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GSAA HOME EQUITY TRUST 2006-4
ASSET-BACKED CERTIFICATES
SERIES 2006-4
FORM OF MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee,
U.S. BANK NATIONAL ASSOCIATION,
DEUTSCHE BANK NATIONAL TRUST COMPANY AND
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Custodians
and
▇▇▇▇▇ FARGO BANK, N.A.,
Master Servicer and Securities Administrator
Dated February 1, 2006
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................11
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans....................................43
Section 2.02 Acceptance by each Custodian 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 [Reserved]......................................................49
Section 2.07 Representations and Warranties of the Custodians................49
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account...............49
Section 3.02 Investment of Funds in the Distribution Account.................51
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution......................................53
Section 4.02 Allocation of Realized Losses and Shortfalls....................57
Section 4.03 Crossover Amounts...............................................58
Section 4.04 Certain Matters Relating to the Determination of LIBOR..........58
Section 4.05 Supplemental Interest Trust.....................................59
Section 4.06 Trust's Obligations under the Interest Rate Swap
Agreement; Replacement and Termination of the
Interest Rate Swap Agreement....................................60
ARTICLE V
THE CERTIFICATES
i
Section 5.01 The Certificates................................................61
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates........................................62
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...............67
Section 5.04 Persons Deemed Owners...........................................68
Section 5.05 Access to List of Certificateholders' Names and Addresses.......68
Section 5.06 Maintenance of Office or Agency.................................68
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor....................................68
Section 6.02 Merger or Consolidation of the Depositor........................69
Section 6.03 Limitation on Liability of the Depositor and Others.............69
Section 6.04 Servicing Compliance Review.....................................69
Section 6.05 Option to Purchase Defaulted Mortgage Loans.....................70
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default...............................................70
Section 7.02 Master Servicer to Act; Appointment of Successor................70
Section 7.03 Master Servicer to Act as Servicer..............................72
Section 7.04 Notification to Certificateholders..............................72
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
Section 8.01 Duties of the Trustee and the Custodians........................72
Section 8.02 [Reserved]......................................................73
Section 8.03 Certain Matters Affecting the Trustee and the Custodians........73
Section 8.04 Trustee and Custodians Not Liable for Certificates
or Mortgage Loans...............................................75
Section 8.05 Trustee May Own Certificates....................................75
Section 8.06 Trustee's Fees and Expenses.....................................75
Section 8.07 Eligibility Requirements for the Trustee........................76
Section 8.08 Resignation and Removal of the Trustee..........................77
Section 8.09 Successor Trustee...............................................77
Section 8.10 Merger or Consolidation of the Trustee or any Custodian.........78
Section 8.11 Appointment of Co-Trustee or Separate Trustee...................78
Section 8.12 Tax Matters.....................................................79
Section 8.13 [RESERVED]......................................................82
Section 8.14 Tax Classification of the Excess Reserve Fund
Account and the Interest Rate Swap Agreement....................82
Section 8.15 Custodial Responsibilities......................................83
ii
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE
MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicers' Obligations..........................................84
Section 9.02 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.............................................86
Section 9.03 Representations and Warranties of the Master Servicer...........86
Section 9.04 Master Servicer Events of Default...............................88
Section 9.05 Waiver of Default...............................................90
Section 9.06 Successor to the Master Servicer................................90
Section 9.07 Compensation of the Master Servicer.............................91
Section 9.08 Merger or Consolidation.........................................91
Section 9.09 Resignation of the Master Servicer..............................91
Section 9.10 Assignment or Delegation of Duties by the Master Servicer.......92
Section 9.11 Limitation on Liability of the Master Servicer..................92
Section 9.12 Indemnification; Third Party Claims.............................93
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator.........................94
Section 10.02 Certain Matters Affecting the Securities Administrator.........95
Section 10.03 Securities Administrator Not Liable for
Certificates or Mortgage Loans.................................96
Section 10.04 Securities Administrator May Own Certificates..................97
Section 10.05 Securities Administrator's Fees and Expenses...................97
Section 10.06 Eligibility Requirements for the Securities Administrator......98
Section 10.07 Resignation and Removal of the Securities Administrator........98
Section 10.08 Successor Securities Administrator.............................99
Section 10.09 Merger or Consolidation of the Securities Administrator.......100
Section 10.10 Assignment or Delegation of Duties by the
Securities Administrator.......................................100
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.................................................101
Section 11.02 Final Distribution on the Certificates........................102
Section 11.03 Additional Termination Requirements...........................103
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.....................................................103
iii
Section 12.02 Recordation of Agreement; Counterparts........................106
Section 12.03 Governing Law.................................................106
Section 12.04 Intention of Parties..........................................106
Section 12.05 Notices.......................................................106
Section 12.06 Severability of Provisions....................................108
Section 12.07 Limitation on Rights of Certificateholders....................108
Section 12.08 Certificates Nonassessable and Fully Paid.....................109
Section 12.09 Waiver of Jury Trial..........................................109
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations............................................109
Section 13.02 Form 10-D Filings.............................................110
Section 13.03 Form 8-K Filings..............................................111
Section 13.04 Form 10-K Filings.............................................111
Section 13.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification..................................112
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and
15d-14(d) under the Exchange Act (pursuant to
Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and
the rules and regulations of the Commission
promulgated thereunder (including any
interpretations thereof by the Commission's staff))............112
Section 13.06 Form 15 Filing................................................113
Section 13.07 Report on Assessment of Compliance and Attestation............113
Section 13.08 Use of Subservicer and Subcontractors.........................114
iv
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A and Class B Certificates
Exhibit B Form of Class 4A-IO Certificate
Exhibit C Form of Class P Certificates
Exhibit D Form of Class R and Class RC Certificates
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of
Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Servicing Agreement, dated as of July 1, 2004, between
Countrywide Home Loans Servicing LP and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company
Exhibit K Master Mortgage Loan Purchase Agreement, dated July 1, 2004,
between Countrywide Home Loans, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company
Exhibit L Amendment Reg AB to the Master Mortgage Loan Purchase and
Servicing Agreement, dated as of January 1, 2006, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, Countrywide Home Loans, Inc.
and Countrywide Home Loans Servicing LP
Exhibit M Flow Servicing Agreement, dated as of May 1, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Countrywide Home Loans
Servicing LP
Exhibit N Form of Master Loan Purchase Agreement, between various
sellers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Exhibit O [Reserved]
Exhibit P Form of Performance Certification (Master Servicer)
Exhibit Q Form of Performance Certification (Securities Administrator)
v
Exhibit R Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
vi
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of February 1,
2005 (this "Agreement"), is hereby executed by and among GS MORTGAGE
SECURITIES CORP., a Delaware corporation (the "Depositor"), DEUTSCHE BANK
NATIONAL TRUST COMPANY, as trustee (in such capacity, the "Trustee"), U.S.
BANK NATIONAL ASSOCIATION, DEUTSCHE BANK NATIONAL TRUST COMPANY and JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION, each as a custodian (together, the
"Custodians") and ▇▇▇▇▇ FARGO BANK, N.A., as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trust shall elect that
four segregated asset pools within the Trust Fund be treated for federal
income tax purposes as comprising four REMICs (each, a "Trust REMIC" or, in
the alternative, the "REMIC 1", the "REMIC 2", the "REMIC 3", and the "Master
REMIC", respectively). The Class UT-Swap IO Interest and each Class of
Certificates (other than the Residual Certificates, the Class P Certificates,
and the rights of each Class of LIBOR Certificates to receive Basis Risk Carry
Forward Amounts), represents ownership of a regular interest in the Upper-Tier
REMIC for purposes of the REMIC Provisions. The Class R Certificates represent
ownership of the sole class of residual interest in the Upper-Tier REMIC, and
the Class RC Certificates represent ownership of the sole class of residual
interest in each of REMIC 1, REMIC 2 and REMIC 3 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 Upper-Tier REMIC shall hold as assets the
several classes of uncertificated REMIC 3 Regular Interests, set out below.
REMIC 1 shall hold as assets the assets described in the definition of "Trust
Fund" herein (other than the Prepayment Premiums, the Interest Rate Swap
Agreement and the Excess Reserve Fund Account). Each REMIC 1 Regular Interest
is hereby designated as a regular interest in REMIC 1. Each REMIC 2 Regular
Interest is hereby designated as a regular interest in REMIC 2. Each REMIC 3
Regular Interest is hereby designated as a regular interest in REMIC 3. The
Class P Certificates represent beneficial ownership of the Prepayment
Premiums, each Class of Regular Certificates represents beneficial ownership
of a regular interest in the Upper-Tier REMIC and the right to receive Basis
Risk Carry Forward Amounts and the Class 4A-IO Certificates represent
beneficial ownership of two separate regular interests in the Upper-Tier
REMIC, the Interest Rate Swap Agreement, the Supplemental Trust and the Excess
Reserve Fund Account, which portions of the Trust Fund shall be treated as a
grantor trust.
