EXECUTION COPY
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EXHIBIT 99.1
________________________________________________________________________________
GSAA HOME EQUITY TRUST 2006-10
ASSET-BACKED CERTIFICATES
SERIES 2006-10
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
DEUTSCHE BANK NATIONAL TRUST COMPANY,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
and
U.S. BANK NATIONAL ASSOCIATION,
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Custodians
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
Dated June 1, 2006
________________________________________________________________________________
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions....................................................10
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans...................................43
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.............45
Section 2.03 Execution and Delivery of Certificates.........................47
Section 2.04 REMIC Matters..................................................47
Section 2.05 Representations and Warranties of the Depositor................47
Section 2.06 Representations and Warranties of JPMorgan.....................49
Section 2.07 Representations and Warranties of Deutsche Bank................49
Section 2.08 Representations and Warranties of U.S. Bank....................50
Section 2.09 Representations and Warranties of ▇▇▇▇▇ Fargo..................50
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account..............52
Section 3.02 Investment of Funds in the Distribution Account................53
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution.....................................55
Section 4.02 Monthly Statements to Certificateholders.......................61
Section 4.03 Allocation of Applied Realized Loss Amounts....................63
Section 4.04 Certain Matters Relating to the Determination of LIBOR.........63
ARTICLE V
THE CERTIFICATES
i
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..............70
Section 5.04 Persons Deemed Owners..........................................70
Section 5.05 Access to List of Certificateholders' Names and Addresses......70
Section 5.06 Maintenance of Office or Agency................................71
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor...................................71
Section 6.02 Merger or Consolidation of the Depositor.......................71
Section 6.03 Limitation on Liability of the Depositor and Others............71
Section 6.04 Servicing Compliance Review....................................72
Section 6.05 Option to Purchase Defaulted Mortgage Loans....................72
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default..............................................72
Section 7.02 Master Servicer to Act; Appointment of Successor...............73
Section 7.03 Master Servicer to Act as Servicer.............................74
Section 7.04 Notification to Certificateholders.............................74
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.................................................77
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.........................79
Section 8.09 Successor Trustee..............................................80
Section 8.10 Merger or Consolidation of the Trustee or the Custodians.......80
Section 8.11 Appointment of Co-Trustee or Separate Trustee..................81
Section 8.12 Tax Matters....................................................82
Section 8.13 [Reserved].....................................................85
Section 8.14 Tax Classification of the Excess Reserve Fund Account and
the Interest Rate Corridor Agreement...........................85
Section 8.15 Custodial Responsibilities.....................................86
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's
Obligations....................................................87
Section 9.02 Maintenance of Fidelity Bond and Errors and
Omissions Insurance............................................88
Section 9.03 Representations and Warranties of the Master Servicer..........88
Section 9.04 Master Servicer Events of Default..............................90
Section 9.05 Waiver of Default..............................................92
Section 9.06 Successor to the Master Servicer...............................92
Section 9.07 Compensation of the Master Servicer............................94
Section 9.08 Merger or Consolidation........................................94
Section 9.09 Resignation of the Master Servicer.............................94
Section 9.10 Assignment or Delegation of Duties by the Master Servicer......94
Section 9.11 Limitation on Liability of the Master Servicer.................95
Section 9.12 Indemnification; Third Party Claims............................95
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator........................96
Section 10.02 Certain Matters Affecting the Securities Administrator........97
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans................................................99
Section 10.04 Securities Administrator May Own Certificates.................99
Section 10.05 Securities Administrator's Fees and Expenses..................99
Section 10.06 Eligibility Requirements for the Securities Administrator....100
Section 10.07 Resignation and Removal of the Securities Administrator......101
Section 10.08 Successor Securities Administrator...........................102
Section 10.09 Merger or Consolidation of the Securities Administrator......103
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator................................................103
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................103
Section 11.02 Final Distribution on the Certificates.......................104
Section 11.03 Additional Termination Requirements..........................106
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.......................................................
iii
Section 12.02 Recordation of Agreement; Counterparts.......................108
Section 12.03 Governing Law................................................109
Section 12.04 Intention of Parties.........................................109
Section 12.05 Notices......................................................109
Section 12.06 Severability of Provisions...................................111
Section 12.07 Limitation on Rights of Certificateholders...................111
Section 12.08 Certificates Nonassessable and Fully Paid....................112
Section 12.09 Waiver of Jury Trial.........................................112
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations...........................................112
Section 13.02 Form 8-K Filings.............................................114
Section 13.03 Form 10-D Filings............................................115
Section 13.04 Form 10-K Filings............................................116
Section 13.05 Form 15 Filing...............................................118
Section 13.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.................................118
Section 13.07 Report on Assessment of Compliance and Attestation...........118
Section 13.08 Use of Subservicers and Subcontractors.......................120
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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 Custodian
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-1 Form of Back-up Certification (Master Servicer)
Exhibit J-2 Form of Back-up Certification (Securities Administrator)
Exhibit K Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
Exhibit L-1 Form of Request for Release of Documents (U.S. Bank National
Association)
Exhibit L-2 Form of Request for Release of Documents (Deutsche Bank National
Trust Company)
Exhibit L-3 Form of Request for Release of Documents (JPMorgan Chase Bank,
National Association)
Exhibit L-4 Form of Request for Release of Documents (▇▇▇▇▇ Fargo Bank,
National Association)
Exhibit M Form 8-K Disclosure Information
Exhibit N Additional Form 10-D Disclosure
Exhibit O Additional Form 10-K Disclosure
v
Exhibit P Form of Master Loan Purchase Agreement, between various sellers
and ▇▇▇▇▇▇▇ Sachs Mortgage Company
Exhibit Q Flow Servicing Agreement, dated as of May 1, 2005, between
Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company
Exhibit R Flow Servicing Agreement, dated as of January 1, 2006, between
Avelo Mortgage, L.L.C. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
Exhibit S 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
Exhibit T Amended and Restated Flow Mortgage Loan Purchase and Warranties
Agreement, dated as of June 1, 2005, between ▇▇▇▇▇▇▇ Sachs
Mortgage Company and Ameriquest Mortgage Company
Exhibit U Master Mortgage Loan Purchase and Interim Servicing Agreement,
dated as of March 24, 2004, between First National Bank of Nevada
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Exhibit V Flow Mortgage Loan Purchase and Warranties Agreement, dated as of
November 1, 2003, between ▇▇▇▇▇▇▇ Sachs Mortgage Company and
Fremont Investment & Loan
Exhibit W Amended and Restated Master Mortgage Loan Purchase Agreement,
dated as of November 1, 2005, between GreenPoint Mortgage
Funding, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Exhibit X Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit Y Flow Mortgage Loan Purchase and Warranties Agreement, dated as of
December 1, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
Novelle Financial Services, Inc.
Exhibit Z Second Amended and Restated Master Seller's Warranties and
Servicing Agreement, dated as of November 1, 2005, between
▇▇▇▇▇▇▇ Sachs Mortgage Company and ▇▇▇▇▇ Fargo Bank, National
Association
vi
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of June 1,
2006 (this "Agreement"), is hereby executed by and among GS MORTGAGE
SECURITIES CORP., a Delaware corporation (the "Depositor"), DEUTSCHE BANK
NATIONAL TRUST COMPANY ("Deutsche Bank"), as trustee (in such capacity, the
"Trustee") and as a custodian, U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank"),
as a custodian, JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ("JPMorgan"), as a
custodian, and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as master servicer (in
such capacity, the "Master Servicer"), as securities administrator (in such
capacity, the "Securities Administrator") and as a custodian (Deutsche Bank,
JPMorgan, U.S. Bank and ▇▇▇▇▇ Fargo, each a "Custodian" and together the
"Custodians").
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 Principal
Certificates (other than the right of each Class of Principal Certificates to
receive Basis Risk Carry Forward Amounts), represents ownership of a regular
interest in the Upper-Tier REMIC for purposes of the REMIC Provisions. The
Class R 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 Corridor
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-AV-1, Class LT-AF-2, Class LT-AF-3, Class LT-AF-4, Class LT-AF-5,
Class LT-AF-6, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class
LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3 and Class
LT-B-4 Interests are hereby designated the LT-Accretion Directed Classes (the
"LT Accretion Directed Classes"). The Class P Certificates represent
beneficial ownership of the Prepayment Premiums, each Class of Certificates
(excluding the Class P, Class X and the Residual 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 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 Upper-Tier REMIC
Designation Interest Rate Initial Lower-Tier Principal Amount Class
----------------------------- ----------------- -------------------------------------------- ----------------------
Class LT-AV-1 (1) 1/2 initial Class Certificate Balance of AV-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-2 (1) 1/2 initial Class Certificate Balance of AF-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-3 (1) 1/2 initial Class Certificate Balance of AF-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-4 (1) 1/2 initial Class Certificate Balance of AF-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-5 (1) 1/2 initial Class Certificate Balance of AF-5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-6 (1) 1/2 initial Class Certificate Balance of AF-6
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-6 (1) 1/2 initial Class Certificate Balance of M-6
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
2
Corresponding
Lower-Tier Interest Lower-Tier Upper-Tier REMIC
Designation Interest Rate Initial Lower-Tier Principal Amount Class
----------------------------- ----------------- -------------------------------------------- ----------------------
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate Balance of B-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount
_____________________________
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
The Lower-Tier REMIC shall hold as assets all of the Lower-Tier
REMIC Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and will be accrued and added to the Lower-Tier
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower-Tier Principal Amount of the Class LT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class
LT-Accrual Interest for such Distribution Date, the excess for such
Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes
on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated (i) 50% to the Class
LT-Accrual Interest 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
3
and shall have no interest rate. Amounts received by the Class LT-R Interest
shall be deemed paid from the Lower-Tier REMIC.
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 Principal
Upper-Tier Corresponding Amount and Corresponding Corresponding Class of
Class Designation Class Pass-Through Rate Class Certificate Balance Certificates
------------------------- --------------------------- ------------------------------- ------------------------
Class AV-1 (1) $ 296,280,000 Class AV-1(18)
Class AF-2 (2) $ 40,496,000 Class AF-2(18)
Class AF-3 (3) $ 117,039,000 Class AF-3(18)
Class AF-4 (4) $ 67,627,000 Class AF-4(18)
Class AF-5 (5) $ 60,523,000 Class AF-5(18)
Class AF-6 (6) $ 64,679,000 Class AF-6(18)
Class M-1 (7) $ 9,158,000 Class M-1(18)
Class M-2 (8) $ 8,454,000 Class M-2(18)
Class M-3 (9) $ 4,931,000 Class M-3(18)
Class M-4 (10) $ 4,579,000 Class M-4(18)
Class M-5 (11) $ 3,874,000 Class M-5(18)
Class M-6 (12) $ 3,523,000 Class M-6(18)
Class B-1 (13) $ 3,523,000 Class B-1(18)
Class B-2 (14) $ 3,523,000 Class B-2(18)
Class B-3 (15) $ 3,523,000 Class B-3(18)
Class B-4 (16) $ 3,523,000 Class B-4(18)
Class X (17) (17) Class X(17)
(1) The Class AV-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) LIBOR plus
0.08000% and (ii) the WAC Cap.
(2) The Class AF-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.82518% and (ii)
the WAC Cap.
(3) The Class AF-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.98458% and (ii)
the WAC Cap.
(4) The Class AF-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) 6.29548% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.79548% and (ii) the WAC Cap.
4
(5) The Class AF-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) 6.44751% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.94751% and (ii) the WAC Cap.
(6) The Class AF-6 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) 6.12331% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.62331% and (ii) the WAC Cap.
(7) 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) 6.25173% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.75173% and (ii) the WAC Cap.
(8) 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) 6.30120% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.80120% and (ii) the WAC Cap.
(9) 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) 6.35075% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.85075% and (ii) the WAC Cap.
(10) 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) 6.40034% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.90034% and (ii) the WAC Cap.
(11) 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) 6.44994% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.94994% and (ii) the WAC Cap.
(12) The Class M-6 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) 6.54907% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.04907% and (ii) the WAC Cap.
(13) 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) 6.70000% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.20000% and (ii) the WAC Cap.
(14) 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
5
lesser of (i) 6.70000% and (ii) the WAC Cap or (b) after the first
possible Optional Termination Date, the lesser of (i) 7.20000% and (ii)
the WAC Cap.
(15) 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) 6.70000% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.20000% and (ii) the WAC Cap.
(16) The Class B-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
2.00000% and (ii) the WAC Cap or (b) after the first possible Optional
Termination Date, the lesser of (i) LIBOR plus 3.00000% and (ii) the WAC
Cap.
(17) 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
Interest is subject to a cap equal to zero and each LT-Accretion
Directed Class is subject to a cap equal to the Pass-Through Rate on its
Corresponding Class. With respect to any Distribution Date, interest
that so accrues on the notional principal balance of the Class X
Interest shall be deferred in an amount equal to any increase in the
Overcollateralized Amount on such Distribution Date. Such deferred
interest shall not itself bear interest. The Class X Certificates will
represent beneficial ownership of a regular interest issued by the Class
X REMIC and amounts in the Excess Reserve Fund Account, subject to the
obligation to make payments from the Excess Reserve Fund Account in
respect of Basis Risk Carry Forward Amounts. For federal income tax
purposes, the Securities Administrator will treat the Class X
Certificateholders' obligation to make payments from the Excess Reserve
Fund Account as payments made pursuant to an interest rate cap contract
written by the Class X Certificateholders in favor of each Class of
Principal Certificates. Such rights of the Class X Certificateholders
and Principal Certificateholders shall be treated as held in a portion
of the Trust Fund that is treated as a grantor trust under subpart E,
Part I of subchapter J of the Code.
(18) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to
receive payments from the Excess Reserve Fund Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders.
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
6
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.
7
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 and the Class
X 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)(ii)(A)(1) 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 and Class RC Certificates will each be $100 and each will be a 100%
Percentage Interest in such Class, (b) the Class RX Certificates will be a
100% Percentage Interest in such Class and (c) the Class P and Class X
Certificates will be a 1% Percentage Interest in each such Class.
8
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates................ All Classes of Certificates other than
the Physical Certificates.
Class A Certificates................... The Class AV-1, Class AF-2, Class
AF-3, Class AF-4, Class AF-5 and
Class AF-6 Certificates, collectively.
Class B Certificates................... The Class B-1, Class B-2, Class B-3
and Class B-4 Certificates,
collectively.
Class M Certificates................... The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and
Class M-6 Certificates, collectively.
Residual Certificates.................. The Class R, Class RC and Class RX
Certificates.
ERISA Restricted The Private Certificates, the Physical
Certificates........................... Certificates and any Certificate with
a rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
Fixed Rate Certificates................ The Class A Certificates (other than
the Class AV-1 Certificates), the
Class M Certificates and the Class B
Certificates (other than the Class B-4
Certificates).
LIBOR Certificates..................... The Class AV-1 Certificates and the
Class B-4 Certificates.
Offered Certificates................... All Classes of Certificates other than
the Private Certificates.
Private Certificates................... The Class B-4, Class P and Class X
Certificates.
Physical Certificates.................. The Class R, Class RC, Class RX,
Class P and Class X Certificates.
Principal Certificates................. The Fixed Rate Certificates and LIBOR
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.
9
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:
10-K Filing Deadline: As defined in Section 13.04.
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 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 or the Excess Reserve
Fund 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 Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior
to such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Additional Form 10-D Disclosure: As defined in Section 13.03.
Additional Form 10-K Disclosure: As defined in Section 13.04.
Additional Servicer: Each affiliate of each Servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
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
Master Servicing Fee Rate.
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"
10
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,
American Home Servicing and the Purchaser, 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 and the Purchaser, 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 Principal 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 9.03(b).
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
11
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; and (vi) 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 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 Call: As defined in Section 11.01.
Avelo Servicing Agreement: The Flow Servicing Agreement, dated as
of January 1, 2006, between Avelo and the Purchaser, as modified by the
related Assignment Agreements.
Back-Up Certification: As defined in Section 13.06.
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
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal
Certificates is based upon 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 and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Book-Entry Certificates: As specified in the Preliminary
Statement.
12
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, Minnesota, Maryland 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 Principal
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class 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 Parties As defined in Section 13.06.
Certifying Person: As defined in Section 13.06.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
13
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) 83.60% 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 AF-2 Certificates: All Certificates bearing the class
designation of "Class AF-2."
Class AF-3 Certificates: All Certificates bearing the class
designation of "Class AF-3."
Class AF-4 Certificates: All Certificates bearing the class
designation of "Class AF-4."
Class AF-5 Certificates: All Certificates bearing the class
designation of "Class AF-5."
Class AF-6 Certificates: All Certificates bearing the class
designation of "Class AF-6."
Class AF-6 Calculation Percentage: With respect to any
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the Class Certificate Balance of the Class AF-6 Certificates and the
denominator of which is the aggregate Class Certificate Balance of all of the
Class A Certificates, in each case before giving effect to distribution of
principal on that Distribution Date.
Class AF-6 Lockout Distribution Amount. With respect to any
Distribution Date, an amount equal to the product of (i) the applicable Class
AF-6 Calculation Percentage for that Distribution Date, (ii) the Class AF-6
Lockout Percentage for that Distribution Date and (iii) the Class A Principal
Distribution Amount for that Distribution Date. In no event shall the Class
AF-6 Lockout Distribution Amount exceed the lesser of the outstanding Class
Certificate Balance of the Class AF-6 Certificates or the Class A Principal
Distribution Amount for the applicable Distribution Date.
