EXECUTION COPY
--------------
EXHIBIT 99.1
------------------------------------------------------------------------------
GSAA HOME EQUITY TRUST 2006-9
ASSET-BACKED CERTIFICATES
SERIES 2006-9
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
U.S. BANK NATIONAL ASSOCIATION,
Trustee
DEUTSCHE BANK NATIONAL TRUST COMPANY,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
and
U.S. BANK NATIONAL ASSOCIATION,
Custodians
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
Dated May 1, 2006
------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.........................................................................................9
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.......................................................................42
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.................................................45
Section 2.03 Execution and Delivery of Certificates.............................................................46
Section 2.04 REMIC Matters......................................................................................46
Section 2.05 Representations and Warranties of the Depositor....................................................47
Section 2.06 Representations and Warranties of JPMorgan.........................................................48
Section 2.07 Representations and Warranties of Deutsche Bank....................................................49
Section 2.08 Representations and Warranties of U.S. Bank........................................................49
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account..................................................50
Section 3.02 Investment of Funds in the Distribution Account....................................................52
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution.........................................................................53
Section 4.02 Monthly Statements to Certificateholders...........................................................58
Section 4.03 Allocation of Applied Realized Loss Amounts........................................................61
Section 4.04 Certain Matters Relating to the Determination of LIBOR.............................................61
Section 4.05 Supplemental Interest Trust........................................................................62
Section 4.06 Trust's Obligations under the Interest Rate Swap Agreement; Replacement and Termination of
the Interest Rate Swap Agreement.................................................................................64
i
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...................................................................................64
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates........................65
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..................................................71
Section 5.04 Persons Deemed Owners..............................................................................71
Section 5.05 Access to List of Certificateholders' Names and Addresses..........................................71
Section 5.06 Maintenance of Office or Agency....................................................................71
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor.......................................................................72
Section 6.02 Merger or Consolidation of the Depositor...........................................................72
Section 6.03 Limitation on Liability of the Depositor and Others................................................72
Section 6.04 Servicing Compliance Review........................................................................73
Section 6.05 Option to Purchase Defaulted Mortgage Loans........................................................73
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default..................................................................................73
Section 7.02 Master Servicer to Act; Appointment of Successor...................................................74
Section 7.03 Master Servicer to Act as Servicer.................................................................75
Section 7.04 Notification to Certificateholders.................................................................75
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians...........................................................75
Section 8.02 [Reserved].........................................................................................76
Section 8.03 Certain Matters Affecting the Trustee and the Custodians...........................................76
Section 8.04 Trustee and Custodians Not Liable for Certificates or Mortgage Loans...............................78
Section 8.05 Trustee May Own Certificates.......................................................................78
Section 8.06 Trustee's Fees and Expenses........................................................................78
Section 8.07 Eligibility Requirements for the Trustee...........................................................79
Section 8.08 Resignation and Removal of the Trustee.............................................................80
Section 8.09 Successor Trustee..................................................................................81
Section 8.10 Merger or Consolidation of the Trustee or the Custodians...........................................81
Section 8.11 Appointment of Co-Trustee or Separate Trustee......................................................81
Section 8.12 Tax Matters........................................................................................82
ii
Section 8.13 [Reserved].........................................................................................86
Section 8.14 Tax Classification of the Excess Reserve Fund Account and the Interest Rate Swap Agreement.........86
Section 8.15 Custodial Responsibilities; Compensation...........................................................87
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's Obligations...............................88
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions Insurance....................................90
Section 9.03 Representations and Warranties of the Master Servicer..............................................90
Section 9.04 Master Servicer Events of Default..................................................................92
Section 9.05 Waiver of Default..................................................................................94
Section 9.06 Successor to the Master Servicer...................................................................94
Section 9.07 Compensation of the Master Servicer................................................................95
Section 9.08 Merger or Consolidation............................................................................95
Section 9.09 Resignation of the Master Servicer.................................................................96
Section 9.10 Assignment or Delegation of Duties by the Master Servicer..........................................96
Section 9.11 Limitation on Liability of the Master Servicer.....................................................96
Section 9.12 Indemnification; Third Party Claims................................................................97
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator............................................................98
Section 10.02 Certain Matters Affecting the Securities Administrator............................................99
Section 10.03 Securities Administrator Not Liable for Certificates or Mortgage Loans...........................101
Section 10.04 Securities Administrator May Own Certificates....................................................101
Section 10.05 Securities Administrator's Fees and Expenses.....................................................101
Section 10.06 Eligibility Requirements for the Securities Administrator........................................102
Section 10.07 Resignation and Removal of the Securities Administrator..........................................103
Section 10.08 Successor Securities Administrator...............................................................104
Section 10.09 Merger or Consolidation of the Securities Administrator..........................................104
Section 10.10 Assignment or Delegation of Duties by the Securities Administrator...............................104
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage Loans...................................105
Section 11.02 Final Distribution on the Certificates...........................................................106
Section 11.03 Additional Termination Requirements..............................................................107
iii
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment........................................................................................108
Section 12.02 Recordation of Agreement; Counterparts...........................................................110
Section 12.03 Governing Law....................................................................................111
Section 12.04 Intention of Parties.............................................................................111
Section 12.05 Notices..........................................................................................111
Section 12.06 Severability of Provisions.......................................................................113
Section 12.07 Limitation on Rights of Certificateholders.......................................................113
Section 12.08 Certificates Nonassessable and Fully Paid........................................................114
Section 12.09 Waiver of Jury Trial.............................................................................114
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations...............................................................................114
Section 13.02 Form 10-D Filings................................................................................115
Section 13.03 Form 8-K Filings.................................................................................116
Section 13.04 Form 10-K Filings................................................................................116
Section 13.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.....................................................................117
Section 13.06 Form 15 Filing...................................................................................117
Section 13.07 Report on Assessment of Compliance and Attestation...............................................118
Section 13.08 Use of Subservicers and Subcontractors...........................................................119
iv
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificates
Exhibit C Form of Class R, Class RC and Class RX Certificates
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
Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Mortgage Loan Sale and Servicing Agreement, dated December
1, 2005, by and among American Home Mortgage Corp., American
Home Mortgage Servicing, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit K Amended and Restated Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Ameriquest Mortgage
Company
Exhibit L Master Mortgage Loan Purchase Agreement, dated as of about
July 1, 2004 between Countrywide Home Loans, Inc. and
▇▇▇▇▇▇▇ Sachs Mortgage Company, as amended by Amendment Reg
AB
Exhibit M Servicing Agreement, dated on or about July 1, 2004, between
Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, as amended by Amendment Reg AB
Exhibit M-1 Amendment Reg AB to the Master Mortgage Loan Purchase and
Servicing Agreement, dated as of January 1, 2006, among
▇▇▇▇▇▇▇ Sachs Mortgage Company, Countrywide Home Loans, Inc.
and Countrywide Home Loans Servicing LP
Exhibit N Amended and Restated Master Mortgage Loan Purchase
Agreement, dated as of November 1, 2005, between GreenPoint
Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
v
Exhibit O Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit P Second Amended and Restated Flow Seller's Warranties and
Servicing Agreement, dated as of January 1, 2006, between
National City Mortgage Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company
Exhibit Q Form of Master Loan Purchase Agreement, between various
sellers and ▇▇▇▇▇▇▇ Sachs Mortgage Company
Exhibit R Flow Servicing Agreement, dated as of May 1, 2005, between
Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company
Exhibit S Flow Servicing Agreement, dated as of January 1, 2006,
between Avelo Mortgage, L.L.C. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit T Flow Mortgage Loan Purchase and Warranties Agreement, dated
as of December 1, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company and Novelle Financial Services, Inc.
Exhibit U Second Amended and Restated Master Seller's Warranties and
Servicing Agreement, dated as of November 1, 2005, between
▇▇▇▇▇▇▇ Sachs Mortgage Company and ▇▇▇▇▇ Fargo Bank, N.A.
Exhibit V-1 Form of Performance Certification (Master Servicer)
Exhibit V-2 Form of Performance Certification (Securities Administrator)
Exhibit W Form of Servicing Criteria to be addressed in assessment of
compliance statement
Exhibit X Form of Request for Release of Documents (U.S. Bank)
Exhibit X-1 Form of Request for Release of Documents (Deutsche Bank)
Exhibit X-2 Form of Request for Release of Documents (JPMorgan)
vi
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of May 1, 2006
(this "Agreement"), is hereby executed by and among GS MORTGAGE SECURITIES
CORP., a Delaware corporation (the "Depositor"), U.S. BANK NATIONAL
ASSOCIATION ("U.S. Bank"), as trustee (in such capacity, the "Trustee") and as
a custodian, DEUTSCHE BANK NATIONAL TRUST COMPANY ("Deutsche Bank"), as a
custodian, JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ("JPMorgan"), as a
custodian (Deutsche Bank, JPMorgan and U.S. Bank, each a "Custodian" and
together the "Custodians") and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
master servicer (in such capacity, the "Master Servicer") and as securities
administrator (in such capacity, the "Securities Administrator").
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 Securities Administrator on behalf of the Trust shall elect that
three segregated asset pools within the Trust Fund be treated for federal
income tax purposes as comprising three REMICs (each, a "Trust REMIC" or, in
the alternative, the "Lower-Tier REMIC," the "Upper-Tier REMIC," and the
"Class X REMIC," respectively). The Class X Interest and each Class of LIBOR
Certificates (other than the right of each Class of LIBOR Certificates to
receive Basis Risk Carry Forward Amounts), represents ownership of a regular
interest in the Upper-Tier REMIC for purposes of the REMIC Provisions. The
Class R Certificates represent ownership of the sole class of residual
interest in the Upper-Tier REMIC, the Class RC Certificates represent
ownership of the sole class of residual interest in the Lower-Tier REMIC and
the Class RX Certificates represent ownership of the sole class of residual
interest in the Class X REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each Certificate is the latest date referenced in
Section 2.04. The Class X REMIC shall hold as assets the Class X Interest as
set out below. The Upper-Tier REMIC shall hold as assets the several classes
of uncertificated Lower-Tier Regular Interests, set out below. The Lower-Tier
REMIC shall hold as assets the assets described in the definition of "Trust
Fund" herein (other than the Prepayment Premiums, the Interest Rate Swap
Agreement and the Excess Reserve Fund Account). Each Lower-Tier Regular
Interest is hereby designated as a regular interest in the Lower-Tier REMIC.
The Class LT-A-1, Class LT-A-2, Class LT-A-3, Class LT-A-4-A, Class LT-A-4-B,
Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class
LT-B-1, Class LT-B-2 and Class LT-B-3 Interests are hereby designated the
LT-Accretion Directed Classes (the "LT Accretion Directed Classes"). The Class
P Certificates represent beneficial ownership of the Prepayment Premiums, each
Class of Regular Certificates represents beneficial ownership of a regular
interest in the Upper-Tier REMIC and the right to receive Basis Risk Carry
Forward Amounts and the Class X Certificates represent beneficial ownership of
a regular interest in the Class X REMIC, the Interest Rate Swap Agreement, the
Supplemental Trust and the Excess Reserve Fund Account, which portions of the
Trust Fund shall be treated as a grantor trust.
The Lower-Tier REMIC
Corresponding
Lower-Tier Interest Lower-Tier Initial Lower-Tier Principal Upper-Tier
Designation Interest Rate Amount REMIC Class
--------------------------- ------------------- ------------------------------------------ --------------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-2 (1) 1/2 initial Class Certificate Balance of A-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-3 (1) 1/2 initial Class Certificate Balance of A-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-4-A (1) 1/2 initial Class Certificate Balance of A-4-A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-A-4-B (1) 1/2 initial Class Certificate Balance of A-4-B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
2
Corresponding
Lower-Tier Interest Lower-Tier Initial Lower-Tier Principal Upper-Tier
Designation Interest Rate Amount REMIC Class
--------------------------- ------------------- ------------------------------------------ --------------------
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount, less aggregate
initial Lower Tier Principal Amounts
-------------------------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap, calculated
without regard to Net Swap Payment or Net Swap Receipt Amounts.
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 and (ii) 50% to the LT-Accretion Directed Classes
(principal payments shall be allocated among such LT-Accretion Directed
Classes in an amount equal to 50% of the principal amounts allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Overcollateralized Amount shall be allocated to the Class
LT-Accrual Interest (until paid in full). Realized Losses shall be applied so
that after all distributions have been made on each Distribution Date (i) the
Lower-Tier Principal Amount of each of the LT-Accretion Directed Classes is
equal to 50% of the Class Certificate Balance of its Corresponding Class, and
(ii) the Class LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralized
Amount.
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class LT-R Interest which shall be the sole
class of residual interests in the Lower-Tier REMIC. The Class RC Certificates
will represent ownership of the Class LT-R Interest and will be issued as a
single certificate in definitive form in a principal amount of $100 and shall
have no interest rate. Amounts received by the Class LT-R Interest shall be
deemed paid from the Lower-Tier REMIC.
3
The 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 and Initial Upper-Tier
Corresponding Principal Amount and
Upper-Tier Class Pass-Through Corresponding Class Corresponding Class
Class Designation Rate Certificate Balance of Certificates
--------------------------- ---------------------- ------------------------- -------------------------
Class A-1 (1) $ 724,918,000 Class A-1(15)
Class A-2 (2) $ 237,590,000 Class A-2(15)
Class A-3 (3) $ 255,442,000 Class A-3(15)
Class A-4-A (4) $ 244,624,000 Class A-4-A(15)
Class A-4-B (5) $ 27,181,000 Class A-4-B(15)
Class M-1 (6) $ 28,726,000 Class M-1(15)
Class M-2 (7) $ 14,363,000 Class M-2(15)
Class M-3 (8) $ 10,373,000 Class M-3(15)
Class M-4 (9) $ 12,765,000 Class M-4(15)
Class M-5 (10) $ 7,980,000 Class M-5(15)
Class B-1 (11) $ 7,980,000 Class B-1
Class B-2 (12) $ 7,980,000 Class B-2
Class B-3 (13) $ 7,980,000 Class B-3
Class X (14) (14) Class X(14)
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) LIBOR plus 0.050% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.100% and (ii) the WAC Cap.
(2) The Class A-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) LIBOR plus 0.120% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.240% and (ii) the WAC Cap.
(3) The Class A-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first possible
Optional Termination Date, the lesser of (i) LIBOR plus 0.160% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.320% and (ii) the WAC Cap.
(4) The Class A-4-A 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 lesser of (i) LIBOR plus 0.240% and (ii)
the WAC Cap or (b) after the first Distribution
4
Date on which the Optional Clean-Up Call is exercisable, the lesser of
(i) LIBOR plus 0.480% and (ii) the WAC Cap.
(5) The Class A-4-B 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 lesser of (i) LIBOR plus 0.270% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.540% and (ii) the WAC Cap.
(6) The Class M-1 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 lesser of (i) LIBOR plus 0.280% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.420% and (ii) the WAC Cap.
(7) The Class M-2 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 lesser of (i) LIBOR plus 0.300% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.450% and (ii) the WAC Cap.
(8) The Class M-3 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 lesser of (i) LIBOR plus 0.310% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.465% and (ii) the WAC Cap.
(9) The Class M-4 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 lesser of (i) LIBOR plus 0.390% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.585% and (ii) the WAC Cap.
(10) The Class M-5 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 lesser of (i) LIBOR plus 0.470% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
0.705% and (ii) the WAC Cap.
(11) The Class B-1 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 lesser of (i) LIBOR plus 1.030% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
1.545% and (ii) the WAC Cap.
(12) The Class B-2 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 lesser of (i) LIBOR plus 1.870% and (ii)
the WAC Cap or (b) after the first Distribution
5
Date on which the Optional Clean-Up Call is exercisable, the lesser of
(i) LIBOR plus 2.805% and (ii) the WAC Cap.
(13) The Class B-3 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 lesser of (i) LIBOR plus 2.000% and (ii)
the WAC Cap or (b) after the first Distribution Date on which the
Optional Clean-Up Call is exercisable, the lesser of (i) LIBOR plus
3.000% and (ii) the WAC Cap.
(14) The Class X Interest will have a principal balance to the extent of any
Overcollateralized Amount. The Class X Interest will not accrue interest
on such balance but will accrue interest on a notional principal balance.
As of any Distribution Date, the Class X Interest shall have a notional
principal balance equal to the aggregate of the principal balances of the
Lower-Tier Regular Interests as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of
the WAC Cap over the product of (i) 2 and (ii) the weighted average
Lower-Tier Interest Rate of the Lower-Tier Regular Interests, where the
Lower-Tier Interest Rates on the Class LT-Accrual are subject to a cap
equal to zero and each LT-Accretion Directed Class is subject to a cap
equal to the Pass-Through Rate on its Corresponding Class. With respect
to any Distribution Date, interest that so accrues on the notional
principal balance of the Class X Interest shall be deferred in an amount
equal to any increase in the Overcollateralized Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
The Class X Certificates will represent beneficial ownership of the Class
X Interest, the Interest Rate Swap Agreement, the Supplemental Interest
Trust and amounts in the Excess Reserve Fund Account, subject to the
obligation to make payments from the Excess Reserve Fund Account and the
Supplemental Interest Trust in respect of Basis Risk Carry Forward
Amounts. For federal income tax purposes, the Securities Administrator
will treat the Class X Certificateholders' obligation to make payments
from the Excess Reserve Fund Account and the Supplemental Interest Trust
as payments made pursuant to an interest rate cap contract written by the
Class X Certificateholders in favor of each Class of LIBOR Certificates.
Such rights of the Class X Certificateholders and LIBOR
Certificateholders shall be treated as held in a portion of the Trust
Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(15) 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 and the
Supplemental Interest Trust in respect of any Basis Risk Carry Forward
Amounts. For federal income tax purposes, the Securities Administrator
will treat a Certificateholder's right to receive payments from the
Excess Reserve Fund Account and the Supplemental Interest Trust as
payments made pursuant to an interest rate cap contract written by the
Class X Certificateholders.
(16) Each of these Certificates will also be subject to the obligation to pay
Class IO Shortfalls as described in Section 8.14. For federal income tax
purposes, any amount distributed on the LIBOR Certificates on any such
Distribution Date in excess of their Pass Through Rate, calculated
without reference to any Net Swap Payment Amounts or Net Swap Receipt
Amounts from the WAC Cap (the "REMIC Cap") shall be treated as having
been
6
paid from the Excess Reserve Fund Account or the Supplemental Interest
Trust, as applicable, and any excess of the REMIC Cap over the amount
distributable on such Class of LIBOR Certificates on such Distribution
Date shall be treated as having been paid to the Supplemental Interest
Trust, all pursuant to, and as further provided in, Section 8.14. The
Securities Administrator will treat a LIBOR Certificateholder's right to
receive payments from the Excess Reserve Fund Account and the
Supplemental Interest Trust as payments made pursuant to an interest rate
cap contract written by the Class X Certificateholders.
7
In addition to issuing the Upper-Tier Regular Interests, the
Upper-Tier REMIC shall issue the Class R Certificates, which shall be the sole
class of residual interests in the Upper-Tier REMIC. The Class R Certificates
will be issued as a single certificate in definitive form in a principal
amount of $100 and shall have no interest rate. Amounts received by the Class
R Certificates shall be deemed paid from the Upper-Tier REMIC.
Class X REMIC
-------------
The Class X REMIC shall issue the following classes of interests. The
Class X Certificates shall represent a regular interest in the Class X REMIC
and the Class RX Certificates shall represent the sole class of residual
interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
-------------------------- ------------- ----------------
Class X Certificates (1) (1)
Class RX Certificates (2) (2)
-----------------
(1) The Class X Certificates are entitled to 100% of the interest and
principal on the Class X Interest on each Distribution Date.
(2) The Class RX Certificates do not have an interest rate or principal
amount.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC as cash flow
on a REMIC regular interest, without creating any actual or potential
shortfall (other than for credit losses) to any Trust REMIC regular interest.
It is not intended that the Class R, Class RC or Class RX Certificates be
entitled to any cash flow pursuant to this Agreement except as provided in
Section 4.01(a)(iii)(N) hereunder.
For any purpose for which the Pass-Through Rates are calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by the Lower-Tier REMIC such rates shall be
adjusted to equal a monthly day count convention based on a 30 day month for
each Due Period and a 360-day year so that the Mortgage Loans and all regular
interests will be using the same monthly day count convention.
The minimum denomination for each Class of the Offered Certificates
will be $50,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for (a) the Class R, Class RC and
Class RX Certificates will each be $100 and each will be a 100% Percentage
Interest in such Class and (b) the Class P and Class X Certificates will be a
1% Percentage Interest in each such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
8
Book-Entry Certificates...................... All Classes of Certificates other than the Physical Certificates.
Class A Certificates......................... The Class A-1, Class A-2, Class A-3, Class A-4-A and Class A-4-B
Certificates, collectively.
Class B Certificates......................... The Class B-1, Class B-2 and Class B-3 Certificates, collectively.
Class M Certificates......................... The Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates, collectively.
Residual Certificates........................ The Class R, Class RC and Class RX Certificates.
ERISA Restricted The Private Certificates and any Certificate with a rating below
Certificates................................. the lowest applicable permitted rating under the Underwriters'
Exemption.
LIBOR Certificates........................... The Offered Certificates (other than the Residual Certificates) and
the Class B-3 Certificates.
Offered Certificates......................... All Classes of Certificates other than the Private Certificates.
Physical Certificates........................ The Class R, Class RC, Class RX, Class P and Class X Certificates.
Private Certificates......................... The Class B-3, Class P and Class X Certificates.
Rating Agencies.............................. ▇▇▇▇▇'▇ and S&P.
Regular Certificates......................... All Classes of Certificates other than the Residual Certificates.
Subordinated Certificates.................... The Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the applicable Servicing
Agreement or Sale Agreement. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Monthly Payment is, as of the last day of the prior Due
Period, two months or
9
more past due (without giving effect to any grace period), each Mortgage Loan
in foreclosure, all REO Property and each Mortgage Loan for which the
Mortgagor has filed for bankruptcy.
Account: Any of the Distribution Account, the Excess Reserve Fund
Account or the Master Servicer Account. Each such Account shall be a separate
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior
to such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Additional Designated Information: As defined in Section 13.02.
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.
Administrative Fee Rate: With respect to any Mortgage Loan, the
investment income earned on amounts in the Distribution Account during the
Master Servicer Float Period and paid to the Master Servicer as compensation
for its activities under this Agreement.
Administrative Fees: As to each Mortgage Loan, the fees calculated
by reference to the Administrative Fee Rate.
Advance: Any Monthly Advance or Servicing Advance.
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 Master Servicing and Trust Agreement and all
amendments or supplements hereto.
American Home: American Home Mortgage Corp., a New York corporation,
and its successors in interest.
American Home Mortgage Loans: The mortgage loans acquired by the
Purchaser from American Home pursuant to the American Home Sale and Servicing
Agreement.
American Home Servicing: American Home Mortgage Servicing, Inc., a
Maryland corporation, and its successors in interest.
American Home Sale and Servicing Agreement: The Mortgage Loan Sale
and Servicing Agreement, dated as of December 1, 2005, among American Home
Mortgage Corp.,
10
American Home Mortgage Servicing, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as
modified by the related Assignment Agreements.
Ameriquest: Ameriquest Mortgage Company, a Delaware corporation, and
its successors in interest.
Ameriquest Mortgage Loans: The mortgage loans acquired by the
Purchaser from Ameriquest pursuant to the Ameririquest Sale Agreement.
Ameriquest Sale Agreement: The Amended and Restated Flow Mortgage
Loan Purchase and Warranties Agreement, dated as of June 1, 2005, among
Ameriquest Mortgage Company and ▇▇▇▇▇▇▇ Sachs Mortgage Company, as modified by
the related Assignment Agreements.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
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.
Assignment Agreement: A Step 1 Assignment Agreement or a Step 2
Assignment Agreement.
Auction Call: As defined in Section 11.01.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer (x) the sum of
(without duplication) (i) all scheduled installments of interest (net of the
related Expense Fees) and principal due on the Due Date on such Mortgage Loans
in the related Due Period and received on or prior to the related
Determination Date, together with any Monthly Advances in respect thereof;
(ii) all Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds
received during the related Principal 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
(excluding Prepayment Premiums) on the Mortgage Loans received during the
related Principal Prepayment Period together with all Compensating Interest
paid in connection therewith; (iv) all amounts received with respect to such
Distribution Date in connection with a purchase or repurchase of a Deleted
Mortgage Loan; (v) all amounts received with respect to such Distribution Date
as a Substitution Adjustment Amount received in connection with the
substitution of a Mortgage Loan; (vi) all Net Swap Receipt Amounts, if any,
less Net Swap Payment Amounts, if any, for such Distribution Date; and (vii)
all proceeds received with respect to the termination of the Trust Fund
pursuant to clause (a) of Section 11.01; reduced by (y) all amounts in
reimbursement for Monthly Advances and Servicing Advances previously made with
respect to the Mortgage Loans, and other amounts as to which
11
the Servicers, the Depositor, the Master Servicer, the Securities
Administrator, the Trustee (or co-trustee) or the Custodians are entitled to
be paid or reimbursed pursuant to this Agreement.
Avelo: Avelo Mortgage, L.L.C., a Delaware limited liability company,
and its successors in interest.
Avelo Servicing Agreement: The Flow Servicing Agreement, dated as of
January 1, 2006, between Avelo and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as modified
by the related Assignment Agreements.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the WAC Cap, the excess, if any, of (i) the amount of interest such
Class of Certificates would otherwise be entitled to receive on such
Distribution Date had such Pass-Through Rate not been subject to the WAC Cap,
over (ii) the amount of interest that Class of Certificates received on such
Distribution Date taking into account 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 applicable Pass-Through Rate for such Class of Certificates for such
Distribution Date, without giving effect to the WAC Cap).
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, (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments) or (iii) the amount payable from the
Supplemental Interest Trust.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
New York or California, (b) with respect to a Servicer, the State in which
such 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 Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of LIBOR
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
Certificates; 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
12
have been previously reduced by Applied Realized Loss Amounts will be
increased, in order of seniority, by the amount of the Subsequent Recovery
distributed on such Distribution Date (up to the amount of Applied Realized
Loss Amounts allocated to such Class or Classes). The Class X and Class P
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
Securities Administrator 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 Party: As defined in Section 13.05.
Certifying Person: As defined in Section 13.05.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance
of the Class A Certificates immediately prior to such Distribution Date over
(ii) the lesser of (A) 86.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1."
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2."
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3."
13
Class A-4-A Certificates: All Certificates bearing the class
designation of "Class A-4-A."
Class A-4-B Certificates: All Certificates bearing the class
designation of "Class A-4-B."
Class B Certificates: As specified in the Preliminary Statement.
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 Balance 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 B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 97.00% and (y) 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 Balance 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 B-1
14
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date) and (H) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of (x) 98.00% and
(y) 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 Balance 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 B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date), (H) 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 (I) the Class Certificate Balance of the Class B-3
Certificates immediately prior to that Distribution Date over (ii) the lesser
of (A) the product of 99.00% and (y) 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 IO Shortfalls: As defined in Section 8.14. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest on such
Distribution Date, all as further provided in Section 8.14.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
15
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance 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) the
product of (x) 90.30% and (y) 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 Balance 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) the product of (x) 92.10% and (y) 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 Balance 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) the product of (x) 93.40%
and (y) 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 Balance 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
16
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) the product of (x) 95.00% and (y) 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 Balance 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) the product of (x) 96.00% and
(y) 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 RC Certificates: All Certificates bearing the class
designation of "Class RC."
Class RX Certificates: All Certificates bearing the class
designation of "Class RX."
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
17
which is distributable as an Overcollateralization Reduction Amount, minus
(iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement
and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Closing Date: May 26, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The "Custodial Account" as defined in the
applicable Servicing Agreement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and Servicer the
lesser of (a) the Prepayment Interest Shortfall, if any, for the Distribution
Date, with respect to voluntary Principal Prepayments in full or in part by
the Mortgagor (excluding any payments made upon liquidation of the Mortgage
Loan), and (b) (i) one-half of its aggregate Servicing Fee received for the
related Distribution Date in the case of Countrywide Servicing (servicing
non-Conduit Mortgage Loans) and GreenPoint or (ii) its aggregate Servicing Fee
received for the related Distribution Date in the case of American Home
Servicing, Avelo, Countrywide Servicing (sub-servicing the Conduit Mortgage
Loans), National City and ▇▇▇▇▇ Fargo.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: With respect to the Securities Administrator
(i) for purposes other than certificate transfers and final payment, to the
principal office of the Securities Administrator at 4 New York Plaza, 6th
Floor, New York, New York 10004, Attention: Worldwide Securities
Services/Structured Finance Services - GSAA Home Equity Trust 2006-9 and (ii)
for certificate transfers and final payment at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Worldwide Securities Services/Structured
Finance Services - GSAA Home Equity Trust 2006-9, or at such other addresses
as the Securities Administrator may designate from time to time by notice to
the Certificateholders. With respect to the Trustee, to the principal office
of the Trustee at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Structured Finance Trust Services or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders.
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:
18
Lower-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
-------------------------------------- ----------------------------------- --------------------------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3 Class A-3 Class A-3
Class LT-A-4-A Class A-4-A Class A-4-A
Class LT-A-4-B Class A-4-B Class A-4-B
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-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
Countrywide: Countrywide Home Loans, Inc., a New York corporation,
and its successors in interest.
Countrywide Mortgage Loans: The mortgage loans acquired by the
Purchaser from Countrywide pursuant to the Countrywide Sale Agreement, and, in
the case of the mortgage loans being serviced by Countrywide, shall include
the Goldman Conduit Mortgage Loans.
Countrywide Sale Agreement: The Master Mortgage Loan Purchase
Agreement, dated July 1, 2004, between Countrywide and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company, as amended by Amendment Reg AB to the Master Mortgage Loan Purchase
and Servicing Agreement, dated January 1, 2006, between Countrywide,
Countrywide Servicing and ▇▇▇▇▇▇▇ Sachs Mortgage Company, as modified by the
related Assignment Agreements.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in interest.
Countrywide Servicing Agreements: Each of (i) the Servicing
Agreement, dated July 1, 2004, between Countrywide Servicing and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, as amended by Amendment Reg AB to the Master Mortgage Loan
Purchase and Servicing Agreement, dated January 1, 2006, between Countrywide,
Countrywide Servicing and ▇▇▇▇▇▇▇ Sachs Mortgage Company and (ii) the Flow
Servicing Agreement, dated May 1, 2005, between Countrywide Servicing and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, each as modified by the related Assignment
Agreements.
Custodial File: With respect to each Mortgage Loan, any Mortgage
Loan Document which is delivered to the applicable Custodian or which at any
time comes into the possession of that Custodian.
Custodian: With respect to the Goldman Conduit Mortgage Loans,
JPMorgan, Deutsche Bank and U.S. Bank, and with respect to all other Mortgage
Loans, Deutsche Bank.
19
Cut-off Date: May 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balance 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).
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Supplemental Interest Trust to the Swap Provider
pursuant to the Interest Rate Swap Agreement as a result of an Event of
Default (as defined in the Interest Rate Swap Agreement) with respect to which
the Swap Provider is the defaulting party or a Termination Event (as defined
in the Interest Rate Swap Agreement) (other than Illegality or a Tax Event
that is not a Tax Event Upon Merger (each as defined in the Interest Rate Swap
Agreement)) with respect to which the Swap Provider is the sole Affected Party
(as defined in the Interest Rate Swap Agreement) or with respect to a
termination resulting from a Substitution Event (as defined in the Interest
Rate Swap Agreement).
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).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by any Responsible Party, the Purchaser or the Depositor in
accordance with the terms of any Sale Agreement, any Assignment Agreement or
this Agreement, as applicable, or which is, in the case of a substitution by
American Home, Countrywide, GreenPoint or Novelle pursuant to the American
Home Sale and Servicing Agreement, the Countrywide Sale Agreement, the
GreenPoint Sale Agreement or the Novelle Sale Agreement, respectively, or by
the Purchaser pursuant to the Assignment Agreements or this Agreement,
replaced or to be replaced with a substitute mortgage loan.
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 and the Securities Administrator, 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-
20
term unsecured debt obligations that are rated "P-1" by Moody's and "A-1" by
Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
Business Day immediately preceding the Remittance Date, or, with respect to
the Goldman Conduit Mortgage Loans, the 15th calendar day (or if such 15th day
is not a Business Day, the Business Day immediately following such 15th day)
of the month of the related Remittance Date.
Deutsche Bank: Deutsche Bank National Trust Company, a national
banking association, and its successors in interest.
Distribution Account: The separate Eligible Account created by the
Securities Administrator pursuant to Section 3.01(b) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and
the Certificateholders and designated "JPMorgan Chase Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2006-9, Asset-Backed Certificates, Series 2006-9." Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Date: The 25th day of each month or, if such day is not
a Business Day, the immediately succeeding Business Day, commencing in June
2006.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in
which that Distribution Date occurs and ending on the first day of the
calendar month in which that Distribution Date occurs, except, in the case of
the Goldman Conduit Mortgage Loans, the period commencing on the first day of
the month and ending on the last day of the month preceding the month of the
Remittance Date.
▇▇▇▇▇: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated
"A-1+" by Standard & Poor's, "F1" by Fitch and "P-1" by Moody's (or 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
21
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 Securities
Administrator or 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.
Event of Default: As defined in the applicable Servicing Agreement.
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 Securities Administrator pursuant to Sections 3.01(a) in
the name of the Securities Administrator as paying agent for the benefit of
the Regular Certificateholders and designated "JPMorgan Chase Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2006-9, Asset-Backed Certificates, Series 2006-9." 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, and
the rules and regulations promulgated thereunder.
Exchange Act Filing Obligation: The obligations of the Master
Servicer under Sections 9.08 and 9.09 with respect to notice and information
to be provided to the Depositor or Article XIII (except Section 13.07).
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate, the Administrative Fee Rate and, if set
forth on the Mortgage Loan Schedule, the applicable Primary Mortgage Insurance
Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
22
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for that
Distribution Date and (y) the related Overcollateralization Deficiency for
such Distribution Date.
Fair Market Value Excess: As defined in Section 11.01.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in May
2036.
Fitch: Fitch, Inc.
Form 10-D Disclosure Item: With respect to any Person, any pending
material litigation or contemplated governmental proceedings against such
Person that would have a material adverse impact on the Certificateholders.
Form 10-K Disclosure Item: With respect to any Person, (a) any
pending material litigation or contemplated governmental proceedings against
such Person that would have a material adverse impact on the
Certificateholders and (b) any affiliations or relationships between such
Person and any Item 1119 Party that would be material to a Certificateholder.
▇▇▇▇▇▇▇ 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.
Goldman Conduit: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Conduit Program.
Goldman Conduit Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the applicable Goldman Conduit Sale Agreements.
Goldman Conduit Sale Agreements: The Master Loan Purchase
Agreements, between various mortgage loan sellers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company, dated as of their respective dates, , as modified by the related
Assignment Agreements.
Goldman Servicing Agreements: Each of (i) the Flow Servicing
Agreement, dated as of May 1, 2005, between Countrywide Servicing and ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Company relating to the servicing of certain of the Goldman
Conduit Mortgage Loans and (ii) the Flow Servicing Agreement, dated as of
January 1, 2006, between Avelo and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company relating to
the servicing of certain of the Goldman Conduit Mortgage Loans, each , as
modified by the related Assignment Agreements.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York
corporation, and its successor in interest.
GreenPoint Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from GreenPoint pursuant to the GreenPoint Sale Agreement.