REMIC 1
The REMIC 1 Regular Interests will have the initial principal
balance, Pass-Through Rates and corresponding Loan Groups as set forth in the
following table:
Initial Principal Pass-Through Corresponding
REMIC 1 Interests Balance Rate Loan Group
----------------- ------- ---- ----------
A-1 (0.9% of the Assumed
Balance of Loan Group 1) (1) (2) 1
B-1 (0.1% of the Assumed
Balance of Loan Group 1) (1) (2) 1
C-1 (Excess of Loan Group 1) (1) (2) 1
A-2 (0.9% of the Assumed
Balance of Loan Group 2) (1) (2) 2
B-2 (0.1% of the Assumed
Balance of Loan Group 2) (1) (2) 2
C-2 (Excess of Loan Group 2) (1) (2) 2
A-3 (0.9% of the Assumed
Balance of Loan Group 3) (1) (2) 3
B-3 (0.1% of the Assumed
Balance of Loan Group 3) (1) (2) 3
C-3 (Excess of Loan Group 3) (1) (2) 3
A-4 (0.9% of the Assumed
Balance of Loan Group 4) (1) (2) 4
B-4 (0.1% of the Assumed
Balance of Loan Group 4) (1) (2) 4
C-4 (Excess of Loan Group 4) (1) (2) 4
R-1 (3) (3) N/A
---------------
(1) Each Class A Interest will have a principal balance initially equal to
0.9% of the Assumed Balance of its corresponding Loan Group. Each Class B
Interest will have a principal balance initially equal to 0.1% of the the
Assumed Balance of its corresponding Loan Group. The initial principal balance
of each Class C Interest will equal the excess of the initial aggregate
principal balance of its corresponding Loan Group over the initial aggregate
principal balances of the Class A and Class B Interests corresponding to such
Loan Group.
(2) The Weighted Average Adjusted Net Mortgage Rate of the corresponding Loan
Group.
(3) The Class R-1 Interest is the sole class of residual interest in REMIC 1.
It has no principal balance and pays no principal or interest.
On each Distribution Date, the Available Distribution Amounts shall
be distributed with respect to the REMIC 1 Interests in the following manner:
(1) Interest is to be distributed with respect to each REMIC 1 Interest
according to the formulas described above;
2
(2) If Cross-Over Situation does not exist with respect to any Class of
Interests, then Principal Amounts and Realized Losses arising with respect to
each Loan Group will be allocated: first to cause the Loan Group's
corresponding Class A and Class B to equal, respectively, 0.9% of the Assumed
Balance and 0.1% of the Assumed Balance (i.e. subordination); and second to
the Loan Group's corresponding Class C Interest;
(4) If a Cross-Over Situation exists with respect to the Class A and Class B
Interests then:
(a) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is less than the Subordinate Pass-Through Rate,
Principal Relocation Payments will be made proportionately to the
outstanding Class A Interests prior to any other distributions of
principal from each such Loan Group; and
(b) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is greater than the Subordinate Pass-Through Rate,
Principal Relocation Payments will be made proportionately to the
outstanding Class B Interests prior to any other distributions of
principal from each such Loan Group.
In case of either (a) or (b), Principal Relocation Payments will be made so as
to cause the Calculation Rate in respect of the outstanding Class A and Class
B Interests to equal the Subordinate Pass-Through Rate. With respect to each
Loan Group, if (and to the extent that) the sum of (a) the principal payments
comprising the Principal Amount received during the Due Period and (b) the
Realized Losses on the Mortgage Loans in that Loan Group, are insufficient to
make the necessary reductions of principal on the Class A and Class B
Interests, then interest will be added to the Loan Group's other REMIC 1
Interests that are not receiving Principal Relocation Payments, in proportion
to their principal balances.
(c) The outstanding aggregate Class A and Class B Interests for all
Loan Groups will not be reduced below 1% of the excess of (i) the
aggregate Stated Principal Balances of the Mortgage Loans as of the
end of any Due Period over (ii) the Certificate Balance of the Senior
Certificates (excluding the Residual Certificates) for all
Certificate Groups as of the related Distribution Date (after taking
into account distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to the Class A and Class B Interests of a Loan
Group, and if the Loan Group's Class C Interest has already been reduced to
zero, then the excess principal from that Loan Group will be paid to the Class
C Interests of the other Loan Group, the aggregate Class A and Class B
Interests of which are less than 1% of the Assumed Balance. If the Mortgage
Loans in the Loan Group of the Class C Interest that receives such payment has
a Weighted Average Adjusted Net Mortgage Rate below the Weighted Average
Adjusted Net Mortgage Rate of the Loan Group making the payment, then the
payment will be treated by the REMIC 1 as a Realized Loss. Conversely, if the
Loan Group of the Class C Interest that receives such payment has a Weighted
Average Adjusted Net Mortgage Rate above the Weighted Average Adjusted Net
Mortgage Rate of the Loan Group making the payment, then the payment will be
treated by the REMIC 1 as a reimbursement for prior Realized Losses.
3
REMIC 2
-------
Class 2-1 (2)
Class 2-2 (2)
Class 2-3 (2)
Class 2-4 (2)
Class 2-5 (2)
Class 2-6 (2)
Class 2-7 (2)
Class 2-8 (2)
Class 3-9 (2)
Class 2-10 (2)
Class 2-11 (2)
Class 2-12 (2)
Class 2-13 (2)
Class 2-14 (2)
Class 2-15 (2)
Class 2-16 (2)
Class 2-17 (2)
Class 2-18 (2)
Class 2-19 (2)
Class 2-20 (2)
Class 2-21 (2)
Class 2-22 (2)
Class 2-23 (2)
4
Class 2-24 (2)
Class 2-25 (2)
Class 2-26 (2)
Class 2-27 (2)
Class 2-28 (2)
Class 2-29 (2)
Class 2-30 (2)
Class 2-31 (2)
Class 2-32 (2)
Class 2-33 (2)
Class 2-Support (2)
(1) Scheduled principal, prepayments and Realized Losses will be
allocated first, among such Classes sequentially to the Class having the
lowest cardinal number following such designation, and second, to the Class
2-Support Interest, in each case until reduced to zero.
(2) The weighted average of the Net Mortgage Rates.
In addition to issuing the REMIC 2 Regular Interests, REMIC 2 shall issue
the Class R-2 Interest, which shall be represented by the Class RC
Certificates and represent the sole class of residual interests in REMIC 2.
REMIC 3
-------
Corresponding
REMIC 3 Interest REMIC 3 Upper-Tier REMIC
Designation Interest Rate Class (1)
----------- ------------- ---------
Class 3-1A1 (2) 1A1
Class 3-1A2 (2) 1A2
Class 3-2A1 (3) 2A1
Class 3-3A1 (4) 3A1
Class 3-4A1 (5) 4A1
Class 3-4A2 (5) 4A2
Class 3-4A3 (6) 4A3
Class 3-B-1 (7) B-1
Class 3-B-2 (7) B-2
Class 3-B-3 (7) B-3
5
Corresponding
REMIC 3 Interest REMIC 3 Upper-Tier REMIC
Designation Interest Rate Class (1)
----------- ------------- ---------
Class 3-B-4 (7) B-4
Class 3-B-5 (7) B-5
Class 3-B-6 (7) B-6
3-Swap IO (8) N/A
--------------------
(1) On each Distribution Date, following the allocation of scheduled
principal, principal prepayments and Realized Losses, the principal
balance of each Class of REMIC 3 Interests will equal the principal
balance in respect of its Corresponding Upper-Tier REMIC Interest.
(2) The interest rate with respect to any Distribution Date will be the Loan
Group I Cap.
(3) The interest rate with respect to any Distribution Date will be the Loan
Group II Cap.
(4) The interest rate with respect to any Distribution Date will be the Loan
Group III Cap.
(5) The interest rate with respect to any Distribution Date will be the Group
IV WAC Cap.
(6) The interest rate with respect to any Distribution Date will be the Loan
Group IV Cap.
(7) The Calculation Rate.
(8) For each Distribution Date, the REMIC 3 Interest Rate will equal the
excess of [?]% over one month LIBOR on a notional balance equal to the
sum of the principal balances of each REMIC 2 Regular Interest whose
cardinal number following such designation (e.g. -1, -2, -3,...) is not
exceeded by the ordinal number of the Distribution Date following the
Closing Date (e.g. first, second, third,...) for such Distribution Date.
REMIC 3 shall hold as assets all of the REMIC 2 Regular Interests.
In addition to issuing the REMIC 3 Regular Interests, REMIC 3 shall
issue the Class R-3 Interest which shall be the sole class of residual
interests in REMIC 3. The Class RC Certificates will represent ownership of
the Class R-3 Interest and will be issued as a single certificate in a
principal amount of $100 and shall have no interest rate. Amounts received by
the Class R-3 Interest shall be deemed paid from REMIC 3.
The Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following classes of Upper-Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper-Tier REMIC.
Upper-Tier Interest
Rate and Initial Upper-Tier Principal
Upper-Tier Corresponding Amount and Corresponding Corresponding Class of
Class Designation Class Pass-Through Rate Class Certificate Balance Certificates
----------------- ----------------------- ------------------------- ------------
Class 1A1 (1) $ Class 1A1(11)
6
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 1A2 (1) $ Class 1A2(11)
Class 2A1 (2) $ Class 2A1(11)
Class 3A1 (3) $ Class 3A1(11)
Class 4A1 (4) $ Class 4A1(11)
Class 4A2 (5) $ Class 4A2(11)
Class 4A3 (6) $ Class 4A3(11)
Class B-1 (5) $ Class B-1
Class B-2 (6) $ Class B-2
Class B-3 (7) $ Class B-3
Class B-4 (7) $ Class B-4
Class B-5 (7) $ Class B-5
Class B-6 (7) $ Class B-6
Class 4A-IO (8) (10) Class 4A-IO(10)
UT-Swap IO (9) N/A
(1) The Class 1A1 and Class 1A2 Interest will bear interest during each
Interest Accrual Period at a per annum rate equal to the Loan Group I
Cap.
(2) The Class 2A1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the Loan Group II Cap.
(3) The Class 3A1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the Loan Group III Cap.
(4) The Class 4A1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (a) LIBOR plus [?]% and
(b) the Group IV WAC Cap.
(5) The Class 4A2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (a) LIBOR plus [?]% and
(b) the Group IV WAC Cap.
(6) The Class 4A3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the Loan Group IV Cap.