Class AF-6 Lockout Percentage. For any Distribution Date, the
following:
Class AF-6
Lockout
Distribution Date (Months) Percentage
1 to 36 0%
37 to 60 45%
61 to 72 80%
73 to 84 100%
85 and thereafter 300%
14
Class AV-1 Certificates: All Certificates bearing the class
designation of "Class AV-1."
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), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount on such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 94.40% 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 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 M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution
15
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the
Class B-1 Principal Distribution Amount on such Distribution Date) and (I) the
Class Certificate Balance of the Class B-2 Certificates immediately prior to
that Distribution Date over (ii) the lesser of (A) the product of (x) 95.40%
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 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 M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount on such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account
the distribution of the Class B-1 Principal Distribution Amount on such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount on such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of 96.40% 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 B-4 Certificates: All Certificates bearing the class
designation of "Class B-4."
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate 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
16
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M-6 Certificates (after taking into account
the distribution of the Class M-6 Principal Distribution Amount on such
Distribution Date), (H) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account
the distribution of the Class B-2 Principal Distribution Amount on such
Distribution Date), (J) the Class Certificate Balance of the Class B-3
Certificates (after taking into account the distribution of the Class B-3
Principal Distribution Amount on such Distribution Date) and (K) the Class
Certificate Balance of the Class B-4 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of 97.40% 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 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 M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate 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) 86.20% 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
17
(x) 88.60% 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) 90.00%
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-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
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) 91.30% 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-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
18
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) 92.40% 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-6 Certificates: All Certificates bearing the class
designation of "Class M-6."
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate 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 M-6
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 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
19
interest remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of
the principal balance of the Class X Interest which is distributable as an
Overcollateralization Reduction Amount, minus (iii) any amounts paid as a
Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Closing Date: June 29, 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 GreenPoint or (ii) its aggregate
Servicing Fee received for the related Distribution Date in the case of
American Home Servicing, Avelo, Countrywide Servicing, M&T 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, to the principal office of the Securities Administrator at
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Services, GSAA Home Equity Trust 2006-10, or at such other
address 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: Trust Administration - GS0610, 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:
Lower-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
---------------------- -------------------- -------------------------
20
Class LT-AV-1 Class AV-1 Class AV-1
Class LT-AF-2 Class AF-2 Class AF-2
Class LT-AF-3 Class AF-3 Class AF-3
Class LT-AF-4 Class AF-4 Class AF-4
Class LT-AF-5 Class AF-5 Class AF-5
Class LT-AF-6 Class AF-6 Class AF-6
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Class LT-B-4 Class B-4 Class B-4
Corridor Provider: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Markets, L.P., a Delaware
limited partnership, and its successors in interest.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas limited partnership, and its successors in interest.
Countrywide Servicing Agreement: The Flow Servicing Agreement,
dated as of May 1, 2005, between Countrywide Servicing and the Purchaser, 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.
Custodians: Deutsche Bank, JPMorgan, U.S. Bank and ▇▇▇▇▇ Fargo.
Cut-off Date: June 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).
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
21
Agreement, any Assignment Agreement or this Agreement, as applicable, or which
is, in the case of a substitution by American Home, Fremont, GreenPoint or
Novelle pursuant to the American Home Sale and Servicing Agreement, the
Fremont 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-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 "▇▇▇▇▇ Fargo Bank, National Association,
as paying agent, in trust for registered holders of GSAA Home Equity Trust
2006-10, Asset-Backed Certificates, Series 2006-10." 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
July 2006.
22
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 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 "▇▇▇▇▇ Fargo Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2006-10, Asset-Backed Certificates, Series 2006-10." Funds in the
Excess Reserve Fund Account shall be held in trust for the Regular
23
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 Section 9.04 and Article XIII (except Section 13.07) with
respect to notice and information to be provided to the Depositor.
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.
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 June 2036.
Fitch: Fitch, Inc.
Fixed Rate Certificates: As specified in the Preliminary
Statement.
FNBN: First National Bank of Nevada, a national banking
association, and its successors in interest.
FNBN Mortgage Loans: The Mortgage Loans acquired by the Purchaser
pursuant to the FNBN Sale Agreement.
FNBN Sale Agreement: The Amended and Restated Master Mortgage Loan
Purchase and Interim Servicing Agreement, dated as of November 1, 2005,
between FNBN and the Purchaser, as modified by the related Assignment
Agreements.
Form 8-K Disclosure Information: As defined in Section 13.02.
24
▇▇▇▇▇▇▇ 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.
Fremont: Fremont Investment & Loan, a California corporation, and
its succesors in interest.
Fremont Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from Fremont pursuant to the Fremont Sale Agreement.
Fremont Sale Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of November 1, 2003, between Fremont and the
Purchaser, as modified by the related Assignment Agreements.
Goldman Conduit: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Residential 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 the Purchaser, dated as
of their respective dates.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York
corporation, and its successors in interest.
GreenPoint Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from GreenPoint pursuant to the GreenPoint Sale Agreement.
GreenPoint Sale Agreement: The Amended and Restated Master
Mortgage Loan Purchase Agreement, dated as of November 1, 2005, between
GreenPoint and the Purchaser, as modified by the related Assignment
Agreements.
GreenPoint Servicing Agreement: The Servicing Agreement, dated as
of November 1, 2005, between GreenPoint and the Purchaser, as modified by the
related Assignment Agreements.
Impac: Impac Funding Corporation, a California corporation, and
its successors in interest. Impac is the sole owner of Novelle, which is one
of the Responsible Parties.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date,
(i) with respect to the LIBOR Certificates, the period commencing on the
immediately preceding Distribution Date (or commencing on the Closing Date in
the case of the first Distribution Date) and ending on the day immediately
preceding the current Distribution Date and (ii) with respect to the Fixed
Rate Certificates, the calendar month immediately preceding the month in which
such Distribution Date occurs. For purposes of computing interest accruals on
each Class of LIBOR Certificates,
25
each Interest Accrual Period has the actual number of days in such period and
each year is assumed to have 360 days. For purposes of computing interest
accruals on the Fixed Rate Certificates, each Interest Accrual Period has 30
days in such period and each year is assumed to have 360 days.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds attributable to interest relating to the
Mortgage Loans.
Interest Rate Corridor Agreement: The interest rate corridor
agreement, dated June 29, 2006, between the Corridor Provider and the Trust,
for the benefit of the Class B-4 Certificates.
Interest Rate Corridor Payment: For the first 24 Distribution
Dates, the amount, if any, as calculated by the Corridor Provider and reported
to the Securities Administrator, equal to the product of (a) the excess, if
any, of one-month LIBOR (as determined pursuant to the Interest Rate Corridor
Agreement) as of the related reset date over a cap strike rate set forth on
the interest rate corridor agreement schedule attached to the Interest Rate
Corridor Agreement, up to 8.00% per annum, (b) $3,594,000 and (c) the actual
number of days in the applicable Interest Accrual Period divided by 360.
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.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, 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 such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two quotations are provided as requested, the rate for
that date will be the arithmetic mean of the rates quoted by major banks in
New York City, selected by the 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.
26
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: As described in the Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
M&T: M&T Mortgage Corporation, a New York State Chartered
Corporation, and its succesors in interest.
M&T Servicing Agreement: The Flow Servicing Rights Purchase and
Servicing Agreement, dated as of August 22, 2005, between M&T and the
Purchaser, as modified by the related Assignment Agreements.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
Master Servicer: ▇▇▇▇▇ Fargo, and if a successor master servicer
is appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicing Fee: As to any Distribution Date and each
Mortgage Loan, an amount equal to 1/12th the product of the investment income
earned on amounts on deposit in the Distribution Account during the Master
Servicer Float Period.
27
Master Servicer Float Period: As to any Distribution Date and each
Mortgage Loan, the period commencing on the related Remittance Date
immediately preceding such Distribution Date and ending on 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.
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
28
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.
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.
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.
29
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.
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 and the
Purchaser, 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
30
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.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of
a Principal Prepayment in Full prior to such Due Date and which did not become
a Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class
Certificate Balances of the Principal Certificates as of such Distribution
Date (after giving effect to the payment of the Principal Remittance Amount on
such Certificates on such Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution
Date, 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
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 ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
31
Advances, fees and expenses of the Master Servicer, the Securities
Administrator and the Trustee and (4) 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 and (3) any
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal
to the percentage obtained by dividing the Denomination of such Certificate by
the aggregate of the Denominations of all Certificates of the same Class.
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, the Securities
Administrator 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;
32
(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 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.
33
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.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date,
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.
34
Prospectus Supplement: The Prospectus Supplement, dated June 26,
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
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
35
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.
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: As defined in Section 13.02.
Reporting Party: The Depositor, any Originator, the Master
Servicer, any Servicer, any originator identified in the Prospectus
Supplement, any corridor contract counterparty, any credit enhancement
provider described herein and any other material transaction party (excluding
the Trustee and the Custodians) as may be mutually agreed between the
Depositor and the Master Servicer from time to time for the purpose of
complying with the requirements of the Commission.
Reporting Servicer: As defined in Section 13.04.
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.
Responsible Officer: When used with respect to 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 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.
When used with respect to the Trustee, any officer of the Trustee having
direct
36
responsibility for the administration of this transaction, or to whom
corporate trust matters are referred because of that officer's knowledge of
and familiarity with the particular subject.
Responsible Party: Each of American Home, Ameriquest, FNBN,
Fremont, GreenPoint, 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 Ameriquest Sale Agreement, the
American Home Sale and Servicing Agreement, the FNBN Sale Agreement, the
Fremont Sale Agreement, the GreenPoint Sale Agreement, the Novelle Sale
Agreement, the ▇▇▇▇▇ Fargo Sale and Servicing Agreement and the Goldman
Conduit Sale Agreement.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 13.06.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo, and if a successor
securities administrator is appointed hereunder, such successor.
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, 16.40%.
Servicer: Each of American Home Servicing, Avelo, Countrywide
Servicing, GreenPoint, M&T 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 related Servicing Agreement.
Servicing Agreement: Each of the American Home Sale and Servicing
Agreement, the Avelo Servicing Agreement, the Countrywide Servicing Agreement,
the GreenPoint Servicing Agreement, the M&T Servicing Agreement and the ▇▇▇▇▇
Fargo Sale and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as the same may be amended from time to time.
37
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: As defined in the applicable Servicing Agreement.
Servicing Function Participant: Any Subservicer, Subcontractor or
any other Person, other than each Servicer, the Master Servicer, the Trustee,
the Securities Administrator and any Custodian, that is performing activities
addressed by the Servicing Criteria.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date,
an amount equal to 1.30% of the Cut-off Date Pool Principal Balance. On and
after the Stepdown Date, an amount equal to 2.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date, subject,
until the Class Certificate Balance of each Class of Principal Certificates
has been reduced to zero, to a minimum amount equal to the
Overcollateralization Floor; provided, however, that if, on any Distribution
Date, a Trigger Event has occurred, the Specified Overcollateralized Amount
shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans but instead will
remain the same as the prior period's Specified Overcollateralized Amount
until the Distribution Date on which a Trigger Event is no longer occurring.
When the Class Certificate Balance of each Class of Principal Certificates has
been reduced to zero, the Specified Overcollateralized Amount will thereafter
be 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: Residential
Mortgage Surveillance Group - GSAA Home Equity Trust 2006-10, 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.
38
Step 1 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Purchaser, American Home, American Home Servicing and the Depositor, (ii)
Assignment, Assumption and Recognition Agreement, dated as of June 29, 2006,
among the Purchaser, Ameriquest and the Depositor, (iii) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Purchaser, Countrywide Servicing and the Depositor, (iv) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Purchaser, FNBN and the Depositor, (v) Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2006, among the Purchaser, GreenPoint and the
Depositor, (vi) Assignment, Assumption and Recognition Agreement, dated as of
June 29, 2006, among the Purchaser, Fremont and the Depositor, (vii)
Assignment, Assumption and Recognition Agreement, dated as of June 29, 2006,
among the Purchaser, M&T and the Depositor, (viii) Assignment, Assumption and
Recognition Agreement, dated as of June 29, 2006, among the Purchaser, Impac
and the Depositor, (ix) Assignment, Assumption and Recognition Agreement,
dated as of June 29, 2006, among the Purchaser, Avelo and the Depositor and
(x) Assignment, Assumption and Recognition Agreement, dated as of June 29,
2006, among the Purchaser, ▇▇▇▇▇ Fargo and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Depositor, the Trustee and American Home Servicing, (ii) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Depositor, the Trustee and Ameriquest, (iii) Assignment, Assumption and
Recognition Agreement, dated as of June 29, 2006, among the Depositor, the
Trustee and Countrywide Servicing, (iv) Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2006, among the Depositor, the Trustee and
GreenPoint, (v) Assignment, Assumption and Recognition Agreement, dated as of
June 29, 2006, among the Depositor, the Trustee and Fremont, (vi) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Depositor, the Trustee and M&T, (vii) Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2006, among the Depositor, the Trustee and
FNBN, (viii) Assignment, Assumption and Recognition Agreement, dated as of
June 29, 2006, among the Depositor, the Trustee and Avelo, (ix) Assignment,
Assumption and Recognition Agreement, dated as of June 29, 2006, among the
Depositor, the Trustee and Impac and (x) Assignment, Assumption and
Recognition Agreement, dated as of June 29, 2006, among the Depositor, the
Trustee and ▇▇▇▇▇ Fargo.
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
July 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.
39
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 Fremont Sale Agreement, the
GreenPoint 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, Fremont, GreenPoint, Novelle or the Purchaser, as applicable,
in connection with a substitution for a Deleted Mortgage Loan.
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,
Middle-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).
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) over (ii) the sum of the
interest payable to the Principal Certificates on such Distribution Date
pursuant to Section 4.01(a)(i).
Transaction Documents: This Agreement, the Assignment Agreements
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 38.00% of the Senior Enhancement
Percentage as of the last day of the prior Due Period or (ii) the quotient
(expressed as a percentage) of (x) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related 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:
40
Distribution Date Occurring In Loss Percentage
------------------------------ ---------------
July 2008 - June 2009 0.250% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 0.279% in August 2008)
July 2009 - June 2010 0.600% for the first month, plus an additional 1/12th
of 0.450% for each month thereafter (e.g.,
approximately 0.638% in August 2009)
July 2010 - June 2011 1.050% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 1.079% in August 2010)
July 2011 - June 2012 1.400% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 1.429% in August 2011)
July 2012 and thereafter 1.750%
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of (i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Interest Rate Corridor Agreement and all amounts received thereunder; (iii)
the 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; and (vi) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: Deutsche 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).
41
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.
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 (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) 30 divided by the actual
number of days in the related Interest Accrual Period, in the case of the
LIBOR Certificates, and 30 divided by 360, in the case of the Fixed Rate
Certificates.
▇▇▇▇▇ 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 and the Purchaser, as modified by the
related Assignment Agreements.
42
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:
(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 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 ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ Conduit Mortgage Loans, an original with evidence of recording
thereon is always required;
(vii) if applicable to the files held by the applicable Custodian,
an original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
43
(ix) for each Mortgage Loan (if applicable to the files held by
the applicable 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;
(x) if applicable to the files held by the applicable Custodian, a
security agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage, if any; and
(xi) with respect to each Mortgage Loan, the complete Custodial
File (as defined below) 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 ▇-▇, ▇-▇, ▇-▇ ▇▇ ▇-▇, as
applicable.
On or prior to the Closing Date, the Depositor shall deliver to
the Custodians and the Master Servicer a copy of the Mortgage Loan Schedule in
electronic, machine readable medium in a form mutually acceptable to the
Depositor, the applicable Custodian, the Master Servicer and the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the 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
44
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.
(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
2006-10" and Deutsche Bank 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, U.S.
Bank, as Custodian, acknowledges that it will maintain possession of the
related Mortgage Notes in the State of Minnesota and ▇▇▇▇▇ Fargo, as
Custodian, acknowledges that it will maintain possesion 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.
45
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it on or prior to the Closing Date 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 the Mortgage Loan Schedule
respecting such Mortgage Loan is correct; (vi) as to ▇▇▇▇▇ Fargo, the
information set forth in items 2, 8, 33, and 34 of the Mortgage Loan Schedule
respecting such Mortgage Loan is correct and (vii) 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 by
delivery of the Document Certification and Exception Report. In its capacity
as "Assignee" under the Step 2 Assignment Agreements, 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 the Master Servicer (who shall be entitled to rely on information
regarding any such defaults by a Responsible Party that has been provided by
the applicable Servicer for purposes of providing such notification to the
Trustee), by notifying the applicable Responsible Party to correct or cure
such default. In its capacity as Assignee under the Step 2 Assignment
Agreements, the Trustee shall also enforce the obligation of the Responsible
Parties under the Sale Agreements, and to the extent applicable, of any
Servicer under 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
46
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) 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
holders of the Class X Certificates prior to distribution of Basis Risk
Payments to the Principal Certificates.
Amounts distributable to the Class X Certificates 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 Principal Certificates.
For federal income tax purposes, any amount distributed on the
Principal Certificates on any such Distribution Date in excess of their Pass
Through Rate shall be treated as having been paid from the Excess Reserve Fund
Account.
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
47
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 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.
48
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 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, in its capacity as a 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 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,
49
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:
(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.