23
GreenPoint Sale Agreement: The Amended and Restated Master Mortgage
Loan Purchase Agreement, dated as of November 1, 2005, between GreenPoint and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as modified by the related Assignment
Agreements.
GreenPoint Servicing Agreement: The Servicing Agreement, dated as of
November 1, 2005, between GreenPoint and ▇▇▇▇▇▇▇ Sachs Mortgage Company, as
modified by the related Assignment Agreements.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date, with
respect to the LIBOR Certificates, the period commencing on the immediately
preceding Distribution Date (or commencing on the Closing Date in the case of
the first Distribution Date) and ending on the day immediately preceding the
current Distribution Date. 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.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of May 26, 2006, between the GSAA Home Equity Trust 2006-9 and the
Swap Provider and assigned to the Supplemental Interest Trust or any other
swap agreement (including any related schedules) assigned to the Supplemental
Interest Trust.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds attributable to interest relating to the
Mortgage Loans and any Net Swap Receipt Amount attributable for such
Distribution Date, net of any Net Swap Payment Amount made with respect to
such Distribution Date.
Investment Account: As defined in Section 3.02(a).
Item 1119 Party: The Depositor, the Master Servicer, the Trustee,
any Servicer, any subservicer, any originator identified in the Prospectus
Supplement and any Swap Provider.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking corporation, and its successors in interest.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator 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 Securities
Administrator shall request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two (2) 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 (2) quotations are provided as requested, the rate
for that date will be the arithmetic mean of the rates quoted by major banks
24
in New York City, selected by the Securities Administrator (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. The
establishment of LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculations based thereon, in the absence of
manifest error, shall be final and binding. Except as otherwise set forth
herein, absent manifest error, the Securities Administrator may conclusively
rely on quotations of LIBOR as such quotations appear on Telerate Screen Page
3750.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the Principal Prepayment Period preceding the month of such Distribution Date
and as to which the applicable Servicer has certified that it has received all
amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
Subsequent Recoveries.
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-A-1, Class LT-A-2,
Class LT-A-3, Class LT-A-4-A, Class LT-A-4-B, Class LT-M-1, Class LT-M-2,
Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-B-1, Class LT-B-2, Class
LT-B-3 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.
Master Servicer: JPMorgan Chase Bank, National Association, and if a
successor master servicer is appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
25
Master Servicer Remittance Date: With respect to each Distribution
Date, the 25th day of each month or, if such day is not a Business Day, the
immediately succeeding Business Day.
Master Servicer Float Period: As to any Distribution Date and each
Mortgage Loan, the period commencing on the 18th Business Day immediately
preceding such Distribution Date and ending two (2) Business Days prior to
such Distribution Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: As defined in the applicable Servicing Agreement.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 12.05(b)
the address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors Service, Inc.,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of a
Sale Agreement and a Servicing Agreement, each Mortgage Loan originally sold
and subject to any Sale Agreement being identified on the Mortgage Loan
Schedule, which Mortgage Loan includes without limitation the Mortgage File,
the Servicing File, the Monthly Payments, Principal Prepayments, Prepayment
Premiums, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition proceeds and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
26
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 (which shall be delivered to the Custodians in an electronic
format acceptable to the Custodians), such schedule setting forth the
following information with respect to each Mortgage Loan: (1) Responsible
Party's Mortgage Loan number; (2) the address, city, state and zip code of the
Mortgaged Property; (3) a code indicating whether the Mortgagor is
self-employed; (4) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (5) a code indicating
whether the Mortgaged Property is a single family residence, two family
residence, three-family residence, four family residence, condominium,
manufactured housing or planned unit development; (6) the purpose of the
Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest Rate
at origination; (9) the current Mortgage Interest Rate; (10) the name of the
applicable Servicer; (11) the applicable Servicing Fee Rate; (12) the current
Monthly Payment; (13) the original term to maturity; (14) the remaining term
to maturity; (15) the principal balance of the Mortgage Loan as of the Cut-off
Date after deduction of payments of principal due on or before the Cut-off
Date whether or not collected; (16) the LTV at origination and if the Mortgage
Loan has a second lien, combined LTV at origination; (17) the actual principal
balance of the Mortgage Loan as of the Cut-off Date; (18) social security
number of the Mortgagor; (19) a code indicating whether the Mortgage Loan had
a second lien at origination; (20) if the Mortgage Loan has a second lien,
combined loan balance as of the Cut-off Date; (21) a code indicating whether
the Mortgaged Property is a leasehold estate; (22) the due date of the
Mortgage Loan; (23) whether the Mortgage Loan is insured by a Primary Mortgage
Insurance Policy and the name of the insurer; (24) the certificate number of
the Primary Mortgage Insurance Policy; (25) the amount of coverage of the
Primary Mortgage Insurance Policy, and if it is a lender-paid Primary Mortgage
Insurance Policy, the premium rate; (26) the type of appraisal; (27) a code
indicating whether the Mortgage Loan is a MERS Loan; (28) documentation type
(including asset and income type); (29) first payment date; (30) the schedule
of the payment delinquencies in the prior 12 months; (31) FICO score; (32) the
Mortgagor's name; (33) the stated maturity date; (34) the original principal
amount of the Mortgage Loan and (35) the name of the applicable Custodian.
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 on a Mortgage Note.
National City: National City Mortgage Co., an Ohio corporation, and
its successors in interest.
National City Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from National City pursuant to the National City Sale and Servicing
Agreement.
National City Sale and Servicing Agreement: Second Amended and
Restated Flow Seller's Warranties and Servicing Agreement, dated as of January
1, 2006, between
27
National City Mortgage Co. and ▇▇▇▇▇▇▇ Sachs Mortgage Company, as modified by
the related Assignment Agreements.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made on such Distribution Date.
Net Swap Payment Amount: With respect to any Distribution Date, the
Fixed Amount (as defined in the Interest Rate Swap Agreement) payable by the
Supplemental Interest Trust to the Swap Provider, pursuant to the applicable
clauses of the Priorities of Distribution, on the related Fixed Rate Payer
Payment Date (as defined in the Interest Rate Swap Agreement).
Net Swap Receipt Amount: With respect to any Distribution Date, the
Floating Amount (as defined in the Interest Rate Swap Agreement) payable by
the Swap Provider to the Supplemental Interest Trust on the related Floating
Rate Payer Payment Date (as defined in the Interest Rate Swap Agreement).
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 P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non Permitted Transferee: As defined in Section 8.12(e).
Nonrecoverable Monthly Advance: Any Monthly 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 (in accordance with the
related Servicing Standard set forth in the related Servicing Agreement), the
Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Monthly 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 Advance 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 (in accordance with
the related Servicing Standard set forth in the related Servicing Agreement),
the Master Servicer or any successor Master Servicer including the Trustee, as
applicable, 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.
28
Notice of Final Distribution: The notice to be provided pursuant to
Section 11.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Novelle: Novelle Financial Services, Inc., a Delaware corporation,
and its succesors in interest.
Novelle Mortgage Loans: The Mortgage Loans acquired by the Purchaser
from Novelle pursuant to the Novelle Sale Agreement.
Novelle Sale Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of December 1, 2005, between Novelle Financial
Services, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as modified by the related
Assignment Agreements.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of any Servicer or any
Responsible Party, and delivered to the Trustee and the Securities
Administrator, as required by any Servicing Agreement or Sale Agreement or, in
the case of any other Person, signed by an authorized officer of such Person.
Opinion of Counsel: A written opinion of counsel, who may be in
house counsel for a Servicer, reasonably acceptable to the Trustee and/or the
Securities Administrator, as applicable (and/or such other Persons as may be
set forth herein); provided, that any Opinion of Counsel relating to (a)
qualification of any Trust 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 applicable Servicer or the
Master Servicer of the Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the applicable Servicer or the Master
Servicer of the Mortgage Loans or in an affiliate of either and (iii) is not
connected with the applicable Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day
of the related Due Period, is equal to 10.00% or less of the Cut-off Date Pool
Principal Balance.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
29
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the LIBOR Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates
on such Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the 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.
Par Value: means an amount equal to the greater of (a) the sum of
(1) 100% of the unpaid principal balance of the Mortgage Loans (other than
Mortgage Loans related to REO Properties), (2) interest accrued and unpaid on
the Mortgage Loans, (3) any ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, fees and expenses of
the Master Servicer, the Securities Administrator and the Trustee, (4) any
Swap Termination Payment other than a Defaulted Swap Termination Payment owed
to the Swap Provider and (5) with respect to any REO Property, the lesser of
(x) the appraised value of each REO Property, as determined by the higher of
two appraisals completed by two independent appraisers selected by the Master
Servicer or its designee, and (y) the unpaid principal balance of each
Mortgage Loan related to any REO Property, and (b) the sum of (1) the
aggregate unpaid Class Certificate Balance of each class of certificates then
outstanding, (2) interest accrued and unpaid on the certificates, (3) any
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee and (4) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider.
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
30
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.
Performance Certification: As defined in Section 13.05.
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 ninety (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 thirty (30) days) denominated in United
States dollars and issued by any Depository Institution and rated F1+ by
Fitch, P-1 by Moody's and A-1+ by S&P;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than thirty (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, the Securities Administrator or the Trustee or
an Affiliate thereof, that have been rated "Aaa" by Moody's, "AAAm" or
"AAAm-G" by Standard & Poor's and, if rated by Fitch, at least "AA" by
Fitch; and
(vii) if previously confirmed in writing to the Securities
Administrator, 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
31
interest and principal payments with respect to such instrument provide a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, international organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in Section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of such Person or any other U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate to such Person
may cause any Trust REMIC to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the ▇▇▇▇▇▇▇ 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 Principal
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 Principal Prepayment
Period, an amount equal to the product of (a) the Mortgage Interest Rate net
of the applicable 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 Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
32
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, including 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 Prepayment Period: With respect to any Distribution Date,
the calendar month preceding the month in which that Distribution Date occurs.
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of 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 Monthly Advances in
respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and
Liquidation Proceeds allocable to principal and received during the related
Principal Prepayment Period; (iii) all Principal Prepayments allocable to
principal and received during the related Principal Prepayment Period; (iv)
all amounts received with respect to such Distribution Date representing the
portion of the purchase price allocable to principal in connection with a
purchase or repurchase of a Deleted Mortgage Loan; (v) principal portion of
all amounts received with respect to such Distribution Date as a Substitution
Adjustment Amount and received in connection with the substitution of a
Mortgage Loan and (vi) the allocable portion of the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
11.01 (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated May 24,
2006, relating to the Offered Certificates.
PTCE: Prohibited Transaction Class Exemption, issued by the U.S.
Department of Labor.
PUD: A planned unit development.
Purchaser: ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited
partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
33
Securities Administrator. 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 12.05(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 any amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the related Interest Accrual Period;
provided, however, that for any Definitive Certificate issued pursuant to
Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
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 of 1940 or any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the 18th day
(or if such 18th day is not a Business Day, the first Business Day immediately
preceding such 18th day) of the month in which such Distribution Date occurs.
34
REO Disposition: The final sale by the Servicer of any REO Property.
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.
Reportable Event: Any event required to be reported on Form 8-K, but
at a minimum will include:
(a) entry into a definitive material agreement related to the Trust
Fund, the Certificates or the Mortgage Loans, or an amendment to a Transaction
Document, only if the Depositor is not a party to such agreement (e.g., a
servicing agreement with a servicer contemplated by Item 1108(a)(3) of
Regulation AB);
(b) termination of a Transaction Document (other than by expiration
of the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), only if the Depositor is
not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to any material party related to the Trust Fund,
the commencement of any bankruptcy or receivership with respect to such party;
(d) with respect to the Master Servicer and any Servicer only, the
occurrence of a Trigger Event, Sequential Trigger Event or an Event of Default
under this Agreement;
(e) the resignation, removal, replacement, substitution of the
Trustee, the Securities Administrator, the Master Servicer, any Servicer, any
subservicer or any Custodian;
(f) with respect to the Depositor only, if the Depositor becomes
aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added with respect
to one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(g) a required distribution to holders of the Certificates is not
made as of the required distribution date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer or the
Securities Administrator, any Subcontractor determined by such Person pursuant
to Section 13.08(b) to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB. References to a Reporting Subcontractor
shall refer only to the Subcontractor of such Person and shall not refer to
Subcontractors generally.
Residual Certificates: As specified in the Preliminary Statement.
35
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator or the Master Servicer, any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer,
any associate or any other officer of the Trustee, the Securities
Administrator or the Master Servicer, customarily performing functions similar
to those performed by any of the above designated officers who at such time
shall be officers to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Agreement.
Responsible Party: Each of American Home, Ameriquest, Countrywide,
GreenPoint, National City, Novelle or ▇▇▇▇▇ Fargo, as the context may require,
in its capacity as seller under the related Sale Agreement. With respect to
the Goldman Conduit Mortgage Loans, the Purchaser.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the American Home Sale and Servicing
Agreement, the Ameriquest Sale Agreement, the Countrywide Sale Agreement, the
GreenPoint Sale Agreement, the National City Sale and Servicing Agreement, the
Novelle Sale Agreement, the ▇▇▇▇▇ Fargo Sale and Servicing Agreement and the
Goldman Conduit Sale Agreement.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 13.05.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: JPMorgan Chase Bank, National Association,
and if a successor securities administrator is appointed hereunder, such
successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution Account, the
period commencing on the second Business Day immediately preceding such
Distribution Date and ending on such Distribution Date.
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 as of the
first day of the month in which such Distribution Date occurs.
Senior Specified Enhancement Percentage: As of any date of
determination, 13.30%.
Sequential Trigger Event: means, if (x) on any Distribution Date
before the 37th Distribution Date, (i) the 60 Day+ Rolling Average equals or
exceeds 40.00% of the prior period's Credit Enhancement Percentage for the
Class A Certificates or (ii) the aggregate amount of Realized Losses incurred
since the Cut-off Date through the last day of the related Principal
36
Prepayment Period divided by the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date exceeds 0.550%, or (y) on any
Distribution Date on or after the 37th Distribution Date, a Trigger Event is
in effect.
Servicer: Each of American Home Servicing, Avelo, Countrywide
Servicing, GreenPoint, National City and ▇▇▇▇▇ Fargo, in its capacity as
servicer under the related Servicing Agreement, or any successor servicer
appointed pursuant to such Servicing Agreement.
Servicing Advances: As defined in the Servicing Agreement.
Servicing Agreement: Each of the American Home Sale and Servicing
Agreement, the Countrywide Servicing Agreements, the GreenPoint Servicing
Agreement, the Avelo Servicing Agreement, the National City Sale and Servicing
Agreement, and the ▇▇▇▇▇ Fargo Sale and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB.
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: As of the statistical calculation date of April
1, 2006, a per annum rate equal to 0.250% with respect to approximately 39.19%
of the mortgage loans, per annum 0.250% increasing to 0.375% per annum after
the initial rate adjustment date with respect to approximately 39.56% of the
mortgage loans, per annum 0.375% with respect to approximately 17.40% of the
mortgage loans and 0.500% per annum with respect to approximately 3.85% of the
mortgage loans.
Servicing File: As defined in the applicable Servicing Agreement.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 0.50% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 1.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance
of the Mortgage Loans but instead will remain the same as the prior period's
Specified Overcollateralized Amount until the Distribution Date on which a
Trigger Event is no longer occurring. When the Class Certificate Balance of
each Class of LIBOR Certificates has been reduced to zero, the Specified
Overcollateralized Amount will thereafter be zero.
Standard & Poor's or S&P: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(b) the address for notices to Standard & Poor's shall be Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
37
Residential Mortgage Surveillance Group - GSAA Home Equity Trust 2006-9, or
such other address as Standard & Poor's may hereafter furnish to the Depositor
and the Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (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 (whether or not received), minus (ii) all amounts previously
remitted to the Securities Administrator 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 or advanced prior to the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Principal 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 Principal
Prepayment Period shall be zero.
Step 1 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of May 26, 2006, among the Purchaser,
American Home, American Home Servicing, and the Depositor, (ii) Assignment,
Assumption and Recognition Agreement, dated as of May 26, 2006, among the
Purchaser, Ameriquest and the Depositor, (iii) Assignment, Assumption and
Recognition Agreement, dated as of May 26, 2006, among the Purchaser,
Countrywide, Countrywide Servicing and the Depositor, (iv) Assignment,
Assumption and Recognition Agreement, dated as of May 26, 2006, among the
Purchaser, GreenPoint and the Depositor, (v) Assignment, Assumption and
Recognition Agreement, dated as of May 26, 2006, among the Purchaser, National
City and the Depositor, (vi) Assignment, Assumption and Recognition Agreement,
dated as of May 26, 2006, among the Purchaser, Novelle and the Depositor,
(vii) Assignment, Assumption and Recognition Agreement, dated as of May 26,
2006, among the Purchaser, ▇▇▇▇▇ Fargo and the Depositor, (viii) Assignment,
Assumption and Recognition Agreement, dated as of May 26, 2006, among the
Purchaser, Avelo and the Depositor and (ix) Assignment, Assumption and
Recognition Agreement, dated as of May 26, 2006, among the Purchaser,
Countrywide Servicing and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of May 26, 2006, among the Depositor, the
Master Servicer, the Trustee and American Home Servicing, (ii) Assignment,
Assumption and Recognition Agreement, dated as of May 26, 2006, among the
Depositor, the Master Servicer, the Trustee and Ameriquest, (iii) Assignment,
Assumption and Recognition Agreement, dated as of May 26, 2006, among the
Depositor, the Master Servicer, the Trustee and Countrywide Servicing, (iv)
Assignment, Assumption and Recognition Agreement, dated as of May 26, 2006,
among the Depositor, the Master Servicer, the Trustee and GreenPoint, (v)
Assignment, Assumption and Recognition Agreement, dated as of May 26, 2006,
among the Depositor, the Master Servicer, the Trustee and National City, (vi)
Assignment, Assumption and Recognition Agreement, dated as of May 26, 2006,
among the Depositor, the Master Servicer, the Trustee and Novelle, (vii)
Assignment, Assumption and Recognition Agreement, dated as of May 26, 2006,
among the Depositor, the Master Servicer, the Trustee and ▇▇▇▇▇ Fargo, (viii)
Assignment, Assumption and Recognition Agreement, dated as of May 26, 2006,
between the Purchaser, Avelo, the Trustee
38
and the Depositor and (ix) Assignment, Assumption and Recognition Agreement,
dated as of May 26, 2006, between the Purchaser, Countrywide Servicing, the
Trustee and the Depositor.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balance of the Class A Certificates has been
reduced to zero and (b) the later to occur of (i) the Distribution Date in May
2009 and (ii) the first Distribution Date on which the Senior Enhancement
Percentage is greater than or equal to the Senior Specified Enhancement
Percentage.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Master Servicer, any Servicer, any subservicer or the Securities
Administrator, as the case may be.
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.
Substitution Adjustment Amount: With respect to any of the American
Home Sale and Servicing Agreement, the GreenPoint Sale Agreement, the
Countrywide Sale Agreement or the Novelle Sale Agreement or with respect to a
Mortgage Loan substituted by the Purchaser, an amount of cash received from
American Home, Countrywide, GreenPoint or Novelle in connection with a
substitution for a Deleted Mortgage Loan.
Supplemental Interest Trust: The corpus of a trust created pursuant
to Section 4.05 of this Agreement, consisting of the Interest Rate Swap
Agreement, subject to the obligation to pay amounts specified in Section 4.05.
Swap Provider: ▇▇▇▇▇▇▇ Sachs Mitsui Marine Derivative Products,
L.P., a Delaware limited partnership, and its successors in interest, and any
successor swap provider under any replacement Interest Rate Swap Agreement.
Swap Termination Payment: Any payment payable by the Supplemental
Interest Trust or the Swap Provider upon termination of the Interest Rate Swap
Agreement as a result of an Event of Default (as defined in the Interest Rate
Swap Agreement) or a Termination Event (as defined in the Interest Rate Swap
Agreement).
Tax Matters Person: The Holder of the Class R, Class RC and Class RX
Certificates is designated as "tax matters person" of the Lower-Tier REMIC and
the Upper-Tier REMIC, respectively, in the manner provided under Treasury
Regulations Section 1.806F-4(d) and Treasury Regulations Section
301.6234(a)(7)-1.
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).
39
Termination Price: As defined in Section 11.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the
related Remittance Date) or advanced on the Mortgage Loans for Due Dates
during the related Due Period (net of Expense Fees) plus the Net Swap Receipt
Amount and minus any Net Swap Payment Amount over (ii) the sum of the interest
payable to the LIBOR Certificates on such Distribution Date pursuant to
Section 4.01(a)(i).
Transaction Documents: This Agreement, the Assignment Agreements,
the Interest Rate Swap Agreement and any other document or agreement entered
into in connection with the Trust Fund, the Certificates or the Mortgage
Loans.
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)(ii).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) on such Distribution Date the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of 60+ Day Delinquent Mortgage Loans, and (y) the aggregate
unpaid principal balance of the Mortgage Loans as of the last day of the
related Due Period equals or exceeds 40.00% 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 Principal
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
------------------------------ ---------------
June 2008 - May 2009 0.200% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 0.229% in July 2008)
June 2009 - May 2010 0.550% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 0.579% in July 2009)
June 2010 - May 2011 0.900% for the first month, plus an additional 1/12th
of 0.400% for each month thereafter (e.g.,
approximately 0.933% in July 2010)
June 2011 - May 2012 1.300% for the first month, plus an additional 1/12th
of 0.250% for each month thereafter (e.g.,
approximately 1.321% in July 2011)
40
June 2012 and thereafter 1.550%
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Interest Rate Swap Agreement and all amounts received thereunder; (iii) the
Excess Reserve Fund Account, the Distribution Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement;
(iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (v) the rights of the
Trust under the Step 2 Assignment Agreements; (vi) the Supplemental Interest
Trust; and (vii) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing. The Trust Fund created hereunder is referred to as the
GSAA Home Equity Trust 2006-9.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: U.S. Bank, and its successors in interest, and, if a
successor trustee is appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
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 remaining unpaid prior to the
current Distribution Date and (b) interest on the amount in clause (a) at the
applicable Pass-Through Rate (to the extent permitted by applicable law).
U.S. Bank: U.S. Bank National Association, a national banking
association, and its successors in interest.
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.
41
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), 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 the product of (i) the sum of (A) the weighted
average of the Adjusted Net Mortgage Interest Rates then in effect on the
beginning of the related Due Period on the Mortgage Loans, and (B) the Net
Swap Receipt Amount, if any, less the Net Swap Payment Amount, if any, divided
by the Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period multiplied by 12 and (ii) 30 divided by the actual number
of days in the related Interest Accrual Period, in the case of the LIBOR
Certificates.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, and its successors in interest.
▇▇▇▇▇ Fargo Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from ▇▇▇▇▇ Fargo pursuant to the ▇▇▇▇▇ Fargo Sale and Servicing
Agreement.
▇▇▇▇▇ Fargo Sale and Servicing Agreement: The Second Amended and
Restated Master Seller's Warranties and Servicing Agreement, dated as of
November 1, 2005, between ▇▇▇▇▇ Fargo Bank, National Association and ▇▇▇▇▇▇▇
Sachs Mortgage Company, as modified by the related Assignment Agreements.
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.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the applicable
Custodian on behalf of the Trustee for the benefit of the Certificateholders
the following documents or instruments with respect to each applicable
Mortgage Loan so assigned:
42
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Loan;
(iii) personal endorsement, surety and/or guaranty agreements
executed in connection with all non individual Mortgage Loans
(corporations, partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its recording or,
in certain limited circumstances as set forth in the applicable Servicing
Agreement, a certified copy of the mortgage with evidence of recording;
(v) originals of any intervening Mortgage assignment or certified
copies in either case necessary to show a complete chain of title from
the original mortgagee to the seller and evidencing recording; provided,
that, except in the case of the Goldman Conduit Mortgage Loans, the
assignment may be in the form of a blanket assignment or assignments, a
copy of which with evidence of recording shall be acceptable;
(vi) originals of all assumption, modification, consolidation or
extension agreements or certified copies thereof, in either case with
evidence of recording if required to maintain the lien of the mortgage or
if otherwise required, or, if recordation is not required, an original or
copy of the agreement; provided, that, in the case of the Goldman Conduit
Mortgage Loans, an original with evidence of recording thereon is always
required;
(vii) except with respect to the Countrywide Mortgage Loans, (if
applicable to the files held by the Custodian) an original or copy of a
title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
except in the case of the Goldman Conduit Mortgage Loans, (if applicable
to the files held by the Custodian) an original power of attorney or, in
limited circumstances as set forth in the applicable Servicing Agreement,
a copy of the power of attorney;
(ix) for each GreenPoint Mortgage Loan (if applicable to the files
held by the Custodian) with respect to which the Mortgagor's name as it
appears on the note does not match the borrower's name on the mortgage
loan schedule, one of the following: the original of the assumption
agreement, or a certified copy thereof, in either case with evidence of
recording thereon if required to maintain the lien of the mortgage or if
otherwise required, or, if recordation is not so required, an original or
copy of such assumption agreement;
(x) except with respect to the Countrywide Mortgage Loans, (if
applicable to the files held by the Custodian) a security agreement,
chattel mortgage or equivalent document executed in connection with the
Mortgage, if any; and
43
(xi) with respect to each Mortgage Loan, the complete Mortgage File
including all items as set forth in the applicable Servicing Agreement to
the extent in the possession of the Depositor or the Depositor's Agents.
The Depositor shall deliver or cause each Responsible Party to
deliver to each Custodian 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, pursuant to the applicable Sale Agreement, the
Responsible Party may forward to the applicable Custodian additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
the applicable Sale Agreement. All such mortgage documents held by the
Custodians as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians Assignments of Mortgages (except in the case of MERS Loans), in
blank, for each applicable Mortgage Loan. On the Closing Date, the Trustee
shall provide a written request to each Responsible Party to submit the
Assignments of Mortgage for recordation, at the Responsible Party's expense,
pursuant to the applicable Sale Agreement. Each Custodian shall deliver the
Assignment of Mortgages to be submitted for recordation to the applicable
Responsible Party upon receipt of a written request for release in standard
and customary form as set forth in Exhibit X, X-1 or X-2, as applicable.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time period and in the manner specified in the
applicable Sale Agreement, the Trustee shall take or cause to be taken such
remedial actions under the Sale Agreement against the applicable Responsible
Party as may be permitted to be taken thereunder, including without
limitation, if applicable, the repurchase by the applicable Responsible Party
of such Mortgage Loan. The foregoing repurchase remedy 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 applicable Responsible Party
shall instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer's certificate of an officer of
the applicable 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 applicable Custodian 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.
44
(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
2006-9" and U.S. Bank National Association is hereby appointed as Trustee in
accordance with the provisions of this Agreement.
(d) It is the policy and intention of the Trust that none of the
Mortgage Loans included in the Trust is (a) covered by the Home Ownership and
Equity Protection Act of 1994, or (b) considered a "high cost home,"
"threshold," "predatory" or "covered" loan (excluding "covered home loans" as
defined under clause (1) of the definition of "covered home loans" in the New
Jersey Home Ownership Security Act of 2002) under applicable state, federal or
local laws.
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.
Each Custodian acknowledges receipt of the documents identified in the Initial
Certification, subject to any exceptions listed on the exception report
attached thereto, 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. Deutsche Bank, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of California, JPMorgan, as Custodian, acknowledges that it will
maintain possession of the related Mortgage Notes in the State of Texas and
U.S. Bank, as Custodian, acknowledges that it will maintain possession of the
related Mortgage Notes in the State of Minnesota, unless otherwise permitted
by the Rating Agencies.
Prior to and as a condition to the Closing, each Custodian shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor 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, subject to any exceptions listed on the
exception report attached thereto, for each Mortgage Loan. None of the
Custodians shall be responsible for verifying the validity, sufficiency or
genuineness of any document in any Custodial File.
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it are in its possession, subject to any
exceptions listed on the exception report attached thereto, and shall deliver
to the Depositor and the Trustee an Initial Certification, in the form annexed
hereto as Exhibit E, and shall deliver to the Depositor and the Trustee a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit F, within ninety (90) days after the Closing Date to the effect that,
as to each applicable Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as an exception and not covered by such
certification): (i) all documents required to be delivered to it are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan; (iii) based on its examination
and only as to the foregoing documents, as to Deutsche Bank, the information
set forth in items 2, 8, 33, and 34 of the Mortgage Loan Schedule respecting
such Mortgage Loan is correct; (iv) based on its examination and only as to
the foregoing documents, as to JPMorgan, the information set forth in items 2,
8, 33, and 34 of the Mortgage Loan Schedule respecting such Mortgage Loan is
correct; (v) based on its examination and only as to the foregoing documents,
as to U.S. Bank, the information set forth in items 2, 8, 33, and 34 of
45
the Mortgage Loan Schedule respecting such Mortgage Loan is correct; and (vi)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. None of the Custodians shall be responsible for verifying the
validity, sufficiency or genuineness of any document in any Custodial File.
Each Custodian shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The Servicer shall promptly deliver to the
applicable Custodian, 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.
Each Custodian shall notify the Trustee of any Mortgage Loans that
do not conform to the requirements of Sections 2.01 and 2.02 hereof. The
Trustee shall enforce the obligation of the Responsible Parties to cure or
repurchase Mortgage Loans that do not conform to such requirements as
determined in the applicable Custodian's review as required herein, or based
upon notification from JPMorgan, by notifying the applicable Responsible Party
to correct or cure such default. The Trustee shall also enforce the obligation
of the Responsible Parties under the Sale Agreements, and the Servicing
Agreements and of the Purchaser under the Step 1 Assignment Agreements to cure
or repurchase Mortgage Loans for which there is a defect or a breach of a
representation or warranty thereunder of which a Responsible Officer of the
Trustee has actual knowledge, by notifying the applicable party to correct or
cure such default. If any Servicer, any Responsible Party or the Purchaser, as
the case may be, fails or is unable to correct or cure the defect or breach
within the period set forth in the applicable agreement, the Trustee shall
notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by the applicable party to correct or cure, the
Trustee shall notify such party to repurchase the Mortgage Loan. If, within
ten (10) Business Days of receipt of such notice by such party, such party
fails to repurchase such Mortgage Loan, the Trustee shall notify the Depositor
of such failure. The Trustee shall pursue all legal remedies available to the
Trustee against the Servicers, the Responsible Parties and the Purchaser, as
applicable, under this Agreement, if the Trustee has received written notice
from the Depositor directing the Trustee to pursue such remedies.
Section 2.03 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, the Securities Administrator
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 2.04 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is June 25, 2036, 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 or Swap Termination Payment) shall be deemed paid from the Upper-Tier
REMIC to the Class X REMIC in respect of the Class X Interest and from the
Class X REMIC to the
46
holders of the Class X Certificates prior to distribution of Basis Risk
Payments to the LIBOR Certificates.
Amounts distributable to the Class X Certificates (prior to any
reduction for any Net Swap Receipt Amounts, Net Swap Payment Amounts or Swap
Termination Payment), shall be deemed paid from the Master REMIC to the
Holders of the Class X Certificates prior to distribution of any Basis Risk
Payments to the LIBOR Certificates.
For federal income tax purposes, any amount distributed on the LIBOR
Certificates on any such Distribution Date in excess of their Pass Through
Rate, calculated by substituting the REMIC Cap for the WAC Cap shall be
treated as having been paid from the Excess Reserve Fund Account or the
Supplemental Interest Trust, as applicable, and any excess of the REMIC Cap
over the amount distributable on such Class of LIBOR Certificates on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to, and as further provided in, Section 8.14.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee 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 other 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) any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the
47
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 12.04
hereof.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the
respective Custodial Files to the Custodians, and shall inure to the benefit
and to Certificateholders.
Section 2.06 Representations and Warranties of JPMorgan. JPMorgan,
as Custodian, hereby represents and warrants to the Depositor, the Master
Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding
48
obligation of such Custodian, enforceable against such Custodian in accordance
with its terms, except that (i) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or
by laws of such Custodian.
Section 2.07 Representations and Warranties of Deutsche Bank.
Deutsche Bank hereby represents and warrants to the Depositor, the Master
Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or
by laws of such Custodian.
Section 2.08 Representations and Warranties of U.S. Bank. U.S. Bank
hereby represents and warrants to the Depositor, the Master Servicer and the
Trustee, as of the Closing Date:
49
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
The execution and delivery of this Agreement by such Custodian, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or
by laws of such Custodian.
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account. (a)
The Securities Administrator shall establish and maintain the Excess Reserve
Fund Account to receive any Basis Risk Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders any Basis Risk
Carry Forward Amounts (prior to using any Net Swap Receipt Amounts). On each
Distribution Date, the Securities Administrator shall deposit the amount of
any Basis Risk Payment received by it for such date into the Excess Reserve
Fund Account. For the avoidance of doubt, any Basis Risk Carry Forward Amounts
shall be paid to the LIBOR Certificates first from the Excess Reserve Fund
Account and then from the Supplemental Interest Trust.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of LIBOR Certificates, the Securities
Administrator shall (1) withdraw from the Distribution Account, to the extent
of funds available therefor in the Distribution Account, and deposit in the
Excess Reserve Fund Account, as set forth in Section 4.01(a)(iii)(K), the
lesser of (x) the Class X Distributable Amount (without regard to the
reduction in clause (iii) of the definition thereof with respect to Basis Risk
Payments) (to the extent remaining after the distributions specified in
Sections 4.01(a)(iii)(A)-(J)) and (y) the aggregate Basis Risk Carry Forward
Amount of the LIBOR Certificates for such Distribution
50
Date and (2) withdraw from the Excess Reserve Fund Account and the
Supplemental Interest Account amounts necessary (including Net Swap Payment
Amounts or Swap Termination Payments (other than amounts received pursuant to
an ISDA Credit Support Annex negotiated between the Trust and the Swap
Provider)) to pay to such Class or Classes of Certificates the related Basis
Risk Carry Forward Amount. Such payments shall be allocated to those Classes
based upon the amount of Basis Risk Carry Forward Amount owed to each such
Class and shall be paid in the priority set forth in Section 4.01(a)(iii)(K).
The Securities Administrator shall account for the Excess Reserve
Fund Account as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve Fund
Account are the Class X Certificateholders. For all federal income tax
purposes, amounts transferred to the Excess Reserve Fund Account shall be
treated as distributions by the Securities Administrator to the Class X
Certificateholders in respect of the Class X Interest and then contributed by
the Class X Certificateholders to the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Securities
Administrator to the LIBOR Certificateholders shall be accounted for by the
Securities Administrator, for federal income tax purposes, as amounts paid
first to the Holders of the Class X Certificates (in respect of the Class X
Interest) and then to the respective Class or Classes of LIBOR Certificates in
accordance with the priority of payments in this Section 3.01. In addition,
the Securities Administrator shall account for the LIBOR Certificateholders'
rights to receive payments of Basis Risk Carry Forward Amounts as rights in a
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of the Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any distributions from
the Excess Reserve Fund Account except as expressly set forth in this Section
3.01(a).
(b) The Master Servicer shall establish and maintain a custodial
account for the benefit of the Trustee (the "Master Servicer Account") which
account shall be an Eligible Account. The amounts remitted by the Servicers to
the Master Servicer on each Remittance Date shall be credited to the Master
Servicer Account within two (2) Business Days once the amounts are identified
as a remittance in connection with the Trust and reconciled to the reports
provided by the Servicer. On the Master Servicer Remittance Date, the Master
Servicer shall remit to the Securities Administrator the amounts received from
the Servicers on the related Remittance Date, net of any fees, expenses and
other amounts payable to the Master Servicer. The Securities Administrator
shall establish and maintain the Distribution Account on behalf of the
Certificateholders. The Securities Administrator shall, promptly upon receipt
on the Business Day received, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount remitted by the Master Servicer;
(ii) any Net Swap Receipt Amounts or Swap Termination Payments
(other than amounts received pursuant to an ISDA Credit Support Annex
negotiated between the Trust and the Swap Provider) remitted by the Swap
Provider; and
51
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted pursuant to the applicable Servicing Agreement, and such
Servicer directs the Master Servicer in writing to withdraw such amount from
the Distribution Account, the Master Servicer shall return such funds to the
applicable Servicer. All funds deposited in the Distribution Account shall be
held by the Securities Administrator in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 4.01.
