EXHIBIT 4
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GS MORTGAGE SECURITIES CORP.,
Depositor,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
NEW CENTURY MORTGAGE CORPORATION,
Servicer,
NC CAPITAL
CORPORATION,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
------------------------------------------------------------
GSAA HOME EQUITY TRUST
2005-2
ASSET-BACKED CERTIFICATES,
SERIES 2005-2
================================================================================
<PAGE>
TABLE OF
CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01
Definitions....................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans...................................
Section 2.02 Acceptance by the Trustee of
the Mortgage Loans................
Section 2.03 Representations, Warranties
and Covenants of the
Responsible Party and the Servicer.............................
Section 2.04 Non-Qualified
Mortgages........................................
Section 2.05 Execution and Delivery of
Certificates.........................
Section 2.06 REMIC
Matters..................................................
Section 2.07 Representations and
Warranties of the Depositor................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage
Loans.............................
Section 3.02 Subservicing Agreements
between the Servicer and
Subservicers...................................................
Section 3.03 Successor
Subservicers.........................................
Section 3.04 Liability of the
Servicer......................................
Section 3.05 No Contractual Relationship
between Subservicers and the
Trustee........................................................
Section 3.06 Assumption or Termination of
Subservicing Agreements by
Trustee........................................................
Section 3.07 Collection of Certain
Mortgage Loan Payments...................
Section 3.08 Subservicing
Accounts..........................................
Section 3.09 Collection of Taxes,
Assessments and Similar Items;
Escrow Accounts................................................
Section 3.10 Collection
Account.............................................
Section 3.11 Withdrawals from the
Collection Account........................
Section 3.12 Investment of Funds in the
Collection Account and the
Distribution Account...........................................
Section 3.13 Maintenance of Hazard
Insurance, Errors and Omissions
and Fidelity Coverage..........................................
Section 3.14 Enforcement of Due-on-Sale
Clauses; Assumption
Agreements.....................................................
Section 3.15 Realization upon Defaulted
Mortgage Loans......................
Section 3.16 Release of Mortgage
Files......................................
Section 3.17 Title, Conservation and
Disposition of REO Property............
Section 3.18 Notification of
Adjustments....................................
Section 3.19 Access to Certain
Documentation and Information
Regarding the Mortgage Loans...................................
Section 3.20 Documents, Records and Funds
in Possession of the
Servicer to Be Held for the Trustee............................
Section 3.21 Servicing
Compensation.........................................
Section 3.22 Annual Statement as to
Compliance..............................
Section 3.23 Annual Independent Public
Accountants' Servicing
Statement; Financial Statements................................
Section 3.24 Trustee to Act as
Servicer.....................................
Section 3.25 Compensating
Interest..........................................
Section 3.26 Credit Reporting;
Gramm-Leach-Bliley Act.......................
Section 3.27 Excess Reserve Fund Account;
Distribution Account..............
Section 3.28 Optional Purchase of
Delinquent Mortgage Loans.................
Section 3.29 Transfer of Servicing for
the Mortgage Loans...................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01
Advances.......................................................
Section 4.02 Priorities of
Distribution.....................................
Section 4.03 Monthly Statements to
Certificateholders.......................
Section 4.04 Certain Matters Relating to
the Determination of LIBOR.........
Section 4.05 Allocation of Applied
Realized Loss Amounts....................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates...............................................
Section 5.02 Certificate Register;
Registration of Transfer and
Exchange of Certificates.......................................
Section 5.03 Mutilated, Destroyed, Lost
or Stolen Certificates..............
Section 5.04 Persons Deemed
Owners..........................................
Section 5.05 Access to List of
Certificateholders' Names and
Addresses......................................................
Section 5.06 Maintenance of Office or
Agency................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of
the Depositor and the Servicer.......
Section 6.02 Merger or Consolidation of
the Depositor or the Servicer.......
Section 6.03 Limitation on Liability of
the Depositor, the Servicer
and Others.....................................................
Section 6.04 Limitation on Resignation of
the Servicer......................
Section 6.05 Additional Indemnification
by the Servicer; Third Party
Claims.........................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default..............................................
Section 7.02 Trustee to Act; Appointment
of Successor.......................
Section 7.03 Notification to
Certificateholders.............................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the
Trustee..........................................
Section 8.02 Certain Matters Affecting
the Trustee..........................
Section 8.03 Trustee Not Liable for
Certificates or Mortgage Loans..........
Section 8.04 Trustee May Own
Certificates...................................
Section 8.05 Trustee's Fees and
Expenses....................................
Section 8.06 Eligibility Requirements for
the Trustee.......................
Section 8.07 Resignation and Removal of
the Trustee.........................
Section 8.08 Successor
Trustee..............................................
Section 8.09 Merger or Consolidation of
the Trustee.........................
Section 8.10 Appointment of Co-Trustee or
Separate Trustee..................
Section 8.11 Tax
Matters....................................................
Section 8.12 Periodic
Filings...............................................
Section 8.13 Tax Classification of the
Excess Reserve Fund Account..........
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation
or Purchase of the Mortgage
Loans..........................................................
Section 9.02 Final Distribution on the
Certificates.........................
Section 9.03 Additional Termination
Requirements............................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment......................................................
Section 10.02 Recordation of Agreement;
Counterparts.........................
Section 10.03 Governing
Law..................................................
Section 10.04 Intention of
Parties...........................................
Section 10.05
Notices........................................................
Section 10.06 Severability of
Provisions.....................................
Section 10.07 Assignment; Sales; Advance
Facilities..........................
Section 10.08 Limitation on Rights of
Certificateholders.....................
Section 10.09 Inspection and Audit
Rights....................................
Section 10.10 Certificates Nonassessable and
Fully Paid......................
Section 10.11 Waiver of Jury
Trial...........................................
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
Schedule V Representations
and Warranties of New Century
EXHIBITS
Exhibit A Form of
Class A, Class M and Class B Certificates
Exhibit B Form of
Class R Certificate
Exhibit C Form of
Class P Certificate
Exhibit D Form of
Class X Certificate
Exhibit E Form of
Initial Certification of Trustee
Exhibit F Form of
Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer
Affidavit
Exhibit H Form of
Transferor Certificate
Exhibit I Form of
Rule 144A Letter
Exhibit J Form of
Request for Release
Exhibit K Form of
Contents for Each Mortgage File
Exhibit L
Countrywide Reporting Requirements
Exhibit M Form of
Certification to be provided with Form 10-K
Exhibit N Form of
Trustee Certification to be provided to Depositor
Exhibit O Form of
Servicer Certification to be provided to Depositor
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1,
2005,
among GS MORTGAGE SECURITIES CORP., a
Delaware corporation (the "Depositor"),
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership, NC CAPITAL
CORPORATION, a California corporation, NEW
CENTURY MORTGAGE CORPORATION, a
California corporation, 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 Regular Interest and each Class of
Principal Certificates (other than the
right of each Class of Principal
Certificates to receive Basis Risk Carry
Forward Amounts) represents ownership
of a regular interest in a REMIC for
purposes of the REMIC Provisions. The Class
R Certificates represent ownership of the
sole class of residual interest in
each of the Lower Tier REMIC and the Upper
Tier REMIC for purposes of the REMIC
Provisions. The Start-up Day for each REMIC
described herein is the Closing
Date. The latest possible maturity date for
each Certificate is the latest date
referenced in Section 2.06. The Upper Tier
REMIC shall hold as assets the
several classes of uncertificated Lower
Tier Regular Interests, set out below.