(7) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and the Class
B-6 Interests will bear interest during each Interest Accrual Period at a
per annum rate equal to (i) the sum of the following for each Loan Group:
the product of (x) the related Loan Group Cap and (y) the related Group
Subordinate Amount, divided by (ii) the aggregate Class Certificate
Balance of the Subordinate Certificates.
(8) The Class 4A-IO Interest will accrue interest on a notional principal
balance. As of any Distribution Date, the Class 4A-IO Interest shall have
a notional principal balance equal to the aggregate of the principal
balances of the REMIC 3 Regular Interests as of the first day of the
related Interest Accrual Period. With respect to any Interest Accrual
Period,
7
the Class 4A-IO Interest shall bear interest at a rate equal to the
excess, if any, of the Group IV WAC Cap minus net swap receipts over the
weighted average of the Pass-Through Rates in respect of the Class 4-A-1
and Class 4-A-2 Certificates. The Class 4A-IO Certificates will represent
beneficial ownership of the Class 4A-IO Interest, the Interest Rate Swap
Agreement, the Supplemental Interest Trust and amounts in the Excess
Reserve Fund Account, subject to the obligation to make payments from the
Excess Reserve Fund Account and the Supplemental Interest Trust in
respect of Basis Risk Carry Forward Amounts. For federal income tax
purposes, the Securities Administrator will treat the Class 4A-IO
Certificateholders' obligation to make payments from the Excess Reserve
Fund Account and the Supplemental Interest Trust as payments made
pursuant to an interest rate cap contract written by the Class 4A-IO
Certificateholders in favor of each Class of LIBOR Certificates. Such
rights of the Class 4A-IO Certificateholders and LIBOR Certificateholders
shall be treated as held in a portion of the Trust Fund that is treated
as a grantor trust under subpart E, Part I of subchapter J of the Code.
(9) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the
Supplemental Interest Trust in respect of any Basis Risk Carry Forward
Amounts. For federal income tax purposes, the Securities Administrator
will treat a Certificateholder's right to receive payments from the
Excess Reserve Fund Account and the Supplemental Interest Trust as
payments made pursuant to an interest rate cap contract written by the
Class 4A-IO Certificateholders.
(10) For each Distribution Date, 100% of the cash flow in respect of the Class
3-Swap IO Interest. The Class 4A-IO Certificates will be entitled to 100%
of the Cash flow in respect of the Class UT-Swap IO Interest.
Each of the Class 4A and Subordinate Certificates will also be subject to
the obligation to pay Class IO Shortfalls as described in Section 8.14. For
federal income tax purposes, any amount distributed on the LIBOR Certificates
on any such Distribution Date in excess of their Pass Through Rate, calculated
by subtracting any Net Swap Payment Amounts from the Group IV WAC Cap (the
"REMIC Cap") shall be treated as having been paid from the Excess Reserve Fund
Account or the Supplemental Interest Trust, as applicable, and any excess of
the REMIC Cap over the amount distributable on such Class of LIBOR
Certificates on such Distribution Date shall be treated as having been paid to
the Supplemental Interest Trust, all pursuant to, and as further provided in,
Section 8.14. The Securities Administrator will treat a LIBOR
Certificateholder's right to receive payments from the Excess Reserve Fund
Account and the Supplemental Interest Trust as payments made pursuant to an
interest rate cap contract written by the Class 4A-IO 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 book-entry 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.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC as cash flow
on a REMIC regular
8
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 or Class RC Certificates be entitled to any cash flow pursuant to
this Agreement except as provided in Section 4.01(a)(iii)(O) 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 REMIC 1 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 or notional amount 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 B-4, Class B-5 and Class
B-6 will each be $6,676,000, $4,895,000 and $3,562,631, respectively, and each
will be a [100]% Percentage Interest in such Class and (b) the Class P
Certificates will be a 1% Percentage Interest in each such Class.
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 and (b) the Class P and Class 4A-IO Certificates will be a 1%
Percentage Interest in each such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.........All Classes of Certificates other than the
Physical Certificates.
Class A Certificates............The Class 1A1, Class 1A2, Class 2A1, Class
3A1, Class 4A1, Class 4A2, Class 4A3 and
Class 4A-IO Certificates, collectively.
9
Class B Certificates............The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates,
collectively.
Group I Certificates............The Class 1A1, Class 1A2, Class B-1, Class
B-2 and Class B-3 Certificates,
collectively.
Group II Certificates...........The Class 2A1, Class B-1, Class B-2 and
Class B-3 Certificates, collectively.
Group III Certificates..........The Class 3A1, Class B-1, Class B-2 and
Class B-3 Certificates, collectively.
Group IV Certificates...........The Class 4A1, Class 4A2, Class 4A3, Class
B-1, Class B-2 and Class B-3 Certificates,
collectively.
Residual Certificates...........The Class R and Class RC Certificates.
ERISA Restricted
Certificates....................The Private Certificates and any
Certificate with a rating below the lowest
applicable permitted rating under the
Underwriters' Exemption.
Interest-Bearing Certificates...The Class A and Class B Certificates.
Offered Certificates............All Classes of Certificates other than the
Private Certificates.
LIBOR Certificates..............The Class 4A1 and Class 4A2 Certificates.
Notional Amount Certificates....The Class 4A-IO Certificates.
Physical Certificates...........The Class P Certificates.
Private Certificates............The Class B-4, Class B-5, Class B-6, Class
P and Class 4A-IO Certificates.
Rating Agencies.................▇▇▇▇▇'▇ and S&P.
Regular Certificates............All Classes of Certificates other than the
Regular Certificates.
Senior Certificates.............The Class 1A1, Class 1A2, Class 2A1, Class
3A1, Class 4A1, Class 4A2, Class 4A3 and
Class 4A-IO Certificates.
10
Subordinate Certificates........The Class B Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the Servicing Agreements
or Sale Agreements. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Account: Any of the Distribution Account or the Excess Reserve Fund
Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest: With respect to any Distribution Date
for each Class of Interest-Bearing Certificates, (i) the amount of interest
accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance or Notional Amount
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 plus
(ii) the sum of (a) the portion of the Accrued Certificate Interest 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).
Additional Designated Information: As defined in Section 13.02.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Administrative Fee Rate: With respect to any Mortgage Loan, the
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.
Affected Senior Certificate: As defined in Section 4.03 hereof.
Affected Subordinate Certificate: As defined in Section 4.01(d)
hereof.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
11
Agreement: This Master Servicing and Trust Agreement and all
amendments or supplements hereto.
[Apportioned Principal Balance: For any Class of Subordinate
Certificates and any Distribution Date, the Class Principal Balance of such
Class immediately prior to such Distribution Date multiplied by a fraction,
the numerator of which is the related Group Subordinate Amount for such date
and the denominator of which is the sum of all Group Subordinate Amounts for
such date.]
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
Assignment Agreement: A Step 1 Assignment Agreement or a Step 2
Assignment Agreement.
Auction Call: As defined in Section 11.01.
Available Distribution Amount: For any Distribution Date and any Loan
Group, the sum for the Mortgage Loans in such Loan Group of the following
amounts:
(a) the total amount of all cash received from or on behalf of the
Mortgagors or advanced by the applicable Servicer, or the Master Servicer as
successor servicer in the event the applicable Servicer fails to make such
required advances, or by the Trustee as successor master servicer in the event
the Master Servicer fails to make any such required advances, in each case
pursuant to the advancing requirements set forth in the applicable Sale
Agreements, Servicing Agreements and Assignment Agreements, as applicable) on
the Mortgage Loans in such Loan Group and not previously distributed
(including Advances made by such Servicer (or the Master Servicer as successor
servicer) in the event the applicable Servicer fails to make any such required
advances or the Trustee as successor master servicer, or by another successor
servicer, in the event the Master Servicer fails to make any such required
advances, in each case pursuant to the advancing requirements set forth in the
applicable Servicing Agreement, Sale Agreements or Assignment Agreements, as
applicable), Compensating Interest made by such Servicer (or the Master
Servicer or the Trustee as successor Master Servicer, as the case may be) and
proceeds of Mortgage Loans that are liquidated), except:
(i) all Scheduled Payments collected but due on a Due Date after that
Distribution Date;
(ii) all voluntary Principal Prepayments in full or in part by the
Mortgagor received after the previous calendar month;
(iii) all voluntary Principal Prepayments in full by the Mortgagor
received after the previous calendar month (together with any interest payment
received with such voluntary Principal Prepayments to the extent that it
represents the payment of interest accrued on the Mortgage Loans for the
period after the previous calendar month);
12
(iv) Liquidation Proceeds and Insurance Proceeds received on the
Mortgage Loans in such Loan Group after the previous calendar month;
(v) all amounts in the Distribution Account from Mortgage Loans in
the related Loan Groups that are then due and payable to the applicable
Servicer under the related Servicing Agreement;
(vi) the Servicing Fee and the Lender Fee Paid Mortgage Insurance
Amount for each Mortgage Loan in such Loan Group, net of any amounts payable
as compensating interest by the applicable Servicer on that Distribution Date;
(vii) any Crossover Amount from such Loan Group required to be
allocated to any other Loan Group pursuant to Section 4.03;
(viii) such Loan Group's share of all related indemnification amounts
and other amounts reimbursable on such Distribution Date to the Master
Servicer, the Securities Administrator, the Custodians and the Trustee, as
provided herein;
(b) the total amount of any cash received by the Securities
Administrator or the applicable Servicer (or the Master Servicer) from the
repurchase by the applicable Seller, the Depositor or GSMC of any Mortgage
Loans pursuant to any Assignment Agreement or any Servicing Agreement,
together with any Substitution Adjustment Amount received by the Securities
Administrator in connection with the substitution by the Depositor of a
Qualified Substitute Mortgage Loan for a Deleted Mortgage Loan pursuant to a
Servicing Agreement or Assignment Agreement, as applicable, in each case as a
result of defective documentation or breach of representations and warranties
(provided that the obligation to repurchase arose before the related Due
Date);
(c) any Crossover Amount from any other Loan Group required to be
allocated to such Loan Group pursuant to Section 4.03; and
(d) any Subsequent Recoveries received with respect to the Mortgage
Loans in such Loan Group.