(c) From time to time, the Securities Administrator may also
establish any other accounts for the purposes of carrying out its duties
hereunder (including, without limitation, any account necessary under the
Interest Rate Swap Agreement).
Section 3.02 Investment of Funds in the Distribution Account. (a)
Other than during the Securities Administrator Float Period, the Depositor
shall direct the investment of funds in the Distribution Account in one or
more Permitted Investments. The Securities Administrator may (but shall not be
obligated to) invest funds in the Distribution Account during the Securities
Administrator Float Period (for purposes of this Section 3.02, such Account is
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, or maturing on such Distribution Date. 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 Securities
Administrator. The Securities Administrator shall be entitled to sole
possession over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Securities
Administrator or its agent, together with any document of transfer necessary
to transfer title to such investment to the Securities Administrator. In the
event amounts on deposit in an Investment Account are at any time invested in
a Permitted Investment payable on demand, the Securities Administrator 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 Distribution Account held by the Securities Administrator
during the Securities Administrator Float Period shall be subject to the
Securities Administrator's withdrawal in the manner set forth in Section
10.05.
(c) 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
52
any other performance required under any Permitted Investment, the Securities
Administrator shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of
appropriate proceedings. Notwithstanding the foregoing, the Depositor shall be
liable to the Trust for any loss on any investment of funds in the
Distribution Account other than during the Securities Administrator Float
Period and the Securities Administrator shall be liable to the Trust for any
such loss on any funds it has invested under this Section 3.02 only during the
Securities Administrator Float Period, and the Depositor or the Securities
Administrator, as the case may be, shall deposit funds in the amount of such
loss in the Distribution Account promptly after such loss is incurred.
(d) The Securities Administrator or its Affiliates are permitted to
receive additional compensation that could be deemed to be in the Securities
Administrator'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. Such compensation is not
payable or reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee may obtain and verify certain information and documentation
from the other parties to this Agreement including, but not limited to, each
such party's name, address and other identifying information.
(f) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, Deutsche Bank as a Custodian is required to
obtain, verify and record certain information relating to individuals and
entities which maintain a business relationship with Deutsche Bank.
Accordingly, each of the parties agrees to provide to Deutsche Bank upon its
request from time to time such party's complete name, address, tax
identification number and such other identifying information together with
copies of such party's constituting documentation, securities disclosure
documentation and such other identifying documentation as may be available for
such party.
(g) In order to comply with its duties under the USA Patriot Act of
2001, U.S. Bank, as a Custodian, and JPMorgan Chase Bank, National
Association, as a Custodian may obtain and verify certain information and
documentation from the other parties to this Agreement, including, but not
limited to, each such party's name, address and other identifying information
in connection with the establishment of any accounts by it to the extent
required by the Agreement.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall make the disbursements and transfers
from amounts then on
53
deposit in the Distribution Account in the following order of priority and to
the extent of the Available Funds remaining:
(i) to the holders of each Class of LIBOR Certificates and to the
Supplemental Interest Trust in the following order of priority:
(A) to the Supplemental Interest Trust, the sum of (x) all Net
Swap Payment Amounts and (y) any Swap Termination Payment owed to
the Swap Provider other than a Defaulted Swap Termination Payment
owed to the Swap Provider, if any;
(B) from the Interest Remittance Amounts, pro rata (based on
the Accrued Certificate Interest Distribution Amounts and Unpaid
Interest Amounts, distributable to each Class of Class A
Certificates), to each of the Class A Certificates, the related
Accrued Certificate Interest Distribution Amounts and Unpaid
Interest Amounts for each Class of the Class A Certificates from
prior Distribution Dates;
(C) from any remaining Interest Remittance Amounts to the Class
M Certificates, sequentially, in ascending numerical order, their
Accrued Certificate Interest; and
(D) from any remaining Interest Remittance Amounts to the Class
B Certificates, sequentially, in ascending numerical order, their
Accrued Certificate Interest.
(ii) (A) on each Distribution Date (x) prior to the Stepdown Date or
(y) with respect to which a Trigger Event is in effect, to the holders of
the Class or Classes of LIBOR Certificates and Residual Certificates then
entitled to distributions of principal, from Available Funds remaining
after making distributions pursuant to clause (a)(i) above, an amount
equal to the Principal Distribution Amount in the following order of
priority:
(1) concurrently, to the Class R, Class RC and Class RX
Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero;
(2) to the Class A Certificates, in the following order of
priority:
(x) sequentially, to the Class A-1, Class A-2 and
Class A-3 Certificates, in that order, until their
respective Class Certificate Balances have been reduced to
zero; and
(y) concurrently, to the Class A-4-A and Class A-4-B
Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero, with the
exception that if a Sequential Trigger Event is in effect,
principal distributions to the
54
Class A-4-A and Class A-4-B Certificates will be allocated
first to the Class A-4-A Certificates, until its Class
Certificate Balance has been reduced to zero, and then to
the Class A-4-B Certificates, until its Class Certificate
Balance has been reduced to zero;
(3) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until their respective Class
Certificate Balances have been reduced to zero;
(B) on each Distribution Date (x) on and after the Stepdown
Date and (y) as long as a Trigger Event is not in effect, to the
holders of the Class or Classes of LIBOR Certificates then entitled
to distribution of principal from Available Funds remaining after
making distributions pursuant to clause (i) above, an amount equal
to the Principal Distribution Amount in the following order of
priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount allocated among those classes in the
following order of priority:
(x) sequentially, to the Class A-1, Class A-2 and
Class A-3 Certificates, in that order, until their
respective Class Certificate Balances have been reduced to
zero; and
(y) concurrently, to the Class A-4-A and Class A-4-B
Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above and (y) the Class M-1 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above and to the Class M-1 Certificates in clause
(ii)(B)(2) above and (y) the Class M-2 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above and to the Class M-2 Certificates in clause
(ii)(B)(3) above and (y) the Class M-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
55
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above and to the Class M-3 Certificates in clause
(ii)(B)(4) above and (y) the Class M-4 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above and to the Class M-4 Certificates in clause
(ii)(B)(5) above and (y) the Class M-5 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
(7) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above and (y) the Class B-1 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero;
(8) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above, to the Class B-1 Certificates in clause
(ii)(B)(7) above and (y) the Class B-2 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero; and
(9) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above, to the Class B-1 Certificates in clause
(ii)(B)(7) above and to the Class B-2 Certificates in clause
56
(ii)(B)(8) above and (y) the Class B-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced
to zero.
(iii) from the Available Funds remaining after the distributions in
clauses (a)(i) and (a)(ii) above, the following amounts shall be
distributed in the following order of priority:
(A) if and to the extent that the Interest Remittance Amounts
distributed pursuant to clauses (a)(i) and (a)(ii) above were
insufficient to make full distributions in respect of interest set
forth in such clauses, (x) to the holders of each Class of Class A
Certificates, any unpaid Accrued Certificate Interest and any Unpaid
Interest Amounts, pro rata among such Classes based on their
respective entitlement to those amounts, and then (y) to the holders
of each Class of the Class M and Class B Certificates, any unpaid
Accrued Certificate Interest, in the order of priority for such
classes set forth in clause (i) above;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment (without regard to Net Swap Receipt Amounts) for such
Distribution Date;
(K) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date, an amount equal to any Basis
Risk Carry Forward Amount with respect to the LIBOR Certificates for
that Distribution Date in the same order and priority in which
Accrued Certificate Interest is
57
allocated among those Classes of Certificates, with the allocation
to the Class A Certificates being pro rata based on their respective
Class Certificate Balances; provided, however, for any Distribution
Date, after the remaining Basis Risk Carry Forward Amount for any of
the Class A Certificates has been reduced to zero, any remaining
Basis Risk Carry Forward Amount that would have been allocated to
such Class A Certificates for that Distribution Date will be
allocated, pro rata, to the remaining Class A Certificates based on
their respective remaining unpaid Basis Risk Carry Forward Amounts;
(L) to the Supplemental Interest Trust, the amount of any
Defaulted Swap Termination Payment owed to the Swap Provider;
(M) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.01(a)(iii)(A)-(L); and
(N) to the holders of the Class R, Class RC and Class RX
Certificates, pro rata, any remaining amount.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Principal
Prepayment Period shall be distributed by the Securities Administrator to the
holders of the Class P Certificates.
(c) Notwithstanding the foregoing description of allocation of
principal distributions to the Class A Certificates, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class B-2
and Class B-3 Certificates and the Overcollateralized Amount have been reduced
to zero, any principal distributions allocated to the Class A Certificates are
required to be allocated pro rata to the Class A Certificates, based on their
respective Class Certificate Balances, until their respective Class Principal
Balances have been returned to zero, with the exception that if a Sequential
Trigger Event is in effect, principal distributions to the Class A-4-A and
Class A-4-B Certificates will be allocated (x) first to the Class A-4-A
Certificates, until its Class Certificate Balance has been reduced to zero and
(y) then to the Class A-4-b Certificates, until its Class Certificate Balance
has been reduced to zero.
(d) On any Distribution Date, any Relief Act Interest Shortfalls and
Net Prepayment Interest Shortfalls for such Distribution Date shall be
allocated pro rata, as a reduction of the Accrued Certificate Interest
Distribution Amount for the Class A, Class M and Class B Certificates, based
on the Accrued Certificate Interest Distribution Amount to which such Classes
would otherwise be entitled on such Distribution Date.
(e) Upon any exercise of the purchase option set forth in Section
11.01(a), the Securities Administrator shall distribute to the holders of the
Class RC Certificates any amounts required to be distributed on the Class RC
Certificates pursuant to Section 11.02.
Section 4.02 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder,
58
the Depositor, the Trustee and each Rating Agency a statement based, in part,
upon the information provided by the Servicers setting forth with respect to
the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis
Risk Carry Forward Amount covered by withdrawals from the Excess Reserve
Fund Account and the Supplemental Interest Trust on such Distribution
Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk Carry Forward Amount not covered
by amounts in the Excess Reserve Fund Account and the Supplemental
Interest Trust;
(iv) the Class Certificate Balance of each Class of Certificates and
the notional amount of the Class P Certificates after giving effect to
the distribution of principal on such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans for
the following Distribution Date;
(vi) the amount of the expenses and fees paid to or retained by the
Servicer and paid to or retained by the Trustee with respect to such
Distribution Date, in each case, identifying the general purpose of such
fees;
(vii) the amount of the expenses and fees paid to the Master
Servicer or Securities Administrator with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicers (and the Master Servicer, the Trustee as successor master
servicer and any other successor master servicer, if applicable) as
outstanding as of the close of business on the Determination Date
immediately preceding such Distribution Date;
(x) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the scheduled payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last business day of the
immediately preceding month;
59
(xi) for each of the preceding 12 calendar months, or all calendar
months since the related Cut-off date, whichever is less, the aggregate
dollar amount of the scheduled payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent sixty (60) days or more on each of the Due Dates in each such
month;
(xii) with respect to all Mortgage Loans that became REO properties
during the preceding calendar month, the aggregate number of such
mortgage loans and the aggregate Stated Principal Balance of such
Mortgage Loans as of the close of business on the Determination Date
preceding such Distribution Date and the date of acquisition of the REO
properties;
(xiii) the total number and principal balance of any REO properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xiv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event and the aggregate outstanding balance of all 60+ Day Delinquent
Mortgage Loans);
(xv) the amount on deposit in the Excess Reserve Fund Account (after
giving effect to distributions on such Distribution Date);
(xvi) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xvii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xviii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xix) the Prepayment Premiums collected by or paid by the Servicers;
(xx) the percentage equal to the aggregate realized losses divided
by the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off date;
(xxi) the amount distributed on the Class X and Class P
Certificates;
(xxii) the amount of any Subsequent Recoveries for such Distribution
Date;
(xxiii) the Record Date for such Distribution Date;
(xxiv) updated Mortgage Loan information, such as weighted average
interest rate, and weighted average remaining term;
60
(xxv) material breaches of Mortgage Loan representations of
warranties of which the Trustee, Master Servicer or any Servicer has
knowledge or received written notice; and
(xxvi) material breaches of any covenants under this Agreement of
which the Trustee, Master Servicer or any Servicer has received written
notice.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Trustee and
the Depositor is limited to the availability, timeliness and accuracy of the
information derived from the Master Servicer, the Servicers and the
Responsible Parties. The Securities Administrator shall provide the above
statement via the Securities Administrator's internet website. Assistance in
using the website can be obtained by calling the Securities Administrator's
investor relations desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. The Securities Administrator will
also make a paper copy of the above statement available upon request.
(c) Upon request, within a reasonable period of time after the end
of each calendar year, the Securities Administrator shall cause to be
furnished to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in clauses
(a)(i), (a)(ii), (a)(iii) and (a)(vii) of this Section 4.02 aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
Section 4.03 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event, Applied Realized Loss Amounts are
allocated to any Class of Certificates, their Class Certificate Balance shall
be reduced by the amount so allocated and no funds shall be distributed with
respect to the written down amounts or with respect to interest or Basis Risk
Carry Forward Amounts on the written down amounts on that Distribution Date or
any future Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of each
Class of Subordinated Certificates that has been previously reduced by Applied
Realized Loss Amounts will be increased, in the order of seniority, by the
amount of the Subsequent Recoveries (but not in excess of the Applied Realized
Loss Amount allocated to the applicable Class of Subordinated Certificates).
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with
the definition of "LIBOR." Until all of the LIBOR Certificates are paid in
full, the Securities Administrator will
61
at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each LIBOR Determination Date. The
Securities Administrator initially shall designate the Reference Banks (after
consultation with the Depositor). Each "Reference Bank" shall be a leading
bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or
unable to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation
with the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable
control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Securities Administrator shall (in the absence
of manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
Section 4.05 Supplemental Interest Trust. On the Closing Date, the
Securities Administrator on behalf of the Trustee shall establish and maintain
a separate non-interest bearing trust (the "Supplemental Interest Trust") to
which the Trustee will transfer and assign the Interest Rate Swap Agreement.
The Supplemental Interest Trust shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payment Amounts owed to the Swap Provider and Net Swap Receipt Amounts for
that Distribution Date will be deposited into the Supplemental Interest Trust.
Funds in the Supplemental Interest Trust will be distributed in the following
order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payment
Amounts and (y) any Swap Termination Payment, other than a Defaulted Swap
Termination Payment, to the Swap Provider, if any, owed for that
Distribution Date;
(ii) to the Certificateholders, to pay Accrued Certificate Interest
and, if applicable, any Unpaid Interest Amounts as described in clause
(i) of "--Priorities of Distributions" above, to the extent unpaid from
other Available Funds;
62
(iii) to the Certificateholders, to pay principal as described in
clause (ii)(A) and clause (ii)(B) of "--Priorities of Distributions"
above, but only to the extent necessary to maintain the
Overcollateralized Amount at the Specified Overcollateralized Amount,
after giving effect to payments and distributions from other Available
Funds;
(iv) to the Certificateholders, to pay Unpaid Interest Amounts and
Basis Risk Carry Forward Amounts as described in clause (iii) of
"--Priorities of Distributions" above, to the extent unpaid from other
Available Funds (including funds on deposit in the Excess Reserve Fund
Account);
(v) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(vi) to the holders of the Class X Certificates, any remaining
amounts.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities
set forth in this Section 4.05.
The Securities Administrator shall account for the Supplemental
Interest Trust as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Supplemental Interest
Trust are the Class X Certificateholders. For federal income tax purposes, Net
Swap Payment Amounts and Swap Termination Payments payable to the Swap
Provider shall be deemed to be paid to the Supplemental Interest Trust first,
by the Holder of the Class X Certificates and second, other than any Defaulted
Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the
applicable Class or Classes of LIBOR Certificates as and to the extent
provided in Section 8.14.
Any Basis Risk Carry Forward Amounts (defined solely for this
purpose as any excess of monies received for such Distribution Date over the
REMIC Cap) distributed by the Securities Administrator to the LIBOR
Certificateholders shall be accounted for by the Securities Administrator, for
federal income tax purposes, as amounts paid first to the Holders of the Class
X Certificates in respect of the Class X Interest and (to the extent remaining
after payments to the Swap Provider) then to the respective Class or Classes
of LIBOR Certificates. In addition, the Securities Administrator shall account
for the rights of Holders of each Class of LIBOR Certificates to receive
payments of Basis Risk Carry Forward Amounts (defined solely for this purpose
as any excess of monies received for such Distribution Date over the REMIC
Cap) from the Supplemental Interest Trust (along with Basis Risk Carry Forward
Amounts (defined solely for this purpose as any excess of monies received for
such Distribution Date over the REMIC Cap) payable from the Excess Reserve
Fund Account) as rights in a separate limited recourse interest rate cap
contract written by the Class X Certificateholders in favor of Holders of each
such Class.
The Supplemental Interest Trust shall be an "outside reserve fund"
for federal income tax purposes and will not be an asset of any Trust REMIC.
Furthermore, the Holders of the Class X Certificates shall be the beneficial
owners of the Supplemental Interest Trust for all federal income tax purposes,
and shall be taxable on all income earned thereon.
63
Section 4.06 Trust's Obligations under the Interest Rate Swap
Agreement; Replacement and Termination of the Interest Rate Swap Agreement.
(a) Upon the Trustee obtaining actual knowledge of the rating of the
Swap Provider falling below the Required Hedge Counterparty Rating (as defined
in the Interest Rate Swap Agreement), the Trustee, acting at the written
direction of the Depositor, shall attempt to negotiate an ISDA Credit Support
Annex (as defined in the Interest Rate Swap Agreement with the Swap Provider
that meets the terms of the Interest Rate Swap Agreement. If an ISDA Credit
Support Annex is negotiated, the Trustee, acting at the written direction of
the Depositor, shall set up an account in accordance with Section 3.01(c) to
hold cash or other eligible investments pledged under such ISDA Credit Support
Annex. Any cash or other eligible investments pledged under an ISDA Credit
Support Annex shall not be part of the Distribution Account, the Excess
Reserve Fund Account or the Supplemental Interest Trust unless they are
applied in accordance with such ISDA Credit Support Annex to make a payment
due to the Trust pursuant to the Interest Rate Swap Agreement.
(b) Upon the Trustee obtaining actual knowledge of an Event of
Default (as defined in the Interest Rate Swap Agreement) or Termination Event
(as defined in the Interest Rate Swap Agreement) for which the Trust has the
right to designate an Early Termination Date (as defined in the Interest Rate
Swap Agreement), the Trustee will act at the written direction of the
Depositor as to whether it will designate an Early Termination Date; provided,
however, that the Trust shall provide written notice to each Rating Agency
following the Event of Default or Termination Event. Upon the termination of
the Interest Rate Swap Agreement under the circumstances contemplated by this
Section 4.06(b), the Trust shall use its reasonable best efforts to enforce
the rights of the Trust and the Trustee thereunder as may be permitted by the
terms of the Interest Rate Swap Agreement and consistent with the terms
hereof, and shall apply the proceeds of any such efforts to enter into a
replacement interest rate swap agreement with another swap provider. To the
extent such replacement interest rate swap agreement can be entered into, any
termination payments received by the Trust in respect of the terminated
interest rate swap agreement shall be used, to the extent necessary, by the
Trust for the purpose of entering into such replacement interest rate swap
agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Depositor hereby directs the Securities Administrator to
transfer the Class X and Class P Certificates in the name of the NIM Trustee
or
64
such other name or names as the Depositor shall request, and to deliver the
Class X and Class P Certificates to the NIM Trustee, or to such other person
or persons as the Depositor shall request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall
make distributions to each Certificateholder of record on the preceding Record
Date either (x) by wire transfer in immediately available funds to the account
of such holder at a bank or other entity having appropriate facilities
therefor as directed by that Certificateholder by written wire instructions
provided to the Securities Administrator or (y), in the event that no wire
instructions are provided to the Securities Administrator, by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time such signatures were affixed, authorized to sign on behalf
of the Securities Administrator shall bind the Securities Administrator,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of any such Certificates
or did not hold such office at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless authenticated by the Securities Administrator by manual
signature, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. Upon surrender for registration of transfer of any Certificate, the
Securities Administrator shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
holder thereof or his attorney duly authorized in writing. In the event, the
Depositor or an Affiliate transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the
65
Securities Administrator in writing of the affiliated status of the
transferee. The Trustee and the Securities Administrator shall have no
liability regarding the lack of notice with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except with respect to (i) the initial transfer of the Class X or Class P
Certificates on the Closing Date, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates to the Depositor or any Affiliate of the
Depositor, in the event that a transfer of a Private Certificate which is a
Physical Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer shall certify to the Securities Administrator in writing the facts
surrounding the transfer in substantially the form set forth in Exhibit H (the
"Transferor Certificate") and either (i) there shall be delivered to the
Securities Administrator a letter in substantially the form of Exhibit I (the
"Rule 144A Letter") or (ii) there shall be delivered to the Securities
Administrator at the expense of the transferor an Opinion of Counsel that such
transfer may be made without registration under the Securities Act. In the
event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities
Act and such laws, in order to assure compliance with the Securities Act and
such laws, the Certificateholder desiring to effect such transfer will be
deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such
Certificate, in each case as if such Certificate were evidenced by a Physical
Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor and each Servicer against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
66
Except with respect to (i) the initial transfer of the Class X or
Class P Certificates on the Closing Date, (ii) the transfer of the Class X or
Class P Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer
of the Class X or Class P Certificates to the Depositor or any Affiliate of
the Depositor, no transfer of an ERISA-Restricted Certificate shall be made
unless the Securities Administrator shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Securities Administrator (in the event
such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Securities Administrator's receipt of a
representation letter from the transferee substantially in the form of Exhibit
G), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets
of any such plan or arrangement to effect such transfer (each such investor a
"Plan"), (ii) in the case of an ERISA-Restricted Certificate (other than a
Residual Certificate) that has been the subject of an ERISA-Qualifying
Underwriting, a representation that the purchaser is an insurance company that
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60) and that the purchase and holding
of such Certificates satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60 or (iii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan or arrangement subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a plan
subject to Similar Law, or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, the
Securities Administrator and the Depositor, which Opinion of Counsel shall not
be an expense of the Trustee, the Depositor, the Securities Administrator or
the Trust Fund, addressed to the Securities Administrator and the Depositor,
to the effect that the purchase and holding of such ERISA-Restricted
Certificate will not constitute or result in a non-exempt prohibited
transaction within the meaning of ERISA, Section 4975 of the Code or any
Similar Law and will not subject the Trustee, the Depositor, the Master
Servicer, any other servicer or the Securities Administrator to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the
preceding sentence is not furnished, such representation shall be deemed to
have been made to the Securities Administrator by the transferee's (including
an initial acquirer's) acceptance of the ERISA-Restricted Certificates. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA, a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement, without such Opinion of Counsel, such attempted transfer or
acquisition shall be void and of no effect.
During the period the Supplemental Interest Trust is in effect, no
transfer of a Certificate shall be made unless the Securities Administrator
shall have received either a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the
Securities Administrator to the effect that such transferee is not a Plan, or
(ii) a
67
representation that the purchase and holding of the Certificate satisfy the
requirements for exemptive relief under ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ 96-23 or a similar exemption, or in the case of a Plan
subject to Similar Law, will not constitute a non-exempt violation of such
Similar Law. In the event such a representation letter is not delivered, one
of the foregoing representations, as appropriate, shall be deemed to have been
made by the transferee's (including an initial acquirer's) acceptance of the
Certificate. In the event that such representation is violated, such transfer
or acquisition shall be void and of no effect.
The Residual Certificates may not be sold to any employee benefit
plan subject to Title I of ERISA, any plan subject to Section 4975 of the
Code, or any plan subject to any Similar Law or any person investing on behalf
of or with plan assets of such plan.
Neither the Securities Administrator nor the Trustee shall have any
duty to monitor transfers of beneficial interests in any Book-Entry
Certificate, and neither the Securities Administrator nor the Trustee shall be
under liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b)
or for making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered by the Securities
Administrator in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
68
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Residual Certificate. Neither the Securities
Administrator nor the Trustee shall have any liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement. The Securities Administrator shall be entitled but not
obligated to recover from any Holder of a Residual Certificate that was
in fact not a Permitted Transferee at the time it became a Holder or, at
such subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Securities Administrator shall be
paid and delivered by the Securities Administrator to the last preceding
Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee, or the Securities Administrator, to the effect that the
elimination of such restrictions will not cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by
the Securities Administrator except to another Depository; (ii) the Depository
shall maintain book entry records with respect to the Certificate
69
Owners and with respect to ownership and transfers of such Book-Entry
Certificates; (iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee and the Securities Administrator shall deal with the Depository,
Depository Participants and indirect participating firms as representatives of
the Certificate Owners of the Book-Entry Certificates for purposes of
exercising the rights of holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners;
and (vi) the Securities Administrator may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or
(y) the Depositor notifies the Depository of its intent to terminate the book
entry system through the Depository, the Depository Participants holding
beneficial interests in the Book-Entry Certificates agree to initiate such
termination, the Securities Administrator shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to
the Securities Administrator of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Securities Administrator shall issue the Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The
Depositor shall provide the Securities Administrator with an adequate
inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder; provided, that
the Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his
70
attorney duly authorized in writing. Each Certificate presented or surrendered
for registration of transfer or exchange shall be canceled and subsequently
disposed of by the Securities Administrator in accordance with its customary
practice. No service charge shall be made for any registration of transfer or
exchange of Private Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator,
or the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to
the Depositor, the Trustee and the Securities Administrator such security or
indemnity as may be required by them to hold each of them harmless, then, in
the absence of notice to the Securities Administrator that such Certificate
has been acquired by a protected purchaser, the Securities Administrator shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Securities Administrator may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Securities Administrator) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Securities Administrator and any agent of the Depositor, the Securities
Administrator or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and none of the Trustee, the Securities Administrator,
the Depositor or any agent of the Depositor, the Securities Administrator or
the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication which such Certificateholders propose
to transmit, or if the Depositor or a Servicer shall request such information
in writing from the Securities Administrator, then the Securities
Administrator shall, within ten (10) Business Days after the receipt of such
request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Securities Administrator, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree
that the Securities Administrator shall not be held accountable by reason of
the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where
71
Certificates may be surrendered for registration of transfer or exchange. The
Securities Administrator initially designates its office for such purposes,
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; Attention:
Worldwide Securities Services, GSAA 2006-9. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by it herein.
Section 6.02 Merger or Consolidation of the Depositor. The Depositor
will keep in full effect its existence, rights and franchises as a corporation
or federally chartered savings bank, as the case may be, under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the
Depositor shall be a party, or any person succeeding to the business of the
Depositor, shall be the successor of the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Depositor shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and which in its
opinion may involve it in any
72
expense or liability; provided, however, that the Depositor may in its
discretion undertake any such action (or direct the Trustee to undertake such
actions for the benefit of the Certificateholders) that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, the Depositor shall be entitled to be reimbursed therefor out of
the Distribution Account.
Section 6.04 Servicing Compliance Review. Promptly upon receipt from
each Servicer of its annual statement of compliance and accountant's report
described in the applicable Step 2 Assignment Agreement the Master Servicer
shall furnish a copy thereof to the Depositor. Promptly after the Depositor's
receipt thereof, the Depositor shall review the same and, if applicable,
consult with such Servicer as to the nature of any defaults by such Servicer
in the fulfillment of any of its Servicer's obligations under the applicable
Servicing Agreement.
Section 6.05 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is ninety (90) days or more delinquent. The
purchase price therefor shall be 100% of the unpaid principal balance of such
Mortgage Loan, plus all related accrued and unpaid interest, and the amount of
any unreimbursed Servicing Advances made by the Servicers or the Master
Servicer related to the Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described in
any Servicing Agreement shall occur with respect to the related Servicer then,
and in each and every such case, so long as such Event of Default shall not
have been remedied, the Master Servicer may, or at the direction of
Certificateholders entitled to a majority of the Voting Rights the Master
Servicer shall, by notice in writing to the applicable Servicer (with a copy
to each Rating Agency), terminate all of the rights and obligations of such
Servicer under the applicable Servicing Agreement and in and to the Mortgage
Loans and the proceeds thereof. The Holders of Certificates evidencing at
least 66% of the Voting Rights of Certificates affected by a Event of Default
may waive such Event of Default; provided, however, that (a) an Event of
Default with respect to any Servicer's obligation to make Monthly Advances may
be waived only by all of the holders of the Certificates affected by such
Event of Default and (b) no such waiver is permitted that would materially
adversely affect any non consenting Certificateholder. On and after the
receipt by such Servicer of such written notice of termination, all authority
and power of such Servicer hereunder or under the applicable Servicing
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Master Servicer. The Master Servicer is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise.
73
Section 7.02 Master Servicer to Act; Appointment of Successor.
Within 120 days after the Master Servicer gives, and the applicable Servicer
receives a notice of termination pursuant to Section 7.01, the Master Servicer
shall, subject to and to the extent provided in Section 7.03, and subject to
the rights of the Master Servicer to appoint a successor Servicer pursuant to
this Section 7.02, be the successor to the Servicer in its capacity as
servicer under the applicable Servicing Agreement and the transactions set
forth or provided for herein and in such Servicing Agreement and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions of such Servicing Agreement
and applicable law including the obligation to make Monthly Advances or
Servicing Advances pursuant to such Servicing Agreement (it being understood
and agreed that if any Servicer fails to make an Advance, the Master Servicer
shall do so unless a determination has been made that such Advance would
constitute a Nonrecoverable Monthly Advance or a Nonrecoverable Servicing
Advance). As compensation therefor, the Master Servicer shall be entitled to
all funds relating to the Mortgage Loans that the Servicer would have been
entitled to charge to the Collection Account if the Servicer had continued to
act under the Servicing Agreement including, if the Servicer was receiving the
Servicing Fee at the Servicing Fee Rate set forth in the Servicing Agreement
(as set forth in the Mortgage Loan Schedule with respect to the related
Mortgage Loans) such Servicing Fee and the income on investments or gain
related to the Collection Account.
Notwithstanding the foregoing, the Master Servicer may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Monthly Advances and Servicing Advances pursuant to the applicable
Servicing Agreement, or if it is otherwise unable to so act, or, at the
written request of Certificateholders entitled to a majority of the Voting
Rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each
Rating Agency, as the successor to such Servicer under the applicable
Servicing Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer. No such appointment
of a successor to a Servicer hereunder shall be effective until the Depositor
shall have consented thereto. Any successor to such Servicer shall be an
institution which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, which has a net worth of at least $25,000,000, which is willing
to service the Mortgage Loans and which executes and delivers to the Depositor
and the Master Servicer an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such terminated Servicer,
(other than liabilities of such terminated Servicer incurred prior to
termination of such Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided, that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced, as a
result of such assignment and delegation. Pending appointment of a successor
to a Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to this Section 7.02, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it, the
Depositor and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee Rate and amounts paid to
the Servicer from investments. The Master Servicer and such successor shall
take such action, consistent with this Agreement, as shall be necessary
74
to effectuate any such succession. Neither the Master Servicer nor any other
successor to a Servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the predecessor Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor Servicer shall give notice to the Mortgagors of such
change of Servicer, in accordance with applicable federal and state law, and
shall, during the term of its service as servicer, maintain in force the
policy or policies that each Servicer is required to maintain pursuant to the
applicable Servicing Agreement.
Notwithstanding the foregoing, the Master Servicer may not terminate
a Servicer without cause.
Section 7.03 Master Servicer to Act as Servicer. In the event that a
Servicer shall for any other reason no longer be the Servicer, the Master
Servicer or another successor Servicer, shall thereupon assume all of the
rights and obligations of the predecessor Servicer hereunder arising
thereafter pursuant to Section 7.02.
Section 7.04 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders
and to each Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such Event of Default shall have been cured
or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians. The Trustee,
before the occurrence of a Master Servicer Event of Default and after the
curing of all Master Servicer Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case a Master Servicer Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee and the Custodians, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or the Custodians, as applicable, that
are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether on their face they are in
the form required by this Agreement, or with respect to the documents in the
respective Custodial Files whether they satisfy the review criteria set forth
in Section 2.02. Neither the
75
Trustee nor the Custodians shall be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order, or
other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee or the Custodians from liability for its own negligent action, its own
negligent failure to act or its own bad faith or willful misfeasance;
provided, however, that:
(a) unless a Master Servicer Event of Default of which a Responsible
Officer of the Trustee obtains actual knowledge has occurred and is
continuing, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee, and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement which it believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of
the Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 [Reserved]
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties
and the Trustee and the Custodians shall have no responsibility to ascertain
or confirm the genuineness of any signature of any such party or parties;
(b) the Trustee and the Custodians may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
76
(c) the Trustee and the Custodians shall not be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of
the Trustee, not assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require indemnity satisfactory to the
Trustee against such cost, expense or liability as a condition to taking any
such action. The reasonable expense of every such examination shall be paid by
the applicable Servicer or, if paid by the Trustee, shall be repaid by the
Servicer upon demand from the applicable Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) neither the Trustee nor the Custodians shall be required to risk
or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default or an Event of
Default, the Trustee shall not be deemed to have knowledge of a Master
Servicer Event of Default or an Event of Default, until a Responsible Officer
of the Trustee shall have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
77
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers
granted hereunder;
(l) notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to a Servicer's request of assigning
the Servicing Agreement or the servicing rights thereunder to any other party;
and
(m) the Trustee is authorized and directed to execute the Interest
Rate Swap Agreement.
Section 8.04 Trustee and Custodians Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and neither the Trustee nor the
Custodians assumes any responsibility for their correctness. The Trustee and
the Custodians make no representations as to the validity or sufficiency of
this Agreement or of the Certificates or of any Mortgage Loan or related
document. Neither the Trustee nor the Custodians shall be accountable for the
use or application by the Depositor, the Master Servicer, any Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, any Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, any Servicer, or
the Securities Administrator.
The Trustee shall have no responsibility (i) for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become and remains the
successor Master Servicer) (ii) to see to any insurance (unless the Trustee
shall have become the successor Master Servicer), or (iii) to confirm or
verify the contents of any reports or certificates of the Servicers,
Securities Administrator or Master Servicer delivered to the Trustee pursuant
to this Agreement believed by the Trustee to be genuine and to have been
signed or presented by the proper party or parties.
The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Securities Administrator on behalf of the
Trust Fund in the Certificates is made and intended not as a personal
undertaking or agreement by the Securities Administrator but is made and
intended for the purpose of binding only the Trust Fund.
Section 8.05 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Trustee.