The Lower Tier REMIC shall hold as assets
the assets described in the definition
of "Trust Fund" herein (other than the
Prepayment Premiums and the Excess
Reserve Fund Account). Each such Lower Tier
Regular Interest is hereby
designated as a regular interest in the
Lower Tier REMIC. The Class LT-1A1,
Class LT-1A2, Class LT-2A1, Class LT-2A2,
Class LT-2A3, 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 Principal 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
X Certificates represent beneficial
ownership of the Class X Regular Interest
and the Excess Reserve Fund Account
and the Class P Certificates represent
beneficial ownership of the Prepayment
Premiums, which portions of the Trust Fund
shall be treated as a grantor trust.
Corresponding
Upper Tier
Lower Tier Regular Lower Tier
Initial Lower
Tier Principal REMIC Regular
Interest
Interest Rate
Amount
Interest
------------------ ------------- ----------------------------
-------------
Class LT-1A1
(1) 1/2
initial Class Certificate
1A1
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-1A2
(1) 1/2
initial Class Certificate
1A2
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-2A1
(1) 1/2
initial Class Certificate
2A1
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-2A2
(1) 1/2
initial Class Certificate
2A2
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-2A3
(1) 1/2
initial Class Certificate
2A3
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-1
(1) 1/2
initial Class Certificate
M-1
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-2
(1) 1/2
initial Class Certificate
M-2
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-3
(1) 1/2
initial Class Certificate
M-3
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-4
(1)
1/2
initial Class Certificate
M-4
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-5
(1) 1/2
initial Class Certificate
M-5
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-M-6
(1) 1/2
initial Class Certificate
M-6
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-B-1
(1) 1/2
initial Class Certificate
B-1
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-B-2
(1) 1/2
initial Class Certificate
B-2
Balance of Corresponding
Upper Tier REMIC Regular
Interest
Class LT-B-3
(1) 1/2
initial Class Certificate
B-3
Balance of
Corresponding
Upper Tier REMIC Regular
Interest
Class LT-B-4
(1) 1/2
initial Class Certificate
B-4
Balance of Corresponding
Upper Tier REMIC Regular
Interest
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% aggregate Stated
Principal Balance of Group I
Mortgage Loans (5)
Class LT-Group II
(3)
0.001% aggregate Stated
Principal Balance of
Group II Mortgage Loans (5)
Class LT-R
(4)
(4)
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(1) The interest rate with
respect to any Distribution Date for these
interests
is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with
respect to any Distribution Date for the Class
LT-Group I
Interest is a per annum variable rate (expressed as a
percentage
rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with
respect to any Distribution Date for the Class
LT-Group
II Interest is a per annum variable rate (expressed as a
percentage rounded to eight
decimal places) equal to the Loan Group II
Cap.
(4) The Class LT-R Interest is
the sole Class of residual interest in the
Lower Tier
REMIC and it does not have a principal amount or an interest
rate.
(5) 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 definition of "Trust Fund" other
than Prepayment Premiums, the Excess
Reserve Fund Account and the Lower-Tier
Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable
as a reduction of the Lower Tier
Principal Amount of the LT-Accretion
Directed Classes (each such Class will be
reduced by an amount equal to 50% of any
increase in the Overcollateralized
Amount that is attributable to a reduction
in the Class Certificate Balance of
its Corresponding Class) and will be
accrued and added to the Lower Tier
Principal Amount of the Class LT-Accrual
Interest. On each Distribution Date,
the increase in the Lower Tier Principal
Amount of the Class LT-Accrual Interest
may not exceed interest accruals for such
Distribution Date for the Class
LT-Accrual Interest. In the event that: (i)
50% of the increase in the
Overcollateralized Amount exceeds (ii)
interest accruals on the Class LT-Accrual
Interest for such Distribution Date, the
excess for such Distribution Date
(accumulated with all such excesses for all
prior Distribution Dates) will be
added to any increase in the
Overcollateralized Amount for purposes of
determining the amount of interest accrual
on the Class LT-Accrual Interest
payable as principal on the LT-Accretion
Directed Classes on the next
Distribution Date pursuant to the first
sentence of this paragraph. All payments
of scheduled principal and prepayments of
principal generated by the Mortgage
Loans 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 principal
balance of each of the LT-Accretion
Directed Classes is equal to 50% of the
Class Certificate Balance of their
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.
Upper Tier REMIC
The Upper Tier REMIC shall issue the following classes of Upper
Tier
Regular Interests, and each such interest,
other than the Class UT-R Interest,
is hereby designated as a regular interest
in the Upper Tier REMIC.
Upper Tier
Interest Rate
Initial Upper Tier
and
Principal Amount
Corresponding and Corresponding
Corresponding
Upper Tier Class
Class
Class Certificate Class
of
Designation
Pass-Through Rate
Balance
Certificates
---------------- -----------------
-----------------
-------------
Class 1A1
(1)
$ 89,370,000
Class 1A1(10)
Class 1A2
(2)
$ 9,930,000
Class 1A2(10)
Class 2A1
(3)
$188,756,000
Class 2A1(10)
Class 2A2
(4)
$ 57,207,000
Class 2A2(10)
Class 2A3
(5)
$ 48,160,000
Class 2A3(10)
Class M-1
(6)
$ 17,191,000 Class M-1(10)
Class M-2
(6)
$ 15,226,000
Class M-2(10)
Class M-3
(6)
$ 8,596,000
Class M-3(10)
Class M-4
(6)
$ 8,595,000
Class M-4(10)
Class M-5
(6)
$ 8,595,000
Class M-5(10)
Class M-6
(6)
$ 7,367,000
Class M-6(10)
Class B-1
(6)
$ 6,140,000
Class B-1(10)
Class B-2
(6)
$
6,140,000
Class B-2(10)
Class B-3
(6)
$ 4,912,000
Class B-3(10)
Class B-4
(7)
$ 6,385,000
Class B-4(10)
Class X
(8)
0(8)
Class X(8)
Class UT-R
(9)
(9)
Class R
(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 0.270%, (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 0.540%, (ii) the
Loan Group
I Cap and (iii) the WAC Cap.
(2) The Class 1A2 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 0.300%, (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 0.600%, (ii) the
Loan Group
I Cap and (iii) the WAC Cap.
(3) 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 0.140%, (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 0.280%, (ii) the
Loan Group
II Cap and (iii) the WAC Cap.
(4) 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 0.230%, (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 0.460%, (ii) the
Loan Group
II Cap and (iii) the WAC Cap.
(5) 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 0.350%, (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 0.700%, (ii) the
Loan Group
II Cap and (iii) the WAC Cap.
(6) 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
0.430%, 0.470%, 0.500%, 0.700%, 0.750%, 0.850%, 1.300%, 1.450%
and
2.300%,
respectively, and (ii) the WAC Cap or (b) after the first
possible
Optional
Termination Date, the lesser of (i) LIBOR plus 0.645%, 0.705%,
0.750%,
1.050%, 1.125%, 1.275%, 1.950%, 2.175% and 3.450%,
respectively,
and (ii)
the WAC Cap.
(7) The Class B-4 Interests will
bear interest during each Interest Accrual
Period at
a per annum rate equal to (a) on or prior to the 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.
(8) The Class X Interest has an
initial principal balance of $8,595,810.64,
but it
will not accrue interest on such balance but will accrue
interest
on a
notional principal balance. As of any Distribution Date, the Class
X
Interest
shall have a notional principal balance equal to the aggregate
of
the
principal balances of the Lower Tier Regular Interests as of the
first
day of the
related Interest Accrual Period. With respect to any Interest
Accrual
Period, the Class X Interest shall bear interest at a rate
equal
to the
excess, if any, of the WAC Cap over the product of (i) 2 and
(ii)
the
weighted average Lower Tier Interest Rate of the Lower Tier
REMIC
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
and
amounts in the Excess Reserve Fund Account, subject to the
obligation
to make
payments from the Excess Reserve Fund Account in respect of
Basis
Risk Carry
Forward Amounts. For federal income tax purposes, the Trustee
will treat
a Class X Certificateholder's obligation to make payments from
the Excess
Reserve Fund Account as payments made pursuant to an interest
rate cap
contract written by the Class X Certificateholders in favor of
each Class
of Principal Certificates. Such rights of the Class X
Certificateholders and Principal Certificateholders shall be
treated as
held in a
portion of the Trust Fund that is treated as a grantor trust
under
subpart E, Part I of subchapter J of the Code.