Avelo: Avelo Mortgage, L.L.C., a Delaware limited liability company,
and its successors in interest.
Avelo Servicing Agreement: The Flow Servicing Agreement, dated as of
January 1, 2006, between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Avelo Mortgage,
L.L.C.
Bankruptcy Coverage: For any Distribution Date, an amount equal to
the greater of (i) (x) $363,428.05 or such lesser amount as may be determined
by the Depositor from time to time upon written confirmation from each Rating
Agency that the use of such lesser amount will not adversely affect the then
current ratings assigned to any Class of Certificates by such Rating Agency,
minus (y) the aggregate amount of Bankruptcy Losses allocated to the
Certificates on or prior to such date and (ii) zero.
13
Bankruptcy Loss: (A) Any reduction in the total amount owed by a
Mortgagor on a Mortgage Loan occurring as a result of a final order of a court
in a bankruptcy proceeding and (B) a Modification Loss in connection with a
bankruptcy.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through for any Class of LIBOR Certificates is
based upon the Group IV 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
Group IV WAC Cap, over (ii) the amount of interest that Class of Certificates
received on such Distribution Date talking into account the Group IV 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 Group IV
WAC Cap.
Basis Risk Payment: For any Distribution Date, an amount equal to the
lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date, (ii) the Accrued Certificate Interest Distribution Amount
payable to the Class 4A-IO Certificates for such Distribution Date (prior to
any reduction for Basis Risk Payments) or (iii) the amount payable from the
Supplemental Interest Trust.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
New York or California, (b) the State in which a 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.
Calculation Rate: For each Distribution Date, the product of (i) 10
and (ii) the weighted average pass-through rate of the outstanding Class A and
Class B Interests, treating each of the Class A Interests as capped at zero or
reduced by a fixed percentage of 100% of the interest accruing on such Class.
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 Certificates (other
than the Notional Amount 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 (A) plus any increase in the
Certificate Balance of such Certificates due to the receipt of Subsequent
Recoveries, (B) minus the sum of (i) all distributions of principal previously
made with respect thereto and (ii) all Realized Losses allocated thereto and,
in the case of each Subordinate Certificates, all other reductions in
Certificate Balance previously allocated thereto pursuant to Section 4.02. The
Class P Certificates and the Notional Amount Certificates have no Certificate
Balance.
14
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered
in the name of the Depositor or any affiliate of the Depositor shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Securities Administrator is entitled to rely conclusively on a certification
of the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 13.05.
Certifying Person: As defined in Section 13.05.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class 1A Certificates: The Class 1A1 and Class 1A2 Certificates,
collectively.
Class 1A1 Certificates: All Certificates bearing the class
designation of "Class 1A1."
Class 1A2 Certificates: All Certificates bearing the class
designation of "Class 1A2."
Class 2A Certificates: The Class 2A1 Certificates.
Class 2A1 Certificates: All Certificates bearing the class
designation of "Class 2A1."
Class 3A Certificates: The Class 3A1 Certificates, collectively.
Class 3A1 Certificates: All Certificates bearing the class
designation of "Class 3A1."
Class 4A Certificates: The Class 4A1, Class 4A2, Class 4A3 and Class
4A-IO Certificates, collectively.
Class 4A1 Certificates: All Certificates bearing the class
designation of "Class 4A1."
15
Class 4A2 Certificates: All Certificates bearing the class
designation of "Class 4A2."
Class 4A3 Certificates: All Certificates bearing the class
designation of "Class 4A3."
Class 4A-IO Certificates: All Certificates bearing the class
designation of "Class 4A-IO."
Class 4A-IO Interest: The Upper-Tier Regular Interest represented by
the Class 4A-IO Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.
Class A Certificate Group: Any of the Class 1A, Class 2A, Class 3A or
Class 4A Certificates.
Class A Certificates: As specified in the Preliminary Statement.
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-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4."
Class B-5 Certificates: All Certificates bearing the class
designation of "Class B-5."
Class B-6 Certificates: All Certificates bearing the class
designation of "Class B-6."
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
[Class IO Shortfalls: As defined in Section 8.14. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class 4A-IO Certificates in respect of amounts due to
the Swap Provider on such Distribution Date (other than Defaulted Swap
Termination Payments) in excess of the amount payable on the Class 4A-10
Interest on such Distribution Date, all as further provided in Section 8.14.]
16
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."
Closing Date: March 2, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The "Custodial Account" as defined in the
Servicing Agreements.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the aggregate of the Prepayment Interest Shortfalls, 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 the aggregate Servicing Fee received
for such Distribution Date in the case of Countrywide Servicing (servicing
non-Goldman Conduit Mortgage Loans or (ii) the aggregate Servicing Fee
received in the case of Avelo and Countrywide (sub-servicing the Goldman
Conduit Mortgage Loans) for such Distribution Date.
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 Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services, GSAA Home Equity Trust 2006-4, or at such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders. With respect to the Deutsche Bank National Trust Company
as Trustee and as a Custodian, to the principal office of the Trustee at ▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust
Administration - GS0604, or at such other address as the Trustee may designate
from time to time by notice to the Certificateholders. With respect to U.S
Bank National Association, as a Custodian, to the principal office of such
Custodian at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telephone number (▇▇▇) ▇▇▇-▇▇▇▇, attention: GSAA Home Equity Trust 2006-4, or
at such other address as such Custodian may designate from time to time by
notice to the Certificateholders. With respect to JPMorgan Chase Bank,
National Association, as a Custodian, to the principal office of such
Custodian at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
telephone number (▇▇▇) ▇▇▇-▇▇▇▇, attention: GSAA Home Equity 2006-4, or at
such other address as such Custodian may designate from time to time by notice
to the Certificateholders.
17
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:
[SUBJECT TO TAX REVIEW]
REMIC 1 REMIC II REMIC III Corresponding
Regular Regular Regular Class of
Interest Interest Interest Certificates
-------- -------- -------- ------------
Class MT-1A1 Class 1A1 Class 1A1
Class MT-1A2 Class 1A2 Class 1A2
Class MT-2A1 Class 2A1 Class 2A1
Class MT-3A1 Class 3A1 Class 3A1
Class MT-3A2 Class 3A2 Class 3A2
Class MT-3A3 Class 3A3 Class 3A3
Class MT-4A1 Class 4A1 Class 4A1
Class MT-4A2 Class 4A2 Class 4A2
Class MT-4A3 Class 4A3 Class 4A3
Class MT-4A-IO Class 4A-IO Class 4A-IO
Class MT-B-1 Class B-1 Class B-1
Class MT-B-2 Class B-2 Class B-2
Class MT-B-3 Class B-3 Class B-3
Class MT-B-4 Class B-4 Class B-4
Class MT-B-5 Class B-5 Class B-5
Class MT-B-6 Class B-6 Class B-6
Countrywide: Countrywide Home Loans, Inc., a New York corporation,
and its successors in interest.
Countrywide Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from Countrywide pursuant to the Countrywide Sale Agreement.
Countrywide Sale Agreement: The Master Mortgage Loan Purchase
Agreement, dated July 1, 2004, between Countrywide and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company, as amended by Amendment Reg AB to the Master Mortgage Loan Purchase
and Servicing Agreement, dated January 1, 2006, between Countrywide,
Countrywide Servicing and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors in interest.
Countrywide Servicing Agreement: The Servicing Agreement, dated July
1, 2004, between Countrywide Servicing and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, as
amended by Amendment Reg AB to the Master Mortgage Loan Purchase and Servicing
Agreement, dated January 1, 2006, between Countrywide, Countrywide Servicing
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company.
18
Crossover Amounts: Amounts related to a Loan Group that are required
to be paid to the Senior Certificates related to another Loan Group pursuant
to Section 4.03.
Cross-over Situation: For any Distribution Date and for any Loan
Group (after taking into account principal distributions on such Distribution
Date) a Cross-Over Situation exists with respect to the Class A and Class B
Interests of the Loan Group if such Interests in the aggregate are less than
1% of the [subordination] of the related Loan Group.
Custodial File: With respect to each Mortgage Loan, any Mortgage Loan
Document which is delivered to the Custodian or which at any time comes into
the possession of the Custodian.
Custodians: Deutsche Bank, U.S. Bank and JPMorgan.
Cut-off Date: February 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).
Delinquency/Loss Test: A test that is satisfied on any Distribution
Date if: (A) the aggregate outstanding principal balance of all Mortgage Loans
delinquent sixty (60) days or more (including Mortgage Loans in bankruptcy or
foreclosure and REO Property) averaged over the immediately preceding
six-month period is less than or equal to 50% of the aggregate outstanding
Class Principal Balance of the Subordinate Certificates as of such
Distribution Date, and (B) cumulative Realized Losses as of each Distribution
Date prior to March 2014, March 2015, March 2016 and March 2017 (and each
March thereafter) do not exceed 30%, 35%, 40%, 45% and 50%, respectively, of
the aggregate initial Class Principal Balance of the Subordinate Certificates.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Supplemental Interest Trust to the Swap Provider
pursuant to the Interest Rate Swap Agreement as a result of an Event of
Default (as defined in the Interest Rate Swap Agreement) with respect to which
the Swap Provider is the defaulting party or a Termination Event (as defined
in the Interest Rate Swap Agreement) (other than Illegality or a Tax Event
that is not a Tax Event Upon Merger (each as defined in the Interest Rate Swap
Agreement)) with respect to which the Swap Provider is the sole Affected Party
(as defined in the Interest Rate Swap Agreement) or with respect to a
termination resulting from a Substitution Event (as defined in the Interest
Rate Swap Agreement).
