
finally received and credited to the Collection Account
pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our
previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Mortgage Loan. If box 4
or 5 above is checked, upon our return of all of the above documents to you as
the Trustee, please acknowledge your receipt by signing in the space indicated
below, and returning this form, if requested.
Address to which Trustee should
K-1
Deliver the Trustee's Mortgage File: _________________________
_________________________
_________________________
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Servicer
By: COUNTRYWIDE GP, INC.
By: ____________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_______________________________________
Name:
Title:
Date:
K-2
EXHIBIT L
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:
1. the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and
signed in the name of the last endorsee. To the extent that there is
no room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge unless the Trustee is
advised by the Responsible Party that state law does not so allow for
the use of allonge. If the Mortgage Loan was acquired by the
Responsible Party 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]"
2. The original of any guaranty executed in connection with the Mortgage
Note.
3. the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If in
connection with any Mortgage Loan, the Responsible Party cannot
deliver or cause to be delivered the original Mortgage with evidence
of recording thereon on or prior to the Closing Date because of a
delay caused by the public recording office where such Mortgage has
been delivered for recordation or because such Mortgage has been lost
or because such public recording office retains the original recorded
Mortgage, the Responsible Party 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 Responsible Party (or certified by the
title company, escrow agent, or closing attorney) stating that such
Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Trustee upon receipt thereof by the
Responsible Party; 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.
4. The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording.
5. The original Assignment of Mortgage for each Mortgage Loan endorsed
in blank and in recordable form.
6. Originals of all intervening Assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of
L-1
recording thereon or a certified true copy of such intervening
Assignments of Mortgage submitted for recording, or if any such
intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded Assignments of Mortgage, the
Responsible Party 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 Responsible Party or a certificate from
an escrow company, a title company or a closing attorney stating that
such intervening Assignment of Mortgage has been dispatched to the
appropriate public recording office for recordation and that such
original recorded intervening Assignment of Mortgage or a copy of
such intervening Assignment of Mortgage certified by the appropriate
public recording office to be a true and complete copy of the
original recorded intervening Assignment of Mortgage will be promptly
delivered to the Trustee upon receipt thereof by the Responsible
Party; 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.
7. The original mortgagee title insurance policy or attorney's opinion
of title and abstract of title or, in the event such original title
policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by
the title insurance company.
8. The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to
document the Mortgage Loan or to service the Mortgage Loan.
L-2
EXHIBIT M
[Intentionally Ommitted]
M-1
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K
Re: GSAA Home Equity Trust 2005-10 (the "Trust") Asset-Backed
Certificates, Series 2005-10, issued pursuant to the Pooling
and Servicing Agreement, dated as of August 1, 2005 (the
"Pooling and Servicing Agreement"), among GS Mortgage
Securities Corp., Deutsche Bank National Trust Company, as
trustee (the "Trustee"), Ameriquest Mortgage Company, as
responsible party, and Countrywide Home Loans Servicing LP,
as servicer (the "Servicer")
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K (the "Annual
Report"), and all reports on Form 8-K containing distribution reports
(collectively with this Annual Report, the "Reports") filed in
respect of periods included in the year covered by this Annual
Report, of the Trust;
2. Based on my knowledge, the information in the Reports, taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by this
Annual Report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under the
Pooling and Servicing Agreement for inclusion in the Reports is
included in the Reports;
4. Based on my knowledge and upon the annual compliance statement
included in this Annual Report and required to be delivered to the
Trustee in accordance with the terms of the Pooling and Servicing
Agreement, and except as disclosed in the Reports, the Servicer has
fulfilled its obligations under the Pooling and Servicing Agreement;
and
5. The Reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon
the report provided by an independent public accountant, after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in
the Pooling and Servicing Agreement, that is included in the Reports.
In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: the
Trustee and the Servicer.
Dated: _________________________
__________________________________
[Signature]
[Title]
N-1
EXHIBIT O
FORM OF TRUSTEE CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAA Home Equity Trust 2005-10 (the "Trust") Asset-Backed
Certificates, Series 2005-10, issued pursuant to the Pooling
and Servicing Agreement, dated as of August 1, 2005 (the
"Pooling and Servicing Agreement"), among GS Mortgage
Securities Corp. (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), Ameriquest
Mortgage Company, as responsible party, and Countrywide Home
Loans Servicing LP, as servicer (the "Servicer")
I, [identify the certifying individual], a [title] of Deutsche Bank National
Trust Company, certify to the Depositor and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K (the "Annual Report")
for the fiscal year [___], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year
covered by the Annual Report (collectively with the Annual Report,
the "Reports"), of the Trust;
2. Based on my knowledge, the information in the Reports, taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by the Annual
Report; and
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under the
Pooling and Servicing Agreement for inclusion in the Reports is
included in the Reports.
Date: _________________________
__________________________________
[Signature]
[Title]
O-1
EXHIBIT P
FORM OF SERVICER CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAA Home Equity Trust 2005-10 (the "Trust") Asset-Backed
Certificates Series 2005-10, issued pursuant to the Pooling
and Servicing Agreement, dated as of August 1, 2005 (the
"Pooling and Servicing Agreement"), among GS Mortgage
Securities Corp. (the "Depositor"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), Ameriquest
Mortgage Company, as responsible party, and Countrywide Home
Loans Servicing LP, as servicer ("Countrywide")
I, [identify the certifying individual], certify to the Depositor, the
Trustee, and their respective officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. Based on our knowledge, the information prepared by Countrywide and
relating to the mortgage loans serviced by the Countrywide pursuant
to the Pooling And Servicing Agreement and provided by Countrywide to
the Trustee in its reports to the Trustee is accurate and complete in
all material respects as of the last day of the period covered by
such report;
2. Based on our knowledge, the servicing information required to be
provided to the Trustee by Countrywide pursuant to the Pooling and
Servicing Agreement has been provided to the Trustee;
3. Based upon the review required under the Pooling and Servicing
Agreement, and except as disclosed in its annual compliance statement
required to be delivered pursuant to the Pooling and Servicing
Agreement, Countrywide as of the last day of the period covered by
such compliance statement has fulfilled its obligations under the
Pooling and Servicing Agreement; and
4. Countrywide has disclosed to its independent auditor, who issues the
independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for it, any significant deficiencies
relating to Countrywide's compliance with the minimum servicing
standards.
Date: _________________________
__________________________________
[Signature]
[Title]