(9) The Class UT-R Interest is
the sole class of residual interest in the
Upper Tier
REMIC. The Class UT-R Interest does not have an interest rate.
(10) Each of these Certificates will
represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the
right to
receive
payments from the Excess Reserve Fund Account in respect of any
Basis Risk
Carry Forward Amounts. 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.
The minimum denomination for each Class of Principal
Certificates
will be $25,000, with integral multiples of
$1 in excess thereof except that one
Certificate in each Class may be issued in
a different amount. The minimum
denomination for (a) each of the Class R
Certificates will be a 100% Percentage
Interest in such Class, (b) each of the
Class P Certificates will be 1%
Percentage Interest and (c) the Class X
Certificates will be a 1% Percentage
Interest in such Class.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
Book-Entry Certificates...... All Classes
of Certificates other than the
Physical Certificates.
Class A Certificates......... Class 1A1,
Class 1A2, Class 2A1, Class 2A2 and
Class 2A3 Certificates.
Delay Certificates........... The Fixed
Rate Certificates.
ERISA-Restricted
Certificates............... 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...... Class B-4
Certificates.
LIBOR Certificates........... All Classes
of Certificates other than the Private
Certificates.
Non-Delay Certificates....... Offered
Certificates.
Offered Certificates......... All Classes
of Certificates other than the Private
Certificates.
Physical Certificates........ Class X,
Class P and Class R Certificates.
Principal Certificates....... The LIBOR
Certificates and the Fixed Rate
Certificates.
Private Certificates......... Class B-4,
Class X, Class P and Class R
Certificates.
Rating Agencies.............. Standard
& Poor's and Moody's.
Regular Certificates......... All Classes
of Certificates other than the Class R
and Class P Certificates.
Residual Certificates........ Class R
Certificates.
Subordinated Certificates.... Class M-1,
Class M-2, 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.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the
context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices set
forth in Section 3.01(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 the
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, 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 (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) amounts received
with respect to such Distribution Date as
the Substitution Adjustment Amount or
as the purchase price in respect of a
Deleted Mortgage Loan or 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.
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 A-1 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 Certificates,
other than the Class P, Class X or Class R
Certificates, at any date, the
maximum dollar amount of principal to which
the Holder thereof is then entitled
hereunder, such amount being equal to the
Denomination thereof minus all
distributions of principal previously made
with respect thereto and in the case
of any Subordinated Certificates, reduced
by any Applied Realized Loss Amounts
applicable to such Class of 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 R Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such
Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The Person in whose name a
Certificate
is registered in the Certificate Register,
except that, solely for the purpose
of giving any consent pursuant to this
Agreement, any Certificate registered in
the name of the Depositor or any affiliate
of the Depositor shall be deemed not
to be Outstanding and the Percentage
Interest evidenced thereby shall not be
taken into account in determining whether
the requisite amount of Percentage
Interests necessary to effect such consent
has been obtained; provided, however,
that if any such Person (including the
Depositor) owns 100% of the Percentage
Interests evidenced by a Class of
Certificates, such Certificates shall be
deemed to be Outstanding for purposes of
any provision hereof that requires the
consent of the Holders of Certificates of a
particular Class as a condition to
the taking of any action hereunder. The
Trustee is entitled to rely conclusively
on a certification of the Depositor or any
affiliate of the Depositor in
determining which Certificates are
registered in the name of an affiliate of the
Depositor.
Certification: As defined in Section 8.12(b).
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A Certificate Group: Either the Class A-1 Certificates or
the
Class A-2 Certificates.
Class A Certificates: The Class A-1 Certificates and the Class
A-2
Certificates.
Class A Principal Allocation Percentage: For any Distribution
Date,
the percentage equivalent of a fraction,
determined as follows: (A) with respect
to the Class A-1 Certificates, a fraction,
the numerator of which is the portion
of the Principal Remittance Amount for such
Distribution Date that is
attributable to the principal received or
advanced on the Group I Mortgage Loans
and the denominator of which is the
Principal Remittance Amount for such
Distribution Date; 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 Balances of
the Class A Certificates immediately prior
to such Distribution Date over (ii)
the lesser of (A) 60.20% (rounded to two
decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the
excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date over the
Overcollateralization Floor.
Class A-1 Certificates: The Class 1A1 and Class 1A2
Certificates,
collectively.
Class 1A1 Certificates: All Certificates bearing the class
designation of "Class 1A1."
Class 1A2 Certificates: All Certificates bearing the class
designation of "Class 1A2."
Class A-2 Certificates: The Class 2A1, Class 2A2 and Class 2A3
Certificates, collectively.
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 B Certificates: The Class 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) 89.40%
(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-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) 91.90% (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
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) 93.90% (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) 96.50%
(rounded to two decimal places) of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date
and (B) the excess, if any, of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution
Date over the Overcollateralization
Floor.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the
Certificate Balances of all
Certificates of such Class as of such
date.
Class LT-R Interest: The residual interest in the Lower Tier
REMIC
as described in the Preliminary Statement
and the related footnote thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3,
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) 67.20%
(rounded to two decimal places) of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date
and (B) the excess, if any, of the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution
Date over the Overcollateralization
Floor.
Class M-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) 73.40% (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) 76.90% (rounded to two decimal
places) of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date over the
Overcollateralization Floor.
Class M-4
Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the
sum of (A) the aggregate Class
Certificate Balances of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of
the Class M-1 Certificates (after
taking into account the distribution of the
Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the
Class Certificate Balance of the
Class M-2 Certificates (after taking into
account the distribution of the Class
M-2 Principal Distribution Amount 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) 80.40%
(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-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) 83.90% (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 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) 86.90% (rounded to two decimal
places) of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date over the
Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation
of "Class P."
Class R Certificates: All Certificates bearing the class
designation
of "Class R."
Class UT-R Interest: The residual interest in the Upper Tier
REMIC
as described in the Preliminary Statement
and the related footnote thereto.
Class X Certificates: All Certificates bearing the class
designation
of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as
a
distribution in respect of interest, the
amount of interest that has accrued on
the Class X Interest and not applied as an
Extra Principal Distribution Amount
on such Distribution Date, plus any such
accrued interest remaining
undistributed from prior Distribution
Dates, plus, 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: January 28, 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 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.
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
1761 East St. Andrew Place Santa Ana,
California 92705-4934, Attn: Trust
Administration-GS0502, facsimile no. (714)
247-6478, and which is the address to which
notices to and correspondence with
the Trustee should be directed.
Corresponding Class: The class of interests in one Trust REMIC
created under this Agreement that
corresponds to the class of interests in the
other Trust REMIC or to a Class of
Certificates in the manner set out below:
Corresponding
Lower Tier
Upper Tier
Certificates or
Class Designation Regular Interest
Regular
Interest
----------------- ----------------
----------------
Class LT-1A1
Class 1A1
Class 1A1
Class LT-1A2
Class 1A2
Class 1A2
Class LT-2A1
Class 2A1
Class 2A1
Class LT-2A2
Class 2A2
Class 2A2
Class LT-2A3
Class 2A3
Class 2A3
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
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 Standard & Poor's
Glossary.