Section 8.06 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid an on-going monthly
or annual fee, as applicable, by the Securities Administrator pursuant to a
separate agreement. The Trustee shall have no lien on the Trust Fund for the
payment of such fees. The Trustee shall be entitled to be reimbursed,
78
from funds on deposit in the Distribution Account, amounts sufficient to
indemnify and hold harmless the Trustee and any director, officer, employee,
or agent of the Trustee against any loss, liability, or expense (including
reasonable attorneys' fees) incurred in connection with any claim or legal
action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of
any Servicer's obligations in connection with a Servicing Agreement for which
that Servicer has performed its obligation to indemnify the Trustee pursuant
to Servicing Agreement, (ii) resulting from any breach of the Responsible
Party's obligations in connection with any Sale Agreement for which it has
performed its obligation to indemnify the Trustee pursuant to the Sale
Agreement, (iii) resulting from any breach of the Master Servicer's
obligations hereunder for which the Master Servicer has performed its
obligation to indemnify the Trustee pursuant to this Agreement, or (iv)
incurred because of willful misfeasance, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee under this Agreement. Without limiting the
foregoing, except as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misfeasance, the Trust Fund shall
pay or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement
with respect to:
(A) the reasonable compensation, expenses, and disbursements of
its counsel not associated with the closing of the issuance of the
Certificates, and
(B) the reasonable compensation, expenses, and disbursements of
any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement, the Trustee shall
not be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee under
this Agreement or for any other expenses.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating which would not cause any of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the
79
aforesaid supervising or examining authority, then for the purposes of this
Section 8.07 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with this Section 8.07,
the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.08. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or with
the Servicer and its affiliates; provided, however, that such entity cannot be
an affiliate of the Depositor or of any Servicer other than the Trustee in its
role as successor to the Master Servicer.
Section 8.08 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Master Servicer, the
Securities Administrator and each Rating Agency not less than sixty (60) days
before the date specified in such notice, when, subject to Section 8.09, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.09 meeting the qualifications set forth in Section
8.07. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within thirty (30) days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Trustee shall provide written notice to the Depositor of
any successor pursuant to this Section 8.08.
If at any time the (i) Trustee shall cease to be eligible in
accordance with Section 8.07 and shall fail to resign after written request
thereto by the Depositor, (ii) the Trustee shall become incapable of acting,
or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Trust Fund
is located and (B) the imposition of such tax would be avoided by the
appointment of a different trustee, or (iv) the Trustee fails to comply with
its obligations under Article XIII and such failure is not remedied within the
lesser of ten (10) calendar days or such period in which the applicable
Exchange Act Report can be filed timely (without taking into account any
extensions), then, in the case of clauses (i) through (iii), the Depositor may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee and one copy to
the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which shall be
delivered to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any
removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.09.
80
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor and the
predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.07 and its appointment does not adversely affect the
then current rating of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor,
all information reasonably requested by the Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to a
replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates and the Custodians. If the
Depositor fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodians. Any corporation into which the Trustee or the Custodians, as
applicable, may be merged or converted or with which it may be consolidated or
any corporation resulting from any merger, conversion or consolidation to
which the Trustee or the Custodians, as applicable, shall be a party, or any
corporation succeeding to the business of the Trustee or the Custodians, as
applicable, shall be the successor of the Trustee or the Custodians, as
applicable, hereunder; provided, that such corporation shall be eligible under
Section 8.07 without the execution or filing of any paper or further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations,
rights and trusts as the Trustee may consider appropriate. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.09 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.09.
81
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor
Master Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.12 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be
made, as set forth in the Preliminary
82
Statement, shall constitute, and that the conduct of matters relating to such
assets shall be such as to qualify such assets as, a "real estate mortgage
investment conduit" as defined in, and in accordance with, the REMIC
Provisions. In furtherance of such intention, the Securities Administrator
covenants and agrees that it shall act as agent (and the Securities
Administrator is hereby appointed to act as agent) on behalf of each REMIC
described in the Preliminary Statement and that in such capacity it shall:
(a) prepare and file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each Trust REMIC containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty (30) days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities and shall also furnish to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that
the holders of the Certificates may contact for tax information relating
thereto, together with such additional information as may be required by such
Form, and update such information at the time or times in the manner required
by the Code;
(c) make an election that each Trust REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any
original issue discount using the prepayment assumption (as described in the
Prospectus Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non Permitted Transferee, or a pass through
entity in which a Non Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
83
(h) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Securities Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Securities Administrator from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Securities Administrator or, if required by applicable tax
law, the Trustee or such other person as may be required to sign such returns
by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the fair market value and adjusted
basis of the assets determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class R, Class
RC and Class RX Certificates shall act as Tax Matters Person for the
Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC, respectively,
within the meaning of Treasury Regulations Section 1.860F-4(d), and the
Securities Administrator is hereby designated as agent of such
Certificateholder for such purpose (or if the Securities Administrator is not
so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall,
as and when necessary and appropriate, represent each Trust REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each Trust REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of any Trust REMIC, and otherwise act on behalf of each Trust
REMIC in relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and
Supplemental Interest Trust (subject to the obligation to pay Basis Risk Carry
Forward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk Carry Forward Amounts (as calculated in the Preliminary Statement)
as the beneficial ownership interests in a grantor trust and not as an
obligations of any REMIC created hereunder, for federal income tax purposes.
The Securities Administrator shall file or cause to
84
be filed with the Internal Revenue Service Form 1041 or such other form as may
be applicable and shall furnish or cause to be furnished, to the Class X
Certificateholders, the Class P Certificateholders and the LIBOR
Certificateholders, the respective amounts described above that are received,
in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten (10) days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account and the Supplemental Interest
Trust. Thereafter, the Depositor shall provide to the Securities Administrator
promptly upon written request therefor any additional information or data that
the Securities Administrator may, from time to time, reasonably request to
enable the Securities Administrator to perform its duties under this
Agreement. The Depositor hereby indemnifies the Securities Administrator for
any losses, liabilities, damages, claims, or expenses of the Securities
Administrator arising from any errors or miscalculations of the Securities
Administrator that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Securities
Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Master
Servicer, the Trustee or the Securities Administrator, as applicable if such
tax arises out of or results from negligence of the Master Servicer, the
Trustee or the Securities Administrator, as applicable in the performance of
any of its obligations under this Agreement, (ii) a Servicer, in the case of
any such minimum tax, and otherwise if such tax arises out of or results from
a breach by the Servicer of any of its obligations under the applicable
Servicing Agreement, (iii) a Responsible Party if such tax arises out of or
results from the Responsible Party's obligation to repurchase a Mortgage Loan
pursuant to the applicable Sale Agreement or (iv) in all other cases, or if
the Trustee, the Master Servicer, the Securities Administrator, the Servicer
or the Responsible Party fails to honor its obligations under the preceding
clause (i), (ii), or (iii), any such tax will be paid with amounts otherwise
to be distributed to the Certificateholders, as provided in Section 4.01(a).
For as long as each Trust REMIC shall exist, the Securities
Administrator shall act as specifically required herein, and the Securities
Administrator shall comply with any directions of the Depositor or a Servicer
stating that such directions are being given to assure such continuing
treatment. In particular, the Securities Administrator shall not (a) sell or
authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement or (b)
accept any contribution to any Trust REMIC after the Startup
85
Day without receipt of an Opinion of Counsel that such action described in
clause (a) or (b) will not result in the imposition of a tax on any Trust
REMIC or cause any Trust REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
Section 8.13 [Reserved]
Section 8.14 Tax Classification of the Excess Reserve Fund Account
and the Interest Rate Swap Agreement. For federal income tax purposes, the
Securities Administrator shall treat the Excess Reserve Fund Account and the
Interest Rate Swap Agreement as beneficially owned by the holder of the Class
X Certificates and shall treat such portion of the Trust Fund as a grantor
trust under subpart E, Part I of subchapter J of the Code. The Securities
Administrator shall treat the rights that each Class of LIBOR Certificates has
to receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account and the Supplemental Interest Trust as rights to receive
payments under an interest rate cap contract written by the Class X
Certificateholders in favor of each Class. Accordingly, each Class of LIBOR
Certificates will comprise two components--a regular interest in the
Upper-Tier REMIC and an interest in an interest rate cap contract, and the
Class X Certificates will be comprised of four components--a regular interest
in the Class X REMIC, an interest in the Interest Rate Swap Agreement, the
Supplemental Interest Trust and the Excess Reserve Fund Account subject to the
obligation to pay Basis Risk ▇▇▇▇ Forward Amounts, Net Swap Payment Amounts
and Swap Termination Payments. The Securities Administrator shall allocate the
issue price for a Class of Certificates among these components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of
each Holder of a LIBOR Certificate to receive the related Basis Risk Carry
Forward Amount for purposes of allocating the purchase price of an initial
LIBOR Certificateholder between such right and the related Upper-Tier Regular
Interest.
Holders of LIBOR Certificates shall also be treated as having agreed
to pay, on each Distribution Date, to the Holders of the Class X Certificates
an aggregate amount equal to the excess, if any, of (i) Net Swap Payment
Amounts and Swap Termination Payments (other that Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest as
provided in the Preliminary Statement hereof (such excess, a "Class IO
Shortfall"), first from interest and then from principal distributable on the
LIBOR Certificates. A Class IO Shortfall payable from interest collections
shall be allocated pro rata among such LIBOR Certificates based on the amount
of interest otherwise payable to such Class of LIBOR Certificates, and a Class
IO Shortfall payable from principal collections shall be allocated in reverse
sequential order beginning with the most subordinate Class of LIBOR
Certificates then outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper-Tier Regular Interest and
as having been paid by such Holders to the Holders of the Class X Certificates
through the Supplemental Interest Trust.
86
Section 8.15 Custodial Responsibilities; Compensation. Each of the
Custodians shall provide access to the Mortgage Loan documents in possession
of such Custodian regarding the related Mortgage Loans and REO Property and
the servicing thereof to the Trustee, the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon two (2) Business Days prior written request and during normal
business hours at the office of such Custodian; provided, however, that,
unless otherwise required by law or any regulatory or administrative agency
(including the FDIC), such Custodian shall not be required to provide access
to such records and documentation if the provision thereof would violate the
legal right to privacy of any Mortgagor. Each of the Custodians shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at the expense of
the Trust that covers such Custodians actual costs.
Upon receipt of a Request for Release by a Servicer, substantially
in the form of Exhibit X, X-1 or X-2 hereto, the applicable Custodian shall
release within five (5) Business Days the related Mortgage File to such
Servicer and the Trustee shall execute and deliver to such Servicer, without
recourse, a request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
(furnished by such Servicer), together with the Mortgage Note.
Each of the Custodians may resign at any time or may be terminated
by the Trustee with cause, in each case, upon sixty (60) days written notice
to the applicable Servicer, the Depositor and the Securities Administrator, in
which event the Depositor will be obligated to appoint a successor. If no
successor has been appointed and has accepted appointment within sixty (60)
days after the resignation or termination of such Custodian, such Custodian
may petition any court of competent jurisdiction for appointment of a
successor.
The Securities Administrator, pursuant to a separate agreement,
shall compensate from its own funds the Custodians for their respective
activities under this Agreement, pursuant to a schedule of fees and expenses
provided by the Custodians to the Securities Administrator. The Custodians
shall have no lien on the Trust Fund for the payment of such fees. The
Custodians shall be entitled to be reimbursed, from funds on deposit in the
Distribution Account, amounts sufficient to indemnify and hold harmless each
of the Custodians and any director, officer, employee, or agent of a Custodian
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Certificates; or
(c) the performance of any of such Custodian's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any
breach of a Servicer's obligations in connection with a Servicing Agreement
for which the Servicer has performed its obligation to indemnify such
Custodian pursuant to such Servicing Agreement, (ii) resulting from any breach
of the Responsible Party's obligations in connection with a Sale Agreement for
which the Responsible Party has performed its obligation to indemnify such
87
Custodian pursuant to such Sale Agreement, or (iii) incurred because of
willful misfeasance, bad faith, or negligence in the performance of any of
such Custodian's duties under this Agreement.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the Servicers under the related Servicing
Agreements, and (except as set forth below) shall use its reasonable good
faith efforts to cause the Servicers to duly and punctually perform their
duties and obligations thereunder as applicable. Upon the occurrence of an
Event of Default of which a Responsible Officer of the Master Servicer has
actual knowledge, the Master Servicer shall promptly notify the Securities
Administrator and the Trustee and shall specify in such notice the action, if
any, the Master Servicer plans to take in respect of such default. So long as
an Event of Default shall occur and be continuing, the Master Servicer shall
take the actions specified in Article VII. In no event, however, will the
Master Servicer be responsible for supervising, monitoring, or overseeing the
administration and the servicing by any Servicer of any defaulted Mortgage
Loans and any related REO Properties.
If (i) a Servicer reports a delinquency on a monthly report and (ii)
such Servicer, by 11:00 a.m. (New York Time) on the Business Day preceding the
Remittance Date (except with respect to JPMorgan, by 4:00 p.m. (New York Time)
on the related Remittance Date), neither makes a Monthly Advance nor provides
the Securities Administrator and the Master Servicer with a report certifying
that such a Monthly Advance would be a Nonrecoverable Monthly Advance, then
the Master Servicer shall deposit in the Distribution Account not later than
the Business Day immediately preceding the related Distribution Date a Monthly
Advance in an amount equal to the difference between (x) with respect to each
Monthly Payment due on a Mortgage Loan that is delinquent (other than Relief
Act Interest Shortfalls) and for which the related Servicer was required to
make a Monthly Advance pursuant to the related Servicing Agreement and (y)
amounts deposited in the Collection Account to be used for Monthly Advances
with respect to such Mortgage Loan, except to the extent the Master Servicer
determines any such Monthly Advance to be a Nonrecoverable Monthly Advance or
Nonrecoverable Servicing Advance. Subject to the foregoing, the Master
Servicer shall continue to make such Monthly Advances for so long as the
related Servicer is required to do so under the related Servicing Agreement.
If applicable, on the Business Day immediately preceding the Distribution
Date, the Master Servicer shall deliver an Officer's Certificate to the
Trustee stating that the Master Servicer elects not to make a Monthly Advance
in a stated amount and detailing the reason(s) it deems the Monthly Advance to
be a Nonrecoverable Monthly Advance. Any amounts deposited by the Master
Servicer pursuant to this Section 9.01 shall be net of the Servicing Fee for
the related Mortgage Loans.
(b) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i)
termination of any Servicer, (ii) the appointment of a successor servicer or
(iii) the transfer to and assumption of, the servicing by the
88
Master Servicer) and shall, to the extent permitted by the related Servicing
Agreement, seek reimbursement therefor initially from the terminated Servicer.
In the event the full costs associated with the transition of servicing
responsibilities to the Master Servicer or to a successor servicer are not
paid for by the predecessor or successor Servicer (provided such successor
Servicer is not the Master Servicer), the Master Servicer may be reimbursed
therefor by the Trust for out-of-pocket costs incurred by the Master Servicer
associated with any such transfer of servicing duties from a Servicer to the
Master Servicer or any other successor servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations
and warranties of any Servicer it replaces or for any errors or omissions of
such Servicer.
If the Depositor or an affiliate of the Depositor, is the owner of
the servicing rights for a servicer and the Depositor chooses to terminate
such servicer with or without cause and sell those servicing rights to a
successor servicer, then the Depositor must provide thirty (30) days' notice
to the Master Servicer, such successor servicer must be reasonably acceptable
to the Master Servicer, the terminated servicer must be reimbursed for any
unreimbursed Monthly Advances, servicing fees and any related expenses, the
successor servicer must be qualified to service mortgage loans for ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac and the Depositor must obtain prior written consent from the
Rating Agencies that the transfer of the servicing of the mortgage loans will
not result in a downgrade, qualification or withdrawal of the then current
ratings of the Certificates. The costs of such transfer (including any costs
of the Master Servicer) are to be borne by the Depositor.
Neither the Depositor nor the Securities Administrator shall consent
to the assignment by any Servicer of such Servicer's rights and obligations
under the Agreement without the prior written consent of the Master Servicer,
which consent shall not be unreasonably withheld.
(d) In addition to the responsibilities described in this Section
9.01, JPMorgan, as back-up servicer (in such capacity, the "Back-up
Servicer"), shall also be responsible for certain additional monitoring,
reporting and reconciliation functions in connection with the ▇▇▇▇▇▇▇ Conduit
Mortgage Loans serviced by Avelo. Prior to the resignation or termination of
Avelo as a Servicer, the Back-up Servicer agrees to perform the following
duties:
(i) The Back-up Servicer shall create a dedicated servicing platform
to review and confirm the information provided to it by Avelo with
respect to the ▇▇▇▇▇▇▇ Conduit Mortgage Loans.
(ii) Receive the initial loan level data tape provided by Avelo
regarding the ▇▇▇▇▇▇▇ Conduit Mortgage Loans and confirm within ten (10)
Business Days of receipt the beginning mortgage loan count, the aggregate
mortgage loan principal balances and aggregate mortgage loan escrow
balances.
(iii) On the 1st of each month, receive the month end data tape
provided by Avelo regarding the ▇▇▇▇▇▇▇ Conduit Mortgage Loans during the
month prior thereto.
89
(iv) Within five (5) Business Days of the receipt of the month end
data tape, confirm the mortgage loan count and the mortgage loan
principal balances to the trial balance report prepared by Avelo with
respect to the ▇▇▇▇▇▇▇ Conduit Mortgage Loans and report all
discrepancies to Avelo and the Depositor. To the extent Avelo and the
Back-up Servicer cannot resolve such discrepancy, the Back-up Servicer
shall provide a written explanation of the discrepancy to the Master
Servicer, with a copy to Avelo.
(v) Not later than the date which is two (2) Business Days prior to
the Remittance Date, the Back-up Servicer shall furnish to the Master
Servicer a monthly remittance advice and a trial balance report in hard
copy and electronic medium mutually acceptable to the Depositor and the
Master Servicer.
(vi) The Back-up Servicer shall consult fully with Avelo as may be
necessary from time to time to perform or carry out the Back-up
Servicer's obligations hereunder.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
(a) The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and
other Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in
such form and amount generally acceptable for entities serving as master
servicers or trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding
90
obligation of the Master Servicer, enforceable against it in accordance
with the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights in general, and by general
equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default
would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit
its entering into this Agreement or performing its obligations under this
Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) Section 11.01(a) of this Agreement and Section 7 of the
applicable Step 2 Assignment Agreements provide that Avelo, at its option, may
purchase (or, if Avelo is no longer acting as a Servicer of any of the
Mortgage Loans, the Depositor, at its option, may request the Master Servicer
to solicit bids in a commercially reasonable manner, on or after the Optional
Termination Date (such event, the "Auction Call"), for the purchase) of all of
the Mortgage Loans (and REO Properties) at the Termination Price. The Master
Servicer shall accommodate such request to conduct an Auction Call at its sole
discretion. Avelo, in consideration of the benefits to it of the transactions
occurring under this Agreement, the Assignment Agreements and the related
Servicing Agreement, hereby represents, covenants and agrees with the
Depositor and any applicable NIM Issuer that it will not exercise its right to
purchase, on or after the Optional Termination Date, all Mortgage Loans (and
REO Properties) unless it has received (x) written notification from the NIM
Trustee that all of the outstanding notes issued under the applicable
indenture have been paid in full or (y) an Officer's Certificate
91
of the NIM Issuer pursuant to the applicable section of the relevant indenture
to the effect that all conditions precedent to the satisfaction and discharge
of the indenture have been complied with. The Depositor hereby represents,
covenants and agrees with any applicable NIM Issuer that it will not exercise
its right to request the Master Servicer to solicit bids in a commercially
reasonable manner, on or after the Optional Termination Date, for the purchase
of all of the Mortgage Loans (and REO Properties) unless it has received (x)
written notification from the NIM Trustee that all of the outstanding notes
issued under the applicable indenture have been paid in full or (y) an
Officer's Certificate of the NIM Issuer pursuant to the applicable section of
the relevant indenture to the effect that all conditions precedent to the
satisfaction and discharge of the indenture have been complied with.
(c) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery
of this Agreement. The Master Servicer shall indemnify the Depositor,
Securities Administrator, and the Trustee and hold them harmless against any
loss, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and other reasonable costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a material breach of the Master Servicer's representations and
warranties contained in Section 9.03(a) above. It is understood and agreed
that the enforcement of the obligation of the Master Servicer set forth in
this Section 9.03 to indemnify the Depositor, Securities Administrator, and
the Trustee constitutes the sole remedy of the Depositor and the Trustee,
respecting a breach of the foregoing representations and warranties. Such
indemnification shall survive any termination of the Master Servicer as Master
Servicer hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor,
the Master Servicer, Securities Administrator or the Trustee or notice thereof
by any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from any Servicer or required
to be made by the Master Servicer under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement (including any obligation to
cause any subservicer or Reporting Subcontractor (except as specified below)
to take any action specified in Article XIII) which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Master Servicer by the Trustee or to the Master Servicer and the
Trustee by the holders of Certificates evidencing at least 25% of the Voting
Rights; provided that the thirty (30) day cure period shall not apply so long
as the Depositor is required to file Exchange Act Reports with respect to the
Trust Fund, the failure to
92
comply with the requirements set forth in Article XIII, for which the grace
period shall not exceed the lesser of ten (10) calendar days or such period in
which the applicable Exchange Act Report can be filed timely (without taking
into account any extensions).
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force, undischarged
or unstayed for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations
for three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Trustee, the Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in
the performance of its obligations under this Agreement, in each case, where
such indictment materially and adversely affects the ability of the Master
Servicer to perform its obligations under this Agreement (subject to the
condition that such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the
Trustee may have at law or equity to damages, including injunctive relief and
specific performance, the Trustee, by notice in writing to the Master
Servicer, may, and (a) upon the request of the Holders of Certificates
representing at least 51% of the Voting Rights (except with respect to any
Master Servicer Event of Default related to a failure to comply with an
Exchange Act Filing Obligation) or (b) the Depositor, in the case of a failure
related to an Exchange Act Filing Obligation, shall, terminate with cause all
the rights and obligations of the Master Servicer under this Agreement.
The Depositor shall not be entitled to terminate the rights and
obligations of the Master Servicer, pursuant to the above paragraph, if a
failure of the Master Servicer to identify a Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with
respect to mortgage loans other than the Mortgage Loans.
93
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which
accepts such appointments. Upon written request from the Trustee or the
Depositor, the Master Servicer shall prepare, execute and deliver to the
successor entity designated by the Trustee any and all documents and other
instruments related to the performance of its duties hereunder as the Master
Servicer and, place in such successor's possession all such documents with
respect to the master servicing of the Mortgage Loans and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, at the Master Servicer's sole expense. The
Master Servicer shall cooperate with the Trustee and such successor master
servicer in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor master servicer for administration by it of all
cash amounts which shall at the time be credited to the Distribution Account
or are thereafter received with respect to the Mortgage Loans.
Upon the occurrence of a Master Servicer Event of Default, the
Securities Administrator shall provide the Depositor in writing and in form
and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a successor master
servicer in the event the Trustee should succeed to the duties of the Master
Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least 51% of the
Voting Rights waive any default by the Master Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Master Servicer Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Master Servicer
under this Agreement prior to the termination of the Master Servicer. Any
successor shall be a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good
standing and acceptable to the Depositor and the Rating Agencies. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that
in no event shall the master servicer fee paid to such successor master
servicer exceed that paid to the Master Servicer hereunder. In the event that
the Master Servicer's duties, responsibilities and liabilities under this
Agreement are terminated, the Master Servicer shall continue to discharge its
duties and responsibilities hereunder until the effective date of such
termination with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement and shall take no action whatsoever
that might impair or prejudice the rights of its successor. The termination of
the Master Servicer shall not become effective until a successor shall be
appointed pursuant hereto and shall in no event (i) relieve the Master
Servicer of responsibility for the
94
representations and warranties made pursuant to Section 9.03(a) hereof and the
remedies available to the Trustee under Section 9.03(b) hereof, it being
understood and agreed that the provisions of Section 9.03 hereof shall be
applicable to the Master Servicer notwithstanding any such sale, assignment,
resignation or termination of the Master Servicer or the termination of this
Agreement; or (ii) affect the right of the Master Servicer to receive payment
and/or reimbursement of any amounts accruing to it hereunder prior to the date
of termination (or during any transition period in which the Master Servicer
continues to perform its duties hereunder prior to the date the successor
master servicer fully assumes its duties).
If no successor Master Servicer has accepted its appointment within
ninety (90) days of the time the Trustee receives the resignation of the
Master Servicer, the Trustee shall be the successor Master Servicer in all
respects under this Agreement and shall have all the rights and powers and be
subject to all the responsibilities, duties and liabilities relating thereto,
including the obligation to make Monthly Advances; provided, however, that any
failure to perform any duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee's capacity as
such successor, the Trustee shall have the same limitations on liability
herein granted to the Master Servicer. As compensation therefor, the Trustee
shall be entitled to receive the compensation, reimbursement and indemnities
otherwise payable to the Master Servicer, including the fees and other amounts
payable pursuant to Section 9.07 hereof.
At least fifteen (15) calendar days prior to the effective date of
such appointment, the Trustee shall provide written notice to the Depositor of
such successor pursuant to this Section 9.06.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Master Servicer or termination of this
Agreement shall not affect any claims that the Trustee may have against the
Master Servicer arising out of the Master Servicer's actions or failure to act
prior to any such termination or resignation or in connection with the
Trustee's assumption of such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be entitled
to the investment income earned on amounts in the Master Servicer Account
during the Master Servicer Float Period.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from
any merger, conversion, other change in form or consolidation to which the
Master Servicer shall be a party, or any
95
Person succeeding to the business of the Master Servicer, shall be the
successor to the Master Servicer hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or resulting Person to the Master Servicer shall (i) be a Person (or
have an Affiliate) that is qualified and approved to service mortgage loans
for ▇▇▇▇▇▇ ▇▇▇ and FHLMC (provided further that a successor Master Servicer
that satisfies subclause (i) through an Affiliate agrees to service the
Mortgage Loans in accordance with all applicable ▇▇▇▇▇▇ Mae and FHLMC
guidelines) and (ii) have a net worth of not less than $25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or a
successor master servicer satisfactory to the Trustee and the Depositor shall
have assumed, the Master Servicer's responsibilities and obligations under
this Agreement. Notice of such resignation shall be given promptly by the
Master Servicer and the Depositor to the Trustee.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Master Servicer shall provide written notice to the
Depositor of any successor pursuant to this Section.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the
Trustee and the Depositor of a letter from each Rating Agency to the effect
that such action shall not result in a downgrade of the ratings assigned to
any of the Certificates, to delegate or assign to or subcontract with or
authorize or appoint any qualified Person to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master
Servicer hereunder. Notice of such permitted assignment shall be given
promptly by the Master Servicer to the Depositor and the Trustee. If, pursuant
to any provision hereof, the duties of the Master Servicer are transferred to
a successor master servicer, the entire compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer but in no event shall the fee payable to the successor master
servicer exceed that payable to the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, the
Securities Administrator, the Servicers or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this
96
provision shall not protect the Master Servicer or any such person against any
liability that would otherwise be imposed by reason of willful malfeasance,
bad faith or negligence in the performance of its duties or by reason of
reckless disregard for its obligations and duties under this Agreement. The
Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Master Servicer shall be under no obligation to appear in, prosecute or defend
any legal action that is not incidental to its duties as Master Servicer with
respect to the Mortgage Loans under this Agreement and that in its opinion may
involve it in any expenses or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action that it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder.
In such event, the legal expenses and costs of such action and any liability
resulting therefrom, shall be liabilities of the Trust, and the Master
Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Account in accordance with the provisions of Section 9.07 and Section
9.12.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Depositor, the Securities Administrator and
the Trustee, and hold them harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
any other costs, liability, fees and expenses that the Depositor, the
Securities Administrator or the Trustee may sustain as a result of the Master
Servicer's willful malfeasance, bad faith or negligence in the performance of
its duties hereunder or by reason of its reckless disregard for its
obligations and duties under this Agreement. The Depositor, the Securities
Administrator, the Servicer, and the Trustee shall immediately notify the
Master Servicer if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans which would entitle the Depositor, the
Servicer or the Trustee to indemnification under this Section 9.12, whereupon
the Master Servicer shall assume the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it
or them in respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer)
of the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any
97
other costs, liabilities, fees and expenses that the Master Servicer may incur
or sustain in connection with, arising out of or related to this Agreement,
the Servicing Agreements, the Sale Agreements, the Step 2 Assignment
Agreements or the Certificates, except to the extent that any such loss,
liability or expense is related to (i) a material breach of the Master
Servicer's representations and warranties in this Agreement or (ii) the Master
Servicer's willful malfeasance, bad faith or negligence or by reason of its
reckless disregard of its duties and obligations under any such agreement;
provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled
to reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the
Securities Administrator, after so requesting, does not receive a
satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Securities Administrator and
conforming to the requirements of this Agreement which it believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities
98
Administrator, unless it shall be conclusively determined by a court of
competent jurisdiction, such determination no longer subject to appeal,
that the Securities Administrator was negligent in ascertaining the
pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates
relating to the time, method and place of conducting any proceeding for
any remedy available to the Securities Administrator, or exercising or
omitting to exercise any trust or power conferred upon the Securities
Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature
of any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Securities Administrator, not
reasonably assured to the Securities Administrator by the security
afforded to it by the terms of this Agreement, the Securities
Administrator may require reasonable indemnity against such expense or
99
liability as a condition to so proceeding. Nothing in this clause (iv)
shall derogate from the obligation of the Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors, provided that the Master Servicer shall have no liability for
disclosure required by this Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities
Administrator reasonable security or indemnity satisfactory to the
Securities Administrator against the costs, expenses and liabilities
which may be incurred therein or thereby;
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities
Administrator may in its discretion undertake any such action that it may
deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and the interests of the Trustee, the
Securities Administrator and the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust
Fund, and the Securities Administrator shall be entitled to be reimbursed
therefor out of the Collection Account; and
(ix) in no event shall the Securities Administrator be liable for
special, indirect or consequential damages.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing thereof,
(B) to see to the provision of any insurance or (C) to see to the payment or
discharge of any tax,
100
assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied against, any
part of the Trust Fund other than from funds available in the Distribution
Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Transferor, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The
Securities Administrator shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become
the owner or pledgee of Certificates and may transact business with the
parties hereto and their Affiliates with the same rights as it would have if
it were not the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee,
agent or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"),
of the Securities Administrator shall be indemnified by the Trust and held
harmless against any loss, liability or expense (including reasonable
attorney's fees) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder, (ii) incurred in connection with
the performance of any of the Securities Administrator's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder or (iii) incurred by reason of any
action of the Securities Administrator taken at the direction of the
Certificateholders, provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such indemnity
shall survive the termination of this Agreement or the resignation or removal
of the Securities Administrator hereunder. Without limiting the foregoing, and
except for any such expense, disbursement or advance as may arise from the
Securities Administrator's negligence, bad faith or willful misconduct, or
which would not be an "unanticipated expense" within the meaning of the second
preceding sentence, the Securities Administrator shall be reimbursed by the
Trust for all reasonable expenses, disbursements and advances incurred or made
by the Securities Administrator in accordance with any of the provisions of
this Agreement with respect to: (A) the reasonable compensation and the
expenses and disbursements of its counsel not associated with the closing of
the issuance of the Certificates, (B) the reasonable compensation, expenses
and disbursements of any accountant, engineer, appraiser or other agent that
is not regularly
101
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder
and (C) printing and engraving expenses in connection with preparing any
Definitive Certificates. The Trust shall fulfill its obligations under this
paragraph from amounts on deposit from time to time in the Distribution
Account.
The Securities Administrator may retain or withdraw from the
Distribution Account, (i) the investment income earned on amounts in the
Distribution Account during the Master Servicer Float Period, (ii) amounts
necessary to reimburse it or the Master Servicer for any previously
unreimbursed Advances and any Advances the Master Servicer deems to be
non-recoverable from the related Mortgage Loan proceeds, (iii) an aggregate
annual amount to indemnify the Master Servicer and itself for amounts due in
accordance with this Agreement, and (iv) any other amounts which it or the
Master Servicer is entitled to receive hereunder for reimbursement,
indemnification or otherwise, including the amount to which the Securities
Administrator is entitled pursuant to Section 3.02 hereof. The Securities
Administrator shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for the Securities
Administrator. The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 10.06 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Securities Administrator shall
cease to be eligible in accordance with the provisions of this Section 10.06,
the Securities Administrator shall resign immediately in the manner and with
the effect specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the
Depositor and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator functions are operated through
an institutional trust department of the Securities Administrator, (ii) must
be authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, and (iii) must be rated at least "A/F1" by
Fitch, if Fitch is a Rating Agency and if rated by Fitch, or the equivalent
rating by S&P or ▇▇▇▇▇'▇. If no successor Securities Administrator shall have
been appointed and shall have accepted appointment within sixty (60) days
after the Securities Administrator ceases to be the Securities Administrator
pursuant to Section 10.07, then the Trustee may (but shall not be obligated
to) become the successor Securities Administrator. The Depositor shall appoint
a successor to the Securities Administrator in accordance with Section 10.07.
The Trustee shall notify the Rating Agencies of any change of Securities
Administrator.
102
Section 10.07 Resignation and Removal of the Securities
Administrator. The Securities Administrator may at any time resign by giving
written notice of resignation to the Depositor and the Trustee and each Rating
Agency not less than sixty (60) days before the date specified in such notice
when, subject to Section 10.08, such resignation is to take effect, and
acceptance by a successor Securities Administrator in accordance with Section
10.08 meeting the qualifications set forth in Section 10.06. If no successor
Securities Administrator meeting such qualifications shall have been so
appointed by the Depositor and have accepted appointment within thirty (30)
days after the giving of such notice of resignation, the resigning Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Securities Administrator.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Securities Administrator shall provide written notice to
the Depositor of any successor pursuant to this Section 10.07.
If at any time (i) the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, (ii) the
Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities
Administrator or of its property shall be appointed, or any public officer
shall take charge or control of the Securities Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii)(A) a tax is imposed with respect to the Trust Fund by any
state in which the Securities Administrator or the Trust Fund is located and
(B) the imposition of such tax would be avoided by the appointment of a
different Securities Administrator, or (iv) the Securities Administrator fails
to comply with its obligations under Article XIII and such failure is not
remedied within the lesser of ten (10) calendar days or such period in which
the applicable Exchange Act Report can be filed timely (without taking into
account any extensions), then, in the case of clauses (i) through (iii), the
Depositor may remove the Securities Administrator and appoint a successor
Securities Administrator by written instrument, in triplicate, one copy of
which instrument shall be delivered to the Securities Administrator so
removed, one copy of which shall be delivered to the Master Servicer and one
copy to the successor Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
103
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the
Trustee, the Master Servicer and the predecessor Securities Administrator
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor Securities Administrator all such rights, powers, duties, and
obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency and has provided to the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a replacement Securities Administrator.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within ten (10) days
after acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of the Securities
Administrator. Any corporation or other entity into which the Securities
Administrator may be merged or converted or with which it may be consolidated
or any corporation or other entity resulting from any merger, conversion or
consolidation to which the Securities Administrator shall be a party, or any
corporation or other entity succeeding to the business of the Securities
Administrator, shall be the successor of the Securities Administrator
hereunder, provided that such corporation or other entity shall be eligible
under the provisions of Section 10.06 hereof, without the execution or filing
of any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities
Administrator shall not assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Securities Administrator;
provided, however, that the Securities Administrator shall have the right with
the prior written consent of the Depositor (which shall not be unreasonably
withheld or delayed), and upon delivery to the Trustee and the Depositor of a
letter from each Rating Agency to the effect that such action shall
104
not result in a downgrade of the ratings assigned to any of the Certificates,
to delegate or assign to or subcontract with or authorize or appoint any
qualified Person to perform and carry out any duties, covenants or obligations
to be performed and carried out by the Securities Administrator hereunder.