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by a Responsible Party, the Purchaser or the Depositor in
accordance with the terms of any Sale
19
Agreement, any Assignment Agreement or this Agreement, as applicable, or which
is, in the case of a substitution by the Depositor pursuant to the Sale
Agreements, the Servicing Agreements, 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 ▇▇▇▇▇'▇
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: The 15th day of each month, or if the 15th day is
not a Business Day, the immediately preceding Business Day..
Deutsche Bank: Deutsche Bank National Trust Company.
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, N.A., as paying
agent, in trust for registered holders of GSAA Home Equity Trust 2006-4,
Asset-Backed Certificates, Series 2006-4." 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 March
2006.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
20
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.
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 ▇▇▇▇▇'▇ (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.
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ 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 Bankruptcy Losses: For any Distribution Date, the amount of
Bankruptcy Losses for such Distribution Date in excess of the Bankruptcy
Coverage for such Distribution Date.
Excess Fraud Losses: For any Distribution Date, the amount of Fraud
Losses for such Distribution Date in excess of the Fraud Coverage 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, N.A., as
paying agent, in trust for registered holders of GSAA Home Equity Trust
2006-4, Asset-Backed Certificates, Series 2006-4." Funds in the Excess Reserve
Fund Account shall be held in trust for the Regular Certificateholders for the
uses and purposes set forth in this Agreement. Amounts on deposit in the
Excess Reserve Fund Account shall not be invested.
Excess Special Hazard Losses: For any Distribution Date, the amount
of Special Hazard Losses for such Distribution Date in excess of the Special
Hazard Coverage for such Distribution Date.
21
Excess Special Losses: Collectively, Excess Fraud Losses, Excess
Bankruptcy Losses and Excess Special Hazard Losses.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Filing Obligations: The obligations of the Master
Servicer under Sections 9.08 and 9.09 with respect to notice and information
to be provided to the Depositor or Article XIII (except Section 13.07).
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal to
the sum of the Servicing Fee Rate, the Administrative Fee Rate and, if set
forth on the Mortgage Loan Schedule, the applicable Primary Mortgage Insurance
Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
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
March 2036.
Fitch: Fitch, Inc.
Form 10-D Disclosure Item: With respect to any Person, any pending
material litigation or contemplated governmental proceedings against such
Person that would have a material adverse impact on the Certificateholders.
Form 10-K Disclosure Item: With respect to any Person: (a) any
pending material litigation or contemplated governmental proceedings pending
against such Person that would have a material adverse impact on the
Certificateholders; and (b) any affiliations or relationships between such
Person and any Item 1119 Party.
Fraud Coverage: For any Distribution Date, an amount equal to (i) the
following percentage of the aggregate Scheduled Principal Balance of all
Mortgage Loans as of the Due Date in the preceding calendar month (or, in the
case of the first Distribution Date, as of the Cut-Off Date): (A) for the
period from and including the Cut-Off Date to but excluding the date of the
first anniversary of the Cut-Off Date, 3.00%, (B) for the period from and
including the first anniversary of the Cut-off Date to but excluding the date
of the second anniversary of the Cut-off Date, 2.00% and (C) for the period
from and including the date of the second anniversary of the Cut-Off Date to
but excluding the date of the fifth anniversary of the Cut-Off Date, 1.00%,
minus (ii) the aggregate amount of Fraud Losses allocated to the Certificates
on or prior to such
22
Distribution Date. On the date of the fifth anniversary of the Cut-Off Date,
and for each Distribution Date thereafter, the Fraud Coverage shall be zero.
In no event may the Fraud Coverage be less than zero.
Fraud Losses: [o].
Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, and its successors in
interest.
Goldman Conduit: The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Conduit, a ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company residential mortgage loan conduit program, and its successors
in interest.
Goldman Conduit Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the applicable Goldman Conduit Sale Agreements.
Goldman Conduit Sale Agreements: The Master Loan Purchase Agreements,
between various mortgage loan sellers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company,
dated as of their respective dates.
Group I Certificates: The Class 1A1, Class 1A2, Class B-1, Class B-2
and Class B-3 Certificates, collectively.
Group I Mortgage Loans: The Mortgage Loans identified on the Mortgage
Loan Schedule as Group I Mortgage Loans.
Group II Certificates: The Class 2A1, Class B-1, Class B-2 and Class
B-3 Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Group III Certificates: The Class 3A1, Class B-1, Class B-2 and Class
B-3 Certificates, collectively.
Group III Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group III Mortgage Loans.
Group IV Certificates: The Class 4A1, Class 4A2, Class 4A3, Class
B-1, Class B-2 and Class B-3 Certificates, collectively.
Group IV Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group IV Mortgage Loans.
Group IV WAC Cap. As to any Distribution Date, a per annum rate equal
to the product of (i) 30 divided by the actual number of days in the Interest
Accrual Period and (ii) the sum of (A) the weighted average gross coupon of
the Group IV Mortgage Loans in effect on the beginning of the related Due
Period less the Expense Fee Rate, if necessary and (B) the Net
23
Swap Receipt Amounts, if any, less Net Swap Payment Amounts, if any, divided
by the Class Certificate Balance of the LIBOR Certificates immediately prior
to that Distribution Date multiplied by 12.
Group Subordinate Amount: As to any Distribution Date and (i) the
Mortgage Loans in Loan Group I, shall be equal to the excess of the aggregate
Scheduled Principal Balance of the Mortgage Loans in Loan Group I for the
preceding Distribution Date over the aggregate Class Principal Balance of the
Group I Certificates after giving effect to distributions on that preceding
Distribution Date; (ii) the Mortgage Loans in Loan Group II, shall be equal to
the excess of the aggregate Scheduled Principal Balance of the Mortgage Loans
in Loan Group II for the preceding Distribution Date over the aggregate Class
Principal Balance of the Group II Certificates after giving effect to
distributions on that preceding Distribution Date; (iii) the Mortgage Loans in
Loan Group III, shall be equal to the excess of the aggregate Scheduled
Principal Balance of the Mortgage Loans in Loan Group III for the preceding
Distribution Date over the aggregate Class Principal Balance of the Group III
Certificates after giving effect to distributions on that preceding
Distribution Date; and (iv) the Mortgage Loans in Loan Group IV, shall be
equal to the excess of the aggregate Scheduled Principal Balance of the
Mortgage Loans in Loan Group IV for the preceding Distribution Date over the
aggregate Class Principal Balance of the Group IV Certificates after giving
effect to distributions on that preceding Distribution Date.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date, with
respect to the LIBOR Certificates, the period commencing on the immediately
preceding Distribution Date (or commencing on the Closing Date in the case of
the first Distribution Date) and ending on the day immediately preceding the
current Distribution Date. For purposes of computing interest accruals on each
Class of LIBOR Certificates, each Interest Accrual Period has the actual
number of days in such period and each year is assumed to have 360 days.
Interest Rate Swap Agreement: The interest rate swap
agreement, dated as of February 28, 2006, between the GSAA Home Equity Trust
2006-4 and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mitsui Marine Derivative Products, L.P. and assigned
to the Supplemental Interest Trust or any other swap agreement (including any
related schedules) assigned to the Supplemental Interest Trust.
Investment Account: As defined in Section 3.02(a).
Item 1119 Party: The Depositor, the Master Servicer, the Trustee, any
Servicer, any subservicer, any originator identified in the Prospectus
Supplement and any Swap Provider.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking 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
24
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.
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 any 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.
Loan Group: Loan Group I, Loan Group II, Loan Group III and Loan
Group IV, as applicable.
Loan Group I: The Group I Mortgage Loans.
Loan Group II: The Group II Mortgage Loans.
Loan Group III: The Group III Mortgage Loans.
Loan Group IV: The Group IV Mortgage Loans.
Loan Group Cap: The Loan Group I Cap, the Loan Group II Cap, the Loan
Group III Cap or the Loan Group IV Cap, as applicable.
25
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group I Mortgage Loans.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group II Mortgage Loans.
Loan Group III Cap: With respect to the Group III Mortgage Loans as
of any Distribution Date, a per annum rate equal to the weighted average of
the Adjusted Net Mortgage Interest Rates then in effect on the beginning of
the related Due Period on the Group III Mortgage Loans.
Loan Group IV Cap: With respect to the Group IV Mortgage Loans as of
any Distribution Date, a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Group IV Mortgage Loans.
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.
Majority Class 4A-IO Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class 4A-IO Certificates.
Master Servicer: Wells Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
26
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to 1/12th the [product of (a) the Master Servicing Fee
Rate and (b)] the investment income earned on amounts on deposit in the
Distribution Account during the Master Servicer Float Period. [▇▇▇▇▇ FARGO TO
CONFIRM]
[Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.01%.] [▇▇▇▇▇ FARGO TO CONFIRM]
[Master Servicer Float Period: As to any Distribution Date and each
Mortgage Loan, the period commencing on the 24th Business Day immediately
preceding such Distribution Date and ending on such Distribution Date.] [▇▇▇▇▇
TO CONFIRM]
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.
Middle-Tier Principal Amount: As described in the Preliminary
Statement.
[Middle-Tier Regular Interest: Each of the Class MT-1A1, Class
MT-1A2, Class MT-2A1, Class MT-3A1, Class MT-4A1, Class MT-4A2, Class MT-4A3,
Class 4A-IO, Class MT-B-1, Class MT-B-2, Class MT-B-3, Class MT-B-4, Class
MT-B-5, Class MT-B-6, Class MT-Group I, Class MT-Group II and Class MT-Accrual
Interests as described in the Preliminary Statement.] [SUBJECT TO TAX
REVISION]
[Middle-Tier REMIC: As described in the Preliminary Statement.]