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: January 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 provided by the
Responsible
Party 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; (5) the number and
type of residential units
constituting the Mortgaged Property (i.e.,
a single family residence, a 2-4
family residence, a unit in a condominium
project or a unit in a planned unit
development, manufactured housing); (6) the
original months to maturity or the
remaining months to maturity from the
Cut-off Date, in any case based on the
original amortization schedule and, if
different, the maturity expressed in the
same manner but based on the actual
amortization schedule; (7) the Loan-to-Value
Ratio; (8) the Mortgage Interest Rate as of
the Cut-off Date; (9) the date on
which the Scheduled Payment was due on the
Mortgage Loan and, if such date is
not consistent with the Due Date currently
in effect, such Due Date; (10) the
stated maturity date; (11) the amount of
the Scheduled Payment as of the Cut-off
Date; (12) the last payment date on which a
Scheduled Payment was actually
applied to pay interest and the outstanding
principal balance; (13) the original
principal amount of the Mortgage Loan; (14)
the principal balance of the
Mortgage Loan as of the close of business
on the Cut-off Date, after deduction
of payments of principal due and collected
on or before the Cut-off Date; (15)
the Adjustment Date; (16) the Gross Margin;
(17) the Lifetime Rate Cap under the
terms of the Mortgage Note; (18) a code
indicating the type of Index; (19) the
Periodic Mortgage Interest Rate Cap under
the terms of the Mortgage Note; (20)
the Periodic Mortgage Interest Rate Floor
under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien,
second lien); (22) a code indicating the
purpose of the loan (i.e., purchase,
rate and term refinance, equity take-out
refinance); (23) a code indicating the
documentation style (i.e., full
documentation, limited documentation or stated
income); (24) the loan credit
classification (as described in the Underwriting
Guidelines); (25) whether such Mortgage
Loan provides for a Prepayment Premium;
(26) the Prepayment Premium period of such
Mortgage Loan, if applicable; (27) a
description of the Prepayment Premium, if
applicable; (28) the Mortgage Interest
Rate as of origination; (29) the credit
risk score (FICO score) at origination;
(30) the Cut-Off Date; (31) the date of the
purchase of the Mortgage Loan; (32)
a code indicating whether the Mortgage is a
Balloon Loan; (33) a code indicating
whether the Mortgage Loan is assumable;
(34) the date of origination; (35) the
Mortgage Interest Rate adjustment period;
(36) the Mortgage Interest Rate
adjustment percentage; (37) the Mortgage
Interest Rate floor; (38) the Mortgage
Interest Rate calculation method (i.e.,
30/360, simple interest, other); (39) a
code indicating whether the Mortgage Loan
has been modified; (40) the one year
payment history; (41) the Due Date for the
first Scheduled Payment; (42) the
original Scheduled Payment due; (43) with
respect to the related Mortgagor, the
debt-to-income ratio; (44) the Appraised
Value of the Mortgaged Property; (45)
the sales price of the Mortgaged Property
if the Mortgage Loan was originated in
connection with the purchase of the
Mortgaged Property; (46) S&P doc type code;
(47) S&P appraisal type code; (48)
escrow holdbacks, if any, and (49) total
points and fees paid by Mortgagor. With
respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage
Loans; (2) the current aggregate
outstanding principal balance of the
Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent
jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled
Payment for such Mortgage Loan which
became final and non-appealable, except for
such a reduction resulting from a
Deficient Valuation or any reduction that
results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
of the related Mortgaged Property by a
court of competent jurisdiction in an
amount less than the then outstanding
principal balance of the Mortgage Loan,
which valuation results from a proceeding
initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in
lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(d).
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial
Certificate Balance of this Certificate" or
the Percentage Interest appearing on the
face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation,
and
its successors in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE &
Co., as the registered Holder of the
Book-Entry Certificates. The Depository
shall at all times be a "clearing
corporation" as defined in Section
8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is
incorporated under the laws of the United
States of America or any State thereof, (b)
is subject to supervision and
examination by federal or state banking
authorities and (c) has outstanding
unsecured commercial paper or other
short-term unsecured debt obligations that
are rated P-1 by Moody's, A-1 by Standard
& Poor's 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 2005-2
Asset-Backed Certificates, Series 2005-2."
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
February 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 Standard & Poor's, "F-1"
by Fitch and "P-1" by Moody's (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
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 2005-2, Asset-Backed
Certificates, Series 2005-2." 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.
Fannie Mae: The Federal National Mortgage Association and its
successors in interest.
Fannie Mae Guides: The Fannie Mae Seller's Guide and the Fannie
Mae
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 in each of the
following months:
Month of
Final Scheduled
Distribution Date
-----------------
Class 1A1
Certificates.................................... December
2034
Class 1A2
Certificates.................................... December
2034
Class 2A1
Certificates.................................... December
2034
Class 2A2
Certificates.................................... December
2034
Class 2A3
Certificates.................................... December
2034
Class M-1
Certificates.................................... December
2034
Class M-2
Certificates.................................... December
2034
Class M-3
Certificates.................................... December
2034
Class M-4
Certificates.................................... December
2034
Class M-5
Certificates.................................... December
2034
Class M-6
Certificates.................................... December
2034
Class B-1
Certificates.................................... December
2034
Class B-2
Certificates.................................... December
2034
Class B-3
Certificates.................................... December
2034
Class B-4
Certificates.................................... December
2034
Class P
Certificates...................................... December
2034
Class X
Certificates...................................... December
2034
Class R
Certificates...................................... December
2034
First Lien Mortgage Loan: Any Mortgage Loan secured by a first
lien
Mortgage on the related Mortgaged
Property.
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).
Freddie 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 I Sequential Trigger Event: With respect to any
Distribution
Date (a) before the 37th Distribution Date,
the circumstances in which the
aggregate amount of Realized Losses
incurred since the Cut-off Date through the
last day of the related Prepayment Period
divided by the aggregate Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date exceeds 2.250%,
or (b) on or after the 37th Distribution
Date, if a Trigger Event is in effect.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage
Loans.
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 Standard & Poor's
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 each Class of LIBOR
Certificates and each corresponding Class
of Lower Tier Regular Interests and
any Distribution Date, the period
commencing on the Distribution Date occurring
in the month preceding the month in which
the current Distribution Date occurs
and ending on the day immediately preceding
the current Distribution Date;
provided, that in the case of the first
Distribution Date, the Interest Accrual
Period is the period from and including the
Closing Date to but excluding such
first Distribution Date). With respect to
each Class of Fixed Rate Certificates
and each corresponding Class of Lower-Tier
Regular Interest and any Distribution
Date, the calendar month preceding the
month in which such Distribution Date
occurs. For purposes of computing interest
accruals on each Class of 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.
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 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-1A2
Class LT-2A1, Class LT-2A2, Class LT-2A3,
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.
Majority Class X
Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the
Class X Certificates.
Market Value Change Report: A report setting forth changes in
property value of the Mortgaged Properties
in a format agreed upon by the
Servicer and the Depositor.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section
4.03.
Moody's: Moody's Investors Service, Inc. If Moody's 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
Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007,
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 replaced or repurchased
Mortgage Loans.