Notice of such permitted assignment shall be given promptly by the Securities
Administrator to the Depositor and the Trustee. If, pursuant to any provision
hereof, the duties of the Securities Administrator are transferred to a
successor securities administrator, the entire compensation payable to the
Securities Administrator pursuant hereto shall thereafter be payable to such
successor securities administrator but in no event shall the fee payable to
the successor securities administrator exceed that payable to the predecessor
securities administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicers, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of: (a) Avelo, at its option, purchasing (the
"Avelo Call") (or, if Avelo is no longer acting as a Servicer of any of the
Mortgage Loans, the Depositor may request the Master Servicer to exercise its
option to conduct an Auction Call for the purchase of) the Mortgage Loans and
all other property of the Trust on a non-recourse basis with no
representations or warranties of any nature whatsoever and the sale of all of
the Property of the Trust Fund, on or after the Optional Termination Date. The
Master Servicer shall accommodate such request to conduct an Auction Call at
its sole discretion. The Property of the Trust Fund shall be sold by the
Trustee as directed by the Depositor or the Master Servicer to the entity with
the highest bid received by the Master Servicer from closed bids solicited by
the Master Servicer or its designee; provided that to effectuate such sale,
the Master Servicer or its designee shall have made reasonable efforts to sell
all of the property of the Trust Fund for its fair market value in a
commercially reasonable manner and on commercially reasonable terms, which
includes the good faith solicitation of competitive bids to prospective
purchasers that are recognized broker/dealers for assets of this type and
provided further that, (i) such sale price shall not be less than the Par
Value as certified by the Depositor, (ii) the Master Servicer receives bids
from no fewer than three prospective purchasers (which may include the
Majority Class X Certificateholder) and (iii) such sale price shall be
deposited with the Trustee prior to the Distribution Date following the month
in which such value is determined and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of
the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof. Any
exercise by Avelo of its option to purchase the Mortgage Loans and all other
property of the Trust as set forth in this Section 11.01 shall be at a price
equal to the Termination Price. For purposes of this Section, the "Termination
Price" shall be equal to the greater of: (1) the sum of (i) 100% of the unpaid
principal balance of each Mortgage Loan (other than in respect of REO
Property) plus accrued and unpaid interest thereon at the applicable Mortgage
Interest Rate, (ii) the lesser of (x) the appraised value of any REO Property
as determined by the higher of two appraisals completed
105
by two independent appraisers selected by the Master Servicer at its expense,
plus accrued and unpaid interest on the related mortgage loans at the
applicable mortgage rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Mortgage Interest Rate; (iii) any
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee and (iv) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider; and
(2) the aggregate fair market value of each Mortgage Loan and any REO
Property, as determined by the highest bid received by the Master Servicer
from closed bids solicited by the Depositor or its designee from at least
three recognized broker/dealers (one of which may be an affiliate of the
Depositor) that deal in similar assets as of the close of business on the
third Business Day preceding the date upon which a Notice of Final
Distribution is furnished to Certificateholders pursuant to Section 11.02,
plus accrued and unpaid interest on the Mortgage Loans at the applicable
Mortgage Interest Rate.
The proceeds of the purchase or sale of such assets of the Trust
pursuant to the Avelo Call or the Auction Call described in Section 11.01
above (other than, with respect to any mortgage loan and the related property,
an amount equal to the excess, if any, of the amount in Section 11.01(a)(2)
over the sum of the amount in Section 11.01(a)(1) (such excess, the "Fair
Market Value Excess")) will be distributed to the holders of the Certificates
in accordance with Section 4.01. Any Fair Market Value Excess received in
connection with the purchase of the Mortgage Loans and REO Properties will be
distributed to the holders of the Class RC Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class RC Certificates, the
proceeds of such a purchase or sale will be treated as a prepayment of the
Mortgage Loans for purposes of distributions to Certificateholders.
Accordingly, the sale of the Mortgage Loans and the REO Properties as a result
of the exercise of the Avelo Call or the Auction Call will result in the final
distribution on the Certificates on that Distribution Date.
Section 11.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicers notify the Securities Administrator that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Collection Account, the Securities
Administrator shall promptly send a Notice of Final Distribution to the
applicable Certificateholders. If either Avelo or the Master Servicer exercise
their respective option to terminate the Trust Fund pursuant to clause (a) of
Section 11.01, by no later than the 10th day of the month of the final
distribution, the Master Servicer, pursuant to the applicable Step 2
Assignment Agreements, shall notify the Trustee, each Servicer and the
Securities Administrator of the final Distribution Date and of the applicable
sale price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not later than the 15th
day of the month of such final distribution. Any such Notice of Final
Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender
of Certificates at
106
the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event the Mortgage Loans (and REO Properties) are purchased
or sold pursuant to Section 11.01 and pursuant to the applicable Step 2
Assignment Agreement, the Trustee is required thereunder to remit to the
Securities Administrator the applicable Termination Price on the applicable
Remittance Date immediately preceding the applicable final Distribution Date.
Upon such final deposit with respect to the Trust Fund and the receipt by the
Securities Administrator and the Custodians of a Request for Release therefor
in the form of Exhibit X, X-1, or X-2, as applicable, the Master Servicer
shall direct the Custodians to release and the relevant Custodians shall
promptly release to the Master Servicer or its designee the Custodial Files
for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due the Depositor, the Trustee and
the Custodians hereunder), in each case on the final Distribution Date and in
the order set forth in Section 4.01, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, an
amount up to an amount equal to (i) as to each Class of Regular Certificates
(except the Class X Certificates), the Certificate Balance thereof plus for
each such Class and the Class X Certificates accrued interest thereon in the
case of an interest-bearing Certificate and all other amounts to which such
Classes are entitled pursuant to Section 4.01, and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account after application pursuant to clause (i) above (other than the amounts
retained to meet claims). The foregoing provisions are intended to distribute
to each Class of Regular Certificates any accrued and unpaid interest and
principal to which they are entitled based on the Pass-Through Rates and
actual Class Certificate Balances or notional principal balances set forth in
the Preliminary Statement upon liquidation of the Trust Fund.
In the event that any affected Certificateholder shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Securities Administrator shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject
hereto.
Section 11.03 Additional Termination Requirements. In the event the
Avelo Call or the Auction Call is exercised as provided in Section 11.01, the
Trust Fund shall be terminated
107
in accordance with the following additional requirements, unless the Trustee
and the Securities Administrator have been supplied with an Opinion of
Counsel, at the expense of the Master Servicer, to the effect that the failure
to comply with the requirements of this Section 11.03 will not (i) result in
the imposition of taxes on "prohibited transactions" on any Trust REMIC as
defined in Section 860F of the Code, or (ii) cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall sell
all of the assets of the Trust Fund to the entity with the highest bid
received pursuant to the Auction Call and, by the next Distribution Date after
such sale, shall distribute to the Certificateholders the proceeds of such
sale in complete liquidation of each of the Trust REMICs;
(b) The Securities Administrator on behalf of the Trustee shall sell
all of the assets of the Trust Fund to the Master Servicer and, by the next
Distribution Date after such sale, shall distribute to the Certificateholders
the proceeds of such sale in complete liquidation of each of the Trust REMICs;
and
(c) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the ninety
(90) day liquidation period for each such Trust REMIC was the date on which
the Securities Administrator on behalf of the Trustee sold the assets of the
Trust Fund to the entity with the highest bid received pursuant to the Auction
Call.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Securities Administrator, the
Custodians and the Trustee (and the Master Servicer may request an amendment
or consent to any amendment of a Servicing Agreement as directed by the
Depositor) without the consent of any of the Certificateholders (i) to cure
any ambiguity or mistake, (ii) to correct any defective provision herein or in
the applicable Servicing Agreement, or to supplement any provision in this
Agreement which may be inconsistent with any other provision herein or in the
applicable Servicing Agreement, (iii) to add to the duties of the Depositor,
or the Trustee (or with respect to the applicable Servicing Agreement, of the
applicable Servicer) the Master Servicer, the Securities Administrator or the
Custodians, (iv) to add any other provisions with respect to matters or
questions arising hereunder or under the applicable Servicing Agreement, or
(v) to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement or in the applicable Servicing Agreement; provided
that any action pursuant to clause (iv) or (v) above shall not, as evidenced
by an Opinion of Counsel (which Opinion of Counsel shall be an expense of the
requesting party, but in any case shall not be an expense of the Trustee, the
Master Servicer, the Securities Administrator, the Custodians or the Trust
Fund), adversely affect in any material respect the interests of any
Certificateholder; provided, further, that the amendment shall not be deemed
to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of
108
the respective ratings then assigned to the Certificates; it being understood
and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. The
Trustee, the Depositor, the Custodians, the Securities Administrator and the
Master Servicer also may at any time and from time to time amend this
Agreement (and the Master Servicer shall request the Servicers amend the
applicable Servicing Agreements), without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the
risk of the imposition of any tax on any Trust REMIC pursuant to the Code that
would be a claim at any time prior to the final redemption of the Certificates
or (iii) comply with any other requirements of the Code; provided, that the
Trustee and the Master Servicer have been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the
effect that such action is necessary or helpful to, as applicable, (i)
maintain such qualification, (ii) avoid or minimize the risk of the imposition
of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Custodians, the Securities Administrator
and the Trustee (and the Master Servicer shall consent to any amendment to the
applicable Servicing Agreement as directed by the Depositor) with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66?% of each Class of Certificates affected thereby for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating
not less than 66?%, or (iii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without
the consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement or any Servicing Agreement unless (i) each shall have first received
an Opinion of Counsel, which opinion shall not be an expense of the Trustee,
the Master Servicer or the Trust Fund, to the effect that such amendment will
not cause the imposition of any tax on any Trust REMIC or the
Certificateholders or cause any Trust REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a
copy of such notice to the Trustee and the Master Servicer) of such amendment,
stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities
of the Trustee or a Servicer under the applicable Servicing Agreement, any
Certificate beneficially owned by the Depositor or any of its Affiliates or by
the Responsible Party or any of its Affiliates shall be deemed not to
109
be outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 12.01 have been obtained.
Promptly after the execution of any amendment to this Agreement or
any Servicing Agreement requiring the consent of Certificateholders, the
Trustee shall furnish written notification of the substance or a copy of such
amendment to each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Custodians,
the Master Servicer or the Securities Administrator to enter into an amendment
which modifies its obligations or liabilities without its consent and in all
cases without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee, the Custodians, the Master Servicer, the Securities
Administrator or the Trust Fund), satisfactory to the Trustee, the Master
Servicer or the Securities Administrator, as applicable, that (i) such
amendment is permitted and is not prohibited by this Agreement or the
applicable Servicing Agreement and that all requirements for amending this
Agreement or such Servicing Agreement have been complied with; and (ii) either
(A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to
this Section 12.01.
Notwithstanding the Trustee's consent to, or the Master Servicer's
request for, any amendment of any Servicing Agreement pursuant to the terms of
this Section 12.01, such Servicing Agreement cannot be amended without the
consent of the applicable Servicer. Neither the Master Servicer nor the
Trustee shall be responsible for any failure by such Servicer to consent to
any amendment to the applicable Servicing Agreement.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation shall be
effected by the Trustee at the expense of the Trust, but only if an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders is delivered to the Trustee.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
110
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of
the parties that such conveyances be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, or if for any other reason this Agreement is
held or deemed to create a security interest in either of such assets, then
(i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for
the benefit of the Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer, Master Servicer,
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the Sale Agreements; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section 4.02.
111
(ii) The Servicer's annual statement of compliance and the
accountant's report described in the Servicing Agreements; and
(iii) Any notice of a purchase of a Mortgage Loan pursuant to this
Agreement and any Sale Agreement.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor or GS Mortgage Securities Corp. or ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance
Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Asset Management Group/Senior Asset Manager,
or such other address as may be hereafter furnished to the Securities
Administrator by the Depositor in writing; (b) in the case of Avelo, Avelo
Mortgage, L.L.C., ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: President and General Counsel, with a copy to Archon Group,
L.P., ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel, or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by Avelo in writing; (c) in the
case of JPMorgan Chase Bank, National Association, c/o Chase Home Finance LLC,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇
Dunks, with a copy to JPMorgan Chase Bank, National Association, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, or such
other address as may be hereafter furnished to the Depositor and the
Securities Administrator by JPMorgan in writing; (d) in the case of
Countrywide or Countrywide Servicing, to Countrywide Home Loans Servicing LP,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investor
Accounting, or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by Countrywide in writing; (e) in
the case of American Home, American Home Mortgage Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇, General Counsel, or such
other address as may be hereafter furnished to the Depositor and the
Securities Administrator by American Home in writing; (f) in the case of
American Home Servicing, American Home Mortgage Servicing, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice
President; (g) in the case of National City, National City Mortgage Co., ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇, Trader, or such
other address as may be hereafter furnished to the Depositor and the
Securities Administrator by National City in writing; (h) in the case of the
Goldman Conduit, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (i) in the case of the Trustee or the Securities Administrator
to its Corporate Trust Office, or such other address as the Trustee or the
Securities Administrator may hereafter furnish to the Depositor; (j) in the
case of the Master Servicer, JPMorgan Chase Bank, National Association, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇, Attention: GSAA
2006-9, or such other address as may be hereafter furnished to the Depositor
and the Securities Administrator by the Master Servicer in writing; (k) in the
case of Deutsche Bank, Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Custody -
GS06EC; (l) in the case of JPMorgan as Custodian, JPMorgan Chase Bank,
National Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
(m) in the case of U.S. Bank, U.S. Bank National Association, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA Home Equity
Trust 2006-4; (n) in the case of Ameriquest, to Ameriquest Mortgage Company,
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇; (o) in the case of GreenPoint, GreenPoint Mortgage Funding,
Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, or such other address
as may be hereafter furnished to the Depositor and the Securities
Administrator by GreenPoint in writing; (p) in the case of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Financial Services, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; (q) in the case of ▇▇▇▇▇ Fargo, ▇▇▇▇▇ Fargo,
National Association, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: GSAA 2006-9, or such other address as may be hereafter furnished to
the Depositor and the Securities Administrator by ▇▇▇▇▇ Fargo in writing; (r)
in the case of the Swap Provider, to the related Swap Provider addressed to it
at the address specified in the Interest Rate Swap Agreement or at any other
address previously furnished in writing to the Trust by the related Swap
Provider; and (s) in the case of each of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 12.07 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for sixty (60) days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly
113
covenanted by each Certificateholder with every other Certificateholder and
the Trustee, that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 12.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.08 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 12.09 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations.
The Master Servicer, the Trustee, the Securities Administrator and
any Custodian shall reasonably cooperate with the Depositor and Securities
Administrator in connection with the satisfaction of the Depositor's reporting
requirements under the Exchange Act with respect to the Trust Fund. In
addition to the information specified below, if so requested by the Depositor
in writing for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee, the Securities Administrator
and any Custodian shall (and the Master Servicer shall cause each Servicer and
subservicer to) provide the Depositor with (a) such information which is
available to such Person without unreasonable effort or expense and within
such timeframe as may be reasonably requested by the Depositor to comply with
the Depositor's reporting obligations under the Exchange Act and (b) to the
extent such Person is a party (and the Depositor is not a party) to any
agreement or amendment required to be filed, copies of such agreement or
amendment in ▇▇▇▇▇-compatible form.
The Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon written request, such further
information, reports and financial statements within its control related to
the Trust Agreement and the Mortgage Loans as the Depositor reasonably deems
appropriate to prepare and file all necessary reports with the Commission.
114
Upon filing with the Commission, the Securities Administrator shall promptly
deliver to the Depositor a copy of any such reports.
Section 13.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Securities Administrator
shall prepare for filing and file within fifteen (15) days after each
Distribution Date commencing May 2006 (subject to permitted extensions under
the Exchange Act and until a Form 15 is filed pursuant to Section 13.06) with
the Commission with respect to the Trust Fund, a Form 10-D with copies of the
Monthly Statement and, to the extent delivered to the Securities
Administrator, no later than ten (10) days following the Distribution Date,
such other information identified by the Depositor, to be filed with the
Commission (such other information, the "Additional Designated Information").
If the Depositor directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor shall specify the Item on Form 10-D to
which such information is responsive and, with respect to any Exhibit to be
filed on Form 10-D, the Exhibit number. Any information to be filed on Form
10-D shall be delivered to the Securities Administrator in ▇▇▇▇▇-compatible
form or as otherwise agreed upon by the Securities Administrator and the
Depositor at the Depositor's expense, and any necessary conversion to
▇▇▇▇▇-compatible format will be at the Depositor's expense. Upon completion of
each 10-D filing by the Securities Administrator, such 10-D filing shall be
submitted to the Depositor for approval. Upon receipt of written notice via
electronic mail to ▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇, from the Depositor that the 10-D has
been approved, the Securities Administrator shall attach to such 10-D the
signature page of the Depositor which has been previously delivered by the
Depositor to the Securities Administrator and submit such 10-D for filing with
the Commission. At the reasonable request of, and in accordance with the
reasonable directions of, the Depositor, the Securities Administrator shall
prepare for filing and file an amendment to any Form 10-D previously filed
with the Commission with respect to the Trust Fund. The Depositor shall sign
the Form 10-D filed on behalf of the Trust Fund.
(b) No later than each Distribution Date, each of the Master Servicer,
the Securities Administrator and the Trustee shall, to the extent they have
knowledge, notify (and the Master Servicer shall cause any Servicer, to the
extent such Servicer is required to make such disclosure under its Servicing
Agreement, to notify) the Depositor of any Form 10-D Disclosure Item, together
with a description of any such Form 10-D Disclosure Item in form and substance
reasonably acceptable to the Depositor. In addition to such information as the
Master Servicer, the Securities Administrator and the Trustee are obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Depositor in writing, each of the Master Servicer, the Securities
Administrator and the Trustee shall provide such information which is
available to the Master Servicer, the Securities Administrator and the
Trustee, as applicable, without unreasonable effort or expense regarding the
performance or servicing of the Mortgage Loans as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB.
(c) The Securities Administrator shall not have any responsibility to
file any items (other than those generated by it) that have not been received
in a format suitable (or readily convertible into a format suitable) for
electronic filing via the ▇▇▇▇▇ system and shall not have any responsibility
to convert any such items to such format (other than those items generated by
115
it or that are readily convertible to such format). The Securities
Administrator shall have no liability to the Certificateholders, the Trust
Fund, the Master Servicer or the Depositor with respect to any failure to
properly prepare or file any of Form 10-D to the extent that such failure is
not the result of any negligence, bad faith or willful misconduct on its part.
Section 13.03 Form 8-K Filings.
The Depositor shall prepare, sign and file (via ▇▇▇▇▇) any Form 8-K
required by the Exchange Act and the Rules and Regulations of the Commission
thereunder. Each of the Master Servicer (and the Master Servicer shall cause
any Servicer to promptly notify), the Securities Administrator and the Trustee
shall promptly notify the Depositor, but in no event later than one (1)
Business Day after its occurrence, of any Reportable Event, applicable to it,
of which a Responsible Officer of such entity has actual knowledge.
Section 13.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2007 (or such earlier
date as may be required by the Exchange Act and the Rules and Regulations of
the Commission and until a Form 15 is filed pursuant to Section 13.06), the
Securities Administrator shall prepare and file on behalf of the Trust Fund a
Form 10-K, in form and substance as required by applicable law or the Exchange
Act. The Depositor shall sign each Form 10-K filed on behalf of the Trust
Fund. Such Form 10-K shall include as exhibits each (i) annual statement of
compliance described in the paragraph below, (ii) annual report on assessments
of compliance with servicing criteria described under Section 13.07 and (iii)
accountant's report described under Section 13.07. Each Form 10-K shall also
include any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be included therewith, as
described in Section 13.05. The Securities Administrator shall have no
liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith.
The Master Servicer shall, and shall cause each Servicer to cause any
subservicer used by such Servicer to, deliver to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing with
its 2007 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of such Person during the
preceding calendar year (or applicable portion thereof) and of the performance
of the Master Servicer under this Agreement, or in the case of a Servicer or
subservicer, the applicable Servicing Agreement, has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, such Person has fulfilled all its obligations under this
Agreement, or in the case of a Servicer or subservicer, the applicable
Servicing Agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof. The Securities Administrator
shall forward a copy of each such statement to each Rating Agency. Copies of
such statement shall be provided by the Securities Administrator to any
Certificateholder upon written request, provided such statement is delivered
by the Master Servicer to the Securities Administrator.
116
No later than March 10 of each year, commencing in 2007, and until a Form
15 is filed pursuant to Section 13.06, the Master Servicer, the Securities
Administrator and the Trustee shall notify (and the Master Servicer shall
cause any Servicer to notify) the Depositor of any Form 10-K Disclosure Item,
together with a description of any such Form 10-K Disclosure Item in form and
substance reasonably acceptable to the Depositor. Additionally, each of the
Master Servicer, the Securities Administrator and the Trustee shall provide,
and shall cause each Reporting Subcontractor retained by the Master Servicer,
the Securities Administrator or the Trustee, as applicable, and in the case of
the Master Servicer shall cause each Servicer, to provide, the following
information no later than March 10 of each year in which a Form 10-K is
required to be filed on behalf of the Trust Fund: (i) if such Person's report
on assessment of compliance with servicing criteria described under Section
13.07 or related registered public accounting firm attestation report
described under Section 13.07 identifies any material instance of
noncompliance, notification of such instance of noncompliance and (ii) if any
such Person's report on assessment of compliance with servicing criteria or
related registered public accounting firm attestation report is not provided
to be filed as an exhibit to such Form 10-K, information detailing the
explanation why such report is not included.
Section 13.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Master Servicer and the Securities
Administrator shall (unless such person is the Certifying Person), and the
Master Servicer shall cause each Servicer to, provide to the Person who signs
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying Person") a certification
(each, a "Performance Certification"), in the form attached hereto as Exhibit
V-1 (in the case of the Master Servicer) and Exhibit V-2 (in the case of the
Securities Administrator), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The Depositor will not request
delivery of a certification under this clause unless the Depositor is required
under the Exchange Act to file an annual report on Form 10-K with respect to
the Trust Fund. In the event that prior to the filing date of the Form 10-K in
March of each year, the Securities Administrator or the Master Servicer has
actual knowledge of information material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification,
the Securities Administrator or the Master Servicer, as the case may be, shall
promptly notify the Depositor. The respective parties hereto agree to
cooperate with all reasonable requests made by any Certifying Person or
Certification Party in connection with such Person's attempt to conduct any
due diligence that such Person reasonably believes to be appropriate in order
to allow it to deliver any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or portion thereof
with respect to the Trust Fund.
Section 13.06 Form 15 Filing.
Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15 relating to the automatic suspension of
reporting in respect of the Trust Fund under the Exchange Act.
117
Section 13.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15th of each calendar year, commencing in 2007:
(1) Each of the Master Servicer, the Securities Administrator and the
Custodians shall deliver to the Depositor and the Securities Administrator a
report regarding the Master Servicer's, the Securities Administrator's or
Custodians', as applicable, assessment of compliance with the Servicing
Criteria applicable to it during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB; provided, however, the Securities Administrator and Custodians
shall deliver such report until a Form 15 is filed pursuant to Section 13.06.
Such report shall be signed by an authorized officer of such Person and shall
address each of the Servicing Criteria applicable to it identified in Exhibit
W hereto delivered to the Depositor concurrently with the execution of this
Agreement. To the extent any of the Servicing Criteria so specified are not
applicable to such Person, with respect to asset-backed securities
transactions taken as a whole involving such Person and that are backed by the
same asset type backing the Certificates, such report shall include such a
statement to that effect. The Depositor and its respective officers and
directors shall be entitled to rely on upon each such servicing criteria
assessment.
(2) Each of the Master Servicer, the Securities Administrator and the
Custodians shall deliver to the Depositor, the Securities Administrator and
the Master Servicer a report of a registered public accounting firm that
attests to, and reports on, the assessment of compliance made by Master
Servicer, the Securities Administrator or the Custodians, as applicable, and
delivered pursuant to the preceding paragraphs. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act, including, without limitation that in the
event that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express such
an opinion. Such report must be available for general use and not contain
restricted use language. To the extent any of the Servicing Criteria are not
applicable to such Person, with respect to asset-backed securities
transactions taken as a whole involving such Person and that are backed by the
same asset type backing the Certificates, such report shall include such a
statement to that effect.
(3) The Master Servicer shall cause each Servicer and Reporting
Subcontractor to deliver to the Depositor and the Securities Administrator an
assessment of compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section 13.07.
(4) The Securities Administrator shall cause each Reporting Subcontractor
under its employ, if any, to deliver to the Depositor, the Securities
Administrator and the Master Servicer an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b) of
this Section.
(b) Each assessment of compliance provided by the Securities
Administrator, the Master Servicer or the Custodians pursuant to Section
13.07(a)(3) shall address each of the Servicing Criteria applicable to it
specified on a certification substantially in the form of Exhibit W hereto
delivered to the Depositor concurrently with the execution of this Agreement
or, in the case of a securities administrator, master servicer or custodian
subsequently appointed as such,
118
on or prior to the date of such appointment. An assessment of compliance
provided by a Subcontractor pursuant to Section 13.07(a)(3) or (4) need not
address any elements of the Servicing Criteria other than those specified
pursuant to Section 13.07(a)(1).
Section 13.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any subservicer used by the Master
Servicer and shall cause each Servicer to cause any subservicer used by such
servicer for the benefit of the Depositor to comply with the provisions of
this Article XIII to the same extent as if such Servicer or subservicer were
the Master Servicer (except with respect to the Master Servicer's duties with
respect to preparing and filing any Exchange Act Reports or as the Certifying
Person). The Master Servicer shall be responsible for obtaining from each
Servicer and subservicer and delivering to the Depositor any servicer
compliance statement required to be delivered by such Servicer or subservicer
pursuant to the second paragraph of Section 13.04, any assessment of
compliance and attestation required to be delivered by such Servicer or
subservicer under Section 13.07 and any certification required to be delivered
to the Certifying Person under Section 13.05 as and when required to be
delivered.
(b) It shall not be necessary for the Master Servicer, any Servicer, any
subservicer or the Securities Administrator to seek the consent of the
Depositor or any other party hereto to the utilization of any Subcontractor.
The Master Servicer or the Securities Administrator, as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Master Servicer or administrator) a written description
(in form and substance satisfactory to the Depositor) of the role and function
of each Subcontractor utilized by such Person (or in the case of the Master
Servicer, any Servicer or any subservicer), specifying (i) the identity of
each such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be a
Reporting Subcontractor, the Master Servicer or the Securities Administrator,
as applicable, shall cause any such Subcontractor used by such Person (or in
the case of the Master Servicer, any Servicer or any subservicer) for the
benefit of the Depositor to comply with the provisions of Section 13.07 of
this Agreement to the same extent as if such Subcontractor were the Master
Servicer (except with respect to the Master Servicer's duties with respect to
preparing and filing any Exchange Act Reports or as the Certifying Person) or
the Securities Administrator, as applicable. The Master Servicer or the
Securities Administrator, as applicable, shall be responsible for obtaining
from each Subcontractor and delivering to the Depositor and the Master
Servicer, any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 13.07, in each case as and when
required to be delivered.
* * * * * * *
119
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, solely as
Trustee and not in its individual capacity
By: /s/▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Authorized Representative
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Master Servicer,
Securities Administrator
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Master Servicing and Trust Agreement
DEUTSCHE BANK NATIONAL TRUST COMPANY, .
as a Custodian
By: /s/▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Associate
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as a Custodian
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION,
as a Custodian
By: /s/▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
Master Servicing and Trust Agreement
SCHEDULE I
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
S-I-1
A-6
EXHIBIT A
FORM OF CLASS A-1, CLASS ▇-▇, ▇▇▇▇▇ ▇-▇, CLASS A-4-A,
CLASS A-4-B, CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4,
CLASS M-5, CLASS B-1, CLASS B-2, AND CLASS B-3 CERTIFICATES
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL
BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
IN THE EVENT THAT A TRANSFER OF A PRIVATE CERTIFICATE WHICH IS A BOOK-ENTRY
CERTIFICATE IS TO BE MADE IN RELIANCE UPON AN EXEMPTION FROM THE SECURITIES
ACT AND SUCH LAWS, IN ORDER TO ASSURE COMPLIANCE WITH THE SECURITIES ACT AND
SUCH LAWS, THE CERTIFICATEHOLDER DESIRING TO EFFECT SUCH TRANSFER WILL BE
DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET
FORTH IN THE TRANSFEROR CERTIFICATE IN RESPECT OF SUCH CERTIFICATE AND THE
TRANSFEREE WILL BE DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER IN RESPECT OF SUCH
CERTIFICATE, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL
CERTIFICATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
A-1
Certificate No. :
Cut-off Date : May 1, 2006
First Distribution Date : June 26, 2006
Initial Certificate Balance of
this Certificate
("Denomination") :
------------
Initial Certificate Balances of
all Certificates of this Class : _______________ ________________
CUSIP
ISIN
A-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates, Series 2006-9
[Class A-1][Class A-2][Class A-3][Class A-4-A][Class A-4-B]
[Class M-1][Class M-2][Class M-3][Class M-4][Class M-5]
[Class B-1][Class B-2][Class B-3]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Master Servicing and Trust Agreement dated
as of the Cut-off Date specified above (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), U.S. Bank National
Association, as trustee (the "Trustee") and as a custodian, JPMorgan Chase
Bank, National Association, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator") and as a custodian and Deutsche Bank National Trust Company,
as a custodian. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
A-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Securities Administrator
By:__________________________________________
Authenticated:
By:_________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
A-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-9 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the applicable Interest
Accrual Period for the related Distribution Date; provided, however, that for
any Definitive Certificates, the Record Date shall be the last Business Day of
the month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other
A-5
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Depositor, the Trustee, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
A-7
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ______, or, if mailed by check, to _____________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by _____________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-8
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR,
TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
B-1
Certificate No. : 1
Cut-off Date : May 1, 2006
First Distribution Date : June 26, 2006
Percentage Interest of this
Certificate
("Denomination") : [_____]%
------------
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates, Series 2006-9
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"), Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase Bank, National Association, as a custodian. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, (in substantially the
form attached to the Agreement), or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall be an expense of the transferor. No transfer of a Certificate of
this Class shall be made unless the
B-3
Securities Administrator shall have received either (i) a representation
letter from the transferee of such Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that
such transferee is not an employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code or any materially similar provisions of
applicable federal, state or local law ("Similar Law") or a person acting on
behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Securities Administrator, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is
purchasing such Certificates with the assets of its general account and that
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, or (iii) in the case
of a Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or a plan or arrangement subject to Section 4975 of the
Code (or comparable provisions of any subsequent enactments) or a plan subject
to Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Securities Administrator,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Trustee or the Trust Fund, addressed to the
Securities Administrator, the Trustee and the Depositor to the effect that the
purchase and holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
B-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:_________________________________________
Authenticated:
By:_________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-9 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Trustee and the other parties to the Agreement with the consent of
the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future
B-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
B-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________,
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by ______,
the assignee named above, or ,
as its agent.
B-9
EXHIBIT C
FORM OF CLASS R, CLASS RC AND CLASS RX CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR AN
OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT. IN THE EVENT THAT SUCH
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT
WITHOUT AN OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [R][RC][RX]
Cut-off Date : May 1, 2006
First Distribution Date : June 26, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
------------
Initial Certificate Balance of all
Certificates of this Class: : $100
C-1
CUSIP :
ISIN :
C-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates, Series 2006-9
Class [R] [RC][RX]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class [R][RC][RX] Certificates pursuant to a Master Servicing and Trust
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"), Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase Bank, National Association, as a custodian. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class
[R][RC][RX] Certificate at the office designated by the Securities
Administrator for such purposes.
No transfer of a Class [R][RC][RX] Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA, a plan or arrangement subject to Section 4975 of the Code or a
plan subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer, which representation letter shall not be an expense of the
Securities Administrator or the Trust Fund, or, alternatively, an opinion of
counsel as described in the Agreement. In the event that such representation
is violated, or any attempt is made to transfer to a plan or arrangement
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
or a plan subject to Similar Law, or a person acting on behalf of any such
plan or arrangement or using the assets of any such plan or arrangement,
without an opinion
C-3
of counsel as described in the Agreement, such attempted transfer or
acquisition shall be void and of no effect.
Each Holder of this Class [R] [RC] [RX] Certificate shall be deemed by
the acceptance or acquisition an Ownership Interest in this Class [R] [RC]
[RX] Certificate to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in this Class [R]
[RC] [RX] Certificate are expressly subject to the following provisions: (i)
each Person holding or acquiring any Ownership Interest in this Class [R] [RC]
[RX] Certificate shall be a Permitted Transferee and shall promptly notify the
Securities Administrator of any change or impending change in its status as a
Permitted Transferee, (ii) no Ownership Interest in this Class [R] [RC] [RX]
Certificate may be registered on the Closing Date or thereafter transferred,
and the Securities Administrator shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered
to the Securities Administrator under Section 5.02(b) of the Agreement, the
Securities Administrator shall have been furnished with a Transfer Affidavit
of the initial owner or the proposed transferee in the form attached as
Exhibit G to the Agreement, (iii) each Person holding or acquiring any
Ownership Interest in this Class [R] [RC] [RX] Certificate shall agree (A) to
obtain a Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest this Class [R] [RC] [RX] Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting
as nominee, trustee or agent in connection with any Transfer of this Class [R]
[RC] [RX] Certificate, (C) not to cause income with respect to the Class [R]
[RC] [RX] Certificate to be attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person and (D) not to Transfer the Ownership Interest
in this Class [R] [RC] [RX] Certificate or to cause the Transfer of the
Ownership Interest in this Class [R] [RC] [RX] Certificate to any other Person
if it has actual knowledge that such Person is not a Permitted Transferee and
(iv) any attempted or purported Transfer of the Ownership Interest in this
Class [R] [RC] [RX] Certificate in violation of the provisions herein shall be
absolutely null and void and shall vest no rights in the purported Transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually authenticated by an authorized
signatory of the Securities Administrator.
C-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:_________________________________________
Authenticated:
By:_________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
C-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-9 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name
this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other parties to the Agreement with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder
C-6
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate
for registration of transfer at the office designated by the Securities
Administrator for such purposes, accompanied by a written instrument of
transfer in form satisfactory to the Securities Administrator duly executed by
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor, the Securities Administrator and any agent of
the Trustee, the Depositor or the Securities Administrator may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Trustee or Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans is less than or equal to 10% of the Cut-off Date Pool
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to effectuate the purchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined and in the manner as provided in the
Agreement. The obligations and responsibilities created by this Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
C-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________,
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _____________________________________,
the assignee named above, or ________________________________________,
as its agent.
C-9
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR
RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR,
THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR,
TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA,
D-1
SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR
OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS DESCRIBED
ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : May 1, 2006
First Distribution Date : June 26, 2006
Percentage Interest of
this Certificate
("Denomination") : 100%
------------
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates, Series 2006-9
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor the Master
Servicer, to Securities Administrator or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank, as
Master Servicer (in such capacity, the "Master Servicer") and Securities
Administrator (in such capacity, the "Securities Administrator"), Deutsche
Bank National Trust Company, as a custodian and JPMorgan Chase Bank, National
Association, as a custodian. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter (in substantially the
form attached to the Agreement), or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall be an expense of the transferor. No transfer of a Certificate of
this Class shall be made unless the
D-3
Securities Administrator shall have received either (i) a representation
letter from the transferee of such Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that
such transferee is not an employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code or any materially similar provisions of
applicable federal, state or local law ("Similar Law") or a person acting on
behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Securities Administrator, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is
purchasing such Certificates with the assets of its general account and that
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, or (iii) in the case
of a Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or a plan or arrangement subject to Section 4975 of the
Code (or comparable provisions of any subsequent enactments) or a plan subject
to Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Securities Administrator,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Trustee or the Trust Fund, addressed to the
Securities Administrator, the Trustee and the Depositor to the effect that the
purchase and holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
D-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, not in its
individual capacity, but solely as
Securities Administrator
By:_________________________________________
Authenticated:
By:_________________________________________
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
D-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-9
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-9 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Trustee and the other parties to the Agreement with the consent of
the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent
by
D-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________________
Signature by or on behalf of assignor
D-8
DISTRIBUTION INSTRUCTIONS
[The assignee should include the following for purposes of
distribution:]
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________,
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _____________________________________________,
the assignee named above, or ________________________________________________,
as its agent.