Section 2.09 Representations and Warranties of ▇▇▇▇▇ Fargo. ▇▇▇▇▇
Fargo, in its capacity as a 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
50
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 (i)
result in a material breach of any term or provision of the articles of
incorporation or by laws of such Custodian, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which such Custodian is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to such Custodian of any court, regulatory body, administrative
agency or governmental body having jurisdiction over such Custodian; and such
Custodian is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may
materially impair such Custodian's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against such
Custodian that would materially and adversely affect the execution, delivery
or enforceability of this Agreement or the ability of such Custodian to
perform any of its obligations under this Agreement in accordance with the
terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by such Custodian of, or compliance by such Custodian with, this
Agreement or the consummation of the transactions contemplated thereby, or if
any such consent, approval, authorization or order is required, such Custodian
has obtained the same.
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.
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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 any Interest Rate
Corridor Payment and to secure their limited recourse obligation to pay to the
Principal Certificateholders any Basis Risk Carry Forward Amounts. On each
Distribution Date, the Securities Administrator shall deposit the amount of
any Basis Risk Payment and any Interest Rate Corridor Payment received by it
for such date into the Excess Reserve Fund Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of Principal 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)(L), 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)-(L)) and (y) the aggregate Basis Risk
Carry Forward Amount of the Principal Certificates for such Distribution Date
and (2) withdraw from the Excess Reserve Fund Account amounts necessary
(including Interest Rate Corridor Payments) 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)(M).
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 from the Class X
REMIC to the Class X Certificates 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 Principal 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 and then to the respective
Class or Classes of Principal Certificates in accordance with the priority of
payments in this Section 3.01. In addition, the Securities Administrator shall
account for the Principal 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).
52
(b) The Securities Administrator shall establish and maintain
the Distribution Account on behalf of the Certificateholders. The amount
remitted by the Servicer to the Master Servicer on each Remittance Date shall
be credited to the Distribution 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. The Securities
Administrator shall establish and maintain the Distribution Account on behalf
of the Certificateholders. The Master Servicer 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 Servicers to the Master
Servicer pursuant to the Servicing Agreements; and
(ii) 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.
Section 3.02 Investment of Funds in the Distribution Account. (a)
Other than during the Master Servicer Float Period, the Depositor shall direct
the investment of funds held in the Distribution Account in one or more
Permitted Investments. Absent such direction, the Securities Administrator
shall invest such funds during such period in the ▇▇▇▇▇ Fargo Advantage Prime
Investment Money Market Fund so long as such fund is a Permitted Investment.
The Securities Administrator may (but shall not be obligated to) invest funds
in the Distribution Account during the Master Servicer 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, in the case of an investment that is an obligation of ▇▇▇▇▇
Fargo, no later than the Business Day immediately preceding the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the 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:
53
(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 Master Servicer 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 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 Master
Servicer 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 Master Servicer 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, U.S. Bank, as a Custodian and JPMorgan, 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.
(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 Trustee and 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
54
documentation, securities disclosure documentation and such other identifying
documentation as may be available for such party.
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 deposit in the Distribution Account in the following
order of priority and to the extent of the Available Funds remaining:
(i) from the Interest Remittance Amount, to the holders of each
Class of Principal Certificates in the following order of priority:
(A) to the Class A Certificates, their respective Accrued
Certificate Interest Distribution Amount and Unpaid Interest
Amounts (allocated pro rata based on their entitlement to those
amounts);
(B) from any remaining Interest Remittance Amounts to the
Class M Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class; and
(C) from any remaining Interest Remittance Amounts to the
Class B Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class.
(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 Principal 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) sequentially,
(a) to the Class AF-6 Certificates, an amount
equal to the Class AF-6 Lockout Distribution Amount,
until its Class Certificate Balance has been reduced
to zero;
(b) sequentially, to the Class AV-1, Class AF-2,
Class AF-3, Class AF-4 and Class AF-5 Certificates, in
that order, until their respective Class Certificate
Balances have been reduced to zero;
55
(c) to the Class AF-6 Certificates, without
regard to the Class AF-6 Lockout Distribution Amount,
until its Class Certificate Balance has been reduced
to zero;
(3) the portion of the available Principal
Distribution Amount remaining after making the distributions
set forth in clause (ii)(A)(2) above will be distributed
sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3
and Class B-4 Certificates, in that order, until their
respective Class Certificate Balances 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 Principal 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 sequentially as follows:
(a) to the Class AF-6 Certificates, an amount
equal to the Class AF-6 Lockout Distribution Amount,
until its Class Certificate Balance has been reduced
to zero;
(b) sequentially, to the Class AV-1, Class AF-2,
Class AF-3, Class AF-4 and Class AF-5 Certificates, in
that order, until their respective Class Certificate
Balances are reduced to zero;
(c) to the Class AF-6 Certificates, without
regard to the Class AF-6 Lockout Distribution Amount,
until its Class Certificate Balance has 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;
56
(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;
(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 M-6 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(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 and to the Class M-5 Certificates in
clause (ii)(B)(6) above and (y) the Class M-6 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(8) 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 to the Class M-6 Certificates in
clause (ii)(B)(7) above and (y) the Class B-1 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(9) to the Class B-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to
57
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 M-6 Certificates in clause (ii)(B)(7) above and to the
Class B-1 Certificates in clause (ii)(B)(8) above and (y)
the Class B-2 Principal Distribution Amount, until their
Class Certificate Balance has been reduced to zero;
(10) 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 M-6 Certificates in
clause (ii)(B)(7) above, to the Class B-1 Certificates in
clause (ii)(B)(8) above and to the Class B-2 Certificates in
clause (ii)(B)(9) above and (y) the Class B-3 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero; and
(11) to the Class B-4 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(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 M-6 Certificates in
clause (ii)(B)(7) above, to the Class B-1 Certificates in
clause (ii)(B)(8) above, to the Class B-2 Certificates in
clause (ii)(B)(9) above and to the Class B-3 Certificates in
clause (ii)(B)(10) above and (y) the Class B-4 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;
58
(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 M-6 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(K) to the holders of the Class B-4 Certificates, any Unpaid
Interest Amount for such Class;
(L) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(M) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date (not including any Interest
Rate Corridor Payments), an amount equal to any Basis Risk Carry
Forward Amount with respect to the Principal Certificates for that
Distribution Date in the same order and priority in which Accrued
Certificate Interest is allocated among those Classes of
Certificates, with the allocation to the Class A Certificates
being pro rata based on their respective Class Certificate
Balances; 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;
59
(N) from any Interest Rate Corridor Payments from the
Interest Rate Corridor Agreement on deposit in the Excess Reserve
Fund Account with respect to that Distribution Date, first, to the
Class B-4 Certificates, up to its unpaid remaining Basis Risk
Carry Forward Amount, and second, from any remaining Interest Rate
Corridor Payments from the Interest Rate Corridor Agreement, after
the distributions to the Class B-4 Certificates, such remaining
amount to be paid to or at the written direction of the Depositor;
(O) 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)-(N);
(P) to the holders of the Class R and Class RC Certificates,
pro rata, any remaining amount; and
(Q) to the holders of the Class RX Certificates, any
remaining amount, in respect of the Class X REMIC.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related
Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then that unpaid amount will be recoverable by
the holders of those Classes, with interest thereon, on future
Distribution Dates, as an Unpaid Interest Amount, subject to the
priorities described above. In the event the Class Certificate Balance
of any Class of Principal Certificates has been reduced to zero, that
Class of Certificates shall no longer be entitled to receive any related
unpaid Basis Risk Carry Forward Amounts except to the extent the Class
Certificate Balance is increased as a result of any Subsequent Recovery.
(b) On each Distribution Date, all amounts representing
Prepayment Premiums from the Mortgage Loans received during the related
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
Subordinated 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.
(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) or Section 11.01(b), the Securities Administrator shall
distribute to the holders of the Class RC
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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, 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 on such
Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the allocation
thereof as between principal and interest, including any Basis
Risk Carry Forward Amount not covered by amounts in the Excess
Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of
Certificates 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;
(vii) the amount of any Administrative 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 Monthly Payment is
delinquent 31 to 60 days, 61 to 90 days
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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;
(xi) with respect to each Mortgage Loan that became an REO
Property during the preceding calendar month, the aggregate number
of such Mortgage Loans and the aggregate Stated Principal Balance
of such Mortgage Loans as of the close of business on the
Determination Date preceding such Distribution Date and the date
of acquisition thereof;
(xii) the total number and principal balance of any REO
Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution
Date;
(xiii) whether a Trigger Event has occurred and is
continuing (including the calculation demonstrating the existence
of the Trigger Event and the aggregate outstanding balance of all
60+ Day Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund
Account (after giving effect to distributions on such Distribution
Date);
(xv) in the aggregate and for each Class of Certificates,
the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized
Loss Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the
Certificateholders with respect to Unpaid Interest Amounts;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) the Prepayment Premiums collected by or paid by the
Servicers;
(xix) 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;
(xx) the amount distributed on the Class X and Class P
Certificates;
(xxi) the amount of any Subsequent Recoveries for such
Distribution Date; and
(xxii) updated Mortgage Loan information, such as weighted
average interest rate, and weighted average remaining term.
(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
62
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 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
63
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.
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 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
64
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 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 Securities Administrator in
writing of the affiliated status of the transferee. 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
65
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.
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
66
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 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.
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.
The Securities Administrator shall have no duty to monitor
transfers of beneficial interests in any Book-Entry Certificate and shall not
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
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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;
(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
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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
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
69
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 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
70
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 Certificates may be surrendered for registration
of transfer or exchange. The Securities Administrator initially designates for
such purposes its office located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - GSAA Home
Equity Trust 2006-10. 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
71
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 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
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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.
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
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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 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.
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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 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.
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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) before taking any action under this Agreement, 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;
(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;
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(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;
(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;
(m) the Trustee and the Custodians shall not be accountable and
shall have no liability for any acts or omissions by the Securities
Administrator, the Master Servicer or other party hereto; and
(n) in no event shall Deutsche Bank, in its capacity as Trustee
and a Custodian hereunder, or any other Custodian hereunder, be liable for
special, indirect or consequential damages.
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
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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, 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 its 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 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
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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 the
appointment of which would not cause any of the Rating Agencies to reduce or
withdraw their respective then current ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation
or association publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.07 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.
If at any time (i) the 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
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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 the last sentence of Section 9.04 in the preceding
paragraph, Section 8.10 or 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 timely filed (without taking into
account any extensions), then, in the case of clauses (i) through (iv), 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.
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
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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.
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
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(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 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;
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(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;
(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.
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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 and the Middle-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
(subject to the obligation to pay Basis Risk Carry Forward Amounts) and the
rights of the Principal Certificateholders to receive Basis Risk Carry Forward
Amounts (as 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 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 Principal Certificateholders, the respective
amounts described above that are received, in the time or times and in the
manner required by the Code.
To enable the 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. 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
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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 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 Corridor Agreement. For federal income tax purposes, the
Securities Administrator shall treat the Excess Reserve Fund Account and the
Interest Rate Corridor 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 Principal
Certificates has to receive payments of Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account as rights to receive payments under an
interest rate cap contract written by the Class X Certificateholders in favor
of each Class. Accordingly, each Class of Principal Certificates will comprise
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 two components--a regular interest in the Class X REMIC and an interest in
the Excess Reserve Fund Account subject to the obligation to pay Basis Risk
▇▇▇▇ Forward Amounts. 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 Principal Certificate to receive the related Basis Risk Carry
Forward Amount for purposes of allocating the purchase price of an initial
Principal Certificateholder between such right and the related Upper-Tier
Regular Interest.
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Section 8.15 Custodial Responsibilities. 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 ▇-▇, ▇-▇, ▇-▇ ▇▇ ▇-▇ 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. 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
Custodian pursuant to such Sale Agreement, or (iii) incurred because of
willful misfeasance, bad
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faith, or negligence in the performance of any of such Custodian's duties
under this Agreement. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of the Custodians.
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.
If (i) a Servicer reports a delinquency on a monthly report and
(ii) such Servicer, by 11 a.m. (New York Time) on the Business Day preceding
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
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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.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. 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;
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(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 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 best of 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
89
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 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
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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 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 timely filed (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 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
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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.
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
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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
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
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prior to any such termination or resignation or in connection with the
Trustee's assumption as successor master servicer 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 paid the
Master Servicing Fee and be entitled to the investment income earned on
amounts in the Distribution 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 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.
If at any time, ▇▇▇▇▇ Fargo, as Master Servicer, resigns under
this Section 9.09, or is removed as Master Servicer pursuant to Section 9.04,
then at such time ▇▇▇▇▇ Fargo shall also resign (and shall be entitled to
resign) as Securities Administrator under this Agreement.
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
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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 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
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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 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.
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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 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:
(a) 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;
(b) 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
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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;
(c) 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;
(d) 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
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;
(e) 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;
(f) 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;
(g) 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;
(h) 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
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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
(i) in no event shall the Securities Administrator be liable for
special, indirect or consequential damages.
The Securities Administrator shall have no duty (A) to cause 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 cause the provision of any insurance or (C) to cause the payment or
discharge of any tax, 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 Master Servicer 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
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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 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 Master Servicing Fee and 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
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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.
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 or 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 timely filed (without taking into
account any extensions), then, in the case of clauses (i) through (iv), 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
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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.
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.
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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 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,
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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 Master Servicer 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. 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 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; 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 this Section 11.01
(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
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Securities Administrator shall promptly send a Notice of Final Distribution to
the applicable Certificateholders. If Avelo exercises its option to terminate
the Trust Fund pursuant to clause (a) of Section 11.01, or if an Auction Call
is requested pursuant to clause (b) of such Section, the Master Servicer,
pursuant to the applicable Step 2 Assignment Agreements and by no later than
the tenth (10th) day of the month of final distribution, 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 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) and all
rights and obligations under the Servicing Agreements are purchased or sold
pursuant to Section 11.01 and pursuant to the applicable Step 2 Assignment
Agreement, the Master Servicer on behalf of 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 ▇-▇, ▇-▇, ▇-▇ ▇▇ ▇-▇ hereto, 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 Master Servicer, the Securities Administrator, 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.
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In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the 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 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; and
(b) 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
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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 and shall be addressed to the foregoing entities), adversely
affect in any material respect the interests of any Certificateholder;
provided, further, that the amendment shall not be deemed to adversely affect
in any material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. The
Trustee, the Depositor, 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
107
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 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
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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 caused to be effected
by the Depositor 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 Depositor.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 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;
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(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.
(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, the Purchaser, the Goldman Conduit or the Corridor Provider,
to ▇▇▇▇▇▇▇, Sachs & 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 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; (c) in the case of the Master Servicer
and the Securities Administrator, to ▇▇▇▇▇ Fargo Bank, National Association,
▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA 2006-10, or such other
address as may be hereafter furnished to the Depositor and the Securities
Administrator by the Master Servicer in writing; (d) in the case of Deutsche
Bank as a Custodian, to Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Custody -
GS0610; (e) in the case of JPMorgan as a Custodian, to JPMorgan Chase Bank,
National Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
(f) in the case of U.S. Bank, to U.S. Bank National Association, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA Home Equity
Trust 2006-10; (g) in the case of ▇▇▇▇▇ Fargo, as a Custodian, to ▇▇▇▇▇ Fargo
Bank, National Association, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: GSAA 2006-10, or such other address as may be hereafter furnished
to the Depositor and the Securities Administrator by ▇▇▇▇▇ Fargo in writing;
(h) in the case of American Home, to 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; (i) in the case
of American Home Servicing, to American Home Mortgage Servicing, Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive
Vice President; (j) in the case of Ameriquest, to Ameriquest Mortgage Company,
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇; (k) in the case of Avelo, Avelo Mortgage, L.L.C., ▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: President and
General Counsel or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by Avelo in writing; (l) in the
case of 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 Servicing in writing; (m) in the case of FNBN, to
First National Bank of Nevada, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secondary Marketing, or such other address as may hereinafter be
furnished to the Depositor and the Securities Administrator by FNBN in
writing; (n) in the case of Fremont, to Fremont Investment & Loan, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Senior Vice
President-Finance, or such other address as may hereinafter be furnished to
the Depositor and the Securities Administrator by Fremont in writing; (o) in
the case of GreenPoint, to 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 Novelle, to Novelle
Financial Services, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or such other address as may be hereafter
furnished to the Depositor and the Securities Administrator by Novelle in
writing; (q) in the case of M&T, to M&T Mortgage Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to M&T
Mortgage Corporation, ▇▇▇ ▇&▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, or such other address as may be hereafter
furnished to the Depositor and the Securities Administrator by M&T in writing;
(r) in the case of ▇▇▇▇▇ Fargo as a Servicer, ▇▇▇▇▇ Fargo Bank, National
Association, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA
2006-10, or such other address as may be hereafter furnished to the Depositor
and the Securities Administrator by ▇▇▇▇▇ Fargo in writing; 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.
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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
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
each 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 each Custodian shall (and the Master Servicer shall cause each Servicer
and subservicer to) provide the Depositor with (a) such
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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.