Mortgage Loan Documents: The mortgage loan documents pertaining
to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto
as Schedule I, such schedule setting forth
the following information with
respect to each Mortgage Loan as of the
Cut-off Date: (1) the Responsible
Party's Mortgage Loan identifying number;
(2) the Mortgagor's name; (3) the
street address of the Mortgaged Property
including the city, state and zip code;
(4) a code indicating whether the Mortgaged
Property is owner-occupied, a second
home or investment property; (5) the number
and type of residential units
constituting the Mortgaged Property (i.e.,
a single family residence, a 2-4
family residence, a unit in a condominium
project or a unit in a planned unit
development, manufactured housing); (6) the
original months to maturity or the
remaining months to maturity from the
Cut-off Date, in any case based on the
original amortization schedule and, if
different, the maturity expressed in the
same manner but based on the actual
amortization schedule; (7) the Loan-to-Value
Ratio; (8) the Mortgage Interest Rate as of
the Cut-off Date; (9) the date on
which the Scheduled Payment was due on the
Mortgage Loan and, if such date is
not consistent with the Due Date currently
in effect, such Due Date; (10) the
stated maturity date; (11) the amount of
the Scheduled Payment as of the Cut-off
Date; (12) the last payment date on which a
Scheduled Payment was actually
applied to pay interest and the outstanding
principal balance; (13) the original
principal amount of the Mortgage Loan; (14)
the principal balance of the
Mortgage Loan as of the close of business
on the Cut-off Date, after deduction
of payments of principal due and collected
on or before the Cut-off Date; (15)
the Adjustment Date; (16) the Gross Margin;
(17) the Lifetime Rate Cap under the
terms of the Mortgage Note; (18) a code
indicating the type of Index; (19) the
Periodic Mortgage Interest Rate Cap under
the terms of the Mortgage Note; (20)
the Periodic Mortgage Interest Rate Floor
under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien,
second lien); (22) a code indicating the
purpose of the loan (i.e., purchase,
rate and term refinance, equity take-out
refinance); (23) a code indicating the
documentation style (i.e., full
documentation, limited documentation or stated
income); (24) the loan credit
classification (as described in the Underwriting
Guidelines); (25) whether such Mortgage
Loan provides for a Prepayment Premium;
(26) the Prepayment Premium period of such
Mortgage Loan, if applicable; (27) a
description of the Prepayment Premium, if
applicable; (28) the Mortgage Interest
Rate as of origination; (29) the credit
risk score (FICO score) at origination;
(30) the Cut-Off Date; (31) the date of the
purchase of the Mortgage Loan, if
applicable; (32) a code indicating whether
the Mortgage Loan is a Balloon Loan;
(33) a code indicating whether the Mortgage
Loan is assumable; (34) the date of
origination; (35) the Mortgage Interest
Rate adjustment period; (36) the
Mortgage Interest Rate adjustment
percentage; (37) the Mortgage Interest Rate
floor; (38) the Mortgage Interest Rate
calculation method (i.e., 30/360, simple
interest, other); (39) a code indicating
whether the Mortgage Loan has been
modified; (40) the one year payment
history; (41) the Due Date for the first
Scheduled Payment; (42) the original
Scheduled Payment due; (43) with respect to
the related Mortgagor, the debt-to-income
ratio; (44) the Appraised Value of the
Mortgaged Property; (45) the sales price of
the Mortgaged Property if the
Mortgage Loan was originated in connection
with the purchase of the Mortgaged
Property; and (46) a code indicating
whether the Mortgage Loan is a Group I
Mortgage Loan or a Group II Mortgage Loan.
With respect to the Mortgage Loans in
the aggregate: (1) the number of Mortgage
Loans; (2) the current aggregate
outstanding principal balance of the
Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan, 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.
New Century: New Century Mortgage Corporation, a California
corporation, and its successors in
interest.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM
Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P
Certificates.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to
which any portion of a Scheduled Payment
is, as of the last day of the prior Due
Period, three months or more past due
(without giving effect to any grace
period), including each Mortgage Loan in
foreclosure, all REO Property and each
Mortgage Loan for which the Mortgagor has
filed for bankruptcy.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or
proposed to be made in respect of a
Mortgage Loan or REO Property that, in the
good faith business judgment of the
Servicer, will not or, in the case of a
proposed P&I Advance, would not be
ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as
provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously
made or proposed to be made in respect of a
Mortgage Loan or REO Property,
which, in the good faith business judgment
of the 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.
One-Month LIBOR Index: With respect to each Mortgage Loan, the
rate
as determined on the basis of rates at
which one-month United States dollar
deposits in the London market are offered
to prime banks in the London interbank
market on such date as provided in the
related Mortgage Note.
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 (at the direction of the Majority
Class X Certificateholders (as
evidenced on the Certificate Register))
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 (provided, that
if the Depositor or an Affiliate of the
Depositor is one of the Holders
constituting such majority, then there must
be at least one other unaffiliated
Holder constituting such majority and the
Class X Certificates held by such
Holder (or unaffiliated Holders in the
aggregate) must represent at least a 10%
Percentage Interest in the Class X
Certificates).
Original Sale Date: November 30, 2004.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(i) Certificates theretofore cancelled by the Trustee or
delivered
to the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to
this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with
a Stated Principal Balance greater than
zero which was not the subject of a
Principal Prepayment in Full prior to such
Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due
Date.
Overcollateralized Amount: As of any Distribution Date, the
excess,
if any, of (a) the aggregate Stated
Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the
aggregate of the Class Certificate Balances
of the Principal Certificates as of such
Distribution Date (after giving effect
to the payment of the Principal Remittance
Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any
Distribution
Date, the excess, if any, of (a) the
Specified Overcollateralized Amount
applicable to such Distribution Date over
(b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution
Date,
0.50% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the
lesser of (a) the Excess
Overcollateralized Amount and (b) the 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, 0.270%; Class
1A2 Certificates, 0.300%; Class 2A1
Certificates, 0.140%; Class 2A2
Certificates, 0.230%; Class 2A3
Certificates, 0.350%; Class M-1 Certificates,
0.430%; Class M-2 Certificates, 0.470%;
Class M-3 Certificates, 0.500%; Class
M-4 Certificates, 0.700%; Class M-5
Certificates, 0.750%; Class M-6
Certificates, 0.850%; Class B-1
Certificates, 1.300%; Class B-2 Certificates,
1.450%; and Class B-3 Certificates, 2.300%.
On the first Distribution Date after
the first possible Optional Termination
Date, the Pass-Through Margins shall
increase to: Class 1A1 Certificates,
0.540%; Class 1A2 Certificates, 0.600%;
Class 2A1 Certificates, 0.280%; Class 2A2
Certificates, 0.460%; Class 2A3
Certificates, 0.700%; Class M-1
Certificates, 0.645%; Class M-2 Certificates,
0.705%; Class M-3 Certificates, 0.750%;
Class M-4 Certificates, 1.050%; Class
M-5 Certificates, 1.125%; Class M-6
Certificates, 1.275%; Class B-1
Certificates, 1.950%; Class B-2
Certificates, 2.175% and Class B-3 Certificates,
3.450%.
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 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
Standard & Poor's 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
Trust REMIC to fail to qualify as a
REMIC at any time that the Certificates are
outstanding. The terms "United
States," "State" and "international
organization" shall have the meanings set
forth in Section 7701 of the Code or
successor provisions. A corporation will
not be treated as an instrumentality of the
United States or of any State or
political subdivision thereof for these
purposes if all of its activities are
subject to tax and, with the exception of
Freddie 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 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, (v) the principal portion of all
Substitution Adjustment Amounts with
respect to the substitutions of Mortgage
Loans that occur during the Prepayment
Period preceding such Distribution Date and
(vi) the allocable portion of the
proceeds received with respect to the
termination of the Trust Fund pursuant to
clause (a) of Section 9.01 (to the extent
such proceeds relate to principal).
Privacy Laws: Title V of the Gramm Leach Bliley 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 January
24,
2005, relating to the Offered
Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties
Agreement, dated as of August 25, 2004
between the Purchaser and the Responsible
Party.
Purchaser: Goldman 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.
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
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: NC Capital Corporation, a California
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).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal
and/or interest on such Mortgage Loan
which, unless otherwise specified herein,
shall give effect to any related Debt
Service Reduction and any Deficient
Valuation that affects the amount of the
monthly payment due on such Mortgage
Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing
(x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated
Certificates and (ii) the
Overcollateralized Amount (in each case
after taking into account the
distributions of the Principal Distribution
Amount for such Distribution Date)
by (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 39.80%.