[SUBJECT TO TAX REVISION]
Modification Loss: A decrease in the total payments due from a
Mortgagor as a result of a modification of such Mortgage Loans following a
default or reasonably expected default thereon. If a Modification Loss results
in a decrease in the Note Rate of a Mortgage Loan, such Modification Loss
shall be treated as occurring on each Due Date to the extent of such decrease.
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.,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
27
10007, 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, 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
28
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; (35) the name of the Custodian and (36)
a code indicating whether the Mortgage Loan is a Group I Mortgage Loan or a
Group II Mortgage Loan. With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
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 Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made on such Distribution Date.
Net Swap Payment Amount: With respect to any Distribution Date, the
Fixed Amount (as defined in the Interest Rate Swap Agreement) payable by the
Supplement Interest Trust to the Swap Provider, pursuant to the applicable
clauses of the Priorities of Distribution, on the related Fixed Rate Payer
Payment Date (as defined in the Interest Rate Swap Agreement).
Net Swap Receipt Amount: With respect to any Distribution Date, the
Floating Amount (as defined in the Interest Rate Swap Agreement) payable to
the Supplemental Interest Trust to the Swap Provider, pursuant to the
applicable clauses of the Priorities of Distribution, on the related Fixed
Rate Payer Payment Date (as defined in the Interest Rate Swap Agreement).
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 Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non-Permitted Transferee: As defined in Section 8.12(e).
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of any Servicer, 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 applicable Servicer, the
Master Servicer or any successor Master
29
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.
Note Rate: The rate of interest borne by each note according to its
terms.
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.
Notional Amount: For any Distribution Date and the Class 4A-IO
Certificates, the aggregate Class Certificate Balance of the Class 4A1 and
Class 4A2 Certificates immediately prior to that Distribution Date.
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 the applicable Servicing Agreement or applicable
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 the applicable Servicer, reasonably acceptable to the Trustee
and/or the Securities Administrator, as applicable (and/or such other Persons
as may be set forth herein); provided, that any Opinion of Counsel relating to
(a) qualification of any Trust REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the applicable Servicer
or the Master Servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the applicable Servicer or the Master
Servicer of the Mortgage Loans or in an affiliate of either and (iii) is not
connected with the applicable Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which
the aggregate Stated Principal Balance of the Mortgage Loans, as of the last
day of the related Due Period, is equal to 10.00% or less of the Cut-off Date
Pool Principal Balance.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
30
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.
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 unreimbursed P&I Advances, fees and expenses of
the Master Servicer, the Securities Administrator and the Trustee, (4) any
Swap Termination Payment other than a Defaulted Swap Termination Payment owed
to the Swap Provider and (5) with respect to any REO Property, the lesser of
(x) the appraised value of each REO Property, as determined by the higher of
two appraisals completed by two independent appraisers selected by the Master
Servicer or its designee, and (y) the unpaid principal balance of each
Mortgage Loan related to any REO Property, and (b) the sum of (1) the
aggregate unpaid Class Certificate Balance of each class of certificates then
outstanding, (2) interest accrued and unpaid on the certificates, (3) any
unreimbursed P&I Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee and (4) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider.
Pass-Through Rate: For each Class of Certificates and each Lower-Tier
Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 13.05.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee, 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 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States
31
dollars and issued by any Depository Institution and rated F1+ by Fitch,
P-1 by ▇▇▇▇▇'▇ and A-1+ by S&P;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities
in its highest short-term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or the Trustee or
an Affiliate thereof, that have been rated "Aaa" by ▇▇▇▇▇'▇, "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
32
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 Freddie Mac, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Principal
Prepayment Period the subject of a Principal Prepayment that was applied by
the applicable 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 Payment Amount: For any Distribution Date and any Loan
Group, the sum, for all Mortgage Loans in such Loan Group, of the portion of
Scheduled Payments due on the Due Date immediately before the Distribution
Date that are allocable to principal on the Mortgage Loans in such Loan Group.
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 Amount: For any Distribution Date and any Loan
Group, the sum, for all of the Mortgage Loans in such Loan Group, of all full
and partial voluntary Principal Prepayments that were received during the
related Prepayment Period.
33
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 immediately preceding the month in which that Distribution
Date occurs.
Principal Relocation Payment: A payment from any Loan Group to REMIC
1 Regular Interests other than those of their corresponding Loan Group as
provided in the Preliminary Statement. Principal Relocation Payments shall be
made of principal allocations comprising the Principal Amount from a Loan
Group.
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated March 1,
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: ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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.
34
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers' Civil Relief Act of 1940 or any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Advice Date: The date two Business Days prior to the
Remittance Date, or if such date is not a Business Day, the immediately
preceding Business Day.
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 any Servicer of any REO Property.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Event: Any event required to be reported on Form 8-K, but
at a minimum will include:
(a) entry into a definitive material agreement related to the Trust
Fund, the Certificates or the Mortgage Loans, or an amendment to a Transaction
Document, only if the Depositor is not a party to such agreement (e.g., a
servicing agreement with a servicer contemplated by Item 1108(a)(3) of
Regulation AB);
(b) termination of a Transaction Document (other than by expiration
of the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), only if the Depositor is
not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
35
(c) with respect to any material party related to the Trust Fund, the
commencement of any bankruptcy or receivership with respect to such party;
(d) with respect to the Securities Administrator, the Master
Servicer, the Servicers and the Depositor only, the occurrence of an Event of
Default under this Agreement;
(e) any amendment to this Agreement that materially modifies the
rights of the Certificateholders (it being understood that the Trustee is not
obligated to notify any party hereto of such amendment);
(f) the resignation, removal, replacement, substitution of the
Trustee, the Securities Administrator, the Master Servicer, any Servicer, any
subservicer or the Custodian;
(g) with respect to the Depositor only, if the Depositor becomes
aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added with respect
to one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(h) a required distribution to holders of the Certificates is not
made as of the required distribution date under this Agreement (it being
understood that the Trustee is not obligated to notify any party hereto of
such event).
Reporting Subcontractor: With respect to the Master Servicer or the
Securities Administrator, any Subcontractor determined by such Person pursuant
to Section 11.08(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 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.
36
Responsible Party: Each of Countrywide and the Goldman Conduit, in
its capacity as seller under the related Sale Agreement.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the Countrywide Sale Agreement and the
Goldman Conduit Sale Agreements.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 13.05.
Scheduled Payment: For each Mortgage Loan, payments of interest and
principal scheduled to be paid on each Due Date in accordance with the terms
of related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Wells Fargo, and if a successor securities
administrator is appointed hereunder, such successor.
Senior Certificates: As specified in the Preliminary Statement.
Senior Liquidation Amount: For any Distribution Date and any Loan
Group, shall equal the aggregate, for each Mortgage Loan in such Loan Group
that became a Liquidated Mortgage Loan during the calendar month preceding the
month of that Distribution Date, of the lesser of (i) the applicable Senior
Percentage of the Scheduled Principal Balance of that Mortgage Loan and (ii)
the applicable Senior Prepayment Percentage of the Liquidation Principal
derived from such Mortgage Loan.
Senior Percentage: For any Distribution Date and any Loan Group,
shall equal the lesser of (a) 100% and (b) the sum of the Class Principal
Balances (immediately before the Distribution Date) of the Senior Certificates
related to such Loan Group, divided by the aggregate Scheduled Principal
Balance of the Mortgage Loans in such Loan Group as of the beginning of the
Due Period related to such Distribution Date.
Senior Prepayment Percentage: For each Distribution Date and any Loan
Group, the applicable Senior Percentage for such Distribution Date, plus the
percentage of the Subordinate Percentage identified below for the period
during which such Distribution Date occurs:
37
Percent of Applicable
Distribution Date Subordinate Percentage
----------------- ----------------------
March 2006 through February 2013.................. 100%
March 2013 through February 2014.................. 70%
March 2014 through February 2015.................. 60%
March 2015 through February 2016.................. 40%
March 2016 through February 2017.................. 20%
March 2017 and thereafter (other than the Final
Distribution Date)............................. 0%
Final Distribution Date........................... 100%
provided, however, that (i) on any Distribution Date, if the Senior
Percentage for any Loan Group for such Distribution Date exceeds the initial
Senior Percentage of such Loan Group as of the Closing Date, then the Senior
Prepayment Percentage for each Loan Group and that Distribution Date shall
equal 100%; (ii) if before the Distribution Date in March 2009, (x) the
combined Subordinate Percentage for all four Loan Groups for such Distribution
Date is greater than or equal to twice the combined Subordinate Percentage as
of the Closing Date and (y) the aggregate amount of Realized Losses realized
on the Mortgage Loans in all four Loan Groups is less than or equal to 20% of
the initial aggregate Class Principal Balance of the Subordinate Certificates,
then the Senior Prepayment Percentage for each Loan Group for such
Distribution Date shall equal the Senior Percentage for such Loan Group plus
50% of the Subordinate Percentage for that Distribution Date; and (iii) if on
or after the Distribution Date in March 2009, (x) the combined Subordinate
Percentage for all four Loan Groups for such Distribution Date is greater than
or equal to twice the combined Subordinate Percentage as of the Closing Date
and (y) the aggregate amount of Realized Losses realized on the Mortgage Loans
in all four Loan Groups is less than or equal to 30% of the initial aggregate
Class Principal Balance of the Subordinate Certificates, then the Senior
Prepayment Percentage for each Loan Group for each Distribution Date shall
equal the Senior Percentage for such Loan Group for such Distribution Date;
and provided, further, that if the Delinquency/Loss Test is not satisfied for
any Loan Group as of the respective Distribution Date, the Subordinate
Percentage for such Loan Group used to calculate the Senior Prepayment
Percentage for the related Distribution Date shall equal 100%. If on any
Distribution Date the allocation to the Senior Certificates in the percentage
required would reduce the sum of the Class Principal Balances of the Senior
Certificates related to a Loan Group below zero, the Senior Prepayment
Percentage for such Distribution Date and such Loan Group shall be limited to
the percentage necessary to reduce such sum to zero.