In the event that the Securities Administrator becomes aware that
it will be unable to timely file with the Commission all or any required
portion of any Form 8-K, 10-D or 10-K required to be filed by this Agreement
because required disclosure information was either not delivered to it or
delivered to it after the delivery deadlines set forth in this Agreement or
for any other reason, the Securities Administrator will promptly notify the
Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement
will cooperate and cause such other Servicers or Servicing Function
Participants, as applicable, to cooperate, to prepare and file a Form 12b-25
and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of all required Form 8-K Disclosure Information and upon the approval and
direction of the Depositor, include such disclosure information on the next
Form 10-D unless directed by the Depositor to file a Form 8-K with such Form
8-K Disclosure Information. In the event that any previously filed Form 8-K,
Form 10-D or Form 10-K needs to be amended, the Securities Administrator shall
notify the Depositor and prepare any necessary Form 8-KA, Form 10-DA or Form
10-KA. Any Form 15, Form 12b-25 or any amendment to Form 8-K or Form 10-D
shall be signed by a duly authorized representative of the Master Servicer.
Any amendment to Form 10-K shall be signed by the Depositor. The parties to
this Agreement acknowledge that the performance by the Securities
Administrator of its duties under this Section 13.01 related to the timely
preparation and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K,
Form 10-D or Form 10-K is contingent upon each such party performing its
duties under this Section. The Securities Administrator shall have no
liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare and/or timely file any such Form
15, Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K, where
such failure results from the Securities Administrator's inability or failure
to receive on a timely basis, any information from or on behalf of any other
party hereto needed to prepare, arrange for execution or file such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from
its own negligence, bad faith or willful misconduct.
The Securities Administrator shall promptly file, and exercise its
reasonable best efforts to obtain a favorable response to, no-action requests,
or other appropriate exemptive relief with the Commission seeking the usual
and customary exemption from such reporting requirements granted to issuers of
securities similar to the Certificates if and to the extent the Depositor
shall deem any such relief to be necessary or appropriate. Unless otherwise
advised by the Depositor, the Securities Administrator shall assume that the
Depositor is in compliance with the preceding sentence. In no event shall the
Securities Administrator have any liability for the execution or content of
any document required to be filed by the 1934 Act. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
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.
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Section 13.02 Form 8-K Filings.
The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter within four (4) Business Days after the
occurrence of an event requiring disclosure in a current report on Form 8-K
(each such event, a "Reportable Event"), and if requested by the Depositor,
the Master Servicer shall sign on behalf of the Depositor and the Securities
Administrator shall prepare and file with the Commission any Form 8-K, as
required by the Exchange Act. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K
("Form 8-K Disclosure Information") shall be determined and prepared by and at
the direction of the Depositor pursuant to this Section 13.02 and the
Securities Administrator shall have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in this Section 13.02.
As set forth on Exhibit M hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of a Reportable Event
each of the Securities Administrator, the Trustee, the Custodians, the Master
Servicer and the Depositor shall be required to provide to the Securities
Administrator and Depositor, to the extent known, in ▇▇▇▇▇-compatible form, or
in such other form as otherwise agreed upon by the Securities Administrator
and such party, the form and substance of any Form 8-K Disclosure Information,
if applicable and (ii) the Depositor shall approve, as to form and substance,
or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor shall be responsible for any reasonable fees and
expenses assessed or incurred by the Securities Administrator in connection
with including any Form 8-K Disclosure Information on Form 8-K pursuant to
this paragraph.
After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor for
review. No later than 12:00 noon New York City time on the fourth (4th)
Business Day after the Reportable Event, a duly authorized representative of
the Master Servicer shall sign the Form 8-K and return such signed Form 8-K to
the Securities Administrator, and no later than 5:30 p.m. New York City time
on such Business Day the Securities Administrator shall file such Form 8-K
with the Commission. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Securities Administrator will follow
the procedures set forth in Section 13.01. Promptly (but no later than one (1)
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a
final executed copy of each Form 8-K. The signing party at the Master Servicer
can be contacted at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust, GSAA 2006-10, by e-mail at
▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile (▇▇▇) ▇▇▇-▇▇▇▇. The
parties to this Agreement acknowledge that the performance by the Securities
Administrator of its duties under this Section 13.02 related to the timely
preparation and filing of Form 8-K is contingent upon such parties strictly
observing all applicable deadlines in the performance of their duties under
this Section 13.02. The Securities Administrator shall have no liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare and/or timely file such Form 8-K, where such failure
results from the Securities Administrator's inability or failure to receive on
a timely basis, any information from any other party hereto
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(other than an Affiliate) needed to prepare, arrange for execution or file
such Form 8-K, not resulting from its own negligence, bad faith or willful
misconduct.
Section 13.03 Form 10-D Filings.
Within fifteen days after each Distribution Date (subject to
permitted extensions under the Exchange Act and until a Form 15 is filed
pursuant to Section 13.05), the Securities Administrator shall prepare and
file, and the Master Servicer shall sign on behalf of the Depositor and file
with the Commission any distribution report on Form 10-D required by the
Exchange Act, in form and substance as required by the Exchange Act. The
Securities Administrator shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the monthly
statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be determined and prepared by and at the direction of the
Depositor pursuant to the following paragraph and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or
prepare any Additional Form 10-D Disclosure, except as set forth in this
Section 13.03.
As set forth on Exhibit N hereto, within five (5) calendar days
after the related Distribution Date, (i) certain parties to the GSAA Home
Equity Trust 2006-10 Asset-Backed Certificates transaction shall be required
to provide to the Securities Administrator and the Depositor, to the extent
known, in ▇▇▇▇▇-compatible form, or in such other form as otherwise agreed
upon by the Securities Administrator and such party, the form and substance of
any Additional Form 10-D Disclosure, if applicable, and (ii) the Depositor
will approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with any Additional Form 10-D
Disclosure on Form 10-D pursuant to this Section 13.03.
After preparing the Form 10-D, the Securities Administrator shall
forward electronically a draft copy of the Form 10-D to the Depositor for
review. No later than fifteen days after the related Distribution Date, a duly
authorized representative of the Master Servicer shall sign the Form 10-D and
return such signed Form 10-D to the Securities Administrator and Depositor,
and no later than 5:30 p.m. New York City time on such day the Securities
Administrator shall file such Form 10-D with the Commission. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator will follow the procedures set forth in
Section 13.01. Promptly (but no later than one (1) Business Day) after filing
with the Commission, the Securities Administrator will make available on its
internet website (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a final executed copy of each
Form 10-D. The signing party at the Master Servicer can be contacted at ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust,
GSAA 2006-10, by e-mail at ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by
facsimile (▇▇▇) ▇▇▇-▇▇▇▇. Each party to this Agreement acknowledges that the
performance by the Securities Administrator of its duties under this Section
13.03 related to the timely preparation and filing of Form 10-D is contingent
upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 13.03. The Securities
Administrator shall have no liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare and/or
timely file such Form 10-D, where such failure results from the Securities
Administrator's
115
inability or failure to receive on a timely basis, any information from any
other party hereto needed to prepare, arrange for execution or file such Form
10-D, not resulting from its own negligence, bad faith or willful misconduct.
Section 13.04 Form 10-K Filings.
Within 90 days after the end of each fiscal year of the Trust or
such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline") (it being understood that the fiscal year for the Trust ends on
December 31 of each year), commencing in March 2007 and continuing until the
Trust has been deregistered with the Commission, the Securities Administrator
shall prepare and file on behalf of the Depositor an annual report on Form
10-K, in form and substance as required by the Exchange Act. Each such Form
10-K shall include the following items, in each case to the extent they have
been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement and the related Servicing Agreement: (i) an
annual compliance statement for each Servicer, each Additional Servicer, the
Master Servicer and the Securities Administrator (each such party, a
"Reporting Servicer") as described below, (ii)(A) the annual reports on
assessment of compliance with servicing criteria for each Reporting Servicer,
as described under this Section 13.04 and Section 13.07, and (B) if each
Reporting Servicer's report on assessment of compliance with servicing
criteria described under Section 13.04 and Section 13.07 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if each Reporting Servicer's report on assessment of
compliance with servicing criteria described under Section 13.04 and Section
13.07 is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for each
Reporting Servicer, as described under Section 13.07, and (B) if any
registered public accounting firm attestation report described under Section
13.07 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any such registered public
accounting firm attestation report is not included as an exhibit to such Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification as described
in Section 13.06. Any disclosure or information in addition to the disclosure
or information specified in items (i) through (iv) above that is required to
be included on Form 10-K ("Additional Form 10-K Disclosure") shall be
determined and prepared by and at the direction of the Depositor pursuant to
the following paragraph and the Securities Administrator shall have no duty or
liability for any failure hereunder to determine or prepare any Additional
Form 10-K Disclosure, except as set forth in this Section 13.04.
The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and Securities Administrator shall cause any
Additional Servicer engaged by it to deliver) to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing in
March 2007, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of such party's activities during the preceding calendar year or
portion thereof and of such party's performance under this Agreement, or such
other applicable agreement in the case of an Additional Servicer, has been
made under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, such party has fulfilled all its obligations
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill
116
any such obligation in any material respect, specifying each such failure
known to such officer and the nature and status thereof. Promptly after
receipt of each such officer's certificate, the Depositor shall review such
officer's certificate and consult with each such party, as applicable, as to
the nature of any failures by such party, in the fulfillment of any of such
party's obligations hereunder or, in the case of an Additional Servicer, under
such other applicable agreement.
The Master Servicer shall enforce any obligation of the Servicers, to
the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer an annual statement of compliance within the time frame set
forth in, and in such form and substance as may be required pursuant to, the
related Servicing Agreement The Master Servicer shall include such annual
statements of compliance with its own annual statement of compliance to be
submitted to the Securities Administrator pursuant to this Section.
As set forth on Exhibit O hereto, no later than March 15 of each year
that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007 and continuing until the Trust has been deregistered with
the Commission, (i) certain parties to the GSAA Home Equity Trust 2006-10
Asset-Backed Certificates transaction shall be required to provide to the
Securities Administrator and the Depositor, to the extent known, in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor shall
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with including any Additional
Form 10-K Disclosure on Form 10-K pursuant to this Section 13.04.
After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Depositor for
review. No later than 12:00 noon New York City time on the fourth Business Day
prior to the 10-K Filing Deadline, a senior officer of the Depositor shall
sign the Form 10-K and return such signed Form 10-K to the Securities
Administrator. If a Form 10-K cannot be filed on time or if a previously filed
Form 10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in 13.01. Promptly (but no later than one (1) Business
Day) after filing with the Commission, the Securities Administrator will make
available on its internet website located at (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a
final executed copy of each Form 10-K. The parties to this Agreement
acknowledge that the performance by the Securities Administrator of its duties
under this Section 13.04 related to the timely preparation and filing of Form
10-K is contingent upon such parties (and any Additional Servicer or Servicing
Function Participant) strictly observing all applicable deadlines in the
performance of their duties under this Section 13.04, Section 13.06, Section
13.01 and Section 13.07. The Securities Administrator shall have no liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's inability or failure to
receive on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-K, not resulting from
its own negligence, bad faith or willful misconduct.
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Section 13.05 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 prepare, sign and file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust Fund under the Exchange Act.
Section 13.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a certification, (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15(d)-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). Each Servicer, the
Securities Administrator and the Master Servicer shall cause any Servicing
Function Participant engaged by it to provide to the Person who signs the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying Person"), by March 15 of each
year in which the Trust is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (each, a "Back-Up Certification"), in the form attached hereto
as Exhibit J-1 (in the case of the Master Servicer) and Exhibit J-2 (in the
case of the Securities Administrator), upon 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 shall serve as the
Certifying Person on behalf of the Trust. 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. In the event
the Master Servicer or the Securities Administrator or any Servicing Function
Participant engaged by parties is terminated or resigns pursuant to the terms
of this Agreement, or any applicable sub-servicing agreement, as the case may
be, such party shall provide a Back-Up Certification to the Certifying Person
pursuant to this Section 13.06 with respect to the period of time it was
subject to this Agreement or any applicable sub-servicing agreement, as the
case may be.
The Master Servicer shall enforce any obligation of the Servicers, to
the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer a certification similar to the Back-Up Certification within
the time frame set forth in, and in such form and substance as may be required
pursuant to, the related Servicing Agreement.
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
118
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 K 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 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 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)(2) shall address each of the Servicing Criteria applicable to it
specified on a Exhibit K 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, 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).
119
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
Sections 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.
* * * * * * *
120
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
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely in its capacity as Trustee and
a Custodian and not in its individual
capacity
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By:___________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer,
Securities Administrator and as a
Custodian
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURES CONTINUE]
Master Servicing and Trust Agreement
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
Solely for purposes of Sections 9.03(b)
and 11.01 accepted and agreed to by:
AVELO MORTGAGE, L.L.C.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: 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
EXHIBIT A
FORM OF CLASS AV-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS AF-5,
CLASS AF-6, CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5,
CLASS M-5, CLASS B-1, CLASS B-2, CLASS B-3 AND CLASS B-4 CERTIFICATES
[To be added to the Class B-4 Certificates while they remain non-investment
grade Certificates: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT I 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 H
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.]
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL
BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
[To be added to the Class B-4 Certificates while they remain Private
Certificates: 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, 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
A-1
WILL NOT SUBJECT THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE
SERVICERS 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, TRUSTEE AND DEPOSITOR AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.]
IN THE EVENT THAT A TRANSFER OF A PRIVATE CERTIFICATE WHICH IS A BOOK-ENTRY
CERTIFICATE IS TO BE MADE IN RELIANCE UPON AN EXEMPTION FROM THE SECURITIES
ACT AND SUCH LAWS, IN ORDER TO ASSURE COMPLIANCE WITH THE SECURITIES ACT AND
SUCH LAWS, THE CERTIFICATEHOLDER DESIRING TO EFFECT SUCH TRANSFER WILL BE
DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET
FORTH IN THE TRANSFEROR CERTIFICATE IN RESPECT OF SUCH CERTIFICATE AND THE
TRANSFEREE WILL BE DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER IN RESPECT OF SUCH
CERTIFICATE, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL
CERTIFICATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
[To be added to the Class B-4 Certificates while they remain Private
Certificates: THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A
TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
A-2
Certificate No. :
Cut-off Date : June 1, 2006
First Distribution Date : July 25, 2006
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class : ______________ _______________
CUSIP
ISIN
A-3
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates, Series 2006-10
[Class AV-1][Class AF-2][Class AF-3][Class AF-4][Class AF-5]
[Class AF-6][Class M-1][Class M-2] [Class M-3]
[Class M-4] [Class M-5][Class M-6]
[Class B-1][Class B-2][Class B-3][Class B-4]
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"), Deutsche Bank National Trust
Company, as trustee (the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer"), as Securities Administrator (in such capacity, the "Securities
Administrator"), and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. 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.
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-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:________________________________
Authenticated:
By:____________________________
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
A-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee 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-6
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-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
A-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number ______, or, if mailed by check, to _____________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by ___________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-9
EXHIBIT B
FORM OF CLASS 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 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, 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 : June 1, 2006
First Distribution Date : July 25, 2006
Percentage Interest of this
Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates, Series 2006-10
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the 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"), Deutsche Bank National Trust
Company, as trustee (the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer"), as Securities Administrator (in such capacity, the "Securities
Administrator"), and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. 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:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:________________________________
Authenticated:
By:___________________________________
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee 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 : June 1, 2006
First Distribution Date : July 25, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
Initial Certificate Balance of all
Certificates of this Class: : $100
CUSIP :
ISIN :
C-1
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates, Series 2006-10
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"), Deutsche Bank
National Trust Company, as trustee (the "Trustee") and as a custodian, ▇▇▇▇▇
Fargo Bank, National Association, as Master Servicer (in such capacity, the
"Master Servicer"), as Securities Administrator (in such capacity, the
"Securities Administrator"), and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. 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-2
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-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:_________________________________
Authenticated:
By:___________________________________
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
C-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee 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-5
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-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
C-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.
C-8
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 : June 1, 2006
First Distribution Date : July 25, 2006
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates, Series 2006-10
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor the 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"), Deutsche
Bank National Trust Company, as trustee (the "Trustee") and as a custodian,
▇▇▇▇▇ Fargo Bank, National Association, as Master Servicer (in such capacity,
the "Master Servicer"), as Securities Administrator (in such capacity, the
"Securities Administrator"), and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. 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
D-3
expense of the transferor. No transfer of a Certificate of this Class shall be
made unless the 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.
* * *
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IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:_________________________________
Authenticated:
By:_________________________________
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
D-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-10
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-10 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee 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
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 June 1,
2006 (the "Agreement"), among GS Mortgage Securities Corp.,
as depositor (the "Depositor"), Deutsche Bank National Trust
Company, as trustee (in such capacity, the "Trustee") and as
a custodian, JPMorgan Chase Bank, National Association, as a
custodian, U.S. Bank National Association, as a custodian,
and ▇▇▇▇▇ Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer"),
securities administrator (in such capacity, the "Securities
Administrator") and 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
E-1
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.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION][U.S. BANK
NATIONAL ASSOCIATION][▇▇▇▇▇ FARGO
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]
[Trustee]
_____________________
_____________________
Re: Master Servicing and Trust Agreement, dated as of June 1,
2006 (the "Agreement"), among GS Mortgage Securities Corp.,
as depositor (the "Depositor"), Deutsche Bank National Trust
Company, as trustee (in such capacity, the "Trustee") and as
a custodian, JPMorgan Chase Bank, National Association, as a
custodian, U.S. Bank National Association, as a custodian,
and ▇▇▇▇▇ Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer"),
securities administrator (in such capacity, the "Securities
Administrator") and 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 provided);
(d) the related original Mortgage and evidence of its recording or
a certified copy of the mortgage with evidence of recording;
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) if provided, 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) if provided, 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;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if provided.