Servicer: New Century and Countrywide Servicing and if a
successor
servicer is appointed hereunder, such
successor servicer. When the term
"Servicer" is used in this Agreement prior
to the Servicing Transfer Date, New
Century, and on and after the Servicing
Transfer Date, Countrywide Servicing,
unless the context otherwise requires.
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.
Servicing Transfer Costs: All reasonable out of pocket costs
and
expenses incurred by the Trustee in
connection with the transfer of servicing
from a terminated Servicer, including,
without limitation, any such costs or
expenses associated with the complete
transfer of all servicing data and the
completion, correction or manipulation of
such servicing data as may be required
by the Trustee to correct any errors or
insufficiencies in the servicing data or
otherwise to enable the Trustee (or any
successor Servicer appointed pursuant to
Section 7.03) to service the Mortgage Loans
properly and effectively.
Servicing Transfer Date: With respect to any Mortgage Loan, March
1,
2005, or such earlier date as to which
servicing of such Mortgage Loan transfers
to Countrywide Servicing.
Similar Law: As defined in Section 5.02(b).
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.
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to
which any portion of a Scheduled Payment
is, as of the last day of the prior Due
Period, two months or more past due
(without giving effect to any grace period),
each Mortgage Loan in foreclosure, each REO
Property and each Mortgage Loan for
which the Mortgagor has filed for
bankruptcy.
Specified Overcollateralized Amount: Prior to the Stepdown Date,
an
amount equal to 1.75% of the Cut-off Date
Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 3.50%
of the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date, subject, until the
Class Certificate Balance of each Class of
Principal Certificates has been
reduced to zero, to a minimum amount equal
to the Overcollateralization Floor;
provided, however, that if, on any
Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized
Amount shall not be reduced to the
applicable percentage of the then current
aggregate Stated Principal Balance of
the Mortgage Loans until the Distribution
Date on which a Trigger Event is no
longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies, Inc, and its
successors in interest. If Standard &
Poor's is designated as a Rating Agency in
the Preliminary Statement, for
purposes of Section 10.05(b) the address
for notices to Standard & Poor's shall
be Standard & Poor's, 55 Water Street,
New York, New York 10041, Attention:
Residential Mortgage Surveillance Group -
GSAA Home Equity Trust 2005-2, or such
other address as Standard & Poor's may
hereafter furnish to the Depositor, the
Servicer and the Trustee.
Standard & Poor's Glossary: Version 5.6 of the Standard &
Poor's
LEVELS(R) Glossary.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of
any
date of determination, (i) the principal
balance of the Mortgage Loan at the
Cut-off Date after giving effect to
payments of principal due on or before such
date, minus (ii) all amounts previously
remitted to the Trustee with respect to
the related Mortgage Loan representing
payments or recoveries of principal
including advances in respect of scheduled
payments of principal. For purposes
of any Distribution Date, the Stated
Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of
principal received by the 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
February 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).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage
Loan which must, on the date of such
substitution, as confirmed in a Request for
Release, substantially in the form
of Exhibit J, (i) have a Stated Principal
Balance, after deduction of the
principal portion of the Scheduled Payment
due in the month of substitution, not
in excess of the Stated Principal Balance
of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than
and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan;
(iii) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage
Loan; (iv) have a remaining term to
maturity no greater than (and not more than
one year less than that of) the
Deleted Mortgage Loan; and (v) comply with
each representation and warranty set
forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03(g).
Tax Service Contract:
As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the
Bridge Telerate Service (or such other page
as may replace that page on that
service for displaying comparable rates or
prices).
Termination Price: As defined in Section 9.01.
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 15.00% of the Senior Enhancement
Percentage as of the last day of the
prior Due Period or (ii) the quotient
(expressed as a percentage) of (x) the
aggregate amount of Realized Losses
incurred since the Cut-off Date through the
last day of the related Prepayment Period
divided by (y) the Cut-off Date Pool
Principal Balance, exceeds the applicable
percentages set forth below with
respect to such Distribution Date:
--------------------------------------------------------------------------
Distribution Date Occurring In
Loss Percentage
--------------------------------------------------------------------------
February
2008 through January 2009 2.250% for the first month,
plus an
additional 1/12th of 1.000% for each
month thereafter (e.g., approximately
2.333% in March 2008)
--------------------------------------------------------------------------
February
2009 through January 2010 3.250% for the first month,
plus an
additional
1/12th of 1.000% for each
month thereafter (e.g., approximately
3.333% in March 2009)
--------------------------------------------------------------------------
February
2010 through January 2011 4.250% for the first month,
plus an
additional 1/12th of 0.250% for each
month thereafter (e.g., approximately
4.271% in March 2010)
--------------------------------------------------------------------------
February
2011 and thereafter
4.500%
--------------------------------------------------------------------------
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and
principal received on or with
respect thereto after the related Cut-off
Date, other than such amounts which
were due on the Mortgage Loans on or before
the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund
Account, the Distribution Account, and
all amounts deposited therein pursuant to
the applicable provisions of this
Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or
otherwise; and (iv) 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, 0.0052%
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 any successor exemption.
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, and (c) the remaining
Voting Rights shall be allocated
among Holders of the remaining Classes of
Certificates in proportion to the
Certificate Balances of their respective
Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution
Date, a per annum rate equal to (a) the
weighted average of the Mortgage
Interest Rates for each Mortgage Loan (in
each case, less the applicable Expense
Fee Rate) then in effect on the beginning
of the related Due Period on the
Mortgage Loans, multiplied by, in the case
of the LIBOR Certificates, (b) 30
divided by the actual number of days in the
related Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and
delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for the benefit of the
Certificateholders, 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) 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 allow for the use of an 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]";
(ii) the original of any guarantee executed in connection with
the
Mortgage
Note;
(iii) 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;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, (if provided), with evidence of recording thereon
or
a
certified true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed
in blank and in recordable form;
(vi) the originals of all intervening Assignments of Mortgage
(if
any)
evidencing a complete chain of assignment from the applicable
originator
to the last endorsee with evidence of recording thereon, or if
any such
intervening assignment has not been returned from the
applicable
recording
office or has been lost or if such public recording office
retains
the original recorded Assignments of Mortgage, the Responsible
Party
shall deliver or cause to be delivered to the Trustee, a
photocopy
of such
intervening assignment, together with (A) in the case of a
delay
caused by
the public recording office, an Officer's Certificate of the
Responsible Party (or
certified by the title company, escrow agent, or
closing
attorney) stating that such intervening Assignment of Mortgage
has
been
dispatched to the appropriate public recording office for
recordation
and that
such original recorded intervening Assignment of Mortgage or a
copy of
such intervening Assignment of Mortgage certified by the
appropriate public recording office to be a true and complete copy
of the
original
recorded intervening assignment of mortgage will be promptly
delivered
to the Trustee upon receipt thereof by the Responsible Party;
or
(B) in the
case of an intervening assignment where a public recording
office
retains the original recorded intervening assignment or in the
case
where an
intervening assignment is lost after recordation in a public
recording
office, a copy of such intervening assignment certified by such
public
recording office to be a true and complete copy of the original
recorded
intervening assignment;
(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).
Each Mortgage Loan for which a Mortgage Note is missing shall
be
evidenced by a lost note affidavit as of
the Closing Date. In the event, for
purposes of the Closing Date, one or more
lost note affidavits are provided to
cover multiple missing Mortgage Notes, the
Responsible Party shall deliver to
the Trustee the applicable individual lost
note affidavits within ten (10)
Business Days of the Closing Date. If the
Responsible Party fails to deliver the
required individual lost note affidavits
within the specified period of time,
the Trustee shall notify the Responsible
Party to take such remedial actions,
including, without limitation, the
repurchase by the Responsible Party of such
Mortgage Loan within 30 days of the Closing
Date.