Senior Principal Distribution Amount: For each Distribution Date and
each Loan Group, the sum of: (i) the applicable Senior Percentage of the
Principal Payment Amount for such Loan Group, (ii) the applicable Senior
Prepayment Percentage of the Principal Prepayment Amount for such Loan Group,
(iii) the Senior Liquidation Amount for such Loan Group, (iv) Crossover
Amounts (allocable to principal), if any, received from the other Loan Groups
and (v)
38
the applicable Senior Prepayment Percentage of any Subsequent Recoveries, with
respect to the Mortgage Loans in such Loan Group.
Servicers: Each of Countrywide Servicing and Avelo, in its capacity
as servicer under the related Servicing Agreement, or any successor servicer
appoint pursuant to such Servicing Agreement.
Servicing Advances: As defined in the applicable Servicing Agreement
and related Assignment Agreements.
Servicing Agreement: Each of the Countrywide Servicing Agreement and
the Avelo Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB.
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: As of the Cut-off Date, a per annum rate equal to
0.25% with respect to 25.73% of the Mortgage Loans and 0.25% (increasing to
0.375% per annum after the initial Adjustment Date) with respect to 74.27% of
the Mortgage Loans..
Servicing File: As defined in the Servicing Agreement.
Similar Law: As defined in Section 5.02(b).
Special Hazard Coverage: For each Distribution Date, an amount equal
to the greatest of (A) the aggregate Scheduled Principal Balance of all
Mortgage Loans secured by Mortgaged Properties located in the single
California zip code area with the largest aggregate Scheduled Principal
Balance of Mortgage Loans, (B) 1% of the aggregate Scheduled Principal Balance
of all Mortgage Loans and (C) twice the Scheduled Principal Balance of the
largest single Mortgage Loan, in each case calculated as of the Due Date in
the immediately preceding month (or, in the case of the first Distribution
Date, as of the Cut-Off Date), minus (iii) the aggregate amount of Special
Hazard Losses allocated to the Certificates on or prior to such Distribution
Date; provided, however, that, in no event may the Special Hazard Coverage be
less than zero.
Special Hazard Loss: Any loss on a Mortgage Loan resulting from (i)
damage to the related Mortgaged Property caused by certain hazards (including
earthquakes and, to a limited extent, tidal waves and related water damage)
not insured against under the standard form of hazard insurance policy for the
state in which the related Mortgaged Property is located or under a flood
insurance policy if the Mortgaged Property is located in a federally
designated flood area, or (ii) the application of the coinsurance clause
contained in such hazard insurance policy; provided, however, that Special
Hazard Losses shall not include losses caused by war, civil insurrection,
action taken by governmental authority in hindering, combating or defending
against an actual, impending or expected attack, errors in design, faulty
workmanship or materials (unless the collapse of the property or a part
thereof ensues, and then only the ensuing
39
loss shall be considered a Special Hazard Loss), nuclear reaction, flood (if
the Mortgaged Property is located in a federally designated flood area) and
chemical contamination.
Special Losses: Bankruptcy Losses, Fraud Losses or Special Hazard
Losses.
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 2006-4, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such date (whether or not received), minus (ii) all amounts previously
remitted to the Securities Administrator with respect to the related Mortgage
Loan representing payments or recoveries of principal including advances in
respect of scheduled payments of principal. For purposes of any Distribution
Date, the Stated Principal Balance of any Mortgage Loan will give effect to
any scheduled payments of principal received or advanced prior to the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Principal Prepayment Period,
and the Stated Principal Balance of any Mortgage Loan that has prepaid in full
or has become a Liquidated Mortgage Loan during the related Principal
Prepayment Period shall be zero.
Step 1 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of March 2, 2006, between the Purchaser,
Countrywide and the Depositor, (ii) Assignment, Assumption and Recognition
Agreement, dated as of March 2, 2006, between the Purchaser, Goldman Conduit
and the Depositor, with Countrywide Servicing as servicer and (iii)
Assignment, Assumption and Recognition Agreement, dated as of March 2, 2005,
between the Purchaser, Goldman Conduit and the Depositor, with Avelo as
servicer.
Step 2 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of March 2, 2006, among the Depositor, the
Master Servicer, the Trustee and Countrywide, (ii) Assignment, Assumption and
Recognition Agreement, dated as of March 2, 2006, among the Depositor, the
Master Servicer, the Trustee and the Goldman Conduit, with Countrywide
Servicing as servicer and (iii) Assignment, Assumption and Recognition
Agreement, dated as of March 2, 2006, among the Depositor, the Master
Servicer, the Trustee and the Goldman Conduit, with Avelo as servicer.
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 the Mortgage Loans under the direction or
authority of the Master Servicer, any Servicer, any subservicer or the
Securities Administrator, as the case may be.
40
Subordinate Certificates: As specified in the Preliminary Statement.
Subordinate Percentage: For any Distribution Date and any Loan Group,
(x) 100%, minus (y) the Senior Percentage for such Loan Group for that
Distribution Date.
Subordinate Principal Distribution Amount: For any Distribution Date
and any Loan Group, (x) the sum, for such Loan Group, of the Principal Payment
Amount, the Principal Prepayment Amount and the Liquidation Principal, minus
(y) the Senior Principal Distribution Amount for such Loan Group, minus (z)
Crossover Amounts, if any, allocable to principal paid to the Senior
Certificates related to the other Loan Groups.
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 Sale Agreement or
with respect to a Mortgage Loan substituted by the Purchaser, an amount of
cash received from the applicable Responsible Party in connection with a
substitution for a Deleted Mortgage Loan.
Supplemental Interest Trust: The corpus of a trust created pursuant
to Section 4.05 of this Agreement, consisting of the Interest Rate Swap
Agreement, subject to the obligation to pay amounts specified in Section 4.05.
Swap Provider: [▇▇▇▇▇▇▇ ▇▇▇▇▇ Mitsui Marine Derivative Products,
L.P.], a Delaware limited partnership, and its successors in interest, and any
successor swap provider under any replacement Interest Rate Swap Agreement.
Swap Termination Payment: Any payment payable by the Supplemental
Interest Trust or the Swap Provider upon termination of the Interest Rate Swap
Agreement as a result of an Event of Default (as defined in the Interest Rate
Swap Agreement) or a Termination Event (as defined in the Interest Rate Swap
Agreement).
Tax Matters Person: The Holder of the Class R and Class RC
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.
Transaction Documents: This Agreement, the Interest Rate Swap
Agreement and any other document or agreement entered into in connection with
the Trust Fund, the Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
41
Transfer Affidavit: As defined in Section 5.02(c)(ii).
Transferor Certificate: As defined in Section 5.02(b).
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Interest Rate Swap Agreement and all amounts received thereunder; (iii) the
Excess Reserve Fund Account, the Distribution Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement;
(iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (v) the rights of the
Trust under the Step 2 Assignment Agreements; (vi) the Supplemental Interest
Trust; and (vii) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest, and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates remaining unpaid prior to the
current Distribution Date and (b) interest on the amount in clause (a) at the
applicable Pass-Through Rate (to the extent permitted by applicable law).
U.S. Bank: U.S. Bank National Association, a national banking
association, and its successors in interest.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate
whose income is includible in gross income for United States income tax
purposes regardless of its source; or (v) a trust, if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more U.S. Persons have authority to control all
substantial decisions of the trust. Notwithstanding the last clause of the
preceding sentence, to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996, and treated as U.S. Persons prior to
such date, may elect to continue to be U.S. Persons.
42
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
4A-IO 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.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, N.A., a national banking association,
and its successors in interest.
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 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,
in certain limited circumstances as set forth in the applicable Servicing
Agreement, a certified copy of the mortgage with evidence of recording;
43
(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, 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;
(vii) except with respect to the Countrywide Mortgage Loans, an
original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
(ix)for each Mortgage Loan with respect to which the ▇▇▇▇▇▇▇▇▇'s
name as it appears on the note does not match the borrower's name on the
Mortgage Loan Schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so required,
an original or copy of such assumption agreement;
(x) except with respect to the Countrywide Mortgage Loans, 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 Mortgage File
including all items as set forth in the applicable Servicing Agreement to
the extent in the possession of the Depositor or the Depositor's Agents.
The Depositor shall deliver or cause each Responsible Party to
deliver to the 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
applicable 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 such Custodian as to each Mortgage Loan shall constitute the
"Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to each
Custodian 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 such 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.
44
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians and the Master Servicer a copy of the related 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 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 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
2006-4" and Deutsche Bank National Trust Company 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 each Custodian 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, unless otherwise permitted by the Rating Agencies.
U.S. Bank, as Custodian, acknowledges that it will maintain possession
45
of the related Mortgage Notes in the State of Minnesota, unless otherwise
permitted by the Rating Agencies. JPMorgan, as Custodian, acknowledges that it
will maintain possession of the related Mortgage Notes in the State of Texas,
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. The Custodians
shall not be responsible for verifying the validity, sufficiency or
genuineness of any document in any Custodial File.
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it 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 an Initial Certification,
in the form annexed hereto as Exhibit E, and shall deliver to the Depositor a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit F, within 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, the information set forth in items 2,
8, 33, and 34 of the Mortgage Loan Schedule respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Custodians shall not 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. Each 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 such Servicer from time to time.