D-9
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
_____________________
_____________________
Re: Master Servicing and Trust Agreement, dated as of May 1, 2006,
among GS Mortgage Securities Corp., as depositor, U.S. Bank
National Association, as trustee, JPMorgan Chase Bank, National
Association, as Master Servicer and Securities Administrator,
Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase Bank, National Association, as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, for each Mortgage Loan listed in the Mortgage Loan Schedule for
which the undersigned is specified as the Custodian (other than any Mortgage
Loan listed in the attached exception report), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to a MERS Loan, an executed Assignment of
Mortgage (which may be included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability, recordability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no determination and makes no representations
as to whether (i) any endorsement is sufficient to transfer all right, title
and interest of the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note or (ii) any assignment is in recordable form or
sufficient to effect the
E-1
assignment of and transfer to the assignee thereof, under the Mortgage to
which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY], [JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION], not in its individual
capacity, but solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Servicer]
_____________________
_____________________
Re: Master Servicing and Trust Agreement, dated as of May 1, 2006,
among GS Mortgage Securities Corp., as depositor, U.S. Bank
National Association, as trustee, JPMorgan Chase Bank, as
Master Servicer and Securities Administrator, Deutsche Bank
National Trust Company, as a custodian, U.S. Bank National
Association, as a custodian and JPMorgan Chase Bank, National
Association, as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, hereby certifies, subject to any exceptions listed on the exception
report attached hereto, that as to each Mortgage Loan listed in the Mortgage
Loan Schedule for which the undersigned is specified as the Custodian (other
than any Mortgage Loan paid in full or listed on the attached exception
report) it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Loan;
(c) personal endorsement and/or guaranty agreements executed in
connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if any);
(d) the related original Mortgage and evidence of its recording or,
in limited circumstances, a certified copy of the mortgage with evidence
of recording with the standard ▇▇▇▇▇▇ ▇▇▇/FHLMC Condominium Rider or PUD
Rider be attached if the mortgaged property is a condominium or is
located in a PUD;
F-1
(e) except with respect to a MERS Loan, originals of any intervening
Mortgage assignment or certified copies in either case evidencing
recording; provided that the assignment may be in the form of a blanket
assignment or assignments, a copy of which with evidence of recording
shall be acceptable;
(f) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording if
required to maintain the lien of the mortgage or if otherwise required,
or, if recordation is not required, an original or copy of the agreement;
(g) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(h) to the extent applicable, (1) an original power of attorney, or
a certified copy thereof, in either case with evidence of recordation if
the document to which such power of attorney relates is recorded, and (2)
an original or copy of any surety agreement or guaranty agreement;
(i) for each Mortgage Loan with respect to which the Mortgagor's
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so required,
an original or copy of such assumption agreement;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if any.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items 2, 8, 33 and 34 of
the Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
F-2
[U.S. BANK NATIONAL ASSOCIATION], [DEUTSCHE
BANK NATIONAL TRUST COMPANY], [JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION] not in its
individual capacity, but
solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
F-3
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
GSAA Home Equity Trust 2006-9,
Asset-Backed Certificates, Series 2006-9
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R][RC][RX]
Certificate (the "Certificate") issued pursuant to the Master Servicing and
Trust Agreement (the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank National Association, as trustee (the
"Trustee") and as a custodian, JPMorgan Chase Bank, as Master Servicer (in
such capacity, the "Master Servicer") and Securities Administrator (in such
capacity, the "Securities Administrator"), Deutsche Bank National Trust
Company, as a custodian and JPMorgan Chase Bank, National Association, as a
custodian. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor, the Securities Administrator and the
Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass through entity an
affidavit that such record holder is a Permitted Transferee and the pass
through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a
G-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash
flow with respect thereto in some or all periods and intends to pay such taxes
as they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other
U.S. person.
12. Check one of the following:
/ / The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
G-2
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of
the highest rate specified in Section 11(b) of the Code if the Transferee has
been subject to the alternative minimum tax under Section 55 of the Code in
the preceding two years and will compute its taxable income in the current
taxable year using the alternative minimum tax rate) and (ii) present values
are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and
the compounding period used by the Transferee.
/ / The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from the
Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the
U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including, but
not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good faith.
/ / None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any federal, state or local law that is substantially similar
to Title I of ERISA or Section 4975 of the Code, and the Transferee is not
acting on behalf of or investing plan assets of such a plan.
G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _______, 20__.
_________________________________
Print Name of Transferee
By:______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
___________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ___________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20__.
___________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
JPMorgan Chase Bank, National Association
[Address]
Re: GSAA Home Equity Trust 2006-9, Asset-Backed Certificates
Series 2006-9, Class ___
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Residual Certificate, (A) we have no knowledge the Transferee is not a
Permitted Transferee and (B) after conducting a reasonable investigation of
the financial condition of the Transferee, we have no knowledge and no reason
to believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (C) we have no reason to believe
that the statements made in paragraphs 7, 10 and 11 of the Transferee's
Residual Transfer Affidavit are false.
Very truly yours,
____________________________________________
Print Name of Transferor
By:_________________________________________
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
JPMorgan Chase Bank, National Association.
[Address]
Re: GSAA Home Equity Trust 2006-9, Asset-Backed Certificates,
Series 2006-9, Class [__]
-----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either we are purchasing a Class
A-1 Certificate, Class A-2 Certificate, Class A-3 Certificate, Class A-4-A
Certificate, Class A-4-B Certificate, Class M-1 Certificate, Class M-2
Certificate, Class M-3 Certificate, Class M-4, Class M-5, Class B-1, Class B-2
or a Class B-3 Certificate, or we are not an employee benefit plan that is
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or a plan subject
to any federal, state or local law materially similar to the foregoing
provisions of ERISA or the Code, nor are we acting on behalf of any such plan
or arrangement or using the assets of any such plan or arrangement to effect
such acquisition, or, with respect to a Class B-4, Class X Certificate or
Class P Certificate that has been the subject of an ERISA-Qualifying
Underwriting, the purchaser is an insurance company that is purchasing this
certificate with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and the purchase and holding of such Certificates
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar
I-1
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act
or that would render the disposition of the Certificates a violation of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will act, nor has authorized or will authorize any person to act, in such
manner with respect to the Certificates and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is
being made in reliance on Rule 144A. We are acquiring the Certificates for our
own account or for resale pursuant to Rule 144A and further, understand that
such Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (ii) pursuant to another exemption from registration under
the Securities Act.
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $___________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____________________________
(1) Buyer must own and/or invest on a discretionary basis at least
$1000,000,000 in securities unless Buyer a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis least $10,000,000 in securities.
I-3
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
I-4
_____________________________
Print Name of Transferee
By:_________________________________________
Name:
Title:
Date:_______________________________________
I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
____ The Buyer owned $___________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the
aggregate $__________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
I-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
__________________________________
Print Name of Transferee
By:_______________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Buyer
Date:______________________________
I-7
EXHIBIT J
Mortgage Loan Sale and Servicing Agreement, dated December 1,
2005, by and among American Home Mortgage Corp., American
Home Mortgage Servicing, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company
[See Exhibit 99.1 to Form 8-K filed with the Commission on May
12, 2006, Accession No. 0000905148-06-003721]
J-1
EXHIBIT K
Amended and Restated Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, between
▇▇▇▇▇▇▇ Sachs Mortgage Company and Ameriquest Mortgage
Company
[See Exhibit 99.3 to Form 8-K filed with the Commission on
February 21, 2006, Accession No. 0000905148-06-001399]
K-1
EXHIBIT L
Master Mortgage Loan Purchase Agreement, dated as of July 1,
2004, between Countrywide Home Loans, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, as amended by Amendment Reg AB
[See Exhibit 99.3 to Form 8-K filed with the Commission on March 14, 2006,
Accession No. 0000905148-06-00297]
L-1
EXHIBIT M
Servicing Agreement, dated as of July 1, 2004,
between Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ Sachs Mortgage Company,
as amended by Amendment Reg AB
[See Exhibit 99.3 to Form 8-K filed with the Commission on March 14, 2006,
Accession No. 0000905148-06-00297]
▇-▇
▇▇▇▇▇▇▇ ▇-▇
Amendment Reg AB to the Master Mortgage Loan Purchase and
Servicing Agreement, dated as of January 1, 2006, among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, Countrywide Home Loans,
Inc. and Countrywide Home Loans Servicing LP
[See Exhibit 99.1 to Form 8-K filed with the Commission on
March 14, 2006, Accession No. 0000905148-06-00297]
M-1-1
EXHIBIT N
Amended and Restated Master Mortgage Loan Purchase
Agreement, dated as of November 1, 2005, between GreenPoint
Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
N-1
EXHIBIT O
Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
O-1
EXHIBIT P
Second Amended and Restated Flow Seller's Warranties and
Servicing Agreement, dated as of January 1, 2006,
between National City Mortgage Co. and
▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.7 to Form 8-K filed with the Commission on
March 14, 2006, Accession No. 0000905148-06-00297]
P-1
EXHIBIT Q
Form of Master Loan Purchase Agreement, between various sellers
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.1 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
Q-1
EXHIBIT R
Flow Servicing Agreement, dated as of May 1, 2005, between
Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.1 to Form 8-K filed with the Commission on
March 17, 2006, Accession No. 0000905148-06-002386]
R-1
EXHIBIT S
Flow Servicing Agreement, dated as of January 1, 2006,
between Avelo Mortgage, L.L.C. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.13 to Form 8-K filed with the Commission on
March 14, 2006, Accession No. 0000905148-06-00297]
S-1
EXHIBIT T
Flow Mortgage Loan Purchase and Warranties Agreement, dated
as of December 1, 2005, between ▇▇▇▇▇▇▇ Sachs Mortgage
Company and Novelle Financial Services, Inc.
T-1
EXECUTION COPY
EXHIBIT T
==============================================================================
FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
Purchaser
NOVELLE FINANCIAL SERVICES, INC.,
Seller
Dated as of December 1, 2005
Conventional,
Fixed and Adjustable Rate Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS...................................................1
SECTION 2. AGREEMENT TO PURCHASE........................................13
SECTION 3. MORTGAGE SCHEDULES...........................................14
SECTION 4. PURCHASE PRICE...............................................14
SECTION 5. EXAMINATION OF MORTGAGE FILES................................14
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................15
Subsection 6.01 Conveyance of Mortgage Loans.............................15
Subsection 6.02 Books and Records........................................15
Subsection 6.03 Delivery of Mortgage Loan Documents......................16
Subsection 6.04 Quality Control Procedures...............................17
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................17
SECTION 8. TRANSFER OF SERVICING........................................18
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................20
Subsection 9.01 Representations and Warranties Regarding the Seller......20
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans...........................................23
Subsection 9.03 Remedies for Breach of Representations and Warranties....36
Subsection 9.04 [Reserved]...............................................39
Subsection 9.05 Purchaser's Right to Review..............................39
SECTION 10. CLOSING......................................................39
SECTION 11. CLOSING DOCUMENTS............................................40
SECTION 12. COSTS........................................................41
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................42
SECTION 14. THE SELLER...................................................43
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.............................................43
Subsection 14.02 Merger or Consolidation of the Seller....................44
SECTION 15. FINANCIAL STATEMENTS.........................................44
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............45
SECTION 17. NOTICES......................................................45
SECTION 18. SEVERABILITY CLAUSE..........................................46
SECTION 19. COUNTERPARTS.................................................46
SECTION 20. GOVERNING LAW................................................46
SECTION 21. INTENTION OF THE PARTIES.....................................46
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....47
SECTION 23. WAIVERS......................................................47
SECTION 24. EXHIBITS.....................................................47
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................47
SECTION 26. REPRODUCTION OF DOCUMENTS....................................48
SECTION 27. FURTHER AGREEMENTS...........................................48
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................48
SECTION 29. NO SOLICITATION..............................................48
SECTION 30. WAIVER OF TRIAL BY JURY......................................49
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................49
SECTION 32. CONFIDENTIAL INFORMATION.....................................50
SECTION 33. COMPLIANCE WITH REGULATION AB................................50
Subsection 33.01 Intent of the Parties; Reasonableness....................50
Subsection 33.02 Additional Representations and Warranties of the
Seller...................................................51
Subsection 33.03 Information To Be Provided by the Seller.................51
Subsection 33.04 Indemnification..........................................54
-ii-
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H [INTENTIONALLY OMITTED]
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
EXHIBIT L [INTENTIONALLY OMITTED]
EXHIBIT M ASSIGNMENT AND CONVEYANCE
EXHIBIT N FORM OF INDEMNIFICATION AGREEMENT
-iii-
FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of December 1, 2005, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, a New York limited partnership, having an office at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser") and Novelle Financial
Services, Inc., a Delaware corporation, having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
WHEREAS, from time to time, the Seller desires to sell to the
Purchaser, and, from time to time, the Purchaser desires to purchase from the
Seller, certain conventional adjustable and fixed rate residential first and
second lien mortgage loans (the "Mortgage Loans") on a servicing released
basis as described herein, and which shall be delivered as a pool of whole
loans;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of
trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Flow Mortgage Loan Purchase and Warranties
Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor
thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) or (iii) the State in which the Custodian's operations are located, are
authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates set forth on the related Purchase
Price and Terms Agreement on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell, the Mortgage Loans
listed on the related Mortgage Loan Schedule
CLTV: As of the date of origination and as to any Second Lien
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
outstanding principal balance of the Second Lien Mortgage Loan as of the date
of origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Mortgage Loan and which are secured by the same
Mortgaged Property to (b) the lesser of the Appraised Value and the purchase
price of the Mortgaged Property.
-2-
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby
the Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a
fixed rate Mortgage Loan in accordance with the terms of the related Mortgage
Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Custodial Agreement: The agreement between the Purchaser and the
Custodian governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other documents constituting the Mortgage
Files.
Custodian: Deutsche Bank (or such other Custodian as specified in
the related Purchase Price and Terms Agreement), or successors in interest or
permitted assigns, or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage
Loan Package, the date set forth on the related Purchase Price and Terms
Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 7.
Determination Date: The 20th day of each calendar month.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
-3-
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of
the outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ Selling Guide and the ▇▇▇▇▇▇ Mae
Servicing Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and
eligible to own and service mortgage loans such as the FHA mortgage loans.
FICO: Fair ▇▇▇▇▇ Corporation, or any successor thereto.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
-4-
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under
any other applicable state, federal or local law (or a similarly classified
loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees) or (c) categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary. For avoidance of doubt,
the parties agree that this definition shall apply to any law regardless of
whether such law is presently, or in the future becomes, the subject of
judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum as specified in the related Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each adjustable
rate Mortgage Loan, the date, specified in the related Mortgage Note and the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan, the Person named on the MERS(R) System as the interim funder pursuant to
the MERS Procedures Manual.
Interim Servicing Agreement: That certain Flow Interim Servicing
Agreement, dated as of the date hereof, by and between the Purchaser and the
Seller.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an Adjustable Rate Mortgage Loan which provides for an absolute maximum
Mortgage Interest
-5-
Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Limited Documentation Program: The guidelines under which the
Seller generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of
the Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the purchase price of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take
such action as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the Seller, in accordance with MERS Procedure Manual and (b) the
Seller has designated or will designate the Custodian as the Investor on the
MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS(R) System listing MERS
Designated Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note, which creates a first or second lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note; except that
with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice,
the mortgage, deed of trust or other instrument securing the Mortgage Note may
secure and create a first or second lien upon a leasehold estate of the
Mortgagor.
-6-
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the related Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Credit File,
the Servicing File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing Rights,
Prepayment Penalties, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents in the Mortgage File.
Mortgage Loan Package: A pool of Mortgage Loans sold to the
Purchaser by the Seller on a Closing Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans, with
respect to each Mortgage Loan Package, attached as Exhibit A to the related
Assignment and Conveyance, setting forth the following information with
respect to each Mortgage Loan in the related Mortgage Loan Package: (1) the
Seller's Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the
street address of the Mortgaged Property including the city, state and zip
code; (4) a code indicating whether the Mortgaged Property is owner-occupied,
a second home or investment property; (5) the number and type of residential
units constituting the Mortgaged Property (i.e., a single family residence, a
2-4 family residence, a unit in a condominium project or a unit in a planned
unit development, manufactured housing); (6) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule;
(7) the LTV and CLTV, each at the origination; (8) the Mortgage Interest Rate
as of the related Cut-off Date; (9) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (10) the stated maturity date; (11) the
amount of the Monthly Payment as of the related Cut-off Date; (12) the last
payment date on which a Monthly Payment was actually applied to pay interest
and the outstanding principal balance; (13) the original principal amount of
the Mortgage Loan; (14) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (15) with
respect to Adjustable Rate Mortgage Loans, the Interest Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross Margin; (17)
with respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under
the terms of the Mortgage Note; (18) with respect to Adjustable Rate Mortgage
Loans, a code indicating the type of Index; (19) with respect to
-7-
Adjustable Rate Mortgage Loans, the Periodic Rate Cap under the terms of the
Mortgage Note; (20) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien, 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, alternative or reduced); (24) the loan credit
classification (as described in the Underwriting Guidelines); (25) whether
such Mortgage Loan provides for a Prepayment Penalty; (26) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (27) ) a description of
the Prepayment Penalty, if applicable; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score) at origination; (30) the
date of origination; (31) the Mortgage Interest Rate adjustment period; (32)
the Mortgage Interest Rate adjustment percentage; (33) the Mortgage Interest
Rate floor; (34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other); (35) a code indicating whether the Mortgage Loan is a
Section 32 Mortgage Loan; (36) a code indicating whether the Mortgage Loan is
assumable; (37) a code indicating whether the Mortgage Loan has been modified;
(38) the one year payment history; (39) the Due Date for the first Monthly
Payment; (40) the original Monthly Payment due; (41) with respect to the
related Mortgagor, the debt-to-income ratio; (42) the Appraised Value of the
Mortgaged Property; (44) the sales price of the Mortgaged Property if the
Mortgage Loan was originated in connection with the purchase of the Mortgaged
Property and (45) a code indicating if the Mortgage Loan is a High Cost Loan
or Home Loan as such terms are defined in the then current Standard & Poor's
Glossary. With respect to the Mortgage Loans in the aggregate, the Mortgage
Loan Schedule shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Servicing Related Representations and Warranties: Those
representations and warranties set forth in Sections 9.01 and 9.02 other than
the representations set forth in the definition of Servicing Related
Representations and Warranties.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, reasonably acceptable to the Purchaser, provided that
any Opinion of Counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account,
(b) qualification of the Mortgage Loans in a REMIC or (c) compliance with
-8-
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 Seller
and any master servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the Seller or any master servicer of
the Mortgage Loans or in an Affiliate of either and (iii) is not connected
with the Seller or any master servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to
an Adjustable Rate Mortgage Loan which provides for an absolute maximum amount
by which the Mortgage Interest Rate therein may increase or decrease on an
Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Rate Cap for each Adjustable Rate Mortgage
Loan is the rate set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee,
if any, payable upon the prepayment, in whole or in part, of such Mortgage
Loan, as set forth in the related Mortgage Note.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal Prepayment: Any payment or other recovery of principal
on a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans in a Mortgage Loan
Package as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: With respect to each purchase
of a Mortgage Loan Package hereunder, that certain letter agreement setting
forth the general terms and conditions of such transaction consummated herein
and identifying the Mortgage Loans to be purchased hereunder, by and between
the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
-9-
Qualified Appraiser: An appraiser, duly appointed by the Seller,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an agreement
between the Seller and such Person that contemplated that such Person would
underwrite mortgage loans from time to time, for sale to the Seller, in
accordance with underwriting guidelines designated by the Seller ("Designated
Guidelines") or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described in
clause (i) above and were acquired by the Seller within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Seller in origination of mortgage
loans of the same type as the Mortgage Loans for the Seller's own account or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Seller on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the Seller; and (iv)
the Seller employed, at the time such Mortgage Loans were acquired by the
Seller, pre-purchase or post-purchase quality assurance procedures (which may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided, approved as an insurer
by ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and whose claims paying ability is rated in the
highest rating category by any of the Rating Agencies with respect to primary
mortgage insurance and in the two highest rating categories by A.M. Best's
with respect to hazard and flood insurance (or such other rating as may be
required by a Rating Agency in connection with a Securitization Transaction in
order to achieve the desired ratings for the securities to be issued in
connection with such Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the
outstanding principal balance of the Deleted Mortgage Loan; (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining
term to maturity not greater than and not more than one (1) year less than
that of the Deleted Mortgage Loan (iv) be of the same type as the Deleted
Mortgage Loan (i.e., fixed rate or adjustable rate with same Periodic Rate
Cap, Lifetime Rate Cap, Index and lien priority); and
-10-
(v) comply with each representation and warranty (respecting individual
Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or
their respective successors designated by the Purchaser.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered
into by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to
a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ▇▇.▇▇. 29.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the outstanding principal balance of the Mortgage Loan to be
repurchased as of the date of repurchase, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding
advances owed to any servicer, plus all costs and expenses incurred by the
Purchaser or any servicer arising out of or based upon such breach, including
without limitation costs and expenses incurred in the enforcement of the
Seller's repurchase obligation hereunder plus any costs and damages incurred
by the related trust with respect to any securitization of the Mortgage Loan
in connection with any violation by such Mortgage Loan of any predatory- or
abusive-lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
-11-
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: Novelle Financial Services, Inc., its successors in
interest and assigns.
Seller Information: As defined in Subsection 33.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, an amount per month as set forth in the Interim
Servicing Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Interim Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in as provided in Subsection
6.03 hereof.
[Servicing Related Representations and Warranties: Those
representations and warranties set forth in Section 9.02(a), the first
sentence of (b), the first sentence of (c) (other than the first clause
thereof), (d), (f) (except the last sentence of (f)), (n), (o), (p), the last
sentence of (s), (t) (except the first sentence of (t)), (w), (x), (y), (ii),
(qq), (rr), (ss), (tt) and (iii).]
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such
servicing rights and all rights of the Seller thereunder; (e) Escrow Payments
or other similar payments with respect to the Mortgage Loans and any amounts
actually collected by the Seller with respect thereto; (f) all accounts and
other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
-12-
Standard & Poor's: Standard & Poor's Rating Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the related Cut-off Date after
giving effect to payments of principal due on or before such date, to the
extent received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: A servicer designated by the Purchaser
pursuant to Section 8 and Subsection 9.03 which is entitled to the benefits of
the indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: With respect to each Mortgage Loan, (a) the date
set forth in the related Purchase Price and Terms Agreement or (b) such other
date as mutually agreed by the Seller and the Purchaser.
Underwriting Guidelines: The underwriting guidelines of the
Seller, a copy of which is attached hereto as Exhibit J.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller, on each related Closing Date, agrees to sell, and the
Purchaser agrees to purchase, Mortgage Loans having an aggregate principal
balance on the related Cut-off Date in an amount as set forth in the related
Purchase Price and Terms Agreement, or in such other amount as agreed by the
Purchaser and the Seller as evidenced by the aggregate scheduled principal
balance of the Mortgage Loans accepted by the Purchaser on the related Closing
Date.
-13-
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
the related Closing Date in accordance with the related Purchase Price and
Terms Agreement and this Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the Mortgage Loans to be purchased on the related Closing Date to the
Purchaser at least two (2) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the Preliminary Mortgage Schedule
with those Mortgage Loans which have not been funded prior to the related
Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage
of par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the Stated Principal Balance,
as of the related Cut-off Date, of the Mortgage Loans, after application of
payments of principal actually received on or before the related Cut-off Date.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, on the related Closing Date, accrued
interest on the Stated Principal Balance of the related Mortgage Loans as of
the related Cut-off Date at the weighted average Mortgage Interest Rate of
those Mortgage Loans from the date interest was paid through on the Mortgage
Loan through the day prior to the related Closing Date, inclusive. The
Purchase Price plus accrued interest as set forth in the preceding paragraph
shall be paid to the Seller by wire transfer of immediately available funds to
an account designated by the Seller in writing.
The Purchaser shall be entitled to (1) all principal received
after the related Cut-off Date, (2) all other recoveries of late charges,
prepayment penalties, assumption fees or other charges collected after the
related Cut-off Date, and (3) all payments of interest on the Mortgage Loans
at the Mortgage Interest Rate.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan in the related Mortgage Loan
Package to be purchased, the related Mortgage File, including a copy of the
Assignment of Mortgage, pertaining to each Mortgage Loan.
At least ten (10) Business Days prior to the related Closing Date,
with respect to each Mortgage Loan in the related Mortgage Loan Package to be
purchased, the Seller shall make the related Servicing Files and Credit Files
available to the Purchaser for examination at such other location as shall
otherwise be acceptable to the Purchaser.
-14-
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the related
Closing Date. If the Purchaser makes such examination prior to the related
Closing Date and determines, in its sole discretion, that any Mortgage Loans
are unacceptable to the Purchaser for any reason, such Mortgage Loans shall be
deleted from the related Mortgage Loan Schedule, and may be replaced by a
Qualified Substitute Mortgage Loan (or Loans) acceptable to the Purchaser. The
Purchaser may, at its option and without notice to the Seller, purchase some
or all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files or
the Credit Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
In the event that the Seller fails to deliver the Credit Files
with respect to any Mortgage Loan after the related Closing Date, the Seller
shall, upon the request of the Purchaser, repurchase such Mortgage Loan at the
price and in the manner specified in Subsection 9.03.
Purchaser acknowledges and agrees that Purchaser shall obligate
any servicer to hold all nonpublic personal information received or obtained
by it with respect to any Mortgage Loan in accordance with all applicable
laws, including but not limited to the privacy provisions of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act ("GLB") and any other comparable federal or state law.
Purchaser shall obligate any servicer to maintain appropriate safeguards to
protect the confidentiality of all information concerning the Mortgage Loans
in accordance with the GLB and its implementing regulations, as the same may
be amended from time to time, and all other applicable federal and state
privacy laws and regulations.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, on each related Closing Date, does hereby sell,
transfer, assign, set over and convey to the Purchaser, without recourse, but
subject to the terms of this Agreement, all rights, title and interest of the
Seller in and to the Mortgage Loans in the related Mortgage Loan Package, and
the Mortgage Files and all rights and obligations arising under the documents
contained therein for each Mortgage Loan in the related Mortgage Loan Package.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of MERS, the Seller, an Affiliate of the Seller, the Purchaser
or one or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall
be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested
in the Purchaser or one or more designees of the Purchaser; provided, however,
that all funds received on or in connection with a Mortgage Loan shall be
received and held by the Seller in trust for the benefit of the Purchaser or
the appropriate
-15-
designee of the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller.
The Seller shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which
shall be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Seller shall maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, including but not limited to documentation as to the
method used in determining the applicability of the provisions of the National
Flood Insurance Act of 1968, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and periodic inspection reports,
as would be retained by a prudent lender. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller may be in the form
of microfilm or microfiche so long as the Seller complies with the customary
requirements of a prudent lender.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than ten (10) Business Days prior to the related Closing Date the Mortgage
Files with respect to each Mortgage Loan in the related Mortgage Loan Package.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the
Custodian in the form annexed to the Custodial Agreement.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two (2) weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or
to such other Person as the Purchaser shall designate in writing, with a
certified true copy of any such document submitted for recordation within two
(2) weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within ninety (90) days of its submission for recordation.
In the event any document listed on Exhibit A as constituting a
part of the Mortgage Files and required to be delivered to the Custodian
pursuant to this Subsection 6.03, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, on the related Closing Date (other than with
respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank on or prior to the related Closing Date and recorded
subsequently by the Purchaser or its designee or document
-16-
submitted for recordation to the appropriate public recording office), and in
the event that the Seller does not cure such failure within thirty (30) days
of discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by the Seller at the price and in the manner specified in
Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall 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 Seller, confirming
that such documents have been accepted for recording; provided that, upon
request of the Purchaser and delivery by the Purchaser to the Seller of a
schedule of the Mortgage Loans, the Seller shall reissue and deliver to the
Purchaser or its designee said officer's certificate and (ii) such document is
delivered within twelve (12) months of the related Closing Date.
The Seller shall pay all initial recording, registration or
transfer fees, if any, for the assignments of mortgage and any other fees or
costs in transferring all original documents to the Custodian or, upon written
request of the Purchaser, to the Purchaser or the Purchaser's designee. The
Purchaser or the Purchaser's designee shall be responsible for recording the
Assignments of Mortgage and shall be reimbursed by the Seller for the costs
associated therewith pursuant to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies the existence and accuracy of the legal documents, credit documents,
property appraisals, and underwriting decisions. The program shall include
evaluating and monitoring the overall quality of the Seller's loan production.
The program is to ensure that the Mortgage Loans are originated in accordance
with the Underwriting Guidelines; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers, employees,
or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. Subject to and upon the terms and conditions of
this Agreement, the Seller hereby sells, transfers, assigns, conveys and
delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
The Purchaser and Seller shall execute the Interim Servicing Agreement on the
date hereof, and, with respect to each Mortgage Loan Package to be interim
serviced thereunder, shall execute an Acknowledgement Agreement in the form of
Exhibit 6 to the Interim Servicing Agreement on each related Closing Date.
Pursuant to the Interim Servicing Agreement, the Seller shall begin servicing
the Mortgage Loans on behalf of the Purchaser and
-17-
shall be entitled to the Servicing Fee with respect to such Mortgage Loans
from the related Closing Date until the related Transfer Date.
SECTION 8. Transfer of Servicing.
On the related Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the Mortgage Loans. The
related Transfer Date shall be the date determined in accordance with the
Interim Servicing Agreement (with respect to each Mortgage Loan, for an
interim period, as specified therein).
On or prior to the related Transfer Date, the Seller shall, at its
sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Successor Servicer, including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor
of each related Mortgage Loan a letter advising such Mortgagor of the transfer
of the servicing of the related Mortgage Loan to the Purchaser, or its
designee, in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing
Act of 1990, as amended; provided, however, the content and format of the
letter shall have the prior approval of the Purchaser. The Seller shall
provide the Purchaser with copies of all such related notices no later than
the related Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The
Seller shall transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the servicing to
the Purchaser, or its designee, and instructions to deliver all notices, tax
bills and insurance statements, as the case may be, to the Purchaser or its
designee from and after the related Transfer Date. The Seller shall provide
the Purchaser and its designee with copies of all such notices no later than
the related Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in
the Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to
each such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or
its designee, with immediately available funds by wire transfer in the amount
of the net Escrow Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The Seller shall provide the
Purchaser with an accounting statement of Escrow Payments and suspense
balances and loss draft balances sufficient to enable the Purchaser to
reconcile the amount of such payment with the accounts of the Mortgage Loans.
Additionally, the Seller shall wire transfer to the Purchaser the amount of
any agency, trustee or prepaid Mortgage Loan payments and all other similar
amounts held by the Seller.
-18-
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to
the related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied to the account of the particular
Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail on or prior to the
date which is one Business Day after the date of receipt. The Seller shall
notify the Purchaser of the particulars of the payment, which notification
requirement shall be satisfied if the Seller forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller shall assume full responsibility for the necessary and
appropriate legal application of such Monthly Payments received by the Seller
after the related Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller
shall comply with the foregoing requirements with respect to all Monthly
Payments received by the it after the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
1. All parties shall cooperate in correcting misapplication
errors;
2. The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and discovered after
the related Transfer Date shall immediately notify the other
party;
3. If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial Account or
Escrow Account, the Seller shall be liable for the amount of such
shortage. The Seller shall reimburse the Purchaser for the amount
of such shortage within thirty (30) days after receipt of written
demand therefor from the Purchaser;
4. If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase Price as
the result of an inaccurate outstanding principal balance, a check
shall be issued to the party shorted by the improper payment
application within five (5) Business Days after notice thereof by
the other party; and
5. Any check issued under the provisions of this Section
8(h) shall be accompanied by a statement indicating the
corresponding Seller and/or the
-19-
Purchaser Mortgage Loan identification number and an explanation
of the allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all Accepted Servicing Practices (as defined in
the Interim Servicing Agreement).
(j) Reconciliation. The Seller shall on or before the related
Transfer Date, reconcile principal balances and make any monetary adjustments
necessary to accurately and correctly reconcile all servicing activities with
respect to such Mortgage Loan, including all payments received and all
advances made relating to such Mortgage Loan. Any such monetary adjustments
will be transferred between the Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS Forms 1099, 1099A,
1098 or 1041 and K-1 which are required to be filed on or before the related
Transfer Date in relation to the servicing and ownership of the related
Mortgage Loans. The Seller shall provide copies of such forms to the Purchaser
upon request and shall reimburse the Purchaser for any costs or penalties
incurred by the Purchaser due to the Seller's failure to comply with this
paragraph.
SECTION 9. Representations, Warranties and Covenants of the
Seller; Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser,
its successors and assigns and the Successor Servicer that as of the date
hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state wherein it owns or leases any material properties or where a Mortgaged
Property is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Seller, and in any event the Seller is in compliance with the laws of any such
state to the extent necessary to ensure the enforceability of the related
Mortgage Loan in accordance with the terms of this Agreement; the Seller has
the full power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement and
all agreements contemplated hereby have been duly executed and delivered and
constitute the valid, legal, binding and enforceable obligations of the
Seller, regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken by the
Seller to make this Agreement and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their terms;
-20-
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Seller's charter
or by-laws or other organizational documents or any legal restriction or any
agreement or instrument to which the Seller is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or result
in the creation or imposition of any lien, charge or encumbrance that would
have an adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
(d) Ability To Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement. There is no action, suit, proceeding or
investigation pending against the Seller with respect to the Mortgage Loans
relating to fraud, predatory lending, servicing or closing practices;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the VA is required for
the execution, delivery and performance by the Seller of or compliance by the
Seller with this Agreement or the Mortgage Loans, the delivery of a portion of
the Mortgage Files to the Custodian or the sale of the Mortgage Loans or the
-21-
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the related Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio
at the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
with respect to each Mortgage Loan pursuant to the Custodial Agreement, and
any other documents required to be delivered with respect to each Mortgage
Loan pursuant to Section 6.03 hereof, shall be delivered to the Custodian.
With respect to each Mortgage Loan, the Seller will be in possession of a
complete Mortgage File in compliance with Exhibit A hereto, except for such
documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the related Closing
Date in the form attached as Exhibit I hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby
(including any Securitization Transaction, Whole Loan Transfer or Agency
Transfer) contains an untrue statement of fact or omits to state a fact
necessary to make the statements contained herein or therein not misleading;
(k) Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. There has been no change in the
business, operations, financial condition, properties or assets of the Seller
since the date of the Seller's financial statements that would have a material
adverse effect on its ability to perform its obligations under this Agreement.