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
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION][U.S. BANK
NATIONAL ASSOCIATION][▇▇▇▇▇ FARGO
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 2006-10,
Asset-Backed Certificates, Series 2006-10
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, dated as of June 1, 2006 (the "Agreement"), among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Deutsche Bank National Trust
Company, as trustee (the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer (in such capacity, the "Master
Servicer"), as securities administrator (in such capacity, the "Securities
Administrator"), and as a custodian, U.S. Bank National Association, 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
G-1
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in pass
through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest
in the Certificate, and in connection with any Transfer by a Person for whom
the Transferee is acting as nominee, trustee or agent, and the Transferee will
not Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the 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:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: GSAA Home Equity Trust 2006-10, Asset-Backed Certificates
Series 2006-10, 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.
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Attention:
▇▇▇▇▇ Fargo Bank, National Association
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Re: GSAA Home Equity Trust 2006-10, Asset-Backed Certificates,
Series 2006-10, Class [__]
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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
AV-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, 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
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Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates
and (f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
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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
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
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____ 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.
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_____________________________
Print Name of Transferee
By:__________________________
Name:
Title:
Date:________________________
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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.
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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:_____________________________
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EXHIBIT J-1
FORM OF BACK-UP CERTIFICATION
(Master Servicer)
Re: Master Servicing and Trust Agreement, dated as of June 1, 2006
(the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Deutsche Bank National Trust Company,
as trustee (in such capacity, the "Trustee") and as a custodian,
JPMorgan Chase Bank, National Association, as a custodian, U.S.
Bank National Association, as a custodian, and ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer (in such capacity, the
"Master Servicer"), securities administrator (in such capacity,
the "Securities Administrator") and as 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"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), all servicing reports, officer's certificates and
other information relating to the servicing of the Mortgage Loans by the
Company during 200[ ] that were delivered by the Company to the
Depositor and the Securities Administrator pursuant to the Agreement
(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 Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement; and
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(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the Master Servicer. Any material instances of noncompliance
described in such reports have been disclosed to the Master Servicer.
Any material instance of noncompliance with the Servicing Criteria has
been disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
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▇▇▇▇▇▇▇ ▇-▇
FORM OF BACK-UP CERTIFICATION
(Securities Administrator)
Re: Master Servicing and Trust Agreement, dated as of June 1, 2006
(the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Deutsche Bank National Trust Company,
as trustee (in such capacity, the "Trustee") and as a custodian,
JPMorgan Chase Bank, National Association, as a custodian, U.S.
Bank National Association, as a custodian, and ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer (in such capacity, the
"Master Servicer"), securities administrator (in such capacity,
the "Securities Administrator") and as 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 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"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), 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;
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(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 independently verify or confirm the accuracy,
completeness or correctness of the information provided by the Master
Servicer;
(5) I am responsible for reviewing the activities performed by the
Company as a person "performing a servicing function" under the
Agreement, and based on my knowledge and the compliance review conducted
in preparing the Servicing Assessment and except as disclosed in the
Servicing Assessment or the Attestation Report, the Company has
fulfilled its obligations under the Agreement; and
(6) The Servicing Assessment and Attestation Report required to be
provided by the Company pursuant to the Agreement, have been provided to
the Depositor. Any material instances of noncompliance described in such
reports have been disclosed to the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: ________________________________
By: ________________________________
Name:
Title:
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EXHIBIT K
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":
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Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
General Servicing Considerations
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default X X
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 X
amount of coverage required by and otherwise in
accordance with the terms of the transaction
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 X X
following receipt, or such other number of days
1122(d)(2)(i) specified in the transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized X
1122(d)(2)(ii) personnel.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
K-1
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Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances, are X
made, reviewed and approved as specified in the
1122(d)(2)(iii) transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
The related accounts for the transaction, such as
cash reserve accounts or accounts established as a
form of overcollateralization, are separately X
maintained (e.g., with respect to commingling of
1122(d)(2)(iv) cash) as set forth in the transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
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" X
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.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Unissued checks are safeguarded so as to prevent X
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 X X
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
resolved within 90 calendar days of their original
identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
K-2
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Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
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 X X
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
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 X
1122(d)(3)(ii) agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Disbursements made to an investor are posted within
two business days to the Servicer's investor records, X
or such other number of days specified in the
1122(d)(3)(iii) transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other form of X X
1122(d)(3)(iv) payment, or custodial bank statements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Pool Asset Administration
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
1122(d)(4)(i) Collateral or security on mortgage loans is
maintained as required by the transaction agreements X
or related mortgage loan documents.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Mortgage loan and related documents are safeguarded
1122(d)(4)(ii) as required by the transaction agreements. X
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and
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K-3
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Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
approved in accordance with any conditions or
requirements in the 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,
or such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
1122(d)(4)(viii) example, phone calls,
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
K-4
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Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
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.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of
1122(d)(4)(xiii) days specified in the
------------------------------------------------------------------------------------------------------------------------------------
K-5
------------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
----------------------------------------------------------------------------- -------------------- ------------------- -------------
Reference Criteria
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
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 X
1122(d)(4)(xv) transaction agreements.
--------------------- ------------------------------------------------------- -------------------- ------------------- -------------
------------------------------------------------------------------------------------------------------------------------------------
K-6
EXHIBIT L-1
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) _____________________________________________
L-1-1
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: |
| ------------------------------ |
| ____________________________________________________________________________ |
| ____________________________________________________________________________ |
| ______________________________ |
| ____________________________________________________________________________ |
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Master Servicing and Trust Agreement, dated as of June 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee") and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian, U.S. Bank National Association, as a custodian,
and ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in such
capacity, the "Master Servicer"), securities administrator (in such capacity,
the "Securities Administrator") and as a 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 paymens
received by the Servicer listed below in connection with this request for
release have been deposited into 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
L-2-1
________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: |
| ------------------------------ |
| ____________________________________________________________________________ |
| ____________________________________________________________________________ |
| ______________________________ |
| ____________________________________________________________________________ |
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
RE: Master Servicing and Trust Agreement, dated as of June 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee") and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian, U.S. Bank National Association, as a custodian,
and ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in such
capacity, the "Master Servicer"), securities administrator (in such capacity,
the "Securities Administrator") and as a 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:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
JPMORGAN CHASE BANK, N.A. #_____________________________________,
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
L-3-1
________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: |
| ------------------------------ |
| ____________________________________________________________________________ |
| ____________________________________________________________________________ |
| ______________________________ |
| ____________________________________________________________________________ |
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: GSAA 2006-10
RE: Master Servicing and Trust Agreement, dated as of June 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee") and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian, U.S. Bank National Association, as a custodian,
and ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in such
capacity, the "Master Servicer"), securities administrator (in such capacity,
the "Securities Administrator") and as a 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:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
JPMORGAN CHASE BANK, N.A. #_____________________________________,
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
L-4-1
________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: |
| ------------------------------ |
| ____________________________________________________________________________ |
| ____________________________________________________________________________ |
| ______________________________ |
| ____________________________________________________________________________ |
L-4-2
EXHIBIT M
Form 8-K Disclosure Information
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
-------------------------------------------------------------------------------------------------------------------
Item 1.01- Entry into a Material Definitive Agreement The party to this Agreement entering into such
material definitive agreement (excluding the Trustee)
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material Definitive The party to this Agreement entering into such
Agreement material definitive agreement (excluding the Trustee)
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Affiliated Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
---------------------------------------------------------- --------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
o Derivative Counterparty Depositor
-------------------------------------------------------------------------------------------------------------------
M-1
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
-------------------------------------------------------------------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase Master Servicer and Securities Administrator
a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of cash
flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements to
the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights of Securities Administrator
Security Holders
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Pooling and Servicing Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of (i) Securities Administrator and (ii) Depositor with
Incorporation or Bylaws; Change of Fiscal Year respect to any information relating to the Depositor
Disclosure is required of any amendment "to the governing
documents of the issuing entity".
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Securities Administrator Master Servicer/Securities Administrator/
Servicer
Requires disclosure of any removal, replacement,
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or more
of pool assets at time of report, other material servicers
or trustee.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new servicer or master Servicer/Master Servicer/Depositor
servicer is also required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also required. successor Trustee
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor and Securities Administrator
Support
Covers termination of any enhancement in manner other than
by its terms, the addition of an
---------------------------------------------------------- --------------------------------------------------------
M-2
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
-------------------------------------------------------------------------------------------------------------------
enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well
as derivatives.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement provider is Depositor
Depositor also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or more
at the time of issuance of the securities from the
description in the final prospectus, provide updated Reg
AB disclosure about the actual asset pool.
---------------------------------------------------------- --------------------------------------------------------
If there are any new servicers or originators required Depositor
Depositor to be disclosed under Regulation AB as a result
of the foregoing, provide the information called for in
Items 1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties (excluding the Trustee and any Custodian)
---------------------------------------------------------- --------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the registrant
deems of importance to certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
-------------------------------------------------------------------------------------------------------------------
M-3
EXHIBIT N
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the [Monthly Statement] Servicer, Master Servicer and Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT included Depositor
on the [Monthly Statement]
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds (i) Depositor (with respect to the Closing Date) and
(ii) Master Servicer
Information from Item 2(a) of Part II of Form 10-Q:
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales and
use of proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if securities
were not registered.
---------------------------------------------------------- --------------------------------------------------------
N-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Securities Administrator
Holders
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
N-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any party responsible for the applicable disclosure
items on Form 8-K
Disclose any information required to be reported on Form
8-K during the period covered by the Form 10-D but not
reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
---------------------------------------------------------- --------------------------------------------------------
N-3
EXHIBIT O
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any party responsible for disclosure items on Form 8-K
Disclose any information required to be reported on Form
8-K during the fourth quarter covered by the Form 10-K
but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules (i) As to agreements, Securities
Administrator/Depositor and (ii) as to financial
statements, Reporting Parties (as to themselves)
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* Depositor
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
O-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Master Servicing and Trust
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Issuing
Depositor as to (a) Entity is an affiliate of the
following parties, and (b) Sponsor/Seller as to (a) to
the extent known and material, any of the following
parties are affiliated with one another:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in Sponsor/Seller as to (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
---------------------------------------------------------- --------------------------------------------------------
O-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships involving Depositor as to (a)
Depositor as to (a) the transaction or the pool assets Sponsor/Seller as to (a)
between (a) the Sponsor/Seller as to (a) Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
O-3
EXHIBIT P
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]
P-1
EXHIBIT Q
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]
Q-1
EXHIBIT R
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]
R-1
EXHIBIT S
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
[See Exhibit 99.1 to Form 8-K filed with the Commission on May 12, 2006,
Accession No. 0000905148-06-003721]
S-1
EXHIBIT T
Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of June 1, 2005, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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]
T-1
EXHIBIT U
Amended and Restated Master Mortgage Loan Purchase and
Interim Servicing Agreement, dated as of November 1, 2005, between
First National Bank of Nevada and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.5 to Form 8-K filed with the Commission on March 14, 2006,
Accession No. 0000905148-06-00297]
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EXHIBIT V
Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of November 1, 2003, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and
Fremont Investment & Loan
Exhibit V
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY,
Purchaser
and
FREMONT INVESTMENT & LOAN
Seller
Dated as of November 1, 2003
Conventional, Alt-A,
Fixed Rate Residential Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.................................................................................1
SECTION 2. AGREEMENT TO PURCHASE.......................................................................8
SECTION 3. MORTGAGE SCHEDULES..........................................................................8
SECTION 4. PURCHASE PRICE..............................................................................9
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................................................9
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER........................................................10
Subsection 6.01 Conveyance of Mortgage Loans.......................................................10
Subsection 6.02 Books and Records..................................................................10
Subsection 6.03 Delivery of Mortgage Loan Documents................................................11
Subsection 6.04 Quality Control Procedures.........................................................12
SECTION 7. SERVICING OF THE MORTGAGE LOANS............................................................12
SECTION 8. TRANSFER OF SERVICING......................................................................12
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR BREACH...............15
Subsection 9.01 Representations and Warranties Regarding the Seller................................15
Subsection 9.02 Representations and Warranties Regarding Individual Mortgage Loans.................18
Subsection 9.03 Remedies for Breach of Representations and Warranties..............................30
Subsection 9.04 Repurchase of Mortgage Loans With First Payment Defaults...........................33
Subsection 9.05 Purchaser's Right to Review........................................................33
SECTION 10. CLOSING....................................................................................33
SECTION 11. CLOSING DOCUMENTS..........................................................................34
SECTION 12. COSTS......................................................................................35
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION................................................35
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SECTION 14. THE SELLER.................................................................................37
Subsection 14.01 Additional Indemnification by the Seller; Third Party Claims.......................37
Subsection 14.02 Merger or Consolidation of the Seller..............................................38
SECTION 15. FINANCIAL STATEMENTS.......................................................................39
SECTION 16. NOTICES....................................................................................39
SECTION 17. SEVERABILITY CLAUSE........................................................................40
SECTION 18. COUNTERPARTS...............................................................................40
SECTION 19. GOVERNING LAW..............................................................................40
SECTION 20. INTENTION OF THE PARTIES...................................................................40
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT...................................40
SECTION 22. WAIVERS....................................................................................41
SECTION 23. EXHIBITS...................................................................................41
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES............................................................41
SECTION 25. REPRODUCTION OF DOCUMENTS..................................................................42
SECTION 26. FURTHER AGREEMENTS.........................................................................42
SECTION 27. RECORDATION OF ASSIGNMENTS OF MORTGAGE.....................................................42
SECTION 28. NO SOLICITATION............................................................................42
SECTION 29. WAIVER OF TRIAL BY JURY....................................................................43
SECTION 30. SUBMISSION TO JURISDICTION; WAIVERS........................................................43
SECTION 31. CONFIDENTIAL INFORMATION...................................................................43
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EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT F FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT G FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT I UNDERWRITING GUIDELINES
EXHIBIT J REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT K SERVICER ACKNOWLEDGMENT
EXHIBIT L ASSIGNMENT AND CONVEYANCE
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
November 1, 2003 ("Agreement"), by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company,
a New York limited partnership, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"), and Fremont Investment & Loan having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
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WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain first lien, fixed rate
residential mortgage loans (the "Mortgage Loans") on a servicing released
basis as described herein, and which shall be delivered on the dates provided
herein (the "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
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
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the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: the value of the related Mortgaged Property based
upon the appraisal made for the originator at the time of origination of the
Mortgage Loan or the sales price of the Mortgaged Property at such time of
origination, whichever is less; provided, however, that in the case of a
refinanced Mortgage Loan, such value is based solely upon the appraisal made
at the time of origination of such refinanced Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Servicer's servicing operations are located
or (c) the State in which the Custodian's operations are located, are
authorized or obligated by law or executive order to be closed.
Closing Date: December 2, 2003 or such other date or dates mutually
acceptable to the parties.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Credit File pursuant to this Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Custodial Agreement: That certain Custodial Agreement, by and
between the Purchaser and the Custodian, dated as of the date hereof,
governing the retention of the originals of each Mortgage Note, Mortgage,
Assignment of Mortgage (if required) and other Mortgage Loan Documents.
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Custodian: The Custodian designated by the Purchaser or any
successor thereto under the Custodial Agreement.
Cut-off Date: November 1, 2003.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Escrow Payments: With respect to any Mortgage Loan with an Escrow
Account, the amounts constituting ground rents, taxes, assessments, water
rates, sewer rents, municipal charges, mortgage insurance premiums, fire and
hazard insurance premiums, condominium charges, and any other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, or any successor thereto.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high
cost," "threshold," "covered", "predatory" or similar loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Insured Depository Institution: As defined in Section 1813(c)(2) of
Title 12 of the United States Code, as amended from time to time.
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Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicing Agreement: That certain Interim Servicing
Agreement, dated as of November 1, 2003, 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.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of
the Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan in Breach: Shall have the meaning set forth in Section 9.04
hereof.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related date of origination (unless otherwise
indicated), to the Appraised Value of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take
such action as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the Seller, in accordance with MERS Procedure Manual and (b) the
Seller has designated or will designate the Custodian as the Investor on the
MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property
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securing the Mortgage Note; except that with respect to real property located
in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, the mortgage, deed of trust or other
instrument securing the Mortgage Note may secure and create a first lien upon
a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Credit File, the Servicing
File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, Servicing Rights, Prepayment
Penalties, and all other rights, benefits, proceeds and obligations arising
from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, a copy of
which will be attached hereto as Exhibit D setting forth the information
attached hereto as Exhibit C.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
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.
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Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan,
as set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
dated as of November 14, 2003, setting forth the general terms and conditions
of the transaction consummated herein and identifying the Mortgage Loans to be
purchased hereunder, by and between the 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.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the
outstanding principal balance of the Deleted Mortgage Loan (the amount of any
shortfall will be deposited in the Custodial Account by the Seller in the
month of substitution); (ii) have a Mortgage Interest Rate not less than, and
not more than 1% greater than, the Mortgage Interest Rate of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than, and
not more than one year less than, that of the Deleted Mortgage Loan; and (iv)
comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus (except for Mortgage Loans which were 60 or more days
delinquent as of the Cut-off Date), accrued interest thereon at the Mortgage
Interest Rate from the date on which interest had last been paid through the
date of such repurchase, plus the amount of any outstanding advances owed to
any servicer, and plus all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such
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breach, including without limitation costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Fremont Investment & Loan and its successors in interest.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Successor Servicer, providing for such successor servicer to
service the Mortgage Loans.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance as of the beginning of the month of such Mortgage Loan. Such fee shall
be payable monthly and shall be pro-rated for any portion of a month during
which the Mortgage Loan is serviced by the Seller under the Interim Servicing
Agreement. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds, to the extent permitted by this
Agreement) of such Monthly Payment collected by the Seller, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such
servicing rights and all rights of the Seller thereunder; (e) Escrow Payments
or other similar payments with respect to the Mortgage Loans and any amounts
actually collected by the Seller with respect thereto; (f) all accounts and
other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans.