The Responsible Party shall deliver to the Trustee the
applicable
recorded document promptly upon receipt
from the respective recording office but
in no event later than 120 days from the
Closing Date.
From time to time, the Responsible Party shall forward, with
respect
to the Mortgage Loans, to the Trustee
additional original documents, additional
documents evidencing an assumption,
modification, consolidation or extension of
a Mortgage Loan approved by the 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 Responsible Party shall
deliver
to the Trustee Assignments of Mortgages, in
blank, for each Mortgage Loan. The
Responsible Party 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 Responsible Party,
at no expense to the Trust Fund, the
Servicer, the Trustee or the Depositor in
the appropriate public office for real
property records, each Assignment of
Mortgage referred to in Section 2.01(b)(v).
Notwithstanding the foregoing,
however, for administrative convenience and
facilitation of servicing and to
reduce closing costs, the Assignments of
Mortgage shall not be required to be
completed and submitted for recording with
respect to any Mortgage Loan if the
Trustee and each Rating Agency has received
an opinion of counsel, satisfactory
in form and substance to the Trustee and
each Rating Agency, to the effect that
the recordation of such Assignments of
Mortgage in any specific jurisdiction is
not necessary to protect the Trustee's
interest in the related Mortgage Note. If
the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned by
the Responsible Party at the Responsible
Party's expense to "Deutsche Bank
National Trust Company as trustee under the
Pooling and Servicing Agreement
dated as of January 1, 2005, GSAA Home
Equity Trust 2005-2." In the event that
any such assignment is lost or returned
unrecorded because of a defect therein,
the Responsible Party shall promptly
prepare a substitute assignment to cure
such defect and thereafter cause each such
assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to
the
Trustee 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
Responsible Party does not cure such
failure within 30 days of discovery or
receipt of written notification of such
failure from the Depositor, the related
Mortgage Loan shall, upon the request of
the Depositor, be repurchased by the
Responsible Party 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
jurisdiction; provided, that the Responsible
Party shall instead deliver a recording
receipt of such recording office or, if
such recording receipt is not available, an
officer's certificate of an officer
of the Responsible Party confirming that
such document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this
Section
2.01, in those instances where the public
recording office retains or loses the
original Mortgage or assignment after it
has been recorded, the obligations of
the Responsible Party shall be deemed to
have been satisfied upon delivery by
the Responsible Party to the Trustee prior
to the Closing Date of a copy of such
Mortgage or assignment, as the case may be,
certified (such certification to be
an original thereof) by the public
recording office to be a true and complete
copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws
of the State of New York, an express
trust (the "Trust") to be known, for
convenience, as "GSAA Home Equity Trust
2005-2" 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 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), (6)
(solely with respect to the original
months to maturity), (8) (solely as of
origination, not as of the Cut-off Date)
and (13) of the Mortgage Loan Schedule and
items (1), (2), (3), (6) (solely with
respect to the original months to
maturity), (8) (solely as of origination, not
as of the Cut-off Date) and (13) of the
Data Tape Information respecting such
Mortgage Loan is correct; and (iv) each
Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement.
The Trustee shall not be responsible
to verify the validity, sufficiency or
genuineness of any document in any
Custodial File.
The Trustee shall retain possession and custody of each
Custodial
File in accordance with and subject to the
terms and conditions set forth
herein. The Servicer shall promptly deliver
to the Trustee, upon the execution
or receipt thereof, the originals of such
other documents or instruments
constituting the Custodial File as come
into the possession of the Servicer from
time to time.
The Responsible Party shall deliver 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 documents shall be delivered by the
Responsible Party at the Responsible
Party's expense to the Servicer.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer. (a)
Countrywide Servicing and New Century,
severally and not jointly, hereby make the
representations and warranties set
forth in Schedule II and Schedule V 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, New Century and the
Trustee.
(c) It is understood and agreed by the Countrywide Servicing,
New
Century 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 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 (i)
if such 30 or 60 day period, as
applicable, expires prior to the second
anniversary of the Closing Date, remove
such related Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and
substitute in its place a Substitute
Mortgage Loan, in the manner and subject to
the conditions set forth in this Section
2.03, or (ii) repurchase such Mortgage
Loan at the Repurchase Price; provided,
however, that any such substitution
pursuant to clause (i) above shall not be
effected prior to the delivery to the
Trustee of a Request for Release
substantially in the form of Exhibit J, and the
Mortgage File for any such Substitute
Mortgage Loan; provided, further, that
with respect to any representations and
warranties which are made to the best of
the Responsible Party's knowledge, if it is
discovered by the Responsible Party,
the Servicer, the Depositor or the Trustee,
that the substance of such
representation and warranty is inaccurate
and such inaccuracy materially and
adversely affects the value of the related
Mortgage Loans or materially and
adversely affects the interests of the
Trustee or the Certificateholders therein
or such inaccuracy materially and adversely
affects the value of the related
Mortgage Loan or materially and adversely
affects the interests of the Trustee
or the Certificateholders therein in the
case of a representation and warranty
relating to a particular Mortgage Loan,
notwithstanding the Responsible Party's
lack of knowledge with respect to the
substance of such representation and
warranty, such inaccuracy shall be deemed a
breach of the applicable
representation and warranty. 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 IV,
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 (x) which causes a Mortgage Loan not
to constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of
the Code or (y) by the Responsible
Party of any of the representations and
warranties set forth in paragraphs (28),
(46), (48), (49), (50), (52), (57), (58),
(59), (64), (65) or (66) 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 (28),
(46), (48), (49), (50), (52), (57),
(58), (59), (64), (65) or (66) 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. The Responsible Party shall
repurchase each such Deleted Mortgage Loan
within 30 days of the earlier of
discovery or receipt of notice with respect
to each such Deleted Mortgage Loan.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the
Trustee for the benefit of the
Certificateholders the Mortgage Note, the
Mortgage, the related assignment of
the Mortgage, and such other documents and
agreements as are required by Section
2.01, with the Mortgage Note endorsed and
the Mortgage assigned as required by
Section 2.01. No substitution is permitted
to be made with respect to any
Distribution Date after the end of the
related Prepayment Period. Scheduled
Payments due with respect to Substitute
Mortgage Loans in the Due Period of
substitution shall not be part of the Trust
Fund and will be retained by the
Responsible Party on the next succeeding
Distribution Date. For the Due Period
of substitution, distributions to
Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan
for such Due Period and thereafter the
Responsible Party shall be entitled to
retain all amounts received in respect of
such Deleted Mortgage Loan.
(f) In connection with any repurchase or substitution 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 Deleted
Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and
the Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute
Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all
respects, and the Responsible Party shall
be deemed to have made with respect to such
Substitute Mortgage Loan or Loans,
as of the date of substitution, the
representations and warranties made pursuant
to Section 2.03(b) with respect to such
Mortgage Loan. Upon any such
substitution and the deposit to the
Collection Account of the amount required to
be deposited therein in connection with
such substitution as described in the
following paragraph, the Trustee shall
release the Mortgage File held for the
benefit of the Certificateholders relating
to such Deleted Mortgage Loan to the
Responsible Party and shall execute and
deliver at the Responsible Party's
direction such instruments of transfer or
assignment prepared by the Responsible
Party, in each case without recourse, as
shall be necessary to vest title in the
Responsible Party, or its designee, of the
Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to
this Section 2.03.