The Seller has completed any forms requested by the Purchaser in a timely
manner and in accordance with the provided instructions;
(l) Loan Experience. The Seller has delivered information as to
its loan gain and loss experience in respect of foreclosures, its loan
delinquency experience for the immediately preceding three-year period,
prepayment speed and individual loan loss severities and delinquency histories
for at least the immediately preceding year, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct
in all material respects;
-22-
(m) No Brokers. The Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to any
commission or compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting
purposes;
(o) Owner of Record. Except for a MERS Designated Mortgage Loan,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for any Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the
owner of record of each Mortgage and the indebtedness evidenced by each
Mortgage Note, and upon the sale of the Mortgage Loans to the Purchaser, the
Seller will retain the Mortgage Files with respect thereto in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
(p) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as
a result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(r) Reports. On or prior to the date which is two Business Days
after the related Closing Date, Seller will provide the Custodian and the
Purchaser with a MERS Report reflecting the Custodian as Investor with respect
to each MERS Designated Mortgage Loan and no Person as Interim Funder for each
MERS Designated Mortgage Loan; and
(s) MERS Designations. With respect to each MERS Designated
Mortgage Loan, on the related Closing Date, the Seller has initiated the
process of designating the Custodian as the Investor on the MERS(R) System.
With respect to each MERS Designated Mortgage Loan, no Person is listed as
Interim Funder on the MERS(R) System.
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, its
successors and assigns and the Successor Servicer that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
-23-
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments for which the related due date was not thirty (30)
or more days prior to the related Closing Date, have been made and credited.
No Mortgage Loan has been delinquent for thirty (30) or more days at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and no delinquent taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which
has been assessed but is not yet due and payable. The Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
related Mortgage Loan Schedule. No Mortgage Loan has been modified so as to
restructure the payment obligations or re-age the Mortgage Loan. The substance
of any such waiver, alteration or modification has been approved by the title
insurer, if any, to the extent required by the policy, and its terms are
reflected on the related Mortgage Loan Schedule, if applicable. No Mortgagor
has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the
extent required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Custodian or to such other Person as the
Purchaser shall designate in writing and the terms of which are reflected in
the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto, and no Mortgagor was a debtor in any state or Federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the ▇▇▇▇▇▇ ▇▇▇ Guides
or by ▇▇▇▇▇▇▇ Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. If required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is covered by a flood
insurance policy meeting
-24-
the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac, as well as all additional requirements set forth in Section 2.10 of the
Interim Servicing Agreement. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's or any
servicer's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of such policy, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value
of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws or unfair and
deceptive practices laws applicable to the Mortgage Loan including, without
limitation, any provisions relating to prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby will
not involve the violation of any such laws or regulations. Each Mortgage Loan
at the time it was made complied in all material respects with applicable
local, state, and federal laws, including, but not limited to, all applicable
predatory and abusive lending laws. The Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. The Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is located in the state identified in the related Mortgage Loan
Schedule and consists of real property with a detached single family residence
erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a low-rise condominium project, or an individual unit in a
planned unit development or a de minimis planned unit development which is in
each case four
-25-
stories or less, provided, however, that any mobile home (double wide only) or
manufactured dwelling shall conform with the applicable ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇
Mac requirements regarding such dwellings and that no Mortgage Loan is secured
by a single parcel of real property with a cooperative housing corporation, a
log home or a mobile home erected thereon or by a mixed-use property, a
property in excess of 10 acres, or other unique property types. As of the date
of origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used
for commercial purposes as long as the Mortgaged Property has not been altered
for commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair, maintenance and/or
household purposes. With respect to any Mortgage Loan secured by a Mortgaged
Property improved by manufactured housing, (i) the related manufactured
housing unit is permanently affixed to the land, and (ii) the related
manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the
Seller as mortgagee and (iii) the related Mortgaged Property is not located in
the state of New Jersey.
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first or second lien (as applicable) on
the Mortgaged Property, including all buildings and improvements on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect
to the foregoing. The lien of the Mortgage is subject only to:
1. the lien of current real property taxes and assessments
not yet due and payable;
2. covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b)
which do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
3. other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property; and
4. with respect to Second Lien Mortgage Loans, the lien of
the first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected (A) first lien and
first priority security interest with respect to each first lien mortgage
loan, or (B) second lien and second priority security interest with respect to
-26-
each Second Lien Mortgage Loan, in either case, on the property described
therein and Seller has full right to sell and assign the same to Purchaser.
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms (including, without limitation, any provisions therein relating to
Prepayment Charges). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties.
No fraud, error, omission, misrepresentation or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any Person,
including without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination or servicing of the
Mortgage Loan;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
-27-
(o) CLTV, LTV. No Mortgage Loan that is a Second Lien Mortgage
Loan has a CLTV in excess of 100%. No Mortgage Loan has an LTV greater than
100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA lender's
title insurance policy, or other generally acceptable form of policy or
insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title
insurance policy is issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first priority lien (with respect to first lien Mortgage
Loans) or second priority lien (with respect to Second Lien Mortgage Loans) of
the Mortgage in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1), (2), (3) and (4) of paragraph
(j) of this Subsection 9.02, and in the case of adjustable rate Mortgage
Loans, against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for adjustment to
the Mortgage Interest Rate and Monthly Payment. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
title policy does not contain any special exceptions (other than the standard
exclusions) for zoning and uses and has been marked to delete the standard
survey exceptions or to replace the standard survey exception with a specific
survey reading. The Seller, its successors and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy, including without limitation, no unlawful
fee, commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm or
other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet thirty (30)
days or more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note and
no event which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration. With respect to
each Second Lien Mortgage Loan, (i) the prior mortgage is in full force and
effect, (ii) there is no default, breach, violation or event of acceleration
existing under such prior mortgage or the related mortgage note, (iii) as of
the related Closing Date, no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Mortgage Loan to receive notice
of, and affords such mortgagee an opportunity to cure any default by payment
in full or otherwise under the prior mortgage;
-28-
(r) No Mechanics' Liens. There are no mechanics' or similar liens
or claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage, unless insured against by a
title insurance policy;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. No Mortgage Loan contains terms or provisions
which would result in negative amortization. Principal payments on the
Mortgage Loan commenced no more than sixty (60) days after funds were
disbursed in connection with the Mortgage Loan. The Mortgage Interest Rate as
well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on
Exhibit I hereto. The Mortgage Note is payable in equal monthly installments
of principal and/or interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments
to the Mortgage Interest Rate on each Interest Rate Adjustment Date, with
interest calculated and payable in arrears, sufficient (except with respect to
interest-only loans) to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty (30) years from
commencement of amortization. The Mortgage Loan is payable on the first day of
each month. There are no Convertible Mortgage Loans which contain a provision
allowing the Mortgagor to convert the Mortgage Note from an adjustable
interest rate Mortgage Note to a fixed interest rate Mortgage Note. No
Mortgage Loan is a balloon mortgage loan that has an original stated maturity
of less than seven (7) years;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or
similar law;
(v) Conformance with Agency and Underwriting Standards. The
Mortgage Loan was underwritten in accordance with the Underwriting Standards
(a copy of which is
-29-
attached hereto as Exhibit J). The Mortgage Note and Mortgage are on forms
acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and the Seller has not made any
representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. The Mortgaged Property is
lawfully occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy
of the same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable by
the Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the Mortgage File or the Mortgagor's credit standing that can
reasonably be expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage
Loan, or cause the Mortgage Loans to prepay during any period materially
faster or slower than the mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents constituting the
Mortgage File for each Mortgage Loan have been delivered to the Custodian. The
Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A hereto, except for such documents the originals of
which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the
Mortgaged Property meets the guidelines set forth in the Seller's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage
(except with respect to any Mortgage that has been recorded in the name of
MERS or its designee), with respect to each Mortgage Loan is in recordable
form and is acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located. The transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller are not
subject to the bulk transfer or similar statutory provisions in effect in any
applicable jurisdiction;
-30-
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first or second lien priority (as
applicable) by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or to the best of Seller's knowledge threatened
for the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, hurricane, tornado or other casualty so as to affect adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use
for which the premises were intended and each Mortgaged Property is in good
repair;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller, and any prior servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of, or
under the control of the Seller and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state
and federal law and the provisions of the related Mortgage Note and Mortgage.
An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
-31-
Rate adjustments have been made in strict compliance with state and federal
law and the terms of the related Mortgage and Mortgage Note on the related
Interest Rate Adjustment Date. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. To the best of Seller's knowledge,
no action, inaction or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of, or
defense to coverage under any applicable, special hazard insurance policy, or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any
officer, director, or employee of the Seller or any designee of the Seller or
any corporation in which the Seller or any officer, director, or employee had
a financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or
regulation. There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers Civil Relief Act of 2003. The Mortgagor has
not notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil Relief
Act of 2003;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the related
originator, who had no interest, direct or indirect in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. To the extent required by law, the
Mortgagor has executed a statement to the effect that the Mortgagor has
received all disclosure materials required by, and the Seller has complied
with, all applicable law with respect to the making of the Mortgage Loans. The
Seller shall maintain such statement in the Mortgage File;
-32-
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation
of a Mortgaged Property or facilitating the trade-in or exchange of a
Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of
any circumstances existing that could be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or
slower than similar mortgage loans held by the Seller generally secured by
properties in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or
will cause to be performed any and all acts required to preserve the rights
and remedies of the Purchaser in any insurance policies applicable to the
Mortgage Loans including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
coinsured, joint loss payee and mortgagee rights in favor of the Purchaser. No
action has been taken or failed to be taken, no event has occurred and no
state of facts exists or has existed on or prior to the related Closing Date
(whether or not known to the Seller on or prior to such date) which has
resulted or will result in an exclusion from, denial of, or defense to
coverage under any primary mortgage insurance (including, without limitation,
any exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss otherwise
due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of
such insurer to pay by reason of such insurer's breach of such insurance
policy or such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller
has within the last twelve (12) months (unless such Mortgage was originated
within such twelve-month period) analyzed the required Escrow Payments for
each Mortgage and adjusted the amount of such payments so that, assuming all
required payments are timely made, any deficiency will be eliminated on or
before the first anniversary of such analysis, or any overage will be refunded
to the Mortgagor, in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in
strict compliance with Accepted Servicing Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms
of the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller has in its capacity as
servicer, for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
-33-
credit repositories), on a monthly basis. The Servicer will transmit full-file
credit reporting data for each Mortgage Loan pursuant to ▇▇▇▇▇▇ Mae Guide
Announcement 95-19 and that for each Mortgage Loan, Servicer agrees it shall
report one of the following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest
in the land; (2) the terms of such lease expressly permit the mortgaging of
the leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the lessee
upon foreclosure or assignment in lieu of foreclosure or provide the holder of
the Mortgage with substantially similar protections; (3) the terms of such
lease do not (a) allow the termination thereof upon the lessee's default
without the holder of the Mortgage being entitled to receive written notice
of, and opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage is in
existence, (c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent other
than pre-established increases set forth in the lease; (4) the original term
of such lease is not less than 15 years; (5) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in which the
use of leasehold estates in transferring ownership in residential properties
is a widely accepted practice;
(ww) Prepayment Penalty. The Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note except as set
forth on the related Mortgage Loan Schedule. With respect to each Mortgage
Loan that has a prepayment penalty feature, each such prepayment penalty is
enforceable and will be enforced by the Seller for the benefit of the
Purchaser, and each prepayment penalty is permitted pursuant to federal, state
and local law. Each such prepayment penalty is in an amount not more than the
maximum amount permitted under applicable law and no such prepayment penalty
may be imposed for a term in excess of five (5) years. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the loan's origination, the
Mortgagor agreed to such premium in exchange for a monetary benefit, including
but not limited to a rate or fee reduction, (ii) prior to the loan's
origination, the Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a premium, (iii) the prepayment premium
is disclosed to the Mortgagor in the loan documents pursuant to applicable
state, local and federal law, and (iv) notwithstanding any state, local or
federal law to the contrary, the Servicer shall not impose such prepayment
premium in any instance when the mortgage debt is accelerated as the result of
the Mortgagor's default in making the loan payments;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High
Cost Loan or Covered Loan, as applicable, and no Mortgage Loan originated on
or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act. No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 and no Mortgage Loan is in violation of any comparable
state or local law. The Mortgaged Property is not located in a jurisdiction
where a breach of this representation with respect to the related Mortgage
Loan may result in additional assignee liability to the Purchaser, as
determined by Purchaser in its reasonable discretion. No predatory or
deceptive lending practices, including, without limitation,
-34-
the extension of credit without regard to the ability of the Mortgagor to
repay and the extension of credit which has no apparent benefit to the
Mortgagor, were employed in the origination of the Mortgage Loan;
(yy) Single-premium Credit Life Insurance Policy. In connection
with the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy.
No Mortgagor was required to purchase any single-premium credit insurance
policy (e.g., life, disability, accident, unemployment, or health insurance
product) or debt cancellation agreement as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy (e.g., life, disability, accident, unemployment, mortgage, or
health insurance) in connection with the origination of the Mortgage Loan; no
proceeds from any Mortgage Loan were used to purchase single-premium credit
insurance policies or debt cancellation agreements as part of the origination
of, or as a condition to closing, such Mortgage Loan;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of
these contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under
a "living trust" and such "living trust" is in compliance with ▇▇▇▇▇▇ ▇▇▇
guidelines for such trusts;
(ccc) Recordation. Each original Mortgage was recorded and, except
for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as against creditors
of the Seller, or is in the process of being recorded;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws,
has conducted the requisite due diligence in connection with the origination
of each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.
(fff) Litigation. The Mortgage Loan is not subject to any
outstanding litigation for fraud, origination, predatory lending, servicing or
closing practices.
-35-
(ggg) MERS Designations. With respect to each MERS Designated
Mortgage Loan, the Seller has designated the Custodian as the Investor and no
Person is listed as Interim Funder on the MERS(R) System;
(hhh) Reports. On or prior to the related Closing Date, the Seller
has provided the Custodian and the Purchaser with a MERS Report listing the
Custodian as the Investor with respect to each MERS Designated Mortgage Loan;
and
(iii) Origination Practices. No Mortgagor was encouraged or
required to select a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination, such
Mortgagor did not qualify taking into account credit history and
debt-to-income ratios for a lower-cost credit product then offered by the
Mortgage Loan's originator or any affiliate of the Mortgage Loan's originator.
If, at the time of loan application, the Mortgagor may have qualified for a
lower-cost credit product then offered by any mortgage lending affiliate of
the Mortgage Loan's originator, the Mortgage Loan's originator referred the
Mortgagor's application to such affiliate for underwriting consideration;
(jjj) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan employs, in part,
objective mathematical principles which relate the Mortgagor's income, assets
and liabilities to the proposed payment and such underwriting methodology does
not rely on the extent of the Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Mortgage Loan.
(kkk) Points and Fees. All points and fees related to each
Mortgage Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation.
(lll) Fees Charges. All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected
in connection with the origination and servicing of each Mortgage Loan has
been disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation; and
(mmm) Arbitration. With respect to any Mortgage Loan originated on
or after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and
warranties set forth in Subsections 9.01 and 9.02 shall survive the sale of
the Mortgage Loans to the Purchaser and shall inure to the benefit of the
Purchaser, its successors and assigns and the Successor Servicer,
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
-36-
either the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other.
Within thirty (30) days of the earlier of either discovery by or
notice to the Seller of any breach of a representation or warranty which
materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser therein (or which materially and adversely affects
the value of the applicable Mortgage Loan or the interest of the Purchaser
therein in the case of a representation and warranty relating to a particular
Mortgage Loan), the Seller shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the
Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at the
Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. Notwithstanding the above sentence, within thirty
(30) days of the earlier of either discovery by, or notice to, the Seller of
any breach of the representations or warranties set forth in clauses (uu),
(ww), (xx), (yy), (aaa) or (mmm) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price, together with all
expenses incurred by the Purchaser as a result of such repurchase. In the
event that a breach shall involve any representation or warranty set forth in
Subsection 9.01, and such breach cannot be cured within thirty (30) days of
the earlier of either discovery by or notice to the Seller of such breach, all
of the Mortgage Loans shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (other than the
representations and warranties set forth in (uu), (ww), (xx), (yy), (aaa), or
(mmm) of such Subsection) and the Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, the Seller may, at
the Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans; provided that any such
substitution shall be effected not later than 120 days after the related
Closing Date. If the Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Subsection 9.03
shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of
the Deleted Mortgage Loan from this Agreement, and, in the case of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, the Seller shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in
this Agreement shall be deemed made as of the date of such substitution. The
Seller shall effect such substitution by delivering to the Custodian or to
such other party as the Purchaser may designate in writing for such Qualified
Substitute Mortgage Loan the documents required by Subsection 6.03, with the
Mortgage Note endorsed as required
-37-
by Subsection 6.03. No substitution will be made in any calendar month after
the Determination Date for such month. The Seller shall remit directly to the
Purchaser, or its designee in accordance with the Purchaser's instructions the
Monthly Payment on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions
to the Purchaser shall include the Monthly Payment due on any Deleted Mortgage
Loan in the month of substitution, and the Seller shall thereafter be entitled
to retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the Seller shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all Deleted Mortgage Loans
(after application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by the Seller
directly to the Purchaser or its designee in accordance with the Purchaser's
instructions within two (2) Business Days of such substitution. Accordingly,
on the date of such substitution, the Seller will remit to the Servicer from
its own funds for deposit into the Custodial Account an amount equal to the
amount of such shortfall plus one month's interest thereon at the Mortgage
Loan remittance rate.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser, its successors and assigns and the
Successor Servicer and hold them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Seller representations and warranties contained in this
Agreement or any Reconstitution Agreement. It is understood and agreed that
the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser, its successors and assigns and the Successor Servicer as provided
in this Subsection 9.03 constitute the sole remedies respecting a breach of
the foregoing representations and warranties. For purposes of this paragraph,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement and "Successor Servicer" shall mean the Person then acting as the
Successor Servicer under this Agreement and any and all Persons who previously
were "Successor Servicers" under this Agreement.
Any cause of action against the Seller relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01
and 9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Seller to the Purchaser, (ii)
failure by the Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
-38-
Subsection 9.04 [Reserved].
Subsection 9.05 Purchaser's Right to Review.
Prior to the related Closing Date, the Purchaser shall have the
right to perform on-site due diligence at the premises of the Seller with
respect to the Mortgage Loans. The Seller will provide information and
otherwise cooperate with the due diligence reviews of the Purchaser, its
co-investor's, its financial partner's, and the rating agencies. The Seller
shall make the legal files and the credit files, together with any payment
histories, collection histories, bankruptcy histories, broker's price
opinions, to the extent available, and any other information with respect to
the Mortgage Loans requested by the Purchaser, available at the Seller's
offices for review by Purchaser or its agents during normal business hours
before the related Closing Date. The Purchaser shall have the right to order
additional broker's price opinions in its sole discretion at the Purchaser's
expense.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the documentation listed in Subsection 6.03 is missing or defective
in whole or in part, (b) for which the related broker's price opinion is below
the appraisal provided in connection with the origination of the related
Mortgage Loan, (c) for which the loan-to-value ratio calculated based upon the
broker's price opinion is greater than 100%, (d) which does not conform to the
Seller's underwriting guidelines, (e) which does not conform to the terms of
the related Purchase Price and Terms Letter or is in breach of the
representations and warranties set forth in this Purchase Agreement, (f) that
is not securitizable in the reasonable opinion of the Purchaser, or (g) which
does not conform to the terms of any applicable federal, state, or local law
or regulation. The Purchaser shall use its best efforts to notify the Seller
of any such rejected Mortgage Loan immediately upon discovery.
The fact that the Purchaser has conducted or failed to conduct any
partial or complete examination of the files shall not affect the Purchaser's
(or any of its successor's) rights to demand repurchase or other relief for
breach of Mortgage Loan representations and warranties, missing or defective
documents or as otherwise provided in this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans in
each Mortgage Loan Package shall take place on the related Closing Date. At
the Purchaser's option, the Closing shall be either: by telephone, confirmed
by letter or wire as the parties shall agree, or conducted in person, at such
place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(A) at least two (2) Business Days prior to the related
Closing Date or such later date on which the Purchaser has
identified to the Seller the final list of Mortgage Loans the
Purchaser desires to purchase, the Seller shall deliver to the
Purchaser via electronic medium a Mortgage Loan Schedule
acceptable to the Purchaser;
-39-
(B) all of the representations and warranties of the Seller
under this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this
Agreement;
(C) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all Closing Documents as
specified in Section 11 of this Agreement, in such forms as are
agreed upon and reasonably acceptable to the Purchaser, duly
executed by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(D) the Seller shall have delivered and released to the
Custodian all documents required hereunder; and
(E) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to
the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 4 of this Agreement, by wire transfer of
immediately available funds to the account(s) designated by the Seller.
SECTION 11. Closing Documents.
(a) The Closing Documents for the Mortgage Loans to be purchased
on the initial Closing Date shall consist of fully executed originals of the
following documents:
1. this Agreement;
2. the Interim Servicing Agreement, any account
certifications and all other documents required thereunder;
3. an Officer's Certificate, in the form of Exhibit C hereto
with respect to the Seller, including all attachments thereto;
4. an Opinion of Counsel of the Seller (who may be an
employee of the Seller), in the form of Exhibit D hereto ("Opinion
of Counsel of the Seller");
5. a Security Release Certification, substantially in the
form of Exhibit E or F, as applicable, hereto executed by any
person, as requested by the Purchaser, if any of the Mortgage
Loans have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
6. the Underwriting Guidelines to be attached hereto as
Exhibit J;
7. a certificate or other evidence of merger or change of
name, signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans
-40-
were acquired by the Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its
present name, if applicable.
(b) The Closing Documents to be delivered on each Closing Date
shall consist of fully executed originals of the following documents:
1. an Assignment and Conveyance in the form of Exhibit M
hereto, including all exhibits;
2. a Purchase Price and Terms Agreement;
3. the related Mortgage Loan Schedule, with one copy to be
attached to the related Assignment and Conveyance;
4. each of the documents required to be delivered by the
Seller pursuant to Subsection 6.03 hereof;
5. the initial certification of the Custodian with respect
to the related Mortgage Loan Package;
6. a Security Release Certification, substantially in the
form of Exhibit E or F, as applicable, hereto executed by any
person, as requested by the Purchaser, if any of the Mortgage
Loans have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
7. a certificate or other evidence of merger or change of
name, signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by merger or
acquired or originated by the Seller while conducting business
under a name other than its present name, if applicable; and
8. if requested by the Purchaser in connection with a
material change in Seller's financial condition or corporate
structure, an updated Officer's Certificate, in the form of
Exhibit C hereto, including all attachments thereto and an updated
Opinion of Counsel of the Seller, in the form of Exhibit D hereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees and the fees and
expenses of its counsel. All servicing fees incurred prior to the related
Closing Date, and all costs and expenses incurred in connection with the
transfer of the Mortgage Loans, fees to transfer files and prepare
assignments/endorsements, all initial recording fees, if any, for the
assignments of mortgage for all Mortgage Loans not recorded in the name of
MERS, all fees, if any, for transferring record ownership on the MERS(R)
System of Mortgage Loans recorded in the name of MERS, custodial fees,
including the costs associated with clearing exceptions, (including costs to
record
-41-
intervening assignments and any existing assumption and modification
agreements), together with the fees and expenses of Seller's counsel, shall be
payable by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or
all of the Mortgage Loans, after the related Closing Date, on one or more
dates (each a "Reconstitution Date") at the Purchaser's sole option, the
Purchaser may effect a sale (each a "Reconstitution") of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:
(i)▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Seller among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac (as the case may be) and any servicer in connection with a Whole
Loan Transfer, a seller's warranties and servicing agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the Seller, and in connection with a Securitization Transaction,
a pooling and servicing agreement in form and substance reasonably acceptable
to the Seller (collectively the agreements referred to herein are designated,
the "Reconstitution Agreements").
With respect to the first three (3) Whole Loan Transfers or
Securitization Transactions entered into by the Purchaser with respect to each
Mortgage Loan Package, the Seller agrees (1) to cooperate fully with the
Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements reasonably required by the Purchaser; and deliver an
opinion of counsel in form and substance satisfactory to the Purchaser if
requested by the Purchaser; (3) (a) to restate the representations and
warranties set forth in this Agreement (i) with respect to Non-Servicing
Related Representations and Warranties, as of the related Closing Date and
(ii) with respect to Servicing-Related Representations and Warranties, as of
the related Transfer Date, or (b) make the representations and warranties set
forth in the related selling/servicing guide of the master servicer or issuer,
as the case may be, or such representations and warranties as may be required
by any Rating Agency or prospective purchaser of the related securities or
such Mortgage Loans, in connection with such Reconstitution. The Seller shall
use its reasonable best efforts to provide to such master servicer or issuer,
as the case may be, and any other participants in such Reconstitution: (i) any
and all information and appropriate verification of information which may be
reasonably available to the Seller or its affiliates, whether through letters
of its auditors and counsel or otherwise, as the
-42-
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser or any such other
participant; and (iii) to execute, deliver and satisfy all conditions set
forth in an indemnity agreement substantially in the form of Exhibit N hereto.
The Seller shall indemnify the Purchaser, each Affiliate designated by the
Purchaser, each Person who controls the Purchaser or such Affiliate and the
Successor Servicer and hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and related costs, judgments, and any other costs, fees and expenses that each
of them may sustain in any way related to any information that contains an
untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the information and statements
therein not misleading provided by or on behalf of the Seller regarding the
Seller (or if the Seller is not the originator, the originator of the Mortgage
Loans), the Seller's servicing practices or performance, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution; provided that Purchaser requests such
information from Seller. For purposes of the previous sentence, "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and
any and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean the Person then acting as the Successor
Servicer under this Agreement and any and all Persons who previously were
"Successor Servicers" under this Agreement. Moreover, the Seller agrees to
cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective
purchaser or trustee, as applicable, from the Seller acceptable to the
prospective purchaser or trustee, as applicable, for each Mortgage Loan that
is part of the Reconstitution and shall pay all preparation and recording
costs associated therewith. In connection with the Reconstitution, the Seller
shall execute each assignment of mortgage, track such Assignments of Mortgage
to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute, at the direction
of the Purchaser, any note endorsement in connection with any and all
seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees (including (without limitation) legal fees incurred in connection
with the enforcement of the Seller's indemnification obligation under this
Subsection 14.01) and related costs, judgments, and any other costs, fees and
expenses that the Purchaser or the Successor Servicer may sustain in any way
related to (a) any breach of
-43-
any of Seller's representations, warranties or covenants set forth in this
Agreement, (b) the failure of the Seller to perform its duties under this
Agreement or (c) the failure of the Seller to service the Mortgage Loans in
strict compliance with the terms of the Interim Servicing Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party
with respect to this Agreement or any Reconstitution Agreement or the Mortgage
Loans, assume (with the prior written consent of the Purchaser) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or the Purchaser in respect of such claim. The Purchaser
promptly shall reimburse the Seller for all amounts advanced by it pursuant to
the preceding sentence, except when the claim is in any way related to (a) a
breach of any of Seller's representations, warranties or covenants set forth
in this Agreement, (b) the failure of the Seller to materially perform its
duties under this Agreement or (c) the failure of the Seller to service the
Mortgage Loans in compliance with the terms of the Interim Servicing Agreement
or any Reconstitution Agreement entered into pursuant to Section 13.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its formation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however,
that the successor or surviving Person shall have a net worth of at least
$17,500,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or
the public at large). The Seller, if it has not already done so, agrees to
furnish promptly to the Purchaser copies of the statements specified above.
The Seller shall also make available information on its servicing performance
with respect to loans serviced for others, including delinquency ratios.
-44-
The Seller also agrees to allow reasonable access to a
knowledgeable financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans is mandatory from and after the date of the execution of the related
Purchase Price and Terms Agreement, it being specifically understood and
agreed that each Mortgage Loan is unique and identifiable on the date hereof
and that an award of money damages would be insufficient to compensate the
Purchaser for the losses and damages incurred by the Purchaser (including
damages to prospective purchasers of the Mortgage Loans) in the event of the
Seller's failure to deliver (i) each of the related Mortgage Loans or (ii) one
or more Qualified Substitute Mortgage Loans or (iii) one or more Mortgage
Loans otherwise acceptable to the Purchaser on or before the related Closing
Date. The Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the related Purchase Price and Terms Agreement, and the
Seller agrees that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (i) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under
this Agreement or afforded by law or equity and all such rights and remedies
may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered
or certified mail, return receipt requested, or, if by other means, when
received by the other party at the address as follows:
(i) if to the Seller:
Novelle Financial Services, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇▇ ▇▇▇ ▇▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-45-
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision, representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement
shall be construed in accordance with the laws of the State of New York and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the substantive laws of the State of New York
(without regard to conflicts of laws principles), except to the extent
preempted by federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is
purchasing, and the Seller is selling the Mortgage Loans and not a debt
instrument of the Seller or another security. Accordingly, the parties hereto
each intend to treat the transaction for federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which shall affect the Federal income tax consequences of owning the Mortgage
Loans
-46-
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller to a third party without the prior written consent of the
Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. If the Purchaser assigns any or all
of its rights as Purchaser hereunder, the assignee of the Purchaser will
become the "Purchaser" hereunder to the extent of such assignment. Any such
assignment by the Purchaser shall be accompanied by the delivery and execution
of an Assignment and Assumption Agreement (the "Assignment and Assumption
Agreement") in the form attached hereto as Exhibit G.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
-47-
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, for Mortgage Loans
which are not registered with MERS, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or their comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Seller's expense in the event recordation is either necessary under applicable
law or requested by the Purchaser (which request may be made by the Purchaser
at any time following the related Closing Date) at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail, solicit the Mortgagor under any
Mortgage Loan for any purpose whatsoever, including to refinance a
-48-
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. It is understood and agreed that all rights and benefits relating
to the solicitation of any Mortgagors and the attendant rights, title and
interest in and to the list of such Mortgagors and data relating to their
Mortgages (including insurance renewal dates) shall be transferred to the
Purchaser pursuant hereto on the related Closing Date and the Seller shall
take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that promotions undertaken by the
Seller or any affiliate of the Seller which are directed to the general public
at large, including, without limitation, mass mailing, internet and e-mail
solicitations, based in all instances, on commercially acquired mailing lists
(which may not be targeted at the Mortgagors) and newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER
ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN NOTIFIED; AND
-49-
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
SECTION 32. Confidential Information.
The Seller and Purchaser understand and agree that this Agreement,
any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with any Reconstitution, and
any offering circulars or other disclosure documents produced in connection
with any Reconstitution are confidential and proprietary to the Purchaser or
Seller, and the Seller and Purchaser agree to hold such documents confidential
and not to divulge such documents to anyone except (a) to the extent required
by law or judicial order or to enforce its rights or remedies under this
Agreement, (b) to the extent such information enters into the public domain
other than through the wrongful act of the Seller or the Purchaser, as the
case may be, (c) as is necessary in working with legal counsel, rating
agencies, auditors, agents, taxing authorities or other governmental agencies
or (d) the federal income tax treatment of the transactions hereunder, any
fact relevant to understanding the federal tax treatment of the transactions
hereunder, and all materials of any kind (including opinions or other tax
analyses) relating to such federal income tax treatment; provided that the
Seller may not disclose the name of or identifying information with respect to
Purchaser or any pricing terms or other nonpublic business or financial
information that is unrelated to the purported or claimed federal income tax
treatment of the transactions hereunder and is not relevant to understanding
the purported or claimed federal income tax treatment of the transactions
hereunder. Moreover, the Seller understands and agrees that this Agreement,
any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with the securitization of
the Mortgage Loans, and any offering circulars or other disclosure documents
produced in connection with such securitization are confidential and
proprietary to the Purchaser, and the Seller agrees to hold such documents
confidential and not to divulge such documents to anyone except (a) to the
extent required by law or judicial order or to enforce its rights or remedies
under this Agreement, (b) to the extent such information enters into the
public domain other than through the wrongful act of the Seller, or (c) as is
necessary in working with legal counsel, auditors, agents, rating agencies,
taxing authorities or other governmental agencies. The rights and obligations
set forth in this paragraph shall survive the Closing Date and shall not merge
into the closing documents but shall be independently enforceable by the
parties hereto.
SECTION 33. Compliance with Regulation AB.
Subsection 33.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the
purpose of Section 33 of this Agreement is to facilitate compliance by the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Although Regulation AB is applicable
by its terms only to offerings of asset-backed securities that are registered
under the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure
-50-
in unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder
(or the provision in a private offering of disclosure comparable to that
required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff
or consensus among participants in the asset-backed securities markets, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Seller shall cooperate with the Purchaser to
deliver to the Purchaser (including any of its assignees or designees) and any
Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser
or any Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Seller, any Third-Party Originator and the Mortgage Loans, or the servicing of
the Mortgage Loans, reasonably believed by the Purchaser or any Depositor to
be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
Subsection 33.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and
to any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 33.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) there are
no material legal or governmental proceedings pending (or known to be
contemplated by governmental authorities) against the Seller or any
Third-Party Originator; and (ii) there are no affiliations, relationships or
transactions relating to the Seller or any Third-Party Originator with respect
to any Securitization Transaction and any party thereto identified by the
related Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 33.03, the Seller shall, within five (5)
Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 33.03 Information To Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five (5) Business Days following request by the Purchaser
-51-
or any Depositor, provide to the Purchaser and such Depositor (or, as
applicable, cause each Third-Party Originator to provide), in writing and in
form and substance reasonably satisfactory to the Purchaser and such
Depositor, the information and materials specified in paragraphs (a) and (b)
of this Subsection, and (ii) as promptly as practicable following notice to or
discovery by the Seller, provide to the Purchaser and any Depositor (in
writing and in form and substance reasonably satisfactory to the Purchaser and
such Depositor) the information specified in paragraph (d) of this Subsection.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program
and how long the originator has been engaged in originating
residential mortgage loans, which description shall include a
discussion of the originator's experience in originating mortgage
loans of a similar type as the Mortgage Loans; information
regarding the size and composition of the originator's origination
portfolio; and information that may be material, in the good faith
judgment of the Purchaser or any Depositor, to an analysis of the
performance of the Mortgage Loans, such as the originator's
credit-granting or underwriting criteria for mortgage loans of
similar type(s) as the Mortgage Loans and such other information
as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
provided that for the avoidance of doubt, such information shall
not include the static pool information required by Item 1105 of
Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated by governmental
authorities) against the Seller and each Third-Party Originator;
and
(D) a description of any affiliation or relationship between
the Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
1. the sponsor;
2. the depositor;
3. the issuing entity;
4. any servicer;
5. any trustee;
6. any originator;
7. any significant obligor;
8. any enhancement or support provider; and
9. any other material transaction party
-52-
provided, that affiliations and relationships with respect to
Third-Party Originators are those affiliations and relationships
known by the Seller after reasonable investigation.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the Purchaser
as provided below) originated by (i) the Seller, if the Seller is an
originator of Mortgage Loans (including as an acquirer of Mortgage Loans from
a Qualified Correspondent), and/or (ii) each Third-Party Originator. Such
Static Pool Information shall be prepared by the Seller (or Third-Party
Originator) on the basis of its reasonable, good faith interpretation of the
requirements of Item 1105(a)(1)-(3) of Regulation AB, subject to the
unavailability of such information as contemplated by Item 1105(f). To the
extent that there is reasonably available to the Seller (or Third-Party
Originator) Static Pool Information with respect to more than one mortgage
loan type, the Purchaser or any Depositor shall be entitled to specify whether
some or all of such information shall be provided pursuant to this paragraph.