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Stated Principal Balance: As to each Mortgage Loan, the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to
payments of principal actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Sections 8 and 9.03 which is entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Transaction Agreement: Shall have the meaning set forth in Section
13 hereof.
Transfer Date: (a) the earlier of (i) the date on which a Successor
Servicer assumes the servicing of the Mortgage Loans pursuant to the Servicing
Agreement pursuant to which the Successor Servicer shall service the Mortgage
Loans on behalf of the Purchaser and its assignees and (ii) the 1st Business
Day of the month following the date which is 65 days after the Closing Date or
(b) such other date as mutually agreed by the Seller and the Purchaser.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit I.
Whole Loan Agreement: Any Transaction Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to
a Transaction Agreement.
SECTION 2. Agreement to Purchase.
The Seller, on the Closing Date, agrees to sell, and the Purchaser
agrees to purchase, Mortgage Loans having an aggregate principal balance on
the Cut-off Date in an amount as set forth in the Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller
as evidenced by the aggregate scheduled principal balance of the Mortgage
Loans accepted by the Purchaser on the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
the Closing Date in accordance with the Purchase Price and Terms Agreement and
this Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least one (1)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be
the Preliminary Mortgage Schedule with those Mortgage Loans which have not
been funded prior to the Closing Date deleted. The Mortgage Loan Schedules
shall be attached to the related Purchase Price and Terms Letter.
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SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the Stated Principal Balance, as of the
Cut-off Date, of the Mortgage Loans, after application of payments of
principal actually received on or before the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, on the Closing Date accrued interest on the Stated
Principal Balance of the related Mortgage Loans as of the Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans from the date
interest was paid through on the Mortgage Loan through the day prior to the
Closing Date, inclusive. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the 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 Cut-off Date, (2) all other recoveries of late charges, prepayment
penalties, assumption fees or other charges collected after the Cut-off Date,
and (3) all payments of interest on the Mortgage Loans at the Mortgage
Interest Rate.
SECTION 5. Examination of Mortgage Files.
Prior to the Closing Date, the 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-investors,
its financial partners, its designees 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, and any other information with respect to the Mortgage Loans
requested by the Purchaser, available at the Seller's offices for review by
Purchaser, its designee or its agents during normal business hours before the
Closing Date. At the Purchaser's expense, the Purchaser shall have the right
to order additional broker's price opinions in its sole discretion.
Prior to the Cut-off Date, the Purchaser shall have the right to
reject any Mortgage Loan (a) for which the documentation listed in Credit File
is missing or defective in whole or in part, (b) for which the related
broker's price opinion varies substantially below the appraisal provided in
connection with the origination of the related Mortgage Loan or poses other
marketing issues, (c) which does not generally conform to the Seller's
underwriting or compliance guidelines, (d) which does not conform to the terms
of this letter agreement or is in breach of the representations and warranties
set forth in Section 9.02, or (e) for which the credit or compliance
characteristics do not comply with federal, state or local requirements.
Purchaser shall notify the Seller of any such rejected Mortgage Loan no later
than three business days prior to the Closing Date.
Notwithstanding the foregoing, the Purchaser may purchase all or
part of the Mortgage Loans without conducting any partial or complete due
diligence examination. The fact that the Purchaser or its designee has
conducted or failed to conduct any partial or complete
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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 the Purchase Agreement.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan, the Seller shall, upon the request of the
Purchaser, repurchase or substitute for such Mortgage Loan at the price and in
the manner specified in Subsection 9.04.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, on each Closing Date, does hereby sell, transfer,
assign, set over and convey to the Purchaser, without recourse, but subject to
the terms of this Agreement, all right, title and interest of the Seller in
and to the Mortgage Loans and the Mortgage Files being sold on the Closing
Date and all rights and obligations arising under the documents contained
therein. The Seller shall cause the Servicing File retained by the Seller
pursuant to this Agreement to be appropriately identified in the Seller's
computer system and/or books and records, as appropriate, to clearly reflect
the sale of the related Mortgage Loan to the Purchaser. The Seller shall
release from its custody the contents of any Servicing File retained by it
only in accordance with this Agreement or the Interim Servicing Agreement,
except when such release is required in connection with a repurchase of any
such Mortgage Loan pursuant to Subsection 9.04.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the 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 Cut-off Date on or in
connection with a Mortgage Loan shall be vested in the Purchaser or one or
more designees of the Purchaser; provided, however, that all funds received on
or in connection with a Mortgage Loan shall be received and held by the Seller
in trust for the benefit of the Purchaser or the appropriate designee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be
marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser, which marking may be evidenced by a designation of electronic files
or records maintained by the Seller in connection with each Mortgage Loan. In
particular, to the extent required by applicable law, the Seller shall
maintain in its possession, available for inspection by the Purchaser, and
shall deliver to the Purchaser upon demand, evidence of compliance with all
federal, state and local laws, rules and regulations. To the extent that
original documents are not required for purposes of realization of
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Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
may be in the form of microfilm or microfiche.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
five (5) Business Days prior to the Closing Date the documents and instruments
in the Mortgage File for each Mortgage Loan.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay
all fees and expenses charged by the Custodian associated with the initial
inventory and maintenance of the Mortgage Loan Documents.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or
to such other Person as the Purchaser shall designate in writing, with a
certified true copy of any such document submitted for recordation within two
weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 180 days of the Closing Date.
In the event any document required to be delivered to the Custodian
pursuant to the preceding paragraph, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, within 180 days following the Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to
the Custodian in blank on or prior to the Closing Date and recorded
subsequently by the Purchaser or its designee), and in the event that the
Seller does not cure such failure within 30 days of discovery or receipt of
written notification of such failure from the Purchaser, the related Mortgage
Loan shall, upon the request of the Purchaser, be repurchased by the Seller at
the price and in the manner specified in Subsection 9.04. The foregoing
repurchase obligation shall not apply in the event that the Seller cannot
deliver such original or copy of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction, provided that
(i) the Seller shall deliver a recording receipt of such recording office or,
if such recording receipt is not available, an Officer's Certificate of a
servicing officer of the Seller, confirming that such documents have been
accepted for recording (upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the
Seller shall reissue and deliver to the Purchaser or its designee said
Officer's Certificate relating to the related Mortgage Loans), and (ii) such
document is delivered within twelve (12) months of the Closing Date.
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The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall maintain an internal quality control program that
verifies in a manner consistent with accepted industry procedures, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions that the Seller
maintain for other mortgage loans purchased, originated and serviced by the
Seller. The program includes evaluating and monitoring the overall quality of
the Seller's loan production and the servicing activities of the Seller. The
program ensures that the Mortgage Loans are originated and serviced in
accordance with Accepted Servicing Practices and the Underwriting Guidelines,
guards against dishonest, fraudulent, or negligent acts; and guards against
errors and omissions by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans shall be sold by the Seller to the Purchaser on a
servicing released basis. Subject to, and upon the terms and conditions of
this Agreement, with respect to the Mortgage Loans, the Seller hereby sells,
transfers, assigns and delivers to the Purchaser, on the Closing Date, 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).
Pursuant to the Interim Servicing Agreement, the Seller shall begin servicing
the Mortgage Loans on behalf of the Purchaser and shall be entitled to the
Servicing Fee with respect to such Mortgage Loans from the Closing Date until
the termination of the Interim Servicing Agreement as set forth therein, but
in no event shall the Seller receive less than 65 days of such compensation.
SECTION 8. Transfer of Servicing.
On the related Transfer Date, the Seller shall cease all servicing
responsibilities under the Interim Servicing Agreement related to the Mortgage
Loans and the Successor Servicer shall service the Mortgage Loans for the
benefit of the Purchaser pursuant to the Servicing Agreement.
On or prior to the 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 Purchaser, or its designee, including but not limited to the
following:
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(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 at least 15 days prior to the related Transfer Date; 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 from and
after the related Transfer Date. The Seller shall provide the Purchaser with
copies of all such notices no later than 30 days following 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.
(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 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 by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller (a) during the first 30
days after the related Transfer Date shall be forwarded to the Purchaser by
overnight mail on the date of receipt and (b) after the date which is 30 days
after the related Transfer Date shall be forwarded to the Purchaser by
overnight mail twice weekly. The Seller shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied
if the Seller forwards with their 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
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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 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 Seller and/or the
Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Reconciliation. The Seller shall, on or before the related
Transfer Date, reconcile principal balances and make any monetary adjustments
required by the Purchaser. Any such monetary adjustments will be transferred
between the Seller and the Purchaser as appropriate.
(j) IRS Forms. The 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.
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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 and
the Successor Servicer that as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in each state wherein it owns or leases any material properties
or where a Mortgaged Property is located, if the laws of such state require
licensing or qualification in order to conduct business of the type conducted
by the Seller, and in any event the Seller is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan in accordance with the terms of this Agreement; the
Seller has the full corporate power, authority and legal right to hold,
transfer and convey the Mortgage Loans and to execute and deliver this
Agreement and to perform its obligations hereunder; the execution, delivery
and performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of
the transactions contemplated hereby have been duly and validly authorized;
this Agreement and all agreements contemplated hereby have been duly executed
and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in
a proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Seller's charter,
by-laws or other organizational documents or any legal restriction or any
agreement or instrument to which the Seller is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or result
in the creation or imposition of any lien, charge or encumbrance that would
have an adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
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(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Seller's knowledge, threatened
against the Seller, before any court, administrative agency or other tribunal
(i) asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, (iii)
which, either in any one instance or in the aggregate, is likely to result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of the right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations of
the Seller contemplated herein, or which would be likely to impair materially
the ability of the Seller to perform under the terms of this Agreement, (iv)
relating to fraud, or (v) relating to predatory lending, or the Seller's
origination, servicing or closing practices which is likely to result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Seller.
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or
governmental agency is required for the execution, delivery and performance by
the Seller of or compliance by the Seller with this Agreement or the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the Custodian or the
sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were not intentionally
selected from among the outstanding one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the representations and
warranties set forth in Subsection 9.02 could not be made;
(h) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans in the form attached as Exhibit J hereto;
(i) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished by the Seller pursuant to this Agreement or any
Transaction Agreement or in connection with the transactions contemplated
hereby contains or will contain any material untrue statement of fact;
(j) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations
and changes in financial position for each of such periods and the
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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 or as required by the Seller's
regulator. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability
to perform its obligations under this Agreement;
(k) Loan Experience. The Seller has delivered information as to its
loan charge-off or loan loss experience, its loan delinquency experience for
the immediately preceding three-year period, prepayment speed and delinquency
histories for at least the immediately preceding year, and all such
information so delivered shall be true and correct in all material respects;
(l) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(m) Sale Treatment. The Seller has been advised by its independent
certified public accountants that under generally accepted accounting
principles the transfer of the Mortgage Loans may be treated as a sale on the
books and records of the Seller and the Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for tax and accounting purposes;
(n) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes
fair consideration and reasonably equivalent value for the Mortgage Loans;
(o) Seller's Purchase or Origination. The Seller's decision to
purchase or originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon Seller's underwriting
guidelines, and is in no way made as a result of Purchaser's decision to
purchase, or not to purchase, or the price Purchaser may offer to pay for, any
such mortgage loan, if originated;
(p) Ability to Service. The Seller has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans
of the same type as the Mortgage Loans. The Seller is duly qualified,
licensed, registered and otherwise authorized under all applicable federal,
state and local laws, and regulations, and is in good standing to enforce,
originate, sell mortgage loans to, and service mortgage loans in each
jurisdiction wherein the Mortgaged Properties are located;
(q) Insured Depository Institution Representations. The Seller makes
the following additional representations and warranties:
(i) This Agreement conforms to all statutory and regulatory
requirements applicable to the Seller. This Agreement is (a)
executed contemporaneously with the agreement reached by the Seller
and the Purchaser, (b) approved by a specific corporate or banking
association resolution by the board of directors of the Seller,
which approval shall be reflected in the minutes
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of said board, and (c) continuously, from the time of its execution,
an official record of the Seller;
(ii) This Agreement has been duly and validly authorized by a
specific corporate or banking association resolution by the board of
directors of the Seller. A copy of such resolution, certified by the
corporate secretary of the Seller or attested to by a vice president
or higher officer of the Seller has been provided to the Purchaser;
and
(iii) The Seller will maintain a copy of this Agreement in its
official books and records.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, its
assignees and the Successor Servicer that, as to each Mortgage Loan, as of the
Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet one month delinquent, have been made and credited. No
payment required under the Mortgage Loan is one month or more delinquent nor
has any payment under the Mortgage Loan been one month or more delinquent at
any time since the origination of the Mortgage Loan;
(c) No Outstanding Charges. Except for payment defaults of less than
one month, there are no defaults in complying with the terms of the Mortgage,
and all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously became
due and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which
has been assessed but is not yet due and payable. The Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the date which precedes by one month the
Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
Mortgage Loan Schedule. No Mortgage Loan has been modified so as to
restructure the payment obligations or re-age the Mortgage Loan. The substance
of any such waiver, alteration or modification has
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been approved by the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the Mortgage Loan Schedule, if
applicable. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement, approved by the issuer of the title
insurer, to the extent required by the policy, and which assumption agreement
is part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which are
reflected in the Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at, or subsequent to, the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage, as well as all additional requirements set forth in the Interim
Servicing Agreement. If required by the National Flood Insurance Act of 1968,
as amended, each Mortgage Loan is covered by a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration as in effect, as well as all additional requirements set forth
in the Interim Servicing Agreement. All individual insurance policies contain
a standard mortgagee clause naming the Seller and its successors and assigns
as mortgagee, and all premiums thereon have been paid and such policies may
not be reduced, terminated or cancelled without 30 days' prior written notice
to the mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain
the hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier
of the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and effect and
inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in,
and has no knowledge of the Mortgagor's or any servicer's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of such policy, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure or unfair and
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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. Seller shall
maintain in its possession, available for the Purchaser's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with all
such requirements;;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. The Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development and that no residence or
dwelling is (i) a mobile home, (ii) a manufactured home, (iii) a modular home,
or (iv) a row house. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First Lien. Each Mortgage is a valid and subsisting first
lien (as applicable) of record on a single parcel of real estate constituting
the Mortgaged Property, including all buildings and improvements on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time, with respect
to the related Mortgage Loan, which exceptions are generally acceptable to
prudent mortgage lending companies, and such other exceptions to which similar
properties are commonly subject and which do not individually, or in the
aggregate, materially and adversely affect the benefits of the security
intended to be provided by such Mortgage. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of recording acceptable to prudent mortgage lending
institutions generally and
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specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (a)
specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b)
which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien and first priority
security interest on the property described therein and the Seller has full
right to sell and assign the same to Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms (including, without limitation, any provisions therein relating to
Prepayment Penalties), except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, 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 a proceeding in equity or a law). All parties to the Mortgage Note,
the Mortgage and any other such related agreement had legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note, the
Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any
other such related agreement have been duly and properly executed by other
such related parties. The documents, instruments and agreements submitted for
loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein
or necessary to make the information and statements therein not misleading. No
fraud, error, omission, misrepresentation, gross negligence or similar
occurrence with respect to a Mortgage Loan has taken place on the part of any
Person, including without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination or
servicing of the Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder, and any and all requirements as
to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files or any part thereof not delivered
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to the Custodian, the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Seller will
have no right to modify or alter the terms of the sale of the Mortgage Loan
and the Seller will have no obligation or right to repurchase the Mortgage
Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA lender's
title insurance policy, and each such title insurance policy is issued by a
title insurer and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first priority lien 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. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The title policy does not contain any
special exceptions (other than the standard exclusions) for zoning and uses
and has been marked to delete the standard survey exception or to replace the
standard survey exception with a specific survey reading. The Seller, its
successor and assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims are pending under such
lender's title insurance policy, and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission, anything which would
impair the coverage of such lender's title insurance policy, including without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
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(q) No Defaults. Other than payment delinquencies of less than one
month, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates
nor any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, savings and loan
association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. The documents, instruments and agreements
submitted for loan underwriting were not falsified and contain no untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the information and statements therein not
misleading. No Mortgage Loan contains terms or provisions which would result
in negative amortization. Principal payments on the Mortgage Loan commenced no
more than sixty days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as the Lifetime Rate Cap and
the Periodic Cap are as set forth on the Mortgage Loan Schedule. Except with
respect to interest-only mortgage loans set forth on the Mortgage Loan
Schedule, the Mortgage Note is payable in equal monthly installments of
principal and interest, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date,
over an original term of not more than thirty years from commencement of
amortization. No Mortgage Loan is a simple interest mortgage loan;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
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foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or
similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines in effect as of
the date of origination of such Mortgage Loan (a copy of which is attached
hereto as Exhibit I). The Mortgage Note and Mortgage are on forms generally
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. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve
as such, has been properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
reconveyance of the deed of trust or a trustee's sale after default by the
Mortgagor;
(z) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to
the Custodian. The 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;
(aa) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project is acceptable to Seller and underwritten in accordance with the
Underwriting Guidelines;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property
is located. The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller is not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(cc) Due-On-Sale. The Mortgage contains an enforceable provision
(except as such enforcement may be effected by bankruptcy and insolvency laws
or by general principals of equity) for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent
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of the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(dd) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the 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;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. As of the Closing Date, the Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is inhabitable under
applicable state and local laws;
(hh) Collection Practices; Escrow Deposits. The origination,
servicing and collection practices used by the Seller with respect to the
Mortgage Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects
legal and proper and prudent in the mortgage origination and servicing
business. With respect to escrow deposits and Escrow Payments, all such
payments are in the possession of, or under the control of, the Seller and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments
have been collected in full compliance with state and federal law and the
provisions of the related Mortgage Note and Mortgage. An escrow of funds is
not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
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(ii) No Violation of Environmental Laws. To the best of the Seller's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. To the best of the Seller's knowledge,
there is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(jj) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested
or allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act
of 1940;
(kk) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the related
originator, who had no interest, direct or indirect in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(ll) Disclosure Materials. The Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law
with respect to the making of the Mortgage Loans;
(mm) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation
of a Mortgaged Property or facilitating the trade-in or exchange of a
Mortgaged Property;
(nn) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect
the value or the marketability of any Mortgaged Property or Mortgage Loan or
to cause the Mortgage Loans to prepay during any period materially faster or
slower than similar mortgage loans originated to the same Underwriting
Guidelines held by the Seller generally secured by properties in the same
geographic area as the related Mortgaged Property;
(oo) 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 Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable,
special hazard insurance policy, or bankruptcy bond (including, without
limitation, any exclusions, denials or defenses which would limit or reduce
the
-26-
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;
(pp) Escrow Analysis. With respect to each Mortgage with an Escrow
Account, the Seller has within the last twelve months (unless such Mortgage
was originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and
the Seller has reported or caused to be reported, the Mortgagor credit files
to each of the three primary credit repositories monthly in a timely manner;
(rr) 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;
(ss) Prepayment Penalty. The Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note except as set
forth on the 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 Interim Servicer for the benefit of the Purchaser,
and each prepayment penalty is permitted pursuant to federal, state and local
law. Each such prepayment penalty is in an amount equal to the maximum amount
permitted under applicable law and no such prepayment penalty may be imposed
for a term in excess of three (3) 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 borrower
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agreed to such premium in exchange for a monetary benefit, including but not
limited to a rate or fee reduction, (ii) originator has available programs
that offered the option of obtaining a mortgage loan that did not require
payment of such a premium and prior to the Mortgage Loan's origination, the
Mortgage Loan was available to the Mortgagor with and without the prepayment
penalty, (iii) the prepayment premium was disclosed to the borrower in the
loan documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, the Servicer shall
not impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the borrower's default in making the loan
payments;
(tt) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan;
(uu) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy; No
Mortgagor was required to purchase any credit life, disability, accident or
health insurance product as a condition of obtaining the extension of credit.