(g) For any month in which the Responsible Party substitutes one
or
more Substitute Mortgage Loans for one or
more Deleted Mortgage Loans, the
Servicer will determine the amount (if any)
by which the aggregate unpaid
principal balance of all such Substitute
Mortgage Loans as of the date of
substitution is less than the aggregate
Stated Principal Balance of all such
Deleted Mortgage Loans (after application
of the scheduled principal portion of
the Scheduled Payments due in the Due
Period of substitution). The amount of
such shortage (the "Substitution Adjustment
Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with
respect to such Deleted Mortgage
Loans shall be remitted by the Responsible
Party to the Servicer for deposit
into the Collection Account on or before
the next Remittance Date.
(h) In addition to such repurchase and/or substitution
obligations,
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.
(i) 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 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 Non-Qualified Mortgages.
(a) Notwithstanding any contrary provision of this Agreement,
no
substitution pursuant to Section 2.03 shall
be made more than two years after
the Closing Date.
(b) Upon discovery by the Depositor, the Responsible Party, the
Servicer or the Trustee, that any Mortgage
Loan does not constitute a "qualified
mortgage" within the meaning of Section
860G(a)(3) of the Code, the party
discovering such fact shall promptly (and
in any event within five (5) Business
Days of discovery) give written notice
thereof to the other parties. In
connection therewith, the Trustee shall
require the Responsible Party to
repurchase the affected Mortgage Loan
within 30 days of the earlier of discovery
or receipt of notice in the same manner as
it would a Mortgage Loan for a breach
of representation or warranty made pursuant
to Section 2.03. The Trustee shall
reconvey to the Responsible Party the
Mortgage Loan to be released pursuant
hereto in the same manner, and on the same
terms and conditions, as it would a
Mortgage Loan repurchased for breach of a
representation or warranty contained
in Section 2.03.
Section 2.05 Execution and Delivery of Certificates. The
Trustee
acknowledges the transfer and assignment to
it of the Trust Fund and,
concurrently with such transfer and
assignment, has executed and delivered to or
upon the order of the Depositor, the
Certificates in authorized denominations
evidencing directly or indirectly the
entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and
exercise the rights referred to above
for the benefit of all present and future
Holders of the Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth
the
designations for federal income tax
purposes of all interests created hereby.
The "Start-up Day" for purposes of the
REMIC Provisions shall be the Closing
Date. The "latest possible maturity date"
is the Distribution Date in December
2034, which is the Distribution Date
following the latest Mortgage Loan maturity
date. Amounts paid to the Class X
Certificates (prior to any reduction for any
Basis Risk Payment) shall be deemed paid
from the Upper Tier REMIC in respect of
the Class X Interest to the holders of the
Class X Certificates prior to
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);
(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.
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 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.
(e) Prior to the Servicing Transfer Date, Countrywide Servicing
shall have no obligation to perform its
duties as Servicer 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 Freddie Mac
or Fannie Mae approved mortgage
servicer. Each Subservicing Agreement must
impose on the Subservicer
requirements conforming to the provisions
set forth in Section 3.08 and provide
for servicing of the Mortgage Loans
consistent with the terms of this Agreement.
The Servicer will examine each Subservicing
Agreement and will be familiar with
the terms thereof. The terms of any
Subservicing Agreement will not be
inconsistent with any of the provisions of
this Agreement. The Servicer and the
Subservicers may enter into and make
amendments to the Subservicing Agreements
or enter into different forms of
Subservicing Agreements; provided, however,
that any such amendments or different forms
shall be consistent with and not
violate the provisions of this Agreement,
and that no such amendment or
different form shall be made or entered
into which could be reasonably expected
to be materially adverse to the interests
of the Trustee, 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).
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 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.
(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 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, or
cause to be established and
maintained, one or more Eligible Accounts
(such account or accounts, the
"Collection Account"), held in trust for
the benefit of the Trustee. On behalf
of the Trustee, the Servicer shall deposit
or cause to be deposited in the
clearing account (which account must be an
Eligible Account) in which it
customarily deposits payments and
collections on mortgage loans in connection
with its mortgage loan servicing activities
on a daily basis, and in no event
more than one Business Day after the
Servicer's receipt thereof, and shall
thereafter deposit in the Collection
Account, in no event more than two Business
Days after the deposit of such funds into
the clearing account, as and when
received or as otherwise required
hereunder, the following payments and
collections received or made by it
subsequent to the Cut-off Date (other than in
respect of principal or interest on the
related Mortgage Loans due on or before
the Cut-off Date), or payments (other than
Principal Prepayments) received by it
on or prior to the Cut-off Date but
allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing
Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent
such
Insurance Proceeds and Condemnation Proceeds are not to be applied
to
the
restoration of the related Mortgaged Property or released to
the
related
Mortgagor in accordance with the express requirements of law or
in
accordance
with prudent and customary servicing practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12
in
connection with any losses realized on Permitted Investments
with
respect to
funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to
the second
paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in
accordance
with this Agreement; and
(vii) all Prepayment Premiums collected by the Servicer.
The foregoing requirements for deposit in the Collection
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 Mortgagor, or otherwise
received
with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to the Servicer as servicing compensation (in
addition
to the
Servicing Fee) on the Remittance Date any interest or
investment
income
earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each
Mortgage
Loan that
has previously been repurchased or replaced pursuant to this
Agreement
all amounts received thereon subsequent to the date of purchase
or
substitution, as the case may be;
(vi) to reimburse the Servicer for (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 unreimbursed P&I 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 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. 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 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 Fannie Mae or Freddie 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.
(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 Fannie Mae or Freddie Mac
if it were the purchaser of the
Mortgage Loans, unless the Servicer has
obtained a waiver of such requirements
from Fannie Mae or Freddie Mac. The
Servicer shall also maintain a fidelity bond
in the form and amount that would meet the
requirements of Fannie Mae or Freddie
Mac, unless the Servicer has obtained a
waiver of such requirements from Fannie
Mae or Freddie 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 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 unreimbursed P&I
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 (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 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 use reasonable best efforts
to cause the applicable Responsible
Party to reimburse the Servicer for any
overnight courier charges incurred for
the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee
shall
execute and deliver to the Servicer copies
of any court pleadings, requests for
trustee's sale or other documents
reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged
Property or to any legal action brought
to obtain judgment against any Mortgagor on
the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce
any other remedies or rights
provided by the Mortgage Note or Mortgage
or otherwise available at law or in
equity, or shall exercise and deliver to
the Servicer a power of attorney
sufficient to authorize the Servicer to
execute such documents on its behalf.
Each such certification shall include a
request that such pleadings or documents
be executed by the Trustee and a statement
as to the reason such documents or
pleadings are required and that the
execution and delivery thereof by the
Trustee will not invalidate or otherwise
affect the lien of the Mortgage, except
for the termination of such a lien upon
completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO
Property.
(a) This Section shall apply only to REO
Properties acquired for the account of
the Trustee and shall not apply to any REO
Property relating to a Mortgage Loan
which was purchased or repurchased from the
Trustee pursuant to any provision
hereof. In the event that title to any such
REO Property is acquired, the
Servicer shall cause the deed or
certificate of sale to be issued in the name of
the Trustee, on behalf of the
Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate
each
REO Property for the Trustee solely for the
purpose of its prompt disposition
and sale. The Servicer, either itself or
through an agent selected by the
Servicer, shall manage, conserve, protect
and operate the REO Property in the
same manner that it manages, conserves,
protects and operates other foreclosed
property for its own account, and in the
same manner that similar property in
the same locality as the REO Property is
managed. The Servicer shall attempt to
sell the same (and may temporarily rent the
same for a period not greater than
one year, except as otherwise provided
below) on such terms and conditions as
the Servicer deems to be in the best
interest of the Trustee.
(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 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 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.
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 or substitutions of Mortgage
Loans hereunder, including but not
limited to repurchases or substitutions
pursuant to Section 2.03, (iv)
responsible for expenses of the 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 February 2005.
Section 3.26 Credit Reporting; Gramm-Leach-Bliley 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 s