The content and presentation of such Static Pool Information may be in the
form customarily provided by the Seller, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in increments no less frequently than quarterly over the life of the mortgage
loans included in the vintage origination year or prior securitized pool. The
most recent periodic increment must be as of a date no later than 135 days
prior to the date of the prospectus or other offering document in which the
Static Pool Information is to be included or incorporated by reference. The
Static Pool Information shall be provided in an electronic format that
provides a permanent record of the information provided, such as a portable
document format (pdf) file, or other such electronic format as customarily
provided by Seller or if Seller does not customarily provide such information
as reasonably required by the Purchaser or the Depositor, as applicable.
Promptly following notice or discovery of a material error in
Static Pool Information provided pursuant to the immediately preceding
paragraph (including an omission to include therein information required to be
provided pursuant to such paragraph), the Seller shall provide corrected
Static Pool Information to the Purchaser or any Depositor, as applicable, in
the same format in which Static Pool Information was previously provided to
such party by the Seller.
If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to this
Agreement), such agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser or Depositor, as
applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in the case of Static Pool Information with respect to the Seller's or
Third-Party Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit
of such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or
-53-
letter may take the form of a standard, generally applicable document
accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) With respect to those Mortgage Loans that were originated by
the Seller and sold to the Purchaser pursuant to this Agreement and
subsequently securitized by the Purchaser or any of its Affiliates, the
Purchaser shall, to the extent consistent with then-current industry practice,
cause the servicer (or another party to such securitization) under the
securitization to provide, information with respect to the Mortgage Loans from
and after cut-off date of such securitization necessary for the Seller to
comply with its obligations under Regulation AB, including, without
limitation, providing to the Seller static pool information, as set forth in
Item 1105(a)(2) and (5) of Regulation AB.
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any
Depositor in writing of any material litigation or governmental proceedings
pending against the Seller or any Third-Party Originator and (ii) provide to
the Purchaser and any Depositor a description of such proceedings.
Subsection 33.04 Indemnification.
The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction; each broker
dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act); and
the respective present and former directors, officers, employees and agents of
each of the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained in any
information, report, certification, accountants' letter or other
material provided in written or electronic form under this Section 33 by
or on behalf of the Seller, or provided under this Section 33 by or on
behalf of any Third-Party Originator at the Seller's request
(collectively, the "Seller Information"), or (B) the omission to state
in the Seller Information a material fact required to be stated in the
Seller Information or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Seller
Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the
Seller Information or any portion thereof is presented together with or
separately from such other information;
-54-
(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or
other material when and as required under this Section 33; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 33.02(a) or in a writing furnished pursuant to
Subsection 33.02(b) and made as of a date prior to the closing date of
the related Securitization Transaction, to the extent that such breach
is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
33.02(b) to the extent made as of a date subsequent to such closing
date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser,
any Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Seller or any Third-Party Originator.
[Signatures Commence on Following Page]
-55-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York
limited partnership
(Purchaser)
By: ▇▇▇▇▇▇▇ SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:____________________________________
Name:
Title:
NOVELLE FINANCIAL SERVICES, INC.,
(Seller)
By:____________________________________
Name:
Title:
[MLPA NOVELLE FINANCIAL SERVICES, INC. DEC 2005]
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection
by the Purchaser and any prospective Purchaser, and which shall be delivered
to the Custodian, or to such other Person as the Purchaser shall designate in
writing, pursuant to Section 6 of the Flow Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage Notes
for endorsements, the endorsement may be contained on an allonge, if state law
so allows and the Custodian is so advised by the Seller that state law so
allows. If the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by "[Last Endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
"[Last Endorsee], formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the related Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage;
(d) the originals of all assumption, modification, consolidation
or extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded
only if recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors
A-1
in the area where the Mortgaged Property is located or on direction of the
Purchaser as provided in this Agreement. If the Assignment of Mortgage is to
be recorded, the Mortgage shall be assigned to the Purchaser. If the
Assignment of Mortgage is not to be recorded, the Assignment of Mortgage shall
be delivered in blank. If the Mortgage Loan was acquired by the Seller in a
merger, the Assignment of Mortgage must be made by "Novelle Financial
Services, Inc., successor by merger to [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Seller while doing business under
another name, the Assignment of Mortgage must be by "Novelle Financial
Services, Inc., formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee (or to MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officers Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such intervening assignment of mortgage has been dispatched to
the appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office to
be a true and complete copy of the original recorded intervening assignment of
mortgage will be promptly delivered to the Custodian upon receipt thereof by
the Seller; or (ii) in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation in a public
recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original
recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officer's Certificate of the Seller is delivered
to the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within ninety (90) days of the related Closing Date, an Officer's Certificate
which shall (i) identify the recorded document, (ii) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent
shall not be unreasonably withheld.
A-2
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income (except for Mortgage
Loans originated under a Limited Documentation Program).
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets,
payment history from date of origination, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
(o) Amortization schedule, if applicable.
B-1
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of Novelle Financial Services, Inc., a corporation organized
under the laws of the State of Delaware (the "Company") and further as
follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and
no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the
Company authorizing the Company to execute and deliver each of the Flow
Mortgage Loan Purchase and Warranties Agreement, dated as of December 1,
2005, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Purchaser")
and the Company (the "Purchase Agreement"), the Flow Interim Servicing
Agreement, dated as of December 1, 2005, by and between the Purchaser
and the Company (the "Servicing Agreement", together with the Purchase
Agreement, the "Agreements") and such resolutions are in effect on the
date hereof and have been in effect without amendment, waiver,
rescission or modification since ___________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Agreements, the sale of the mortgage loans or the consummation
of the transactions contemplated by the agreements; or (ii) any required
consent, approval, authorization or order has been obtained by the
Company.
6. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Agreements conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company,
the terms of any indenture or, to the best of the Company's knowledge,
other agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
C-1
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on
its business substantially as now conducted or in any material liability
on the part of the Company or which would draw into question the
validity of the Agreements, or the mortgage loans or of any action taken
or to be taken in connection with the transactions contemplated hereby,
or which would be likely to impair materially the ability of the Company
to perform under the terms of the Agreements.
8. Each person who, as an officer or representative of the
Company, signed the Agreements and any other document delivered or on
the date hereof in connection with any purchase described in the
agreements set forth above was, at the respective times of such signing
and delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company and the signatures of
such persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Agreements.
C-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: ____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of Novelle
Financial Services, Inc., hereby certify that ____________ is the duly
elected, qualified and acting [Vice] President of the Company and that the
signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: ____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
C-3
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain
matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Flow Mortgage Loan Purchase and Warranties Agreement
by and between the Company and ▇▇▇▇▇▇▇ Sachs Mortgage Company (the
"Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement") which
sale is in the form of whole loans and that certain Flow Interim Servicing
Agreement by and between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the
"Purchaser"), dated as of _________ __, 200_ (the "Servicing Agreement",
together with the Purchase Agreement, the "Agreements"). Capitalized terms not
otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Agreements;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained
in the Purchase Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
D-1
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and
conditions of such Agreements.
3. Each of the Agreements has been duly authorized, executed
and delivered by the Company, and is a legal, valid and
binding agreement enforceable in accordance with its
respective terms against the Company, subject to bankruptcy
laws and other similar laws of general application affecting
rights of creditors and subject to the application of the
rules of equity, including those respecting the availability
of specific performance, none of which will materially
interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage
Loans.
4. The Company has been duly authorized to allow certain of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow certain
employees to execute by original [or facsimile] signature
the endorsements to the Mortgage Notes and the Assignments
of Mortgages, and the original [or facsimile] signature of
the employee at the Company executing the endorsements to
the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of
the Company.
6. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance with the Agreements and the sale of the Mortgage
Loans by the Company or the consummation of the transactions
contemplated by the Agreements or (ii) any required consent,
approval, authorization or order has been obtained by the
Company.
7. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements
conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company, the terms of
any indenture or, to the best of the Company's knowledge,
other agreement or instrument to which the Company is a
party or by which it is bound or to which it is subject, or
violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which
it is bound.
8. There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company which, in [our] [my] judgment, either in
any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial
D-2
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company
to carry on its business substantially as now conducted or
in any material liability on the part of the Company or
which would draw into question the validity of the
Agreements to which it is a party or the Mortgage Loans or
of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely
to impair materially the ability of the Company to perform
under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Servicing Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company
thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in Exhibit A to the
Purchase Agreement. The Assignments of Mortgage are in
recordable form, except for the insertion of the name of the
assignee, and upon the name of the assignee being inserted,
are acceptable for recording under the laws of the state
where each related Mortgaged Property is located. The
endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit the
Purchaser to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of
the Mortgages and the Mortgage Notes by the Company from
being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
D-3
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
___________________________
___________________________
___________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that Novelle Financial Services,
Inc., a corporation organized pursuant to the laws of the State of Delaware
(the "Company") has committed to sell to ▇▇▇▇▇▇▇ Sachs Mortgage Company under
a Flow Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, certain mortgage loans originated by the Association. The Company
warrants that the mortgage loans to be sold to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
are in addition to and beyond any collateral required to secure advances made
by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇▇ Sachs Mortgage Company shall not be used as additional or substitute
collateral for advances made by the Association. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company understands that the balance of the Company's mortgage loan portfolio
may be used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a
full and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇▇ Sachs
Mortgage Company.
E-1
Very truly yours,
_____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
__________________________
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
E-2
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be
purchased by to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company from the Company named below
pursuant to that certain Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of ______ __, 200_, and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company named below or its
designees, as of the date and time of the sale of such Mortgage Loans to
▇▇▇▇▇▇▇ Sachs Mortgage Company.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
F-1
II. Certification of Release
The Company named below hereby certifies to
___________________________ that, as of the date and time of the sale of the
above-mentioned ___________________________________ the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage
Loans. The Company warrants that, as of such time, there are and will be no
other security interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
F-2
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ___________________ corporation
("Assignor") and ________________________________, a __________________
corporation ("Assignee"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained,
the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the
"Mortgage Loans"), and with respect to such Mortgage Loans, in, to and under
(a) that certain Flow Mortgage Loan Purchase and Warranties Agreement, dated
as of December 1, 2005, by and between the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the
"Purchaser") and Novelle Financial Services, Inc. (the "Purchase Agreement"),
and (b) that certain Flow Interim Servicing Agreement, dated as of December 1,
2005, by and between the Purchaser and Novelle Financial Services, Inc. (the
"Servicing Agreement"); and (c) the Purchase Agreement and the Servicing
Agreement are collectively referred to as the "Agreements").
2. The Assignor warrants and represents to, and covenants with,
the Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans
with the full right to transfer the Mortgage Loans free from any and all
claims and encumbrances whatsoever;
b. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Seller with respect to the Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver
under, or agreed to any amendment or other modification of, the Agreements.
The Assignor has no knowledge of, and has not received notice of, any waivers
under or amendments or other modifications of, or assignments of rights or
obligations under, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage
Loans or any interest in the Mortgage Loans, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Mortgage Loans, or any
interest in the Mortgage Loans or otherwise approached or negotiated with
respect to the Mortgage Loans, or any interest in the Mortgage with any person
in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans
G-1
under the Securities Act of 1933, as amended (the "1933 Act") or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with,
the Assignor and the Seller pursuant to the Agreements that:
a. The Assignee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to acquire,
own and purchase the Mortgage Loans;
b. The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment and Assumption Agreement,
and to consummate the transactions set forth herein. The execution, delivery
and performance of the Assignee of this Assignment and Assumption Agreement,
and the consummation by it of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action of the Assignee. This
Assignment and Assumption Agreement has been duly executed and delivered by
the Assignee and constitutes the valid and legally binding obligation of the
Assignee enforceable against the Assignee in accordance with its respective
terms;
c. To the best of Assignee's knowledge, no material consent,
approval, order or authorization of, or declaration, filing or registration
with, any governmental entity is required to be obtained or made by the
Assignee in connection with the execution, delivery or performance by the
Assignee of this Assignment and Assumption Agreement, or the consummation by
it of the transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Agreements, the Mortgage Loans, and
from and after the date hereof, the Assignee assumes for the benefit of each
of the Seller, the Assignor and the Custodian all of the Assignor's
obligations as Purchaser thereunder; including, without limitation, the
limitation on assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for
investment for its own account only and not for any other person;
h. The Assignee considers itself a substantial,
sophisticated institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
G-2
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage
Loans or any interest in the Mortgage Loans, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Mortgage Loans or any
interest in the Mortgage Loans, or otherwise approached or negotiated with
respect to the Mortgage Loans or any interest in the Mortgage Loans with any
person in any manner which would constitute a distribution of the Mortgage
Loans under the 1933 Act or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986, as amended
("Code"), and the Assignee is not directly or indirectly purchasing the
Mortgage Loans on behalf of, investment manager of, as named fiduciary of, as
Trustee of, or with assets of, a Plan; or (2) the Assignee's purchase of the
Mortgage Loans will not result in a prohibited transaction under section 406
of ERISA or section 4975 of the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Agreements is:
The Assignee's wire instructions for purposes of all remittances
and payments related to the Mortgage Loans are:
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and
Assumption Agreement is:
5. This Assignment and Assumption Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment
and Assumption Agreement may not be assigned by the Assignee without the
express written consent of the Assignor. Any entity into which the Assignor or
Assignee may be merged or consolidated shall, without the requirement for any
further writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption
Agreement may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
G-3
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and such counterparts shall constitute and be one and the same
instrument.
G-4
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of
the date first above written.
______________________________ ______________________________
Assignor Assignee
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
Taxpayer Taxpayer
Identification No.____________ Identification No.____________
G-5
EXHIBIT H
[INTENTIONALLY OMITTED]
H-1
EXHIBIT I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
THE MORTGAGE LOANS
Pool Characteristics of the Mortgage Loans as delivered on the Closing Date:
I-1
EXHIBIT J
ORIGINATOR'S UNDERWRITING GUIDELINES
J-1
EXHIBIT K
MORTGAGE LOAN SCHEDULE
K-1
EXHIBIT L
[INTENTIONALLY OMITTED]
L-1
EXHIBIT M
ASSIGNMENT AND CONVEYANCE
-------------------------
On this __ day of _________, 200_, Novelle Financial Services,
Inc., as the Seller, under that certain Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of December 1, 2005 (the "Agreement") does
hereby sell, transfer, assign, set over and convey to ▇▇▇▇▇▇▇ Sachs Mortgage
Company, as Purchaser under the Agreement all rights, title and interest of
the Seller in and to (a) the Mortgage Loans listed on the related Mortgage
Loan Schedule attached as Exhibit 1 hereto, and (b) the Servicing Rights,
together with the related Mortgage Files and all rights and obligations
arising under the documents contained therein. Pursuant to Subsection 6.03 of
the Agreement, the Seller has delivered to the Custodian the documents for
each Mortgage Loan to be purchased as set forth in the Agreement. The
ownership of each Mortgage Note, Mortgage, and the contents of each Mortgage
File is vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall be
delivered promptly by the Seller to the Purchaser.
The Seller confirms to the Purchaser that, unless otherwise agreed
upon in writing by the Seller and the Purchaser, the representations and
warranties set forth in Subsection 4.02 of the Agreement with respect to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto, and the
representations and warranties in Subsection 4.01 of the Agreement with
respect to the Seller are true and correct as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
NOVELLE FINANCIAL SERVICES, INC.,
(Seller)
By:________________________
Name:______________________
Title:_______________________
M-1
EXHIBIT N
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated [_______],
200___ ("Agreement") between GS Mortgage Securities Corp., a Delaware
corporation (the "Depositor"), and [___________________], a [_________]
corporation (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party or its Affiliate originated or
acquired the Mortgage Loans and subsequently sold the Mortgage Loans to an
Affiliate of the Depositor in anticipation of the securitization transaction;
and
WHEREAS, as an inducement to the Depositor to enter into the
Assignment and Recognition Agreement, to the Underwriter[s] to enter into the
Underwriting Agreement (as defined herein), and to the Initial Purchaser[s] to
enter into the Certificate Purchase Agreement (as defined herein), the
Indemnifying Party wishes to provide for indemnification and contribution on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
Subsection 1.01 Certain Defined Terms. The following terms shall
have the meanings set forth below, unless the context clearly indicates
otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
ABS Informational and Computational Material: Any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act
and the 1934 Act, as may be amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Certificate Purchase Agreement: The Purchase Agreement, dated as
of [______], 200___, [among] the Depositor and the Initial Purchaser[s],
relating to the Privately Offered Certificates.
N-1
Free Writing Prospectus: Any written communication that
constitutes a "free writing prospectus," as defined in Rule 405 under the 1933
Act.
GSMC: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited
partnership, and its successors and assigns.
Indemnified Parties: As defined in Section 3.01.
Indemnifying Party Information: (A) All information in the
Prospectus Supplement, the Offering Circular, ABS Informational and
Computational Materials, or any Free Writing Prospectus or any amendment or
supplement thereto, (i) contained under the headings ["Transaction
Overview--Parties--The Responsible Party"] and ["The Mortgage Loan
Pool--Underwriting Guidelines"] and (ii) regarding the Mortgage Loans, the
related Mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission or
arises from or is based upon errors or omissions in the information concerning
the Mortgage Loans, the related Mortgagors and/or the related Mortgaged
Properties, as applicable, provided to the Depositor or any Affiliate thereof
by or on behalf of the Indemnifying Party or any Affiliate thereof), and (B)
[and static pool information regarding mortgage loans originated or acquired
by the Seller [and included in the Prospectus Supplement, the Offering
Circular, ABS Informational and Computational Materials or any Free Writing
Prospectus] [incorporated by reference from the website located at
______________].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of [_______], 200___, among the Depositor, the
Indemnifying Party, [Servicer], as servicer, and [Trustee], as trustee.
Privately Offered Certificates: [__________________], issued
pursuant to the Pooling and Servicing Agreement.
Prospectus Supplement: The prospectus supplement, dated [______],
200___, relating to the public offering of the Publicly Offered Certificates.
Publicly Offered Certificates: [______________________________],
issued pursuant to the Pooling and Servicing Agreement.
Underwriters: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., a New York limited
partnership[, and [____________], a [___________] corporation], and their
successors and assigns.
Underwriting Agreement: The Underwriting Agreement, dated as of
[________], 200__, [among] the Depositor and the Underwriter[s], relating to
the Publicly Offered Certificates.
N-2
Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each party hereto
represents and warrants that:
(a) it has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and
delivered by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
SECTION 3. INDEMNIFICATION
Subsection 3.01 Indemnification by the Indemnifying Party of the
Depositor and the Underwriters.
(a) The Indemnifying Party shall indemnify and hold harmless the
Depositor, GSMC, [each of] the Underwriter[s], the Initial Purchaser[s], and
their respective Affiliates and their respective present and former directors,
officers, partners and each Person, if any, that controls the Depositor, GSMC,
such Underwriter, such Initial Purchaser, or such Affiliate, within the
meaning of either the 1933 Act or the 1934 Act (collectively, the "Indemnified
Parties") against any and all losses, claims, damages, penalties, fines,
forfeitures, or liabilities, joint or several, to which each such Indemnified
Party may become subject, under the 1933 Act, the 1934 Act or otherwise, to
the extent that such losses, claims, damages, penalties, fines, forfeitures,
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement of any material fact contained in the Prospectus
Supplement, the Offering Circular, ABS Informational and Computational
Materials, any Free Writing Prospectus or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading, to the extent that such untrue statement or omission relates to
information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability, penalties, fines, forfeitures, or action. The Indemnifying Party's
liability under this Section 3.01 shall be in addition to any other liability
that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.01 shall
for any reason be unavailable to an Indemnified Party under this Section 3.01,
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated herein
and incurred by the parties hereto in such proportions that are appropriate to
reflect the relative fault of the Depositor, GSMC, the Underwriter[s], and the
Initial Purchaser[s], on one hand, and the
N-3
Indemnifying Party, on the other hand, in connection with the applicable
misstatements or omissions as well as any other relevant equitable
considerations. Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall
be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. For purposes of this Section 3.01, each
director, officer, partner and controlling Person, of the Depositor, GSMC, the
Underwriter[s] and the Initial Purchaser[s] and their respective Affiliates
shall have the same rights to contribution as such Person.
Subsection 3.02 Notification; Procedural Matters. Promptly after
receipt by an Indemnified Party under Section 3.01 of notice of any claim or
the commencement of any action, such Indemnified Party shall, if a claim in
respect thereof is to be made against the Indemnifying Party under Section
3.01, notify the Indemnifying Party (or other contributing party) in writing
of the claim or the commencement of such action; provided, however, that the
failure to notify the Indemnifying Party (or other contributing party) shall
not relieve it from any liability which it may have under Section 3.01 except
to the extent it has been materially prejudiced by such failure; and provided
further, however, that the failure to notify the Indemnifying Party shall not
relieve it from any liability which it may have to any Indemnified Party
otherwise than under Section 3.01. In case any such action is brought against
any Indemnified Party and it notifies the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
therein and, to the extent that, by written notice delivered to the
Indemnified Party promptly after receiving the aforesaid notice from such
Indemnified Party, the Indemnifying Party elects to assume the defense
thereof, it may participate with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that if the defendants in any such
action include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party or parties shall reasonably have concluded that there may be
legal defenses available to it or them and/or other Indemnified Parties that
are different from or additional to those available to the Indemnifying Party,
the Indemnified Party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such Indemnified Party or parties. Upon
receipt of notice from the Indemnifying Party to such Indemnified Party of its
election so to assume the defense of such action and approval by the
Indemnified Party of such counsel, the Indemnifying Party shall not be liable
to such Indemnified Party under this paragraph for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel
(plus any local counsel) in connection with the assertion of legal defenses in
accordance with the proviso to the immediately preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party within a reasonable
time after notice of commencement of the action or (iii) the Indemnifying
Party shall have authorized the employment of counsel for the Indemnified
Party at the expense of the Indemnifying Party. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one
counsel representing the Indemnified Parties (in addition to any local
counsel) separate from its own counsel for all Indemnified Parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
N-4
SECTION 4. GENERAL.
Subsection 4.01 Survival. This Agreement and the obligations of
the parties hereunder shall survive the purchase and sale of the Publicly
Offered Certificates and the Privately Offered Certificates.
Subsection 4.02 Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, each Indemnified Party and
their respective successors and assigns, and no other Person shall have any
right or obligation hereunder.
Subsection 4.03 Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
giving effect to principles of conflict of laws.
Subsection 4.04 Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken
together shall constitute one and the same instrument.
Subsection 4.05 Notices. All communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in
the case of the Depositor, GSMC, the Underwriter[s], or the Initial
Purchaser[s], GS Mortgage Securities Corp., ▇▇▇▇▇▇▇ Sachs Mortgage Company or
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., c/o Goldman, Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and (b)
in the case of the Indemnifying Party: [______________], [Address], Attention:
[____________].
Subsection 4.06 Submission To Jurisdiction; Waivers. The
Indemnifying Party hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
N-5
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE
DEPOSITOR SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
[SIGNATURE PAGE FOLLOWS]
N-6
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
N-7
EXHIBIT U
Second Amended and Restated Master Seller's Warranties and
Servicing Agreement, dated as of November 1, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and ▇▇▇▇▇ Fargo Bank, N.A.
[See Exhibit 99.1 to Form 8-K filed with the Commission on
May 12, 2006, Accession No. 0000905148-06-003718]
U-1
EXHIBIT V-1
FORM OF PERFORMANCE CERTIFICATION
(Master Servicer)
Re: Master Servicing and Trust Agreement, dated as of May 1, 2006
(the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank, National Association,
as trustee (the "Trustee"), JPMorgan Chase Bank, National
Association, as master servicer (the "Master Servicer") and
securities administrator (the "Securities Administrator"),
Deutsche Bank National Trust Company, as a custodian, U.S. Bank
National Association, as a custodian and JPMorgan Trust
Company, N.A., as a custodian (each, a "Custodian").
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor, and its officers,
with the knowledge and intent that they will rely upon this certification,
that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were prepared and
delivered by the Company to the Depositor and the Securities
Administrator pursuant to the Agreement, and as may have been
subsequently amended in a report, certification or document
subsequently prepared and delivered by the Company (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which
such statements were made, not misleading with respect to the period
of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the Depositor;
(4) I am responsible for reviewing the activities performed
by the Company as a servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the
V-1-1
Compliance Statement or the Servicing Assessment, the Company has
fulfilled its obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement and the Servicing Assessment
required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
Depositor. Any material instances of noncompliance have been
disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
V-1-2
EXHIBIT V-2
FORM OF PERFORMANCE CERTIFICATION
(Securities Administrator)
Re: Master Servicing and Trust Agreement, dated as of May 1,
2006 (the "Agreement"), among GS Mortgage Securities Corp.,
as depositor (the "Depositor"), U.S. Bank, National
Association, as trustee (the "Trustee"), JPMorgan Chase
Bank, National Association, as master servicer (the "Master
Servicer") and securities administrator (the "Securities
Administrator"), Deutsche Bank National Trust Company, as a
custodian, U.S. Bank National Association, as a custodian
and JPMorgan Trust Company, N.A., as a custodian (each, a
"Custodian").
The Securities Administrator (the "Company"), certifies to the
Depositor, and its officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) The Securities Administrator has reviewed the report on
assessment of the Company's compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the "Servicing
Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), all reports
on Form 10-D containing statements to certificateholders filed in
respect of the period included in the year covered by the annual
report of the Trust Fund (collectively, the "Distribution Date
Statements");
(2) Assuming the accuracy and completeness of the
information delivered to the Company by the Master Servicer as
provided in the Agreement and subject to paragraph (4) below, the
distribution information determined by the Company and set forth in
the Distribution Date Statements contained in all Form 10-D's
included in the year covered by the annual report of such Trust on
Form 10-K for the calendar year 200[ ], is complete and does not
contain any material misstatement of fact as of the last day of the
period covered by such annual report;
(3) Based solely on the information delivered to the Company
by the Master Servicer as provided in the Agreement, (i) the
distribution information required under the Agreement to be contained
in the Trust Fund's Distribution Date Statements and (ii) the
servicing information required to be provided by the Master Servicer
to the Securities Administrator for inclusion in the Trust Fund's
Distribution Date Statements, to the extent received by the
Securities Administrator from the Master Servicer in accordance with
the Agreement, is included in such Distribution Date Statements;
(4) The Company is not certifying as to the accuracy,
completeness or correctness of the information which it received from
the Master Servicer and did not
V-2-1
independently verify or confirm the accuracy, completeness or
correctness of the information provided by the Master Servicer; and
(5) The Servicing Assessment required to be provided by the
Company pursuant to the Agreement, has been provided to the
Depositor. Any material instances of noncompliance described in such
report have been disclosed to the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
report.
Date: _________________________
By: ________________________________
Name:
Title:
V-2-2
EXHIBIT W
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the [Master Servicer]
[Securities Administrator] [Custodian] shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
------------------------ ----------------- ---------------- ---------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default
1122(d)(1)(i) in accordance with the transaction agreements.
------------------------ ----------------- ---------------- ---------------
If any material servicing activities are outsourced
to third parties, policies and procedures are
instituted to monitor the third party's performance
1122(d)(1)(ii) and compliance with such servicing activities.
------------------------ ----------------- ---------------- ---------------
Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
1122(d)(1)(iii) are maintained.
------------------------ ----------------- ---------------- ---------------
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the
amount of coverage required by and otherwise in
accordance with the terms of the transaction X
1122(d)(1)(iv) agreements.
------------------------ ----------------- ---------------- ---------------
Cash Collection and Administration
------------------------ ----------------- ---------------- ---------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days
1122(d)(2)(i) specified in the transaction agreements. X X
------------------------ ----------------- ---------------- ---------------
Disbursements made via wire transfer on behalf of an
1122(d)(2)(ii) obligor or to an investor are
------------------------ ----------------- ---------------- ---------------
W-1
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
made only by authorized personnel.
------------------------ ----------------- ---------------- ---------------
Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances, are
made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements. X
------------------------ ----------------- ---------------- ---------------
The related accounts for the transaction, such as
cash reserve accounts or accounts established as a
form of overcollateralization, are separately
maintained (e.g., with respect to commingling of
1122(d)(2)(iv) cash) as set forth in the transaction agreements. X X
------------------------ ----------------- ---------------- ---------------
Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act. X X*
------------------------ ----------------- ---------------- ---------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access.
------------------------ ----------------- ---------------- ---------------
Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank
clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date,
or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are
1122(d)(2)(vii) resolved within 90 calendar days of their original X X
------------------------ ----------------- ---------------- ---------------
______________________________
* For 1122(d)(2)(v) the Securities Administrator needs to
provide only if it is a "custodial account" for purposes of these
servicing criteria. Subject to further clarification from the
Commission.
W-2
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
identification, or such other number of days
specified in the transaction agreements.
------------------------ ----------------- ---------------- ---------------
Investor Remittances and Reporting
------------------------ ----------------- ---------------- ---------------
Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such reports
(A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements;
(B) provide information calculated in accordance with
the terms specified in the transaction agreements;
(C) are filed with the Commission as required by its
rules and regulations; and (D) agree with investors'
or the trustee's records as to the total unpaid
principal balance and number of mortgage loans X X
1122(d)(3)(i) serviced by the Servicer.
------------------------ ----------------- ---------------- ---------------
Amounts due to investors are allocated and remitted
in accordance with timeframes, distribution priority
and other terms set forth in the transaction
1122(d)(3)(ii) agreements. X
------------------------ ----------------- ---------------- ---------------
Disbursements made to an investor are posted within
two business days to the Servicer's investor records,
or such other number of days specified in the
1122(d)(3)(iii) transaction agreements. X
------------------------ ----------------- ---------------- ---------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other form of
1122(d)(3)(iv) payment, or custodial bank statements. X
------------------------ ----------------- ---------------- ---------------
Pool Asset Administration
------------------------ ----------------- ---------------- ---------------
Collateral or security on mortgage loans is
maintained as required by the transaction agreements
1122(d)(4)(i) or related mortgage loan documents. X
------------------------ ----------------- ---------------- ---------------
Mortgage loan and related documents are safeguarded
1122(d)(4)(ii) as required by the transaction X
------------------------ ----------------- ---------------- ---------------
W-3
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
agreements.
------------------------ ----------------- ---------------- ---------------
Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
------------------------ ----------------- ---------------- ---------------
Payments on mortgage loans, including any payoffs,
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor
records maintained no more than two business days
after receipt, or such other number of days specified
in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
1122(d)(4)(iv) accordance with the related mortgage loan documents.
------------------------ ----------------- ---------------- ---------------
The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
1122(d)(4)(v) obligor's unpaid principal balance.
------------------------ ----------------- ---------------- ---------------
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
1122(d)(4)(vi) documents.
------------------------ ----------------- ---------------- ---------------
Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
------------------------ ----------------- ---------------- ---------------
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis,
1122(d)(4)(viii) or such other period specified in the transaction
------------------------ ----------------- ---------------- ---------------
W-4
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment
rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
------------------------ ----------------- ---------------- ---------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based
1122(d)(4)(ix) on the related mortgage loan documents.
------------------------ ----------------- ---------------- ---------------
Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or such
other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of
full repayment of the related mortgage loans, or such
other number of days specified in the transaction
1122(d)(4)(x) agreements.
------------------------ ----------------- ---------------- ---------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
1122(d)(4)(xi) transaction agreements.
------------------------ ----------------- ---------------- ---------------
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
------------------------ ----------------- ---------------- ---------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor
------------------------ ----------------- ---------------- ---------------
W-5
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
are posted within two business days to the obligor's
records maintained by the servicer, or such other
number of days specified in the transaction agreements.
------------------------ ----------------- ---------------- ---------------
Delinquencies, charge-offs and uncollectible accounts
are recognized and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
------------------------ ----------------- ---------------- ---------------
Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
------------------------ ------------------------------------------------------- ----------------- ---------------- ---------------
------------------------ ------------------------------------------------------- ----------------- ---------------- ---------------
W-6
EXHIBIT X
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: U.S. Bank National Assoc. Attention: Document Custody Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇-▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Custodial Agreement between U.S. Bank National Association, a custodian,
and ___________________ as the company stated in the "agreement".
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated:
FROM: Servicer:______________________________________, City/State______________
SERVICER LOAN #: ________________________, U.S. BANK#__________________________,
Deal Name: ____________________,
Mortgagor's Name: _________________________________ Original loan amount: ______
Property Address: _________________________________ Payment amount: ____________
City/State/Zip: ___________________________________ Interest rate: _____________
REASON FOR REQUESTING DOCUMENTS (check one)
-------------------------------------------
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain) _____________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:___________________________________PHONE#__________________________
AUTHORIZED SIGNER: _____________________________________________________________
NAME(TYPED):__________________________________________DATE:_____________________
PHONE #:______________________________________________ DATE:____________________
________________________________________________________________________________
PLEASE MAIL DOCUMENTS BACK TO:
------------------------------
_______________________________________________________________________________
_______________________________________________________________
-------------------------------------------------------------------------------
X-1
EXHIBIT X-1
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mortgage Custody - GS06EC
RE: Master Servicing and Trust Agreement, dated as of April 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), U.S. Bank National Association, as trustee (in such capacity,
the "Trustee") and as a custodian, JPMorgan Chase Bank, National Association,
and Deutsche Bank National Trust Company, each as a custodian, and ▇▇▇▇▇ Fargo
Bank, N.A., as master servicer (in such capacity, the "Master Servicer"),
securities administrator (in such capacity, the "Securities Administrator")
and custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below. Further, any payments
received by the Servicer in connection with this request for release have been
deposited in the Distribution Account for the benefit of the Trust:
FROM: Servicer:______________________________________, City/State______________
SERVICER LOAN #: _____________________, DEUTSCHE BANK#_________________________,
Deal Name: ____________________,
Mortgagor's Name: _________________________________ Original loan amount: ______
Property Address: _________________________________ Payment amount: ____________
City/State/Zip: ___________________________________ Interest rate: _____________
REASON FOR REQUESTING DOCUMENTS (check one)
-------------------------------------------
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain) _____________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:___________________________________PHONE#__________________________
AUTHORIZED SIGNER: _____________________________________________________________
NAME(TYPED):__________________________________________DATE:_____________________
PHONE #:______________________________________________ DATE:____________________
-------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
------------------------------
_______________________________________________________________________________
_______________________________________________________________
-------------------------------------------------------------------------------
X-2
EXHIBIT X-2
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
RE: Master Servicing and Trust Agreement, dated as of April 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), U.S. Bank National Association, as trustee (in such capacity,
the "Trustee") and as a custodian, JPMorgan Chase Bank, National Association,
and Deutsche Bank National Trust Company, each as a custodian, and ▇▇▇▇▇ Fargo
Bank, N.A., as master servicer (in such capacity, the "Master Servicer"),
securities administrator (in such capacity, the "Securities Administrator")
and custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below. Further, any payments
received by the Servicer in connection with this request for release have been
deposited in the Distribution Account for the benefit of the Trust:
FROM: Servicer:______________________________________, City/State______________
SERVICER LOAN #: _____________________, JPMORGAN BANK#_________________________,
Deal Name: ____________________,
Mortgagor's Name: _________________________________ Original loan amount: ______
Property Address: _________________________________ Payment amount: ____________
City/State/Zip: ___________________________________ Interest rate: _____________
REASON FOR REQUESTING DOCUMENTS (check one)
-------------------------------------------
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain) _____________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:___________________________________PHONE#__________________________
AUTHORIZED SIGNER: _____________________________________________________________
NAME(TYPED):__________________________________________DATE:_____________________
PHONE #:______________________________________________ DATE:____________________
-------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
------------------------------
_______________________________________________________________________________
_______________________________________________________________
-------------------------------------------------------------------------------
X-3