No Mortgagor obtained a prepaid single-premium credit life, disability,
accident or health insurance policy in connection with the origination of the
Mortgage Loan;
(vv) 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;
(ww) Qualified Mortgage. The Mortgage Loan is an obligation
(including any participation or certificate of beneficial ownership therein)
which is principally secured by an interest in real property;
(xx) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust;
(yy) 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;
(zz) FICO Scores. Unless set forth in the related Purchase Price and
Terms Letter, each Mortgage Loan has a non-zero FICO score. No Mortgage Loan
has a Mortgagor with a FICO score of less than 500 as of the related
origination date;
(aaa) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); to the extent applicable to the Seller as of
the Closing Date, the Seller has established an anti-money laundering
compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable Mortgagor and the origin of
the assets used by the said Mortgagor to purchase the
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property in question, and maintains, and will maintain, sufficient information
to identify the applicable Mortgagor for purposes of the Anti-Money Laundering
Laws;
(bbb) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated on or after March 7, 2003 that is a "high cost home
loan" as defined under the Georgia Fair Lending Act; and
(ccc) New York State Banking Law. There is no Mortgage Loan that (a)
is secured by property located in the State of New York; (b) had an original
principal balance of $300,000 or less, and (c) has an application date on or
after April 1, 2003, the terms of which loan equal or exceed either the annual
percentage rate or the points and fees threshold for "high-cost home loans,"
as defined in Section 6-L of the New York State Banking Law.
(ddd) New Jersey Mortgage Loans. All Mortgage Loans originated in
New Jersey on or after November 27, 2003 are ratable by Standard & Poor's,
Fitch Ratings and ▇▇▇▇▇'▇.
(eee) Oakland Mortgage Loans. No Mortgage Loan is subject to the
Oakland, California Anti-Predatory Lending Ordinance
(fff) 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;
(ggg) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
with respect to each Mortgage Loan pursuant to the Custodial Agreement, shall
be delivered to the Custodian all in compliance with the specific requirements
of the Custodial Agreement. With respect to each Mortgage Loan, the Seller
will be in possession of a complete Mortgage File in compliance with Exhibit A
hereto, except for such documents as will be delivered to the Custodian;
(hhh) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon
recordation the Seller will be the owner of record of each Mortgage and the
indebtedness evidenced by each Mortgage Note, and upon the sale of the
Mortgage Loans to the Purchaser, the Seller will retain the Mortgage Files
with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan.
(iii) Reports. On or prior to the 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.
(jjj) Payoffs. No Mortgage Loans prepaid in full prior to the
Closing Date.
(kkk) 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
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Seller to the Purchaser, that Seller has full right and authority and is not
precluded by law or contract from furnishing such information to the Purchaser
and the Purchaser is not precluded by the terms of the Mortgage Loan Documents
from furnishing the same to any subsequent or prospective purchaser of such
Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's secondary
marketing operations and the purchase and sale of mortgages. The Seller has or
has caused the related servicer to, for each Mortgage Loan, fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
(lll) Origination Practices. Each Mortgagor was assigned the highest
credit grade available with respect to a mortgage loan product offered by such
Mortgage Loan's originator, taking into account the credit history, debt to
income ratio and loan requirement of such Mortgagor;
(mmm) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the borrower's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the borrower's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval)
the borrower had a reasonable ability to make timely payments on the Mortgage
Loan.
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,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by the Seller or the Purchaser of a breach of
any of the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case
of a representation and warranty relating to a particular Mortgage Loan);
(provided, with respect to any representations and warranties which are made
to the best of the Seller's knowledge, if it is discovered by the Seller or
the Purchaser that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan or the interest of the Purchaser or which materially
and adversely affects the value of a Mortgage Loan or the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), notwithstanding the Seller's
lack of knowledge with respect to the substance of such
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representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation and warranty) (a "Loan In Breach"), the Seller shall
use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Seller shall, at the Purchaser's
option, repurchase such Mortgage Loan at the Repurchase Price, together with
all expenses incurred by the Purchaser as a result of such repurchase.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in clauses (tt), (uu), (vv) or (xx) 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 Loan in Breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty
set forth in Subsections 9.02 or 9.08 (other than the representations and
warranties set forth in clauses (tt), (uu), (vv) or (xx) of Subsection 9.02)
and the Seller discovers or receives notice of any such breach within 120 days
of the Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, the Seller shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Subsection 9.04 shall be accomplished by either (a) if the
Interim Servicing Agreement has been entered into and is in effect, deposit in
the Custodial Account of the amount of the Repurchase Price for distribution
to the Purchaser on the next scheduled Remittance Date, after deducting
therefrom any amount received in respect of such repurchased Mortgage Loan or
Loans and being held in the Custodial Account for future distribution or (b)
if the Interim Servicing Agreement is no longer in effect, by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Seller shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution, whether or not such
substitution date is after the related Transfer Date. The Seller shall effect
such substitution by delivering to the Custodian or to such other party as the
Purchaser may designate in writing for such Qualified Substitute Mortgage Loan
the documents required by Subsection 6.03 and the
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Custodial Agreement, with the Mortgage Note endorsed as required by Subsection
6.03 and the Custodial Agreement. No substitution will be made in any calendar
month after the initial Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if
any, on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Seller. For the month of substitution, distributions to the
Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Seller directly to
the Purchaser or its designee in accordance with the Purchaser's instructions
within two (2) Business Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
reasonable costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Seller's representations and warranties contained in this Agreement or any
Transaction Agreement. It is understood and agreed that the obligations of the
Seller set forth in this Subsection 9.03 to cure, substitute for or repurchase
a defective Mortgage Loan and to indemnify the Purchaser as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and the
Successor Servicer respecting a breach of the foregoing representations and
warranties. For purposes of this paragraph, "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer"
shall mean the Person then acting as the Successor Servicer under this
Agreement and any and all Persons who previously were "Successor Servicers"
under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement in the form of Exhibit L hereto recognizing
the servicer designated by the Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01,
9.02 or 9.08 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Seller to the Purchaser, (ii)
failure by the Seller to cure such breach, repurchase such Mortgage Loan or
substitute a Qualified Substitute Mortgage Loan as specified above, and (iii)
demand upon the Seller by the Purchaser for compliance with this Agreement.
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Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to any Mortgage Loan, if the related Mortgagor fails to
make the Monthly Payment due on December 1, 2003 within 30 days of the related
Due Date (such date, the "First Payment Default Date", such failure to pay, a
"First Payment Default"), the Seller shall, within five Business Days of
receipt of notice from the Purchaser, promptly repurchase such Mortgage Loan
(a "First Payment Default Mortgage Loan") from the Purchaser at the Purchase
Price plus accrued interest thereon at the Mortgage Interest Rate from the
date on which interest had last been paid through the date of such repurchase,
plus the amount of any outstanding advances owed to any servicer, plus all
costs and expenses incurred by the Purchaser or any servicer arising out of or
based upon such breach, including, without limitation, costs and expenses
incurred in the enforcement of the Seller's repurchase obligation hereunder.
Subsection 9.05 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
perform on-site due diligence at the premises of the Seller with respect to
the Mortgage Loans. The Seller will provide information and otherwise
cooperate with the due diligence reviews of the Purchaser, its co-investor's,
its financial partner's, and the rating agencies. The Seller shall make the
Mortgage Files and the Credit Files, together with any payment histories,
collection histories, bankruptcy histories, broker's price opinions, and any
other information with respect to the Mortgage Loans requested by the
Purchaser, available at the Seller's offices for review by Purchaser or its
agents during normal business hours before the Closing Date. The Purchaser
shall have the right, at its own expense, to order additional broker's price
opinions in its sole discretion.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the Mortgage File documentation is missing or defective in whole or
in part, (b) for which (i) the related broker's price opinion is more than 15%
below the appraisal provided in connection with the origination of the related
Mortgage Loan, (c) which does not conform to the Seller's Underwriting
Guidelines or compliance guidelines, (d) which does not conform to the terms
of the Purchase Price and Terms Letter or is in breach of the representations
and warranties set forth herein, (e) for which the credit or compliance
characteristics are unacceptable to the Purchaser, and (f) that is not
securitizable in the reasonable opinion of the Purchaser.
Notwithstanding the foregoing, the Purchaser may purchase all or
part of the Mortgage Loans without conducting any partial or complete due
diligence examination. The fact that the Purchaser has conducted or failed to
conduct any partial or complete examination of the files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase or other
relief for breach of Mortgage Loan representations and warranties, missing or
defective documents or as otherwise provided in this Agreement.
SECTION 10. Closing.
Each closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, each closing shall
be either: by telephone, confirmed by letter or wire as the parties shall
agree, or conducted in person, at such place as the parties shall agree.
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The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) prior to the Closing Date, the Seller shall deliver to the
Purchaser via electronic medium acceptable to the Purchaser, a
listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on
the Closing Date (including accrued interest), and prepare a
Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this
Agreement or an Event of Default under the Interim Servicing
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available
funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans shall consist of fully
executed originals of the following documents:
1. this Agreement;
2. the Interim Servicing Agreement, dated as of the Cut-off Date;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the related Mortgage Loan Schedule, one copy to be attached hereto, and
one copy to be attached to the Custodian's counterpart of the Custodial
Agreement;
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5. a Custodian's Certification, as required under the Custodial Agreement,
in the form of Exhibit 2 to the Custodial Agreement;
6. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required under the Interim Servicing
Agreement;
7. an Escrow Account Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Interim Servicing Agreement;
8. an Officer's Certificate, in the form of Exhibit E hereto with respect to
each Seller, including all attachments thereto;
9. an Opinion of Counsel of the Seller (who may be an employee of the
Seller), in form and substance acceptable to the Purchaser ("Opinion of
Counsel of the Seller");
10. an Opinion of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial Agreement;
11. a Security Release Certification, in the form of Exhibit G or H, as
applicable, hereto executed by any person, as requested by the Purchaser,
if any of the Mortgage Loans have at any time been subject to any
security interest, pledge or hypothecation for the benefit of such
person;
12. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the related Seller by merger or acquired or
originated by the Seller while conducting business under a name other
than its present name, if applicable; and
13. a MERS Report reflecting the Custodian as Investor and no Person as
Interim Funder for each MERS Designated Mortgage Loan.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees and the fees and
expenses of its counsel. All servicing fees incurred prior to the Closing
Date, and all costs and expenses incurred in connection with the transfer of
the Mortgage Loans, fees to transfer files and prepare
assignments/endorsements, all initial recording fees, if any, for the
assignments of mortgage for all Mortgage Loans not recorded in the name of
MERS, all fees, if any, for transferring record ownership on the MERS system
of Mortgage Loans recorded in the name of MERS, custodial fees, including the
costs associated with clearing exceptions, (including costs to record
intervening assignments and any existing assumption and modification
agreements), together with the fees and expenses of 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 Closing Date, on one or more dates (each a
"Reconstitution Date") at
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the Purchaser's sole option, the Purchaser may effect a sale (each, a
"Reconstitution") of some or all of the Mortgage Loans then subject to this
Agreement, without recourse, to:
(i) one or more third party purchasers in one or more Whole Loan
Transfers; or
(ii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers;
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to restate the
representations and warranties set forth in this Agreement and the Interim
Servicing Agreement as of the related Reconstitution Date, provided, that with
respect to representations and warranties for which modifications may be
necessary to reflect changes due to events that may have occurred since the
Closing Date, such representations and warranties shall be restated as of the
related Transfer Date, modified, if necessary, to reflect changes due to
events that may have occurred from the Closing Date through the related
Transfer Date and (3) to enter into an assignment and recognition agreement or
other agreement in connection with such Transaction (the "Transaction
Agreement") setting forth such restated representations and warranties as of
the related Transfer Date and the remedies for breach of same (which remedies
will be the same as those set forth in this Agreement). The Seller shall use
its reasonable best efforts to assist the Purchaser, and any prospective
purchaser, if the Purchaser or such prospective purchaser so requests, in
connection with each Transaction, which assistance shall include, but not be
limited to, (i) providing any information relating to the Mortgage Loans
necessary to assist in the preparation of any disclosure documents, (ii)
restating as of the related Transfer Date, for the benefit of the Purchaser,
its assignees and the Successor Servicer, the same representations and
warranties as to the Mortgage Loans as set forth in clause (2) above, and
(iii) delivering an opinion of counsel (which may be from in-house counsel) in
form and substance satisfactory to the Purchaser if requested by the
Purchaser, provided that any opinion required of outside counsel with respect
to Rule 10B-5 shall be at the expense of Purchaser which shall not exceed
$2,500. The Seller agrees to enter into (a) an assignment, assumption and
recognition agreement pursuant to which the Seller assigns the restated
representations and warranties and remedies to the Transaction. If a
Transaction occurs during an Interim Period, the Seller agrees to enter into a
sub-servicing agreement with the Purchaser and the related successor servicer
mutually acceptable to the parties. Any such sub-servicing agreement shall
require the Seller to deliver (but not file) all necessary ▇▇▇▇▇▇▇▇-▇▇▇▇▇
certifications with respect to the Mortgage Loans mutually acceptable to the
parties. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Transaction Agreements and
Reconstitutions. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser, each Person who controls the Purchaser or such
Affiliate, and any Successor Servicer and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other reasonable
costs, fees and expenses that each of them may sustain in any way related to
any information provided by or on behalf of the Seller regarding the Seller,
the Seller's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution which contains or will contain any material
untrue statement
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of fact or omits or will omit to state a fact necessary to make the statements
contained herein or therein not misleading. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective
purchaser or trustee, as applicable, from the Seller, acceptable to the
prospective purchaser or trustee, as applicable, for each Mortgage Loan that
is part of the Reconstitution and shall pay all preparation and recording
costs associated therewith. In connection with the Reconstitution, the Seller
shall execute each Assignment of Mortgage, (except with respect to each MERS
Designated Mortgage Loan), track such Assignments of Mortgage to ensure they
have been recorded and deliver them as required by the prospective purchaser
or trustee, as applicable, upon the Seller's receipt thereof. Additionally,
the Seller shall prepare and execute, at the direction of the Purchaser, any
note endorsement in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the Mortgage Loans,
shall continue to be serviced in accordance with the terms of this Agreement
and the Interim Servicing Agreement and with respect thereto this Agreement
shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold it harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees (including (without limitation) legal fees
incurred in connection with the enforcement of the Seller's indemnification
obligation under this Subsection 14.01) and related costs, judgments, and any
other reasonable costs, fees and expenses that the Purchaser or the Successor
Servicer have incurred as a result of (a) the failure of the Seller to perform
its duties under this Agreement or (b) any breach of any of Seller's
representations, warranties or covenants set forth in this Agreement, (c) any
failure to service the Mortgage Loans in strict compliance with the terms of
the Interim Servicing Agreement or (d) any breach of any of Seller's
representations, warranties or covenants set forth in Transaction Agreement
entered into pursuant to Section 13. The Seller immediately shall notify the
Purchaser if a claim is made by a third party against the Seller with respect
to this Agreement or any Transaction Agreement or the Mortgage Loans, assume
(with the prior written consent of the Purchaser) the defense (provided, that
if the Purchaser does not consent, the Purchaser shall assume the defense) of
any such claim and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or the Purchaser in respect of such claim.
With respect to any third party claim or defense which Purchaser is
defending which relates to an allegation that Seller failed to originate or
service a Mortgage Loan in accordance with any federal, state or local law, in
the event that the Seller does not possess,
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and/or fails to deliver to the Purchaser upon demand, evidence of Seller's
compliance with all such requirements of applicable law, Seller shall (a)
repurchase such Mortgage Loan at the Repurchase Price and (b) indemnify the
Purchaser for all expenses in connection with the Purchaser's defense of such
claim, including legal fees, and (c) assume the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser in respect of such claim.
The Purchaser promptly shall reimburse the Seller for all reasonable
amounts advanced by it pursuant to the preceding paragraphs, except when the
claim is in any way related to the Servicer's indemnification pursuant to
Section 9.04 or the Interim Servicing Agreement, or is in any way related to
the failure of the Seller to service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement or any Transaction
Agreement.
Subsection 14.02 Purchaser Indemnification
The Purchaser shall indemnify and hold harmless Seller and its
directors, officers, partners and each Person, if any, that controls Seller,
within the meaning of either the Securities Act or the Exchange Act, against
any and all losses, claims, damages, penalties, fines, forfeitures or
liabilities to which Seller or any such director, officer, partner or
controlling Person may become subject, under the Securities Act, the Exchange
Act or otherwise, to the extent that such losses, claims, damages, penalties,
fines, forfeitures or liabilities (or actions in respect thereof) arise out of
the servicing of the Mortgage Loans by a successor servicer, out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any offering document prepared in connection with any
Reconstitution or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged 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, but only
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission relates to information set forth in any
information provided by the Purchaser set forth in any offering document
prepared in connection with any Reconstitution, and the Purchaser shall in
each case reimburse Seller and each such director, officer, partner or
controlling Person for any legal or other expenses reasonably incurred by
Seller, and each such director, officer or controlling Person, in connection
with investigating or defending any such loss, claim, damage, liability,
penalties, fines, forfeitures or action, as such expenses are incurred.
Subsection 14.03 Merger or Consolidation of the Seller
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller, shall be the successor of the Seller
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hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person
shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
Financial information regarding the Seller may be provided to
prospective purchasers for a period of three (3) years following the Closing
Date; provided, however, that such information will be limited to the audited
financial statements of the Seller for the three (3) years preceding such
disclosure; and such information may only be provided if the prospective
purchaser has executed a written confidentiality agreement, addressed to the
Seller, stating that all non-public information will be used only for the
purposes of evaluating the proposed investment and that the prospective
purchaser has required such information as integral to its decision-making
process. Copies of any such confidentiality agreements must be delivered by
the Purchaser to the Seller within five (5) Business Days of receipt thereof
by the Purchaser.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked
by any prospective purchaser regarding recent developments affecting the
Seller or the financial statements of the Seller.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered
or certified mail, return receipt requested, or, if by other means, when
received by the other party at the address as follows:
(i) if to a Seller:
Fremont Investment & Loan
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
(ii) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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).
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SECTION 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement
shall be construed in accordance with the laws of the State of New York and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the substantive laws of the State of New York
(without regard to conflicts of laws principles), except to the extent
preempted by Federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller are selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to
treat the transaction for Federal income tax purposes as a sale by the Seller,
and a purchase by the Purchaser, of the Mortgage Loans. Moreover, the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is not
found to represent direct ownership of the Mortgage Loans. The Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage Loan
Files to determine the characteristics of the Mortgage Loans which shall
affect the Federal income tax consequences of owning the Mortgage Loans and
the Seller shall cooperate with all reasonable requests made by the Purchaser
in the course of such review.
SECTION 21. 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
-40-
hypothecated by the Seller to a third party without the prior written consent
of the Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller; provided that Seller shall not be
required to recognize more than (a) three transferees of the Purchaser
pursuant to Securitization Transfers and (b) one transferee of the Purchaser
pursuant to a Whole Loan Transfer. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and
the Purchaser shall be relieved from any liability to the Seller with respect
thereto. The Successor Servicer shall be an intended third party beneficiary
of this Agreement to the same extent as if it were a party hereto, and shall
have the right to enforce the provisions of this Agreement.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
-41-
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 26. Further Agreements.
The 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 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or their comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option (except
with respect to any MERS Designated Mortgage Loan).
SECTION 28. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan to refinance a Mortgage Loan, in whole or in part, without the
prior written consent of the Purchaser. It is understood and agreed that all
rights and benefits relating to the solicitation of any mortgagors to
refinance any Mortgage Loans and the attendant rights, title and interest in
and to the list of such mortgagors and data relating to their mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant to the Purchase Agreement on the Closing Date and the Seller shall
take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that promotions undertaken by the
Seller or any affiliate of the Seller which are directed to the general public
at large, including, without limitation, mass mailing, internet, and email
solicitations based, in all instances, on commercially acquired mailing lists
(which may not be targeted at the Mortgagors,) and newspaper, radio and
television advertisements shall not constitute solicitation under this
-42-
Section 28. It is understood and agreed that responses to payoff inquiries by
the Mortgagors or obligors shall not constitute solicitation for purposes of
this Section 28.
SECTION 29. 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 30. Submission To Jurisdiction; Waivers.
Each party hereto hereby irrevocably and unconditionally:
(A) SUBMITS ITSELF IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PARTIES HERETO SHALL HAVE
BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
SECTION 31. Confidential Information
The Seller understands and agrees that this Agreement, the Side
Letter, the Purchase Price and Terms Letter, the Interim Servicing Agreement,
and any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with the securitization of
the Mortgage Loans, and any offering circulars or other disclosure documents
produced in connection with such securitization (the "Agreements") are
confidential and proprietary to the Purchaser, and the Seller agrees to hold
such documents confidential and not to divulge such documents to anyone except
(a) to the extent required by
-43-
law or judicial order or to enforce its rights or remedies under the Purchase
Price and Terms Agreement or the Agreements, (b) to the extent such
information enters into the public domain other than through the wrongful act
of the Seller, (c) as is necessary in working with legal counsel, auditors,
agents, rating agencies, taxing authorities or other governmental agencies or
(d) the federal income tax treatment of the transactions hereunder, any fact
relevant to understanding the federal tax treatment of the transactions
hereunder, and all materials of any kind (including opinions or other tax
analyses) relating to such federal income tax treatment; provided that the
Seller may not disclose the name of or identifying information with respect to
Purchaser or any pricing terms or other nonpublic business or financial
information that is unrelated to the purported or claimed federal income tax
treatment of the transactions hereunder and is not relevant to understanding
the purported or claimed federal income tax treatment of the transactions
hereunder.
[Signatures Commence on Following Page]
-44-
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.
▇▇▇▇▇▇▇ SACHS MORTGAGE
COMPANY, a New York limited partnership
(Purchaser)
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL
ESTATE FUNDING CORP., a New
York corporation, as General Partner
By:__________________________________
Name:________________________________
Title:_______________________________
FREMONT INVESTMENT & LOAN
(Seller)
By:__________________________________
Name:________________________________
Title:_______________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in
writing, pursuant to Section 6 of the Mortgage Loan Purchase and Warranties
Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To
the extent that there is no room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an allonge, if state law so
allows and the Custodian is so advised by the Seller that state law so allows.
If the Mortgage Loan was acquired by the Seller in a merger, the endorsement
must be by "[Last Endorsee], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by the Last Endorsee while doing
business under another name, the endorsement must be by "[Last Endorsee],
formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded
only if recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the Purchaser as provided
A-1
in this Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of Mortgage is
not to be recorded, the Assignment of Mortgage shall be delivered in blank. If
the Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller (or MERS with
respect to each MERS Designated Mortgage Loan) to the Last Endorsee with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such intervening assignment of mortgage has been dispatched to
the appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office to
be a true and complete copy of the original recorded intervening assignment of
mortgage will be promptly delivered to the Custodian upon receipt thereof by
the Seller; or (ii) in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation in a public
recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original
recorded intervening assignment;
(g) The original mortgagee policy of title insurance or attorney's
opinion of title accompanied by a title abstract or, in the event such
original title policy is unavailable, a certified true copy of the related
policy binder or commitment for title certified to be true and complete by the
title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage;
(i) original powers of attorney, if applicable, with evidence of
recording thereon, if required;
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be delivered to the Custodian.
A-2
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(b) The original hazard insurance policy and, if required by law,
flood insurance policy.
(c) Residential loan application.
(d) Mortgage Loan closing statement.
(e) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(f) Verification of acceptable evidence of source and amount of
downpayment.
(g) Credit report on the Mortgagor.
(h) Residential appraisal report.
(i) Photograph of the Mortgaged Property.
(j) Survey of the Mortgaged Property, if any.
(k) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e.,
map or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(l) All required disclosure statements.
(m) If available, termite report, structural engineer's report,
water potability and septic certification.
(n) Sales contract.
(o) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily contained in
a mortgage loan file and which are required to document the Mortgage Loan or
to service the Mortgage Loan.
(p) Amortization schedule.
B-1
EXHIBIT C
MORTGAGE LOAN SCHEDULE FIELDS
-----------------------------
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but
based on the actual amortization schedule;
(7) the LTV at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
C-1
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien);
(21) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(22) a code indicating the documentation style (i.e. full,
alternative or reduced);
(23) the loan credit classification (as described in the
Underwriting Guidelines);
(24) whether such Mortgage Loan provides for a Prepayment Penalty;
(25) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(26) a description of the Prepayment Penalty, if applicable;
(27) the Mortgage Interest Rate as of origination;
(28) the credit risk score (FICO score) at origination;
(29) the date of origination;
(30) the Mortgage Interest Rate adjustment period;
(31) the Mortgage Interest Rate floor;
(32) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(33) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan;
(34) a code indicating whether the Mortgage Loan has been modified;
(35) the Current CLTV;
(36) the one year payment history;
(37) the Due Date for the first Monthly Payment;
(38) the original Monthly Payment due;
(39) with respect to the related Mortgagor, the debt-to-income
ratio;
(40) the Appraised Value of the Mortgaged Property;
C-2
(41) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(42) the MERS Identification Number
(43) Senior lien balance
(44) Lien position marker
(45) CLTV at origination
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
C-3
EXHIBIT D
MORTGAGE LOAN SCHEDULE
----------------------
D-1
EXHIBIT E
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of Fremont Investment & Loan], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage Loan
Purchase and Warranties Agreement, dated as of November 1, 2003, by and
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"), and the Interim Servicing Agreement, dated as
of November 1, 2003, by and between the Company and the Purchaser (the
"Interim Servicing Agreement") and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and
have been in effect without amendment, waiver, rescission or
modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Interim Servicing Agreement, the sale of
the mortgage loans or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval, authorization
or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement and the Interim
Servicing Agreement conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by which
it is bound or to which it is subject, or any statute or order, rule,
regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
E-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 Purchase Agreement and the Interim Servicing Agreement, or the
mortgage loans or of any action taken or to be taken in connection with
the transactions contemplated hereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Purchase Agreement and the Interim Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) the Interim Servicing Agreement, (and (c) any other
document delivered or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective times
of such signing and delivery, and is now, a duly elected or appointed,
qualified and acting officer or representative of the Company, who holds
the office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Interim
Servicing Agreement.
E-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 ______________
[COMPANY], hereby certify that ____________ is the duly elected, qualified and
acting [Vice] President of the Company and that the signature appearing above
is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
E-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
E-4
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
F-1
EXHIBIT G
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that Fremont Investment & Loan a [type
of entity], organized pursuant to the laws of [the state of incorporation]
(the "Company") has committed to sell to ▇▇▇▇▇▇▇ Sachs Mortgage Company under
a Mortgage Loan Purchase and Warranties Agreement, dated as of November 1,
2003, 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.
G-1
Very truly yours,
____________________________
By:_________________________
Name:_______________________
Title:______________________
Date:_______________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
___________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
G-2
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be
purchased by to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company from the Company named below
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement,
dated as of November 1, 2003, 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:_____________________________
H-1
II. Certification of Release
------------------------
The Company named below hereby certifies ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ Sachs Mortgage Company the security interests in the
Mortgage Loans released by the above-named financial institution comprise all
security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
______________________________
By:___________________________
Title:________________________
Date:_________________________
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EXHIBIT I
UNDERWRITING GUIDELINES
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I-1
EXHIBIT J
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
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CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the Closing
Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than
___% are secured by real property improved by individual condominium units,
(c) no more than ___% are secured by real property improved by an individual
unit in a planned unit development, and (d) at least ___% are secured by real
property with a detached one family residence erected thereon. With respect to
the aggregate unpaid principal balance of the Mortgage Loans, (a) no more than
____% are "cash-out" refinance mortgage loans, (b) no more than ____% are rate
and term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to
the aggregate unpaid principal balance of the Mortgage Loans, the weighted
average FICO Score shall be at least _______. No Mortgage Loan shall have a
FICO Score less than ___ as of the origination date. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (i) no more than __%
of the Mortgage Loans were originated under a `stated documentation' program,
(ii) no more than __% of the Mortgage Loans were originated under a
documentation program which is lacking ratio verification, (iii) no more than
__% of the Mortgage Loans have no documentation and (iv) at least _________%
of the Mortgage Loan were originated under a `full documentation' program. The
maximum Mortgage Interest Rate on the Mortgage Loans as of the Cut-off Date
was ____%. The minimum Mortgage Interest Rate on the Mortgage Loans as of the
Cut-off Date was ____%. The Mortgage Loans have a weighted average remaining
term of ___ months. The maximum original principal balance of the Mortgage
Loans is $_______________. The minimum original principal balance of the
Mortgage Loans is $______________. The average original principal balance of
the Mortgage Loans is $ _______________. With respect to the aggregate unpaid
principal balance of the Mortgage Loans: (a) __% of the Mortgaged Properties
will be located in [_______]; (b) __% of the Mortgaged Properties will be
located in [______] and (c) not more than __% of the Mortgaged Properties will
be located in any other single state. The Mortgage Loan, as of the date of its
origination, has an LTV equal to or less than ___%. The weighted average LTV
of all the Mortgage Loans as of their respective dates of origination was not
greater than ____%
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EXHIBIT K
SERVICER ACKNOWLEDGMENT
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As of [_________]
Fremont Investment & Loan
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Letter Agreement in connection with the purchase by ▇▇▇▇▇▇▇
Sachs Mortgage Company (the "Purchaser") and the sale by
Fremont Investment & Loan (the "Company") of mortgage loans
pursuant to that certain Mortgage Loan Purchase and Warranties
Agreement (the "Agreement"), dated as of November 1, 2003, by
and between the Company and the Purchaser
-----------------------------------------
Ladies and Gentlemen:
In connection with the above-referenced transaction, and in
consideration of the mutual agreements hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Purchaser and the Company hereby agree as follows:
1. Unless otherwise specified in this letter agreement, all capitalized
terms herein shall have the meaning as provided in the Agreement.
2. The Purchaser hereby requests, and the Company hereby acknowledges, that
[SERVICER] shall be the "Successor Servicer" under the agreement.
3. This letter may be executed in any number of counterparts each of which
shall constitute one and the same instrument, and either party hereto may
execute this letter by signing any such counterpart.
[the remainder of this page intentionally left blank]
4. This letter shall be deemed in effect when a fully executed counterpart
thereof is received by the Company in the State of New York and shall be
deemed to have been made in the State of New York. This letter shall be
construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the laws of the State of New York except to
the extent preempted by Federal law.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE
COMPANY
By:____________________________
Name:__________________________
Title:_________________________
Accepted and Agreed:
FREMONT INVESTMENT & LOAN
(Seller)
By: _________________________
Name: _________________________
Title: _________________________
EXHIBIT W
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]
W-1
EXHIBIT X
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]
X-1
EXHIBIT Y
Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of December 1, 2005, between ▇▇▇▇▇▇▇ Sachs Mortgage Company and
Novelle Financial Services, Inc.
[See Exhibit 99.1 to Form 8-K filed with the Commission on June 12, 2006,
Accession No. 0000905148-06-004373]
Y-1
EXHIBIT Z
Second Amended and Restated Master Seller's Warranties and
Servicing Agreement, dated as of November 1, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and ▇▇▇▇▇ Fargo Bank, National Association
[See Exhibit 99.1 to Form 8-K filed with the Commission on May 12, 2006,
Accession No. 0000905148-06-003718]
Z-1