Each Custodian shall notify the Trustee of any Mortgage Loans that do
not conform to such requirements of Sections 2.01 and 2.02 hereof. The Trustee
shall enforce the obligations 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. The Trustee shall also
enforce the obligations of the Responsible Parties under the Sale Agreements,
of the Servicers 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 or the Trustee has actual knowledge, by notifying
the applicable party to correct or cure such default. If the Servicer, any
Responsible Party or the Purchaser, as the case may be, fails or is unable to
correct or cure the defect or breach within the period set forth in the
applicable agreement, the Trustee shall notify the Depositor of such failure
to correct or cure. Unless otherwise directed by the
46
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 any
Servicer, any Responsible Party 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 March 25, 2036, which is the
Distribution Date following the latest Mortgage Loan maturity date. Amounts
paid to the Class 4A-IO Certificates (prior to any reduction for any Basis
Risk Payment or Swap Termination Payment) shall be deemed paid from the
Upper-Tier REMIC in respect of the Class 4A-IO Interest to the holders of the
Class 4A-IO Certificates prior to distribution of Basis Risk Payments to the
LIBOR Certificates.
Amounts distributable to the Class 4A-IO Certificates (prior to any
reduction for any Net Swap Receipt, Net Swap Payment or Swap Termination
Payment), shall be deemed paid from the Master REMIC to the Holders of the
Class 4A-IO Certificates prior to distribution of any Basis Risk Payments to
the LIBOR Certificates.
For federal income tax purposes, any amount distributed on the LIBOR
Certificates on any such Distribution Date in excess of their Pass Through
Rate, calculated by substituting the REMIC Cap for the Group IV WAC Cap shall
be treated as having been paid from the Excess Reserve Fund Account or the
Supplemental Interest Trust, as applicable, and any excess of the REMIC Cap
over the amount distributable on such Class of LIBOR Certificates on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to, and as further provided in, Section 8.14.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
47
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the 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.
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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 Custodian, and shall inure to the benefit
and to Certificateholders.
Section 2.06 [Reserved].
Section 2.07 Representations and Warranties of the Custodians. Each
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 the Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or
by laws of such Custodian.
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account. (a)
The Securities Administrator shall establish and maintain the Excess Reserve
Fund Account to receive any Basis Risk Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders any Basis Risk
Carry Forward Amounts (prior to using any Net Swap Receipt Amounts). On each
Distribution Date, the Securities Administrator shall deposit the amount of
any Basis Risk Payment received by it for such date into the Excess Reserve
Fund Account. For the avoidance of doubt, any Basis Risk Carry Forward Amounts
shall be paid to
49
the LIBOR Certificates first from the Excess Reserve Fund Account and then
from the Supplemental Interest Trust.
[On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of LIBOR Certificates, the Securities
Administrator shall (1) withdraw from the Distribution Account, to the extent
of funds available therefor in the Distribution Account, and deposit in the
Excess Reserve Fund Account, as set forth in Section 4.01(a)(iii)(I), the
lesser of (x) the Accrued Certificate Interest Distribution Amount payable to
the Class 4A-IO Certificates (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)-(H))
and (y) the aggregate Basis Risk Carry Forward Amount of the LIBOR
Certificates for such Distribution Date and (2) withdraw from the Excess
Reserve Fund Account and the Supplemental Interest Account amounts necessary
(including Net Swap Payments or Swap Termination Payments (other than amounts
received pursuant to an ISDA Credit Support Annex negotiated between the Trust
and the Swap Provider)) to pay to such Class or Classes of Certificates the
related Basis Risk Carry Forward Amount. Such payments shall be allocated to
those Classes based upon the amount of Basis Risk Carry Forward Amount owed to
each such Class and shall be paid in the priority set forth in Section
4.01(a)(iii)(L).]
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 4A-IO Certificateholders. For all federal income tax
purposes, amounts transferred by the Upper-Tier REMIC to the Excess Reserve
Fund Account shall be treated as distributions by the Securities Administrator
to the Class 4A-IO Certificateholders in respect of the Class 4A-IO Interest
and then contributed by the Class 4A-IO Certificateholders to the Excess
Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Securities
Administrator to the LIBOR Certificateholders shall be accounted for by the
Securities Administrator, for federal income tax purposes, as amounts paid
first to the Holders of the Class 4A-IO Certificates (in respect of the Class
4A-IO Interest) and then to the respective Class or Classes of LIBOR
Certificates in accordance with the priority of payments in this Section 3.01.
In addition, the Securities Administrator shall account for the LIBOR
Certificateholders' rights to receive payments of Basis Risk Carry Forward
Amounts as rights in a limited recourse interest rate cap contract written by
the Class 4A-IO Certificateholders in favor of the Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any distributions from
the Excess Reserve Fund Account except as expressly set forth in this Section
3.01(a).
(b) The 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
50
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;
(ii) any Net Swap Receipt Amounts or Swap Termination Payments
(other than amounts received pursuant to an ISDA Credit Support Annex
negotiated between the Trust and the Swap Provider) remitted by the Swap
Provider; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required to
be remitted pursuant to the applicable Servicing Agreement, and such Servicer
directs the Master Servicer in writing to withdraw such amount from the
Distribution Account, the Master Servicer shall return such funds to such
Servicer. All funds deposited in the Distribution Account shall be held by the
Securities Administrator in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section
4.01.
(c) From time to time, the Securities Administrator may also
establish any other accounts for the purposes of carrying out its duties
hereunder (including, without limitation, any account necessary under the
Interest Rate Swap Agreement).
Section 3.02 Investment of Funds in the Distribution Account. (a) 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:
(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
51
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
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 Securities Administrator 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, US Bank National Association, as a Custodian and JPMorgan Chase Bank,
National Association, as a Custodian shall obtain and verify certain
information and documentation from the other parties to this Agreement,
including, but not limited to, each such party's name, address and other
identifying information in connection with the establishment of any accounts
by it to the extent required by the Agreement.
(f) To help fight the funding of terrorism and money laundering
activities, Deutsche Bank National as Trustee and a Custodian will obtain,
verify and record information that identifies individuals or entities that
establish a relationship or open an account with Deutsche Bank. Deutsche Bank
will ask for the name, address, tax identification number and other
information that will allow Deutsche Bank to identify the individual or entity
who is establishing the relationship or opening the account. Deutsche Bank may
also ask for formation documents such as articles of incorporation, an
offering memorandum or other identifying documents to be provided.
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ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) In accordance with
Section 3.01(b) herein and subject to the exceptions set forth below, on each
Distribution Date, the Securities Administrator shall withdraw the aggregate
Available Distribution Amount for Loan Group I, Loan Group II, Loan Group III
and Loan Group IV and shall distribute it in the following manner and order of
priority:
(1) the Available Distribution Amount for Loan Group I shall
be distributed in the following order of priority:
(i) first, pro rata (based on their
respective Accrued Certificate Interest), to the
Class 1A1 and Class 1A2 Certificates, Accrued
Certificate Interest thereon; and
(ii) second, sequentially, to the Class R,
Class RC and, as a group, the Class 1A1 and Class
1A2 Certificates, in that order, as principal, in
an amount up to the Senior Principal Distribution
Amount for Loan Group I, until the Class Principal
Balance of each such Class is reduced to zero;
provided that distributions to the Class 1A1 and
Class 1A2 Certificates, as a group, will be made
pro rata, based on their respective Class Principal
Balances;
(2) the Available Distribution Amount for Loan Group II
shall be distributed in the following order of priority:
(i) first, to the Class 2A1 Certificates,
Accrued Certificate Interest thereon;
(ii) second, to the Class 2A1
Certificates, as principal, in an amount up to the
Senior Principal Distribution Amount for Loan Group
II for such Distribution Date, until the Class
Principal Balance thereof has been reduced to zero;
(3) the Available Distribution Amount for Loan Group III
shall be distributed in the following order of priority:
(i) first, to the Class 3A1 Certificates, Accrued
Certificate Interest thereon; and
(ii) second, to the Class 3A1 Certificates, as
principal, in an amount up to the Senior Principal
Distribution Amount for Loan Group III, until the
Class Principal Balance thereof is reduced to zero;
(4) the Available Distribution Amount for Loan Group IV
shall be distributed in the following order of priority:
53
(i) first, concurrently;
(A) to the Class 4A3 Certificates,
Accrued Certificate Interest thereon, and
(B) to the other Class 4A
Certificates and the Supplemental Interest
Trust as follows:
(1) to the Supplemental
Interest Trust, the sum of (x) all
Net Swap Payment Amounts and (y)
any Swap Termination Payment owed
to the Swap Provider other than a
Defaulted Swap Termination Payment
owed to the Swap Provider, if any;
(2) to the Class 4A1 and
Class 4A2 Certificates, (x) pro
rata (based on their respective
Accrued Certificate Interest),
Accrued Certificate Interest
thereon and (y), but only from
funds that would otherwise be
distributable on the Class 4A-IO
Certificates, to the Excess
Reserve Fund Account, any Basis
Risk Carry Forward Amounts; and
(3) to the Class 4A-IO
Certificates, Accrued Certificate
Interest thereon (net of any
amounts distributed as described
in clause (2)(y), above) and any
swap termination payments
distributed as described in clause
(1), above; and
(ii) second, sequentially, to the Class
4A1, Class 4A2 and Class 4A3 Certificates, in that
order, as principal, in an amount up to the Senior
Principal Distribution Amount for Loan Group IV for
such Distribution Date, until the respective Class
Principal Balances of each such class have been
reduced to zero.
(5) Subject to the exceptions described below, unless the Class
Principal Balance of a Class of Subordinate Certificates has been previously
reduced to zero, the portion of the Available Distribution Amount for all of
the Loan Groups in the aggregate remaining after making the distributions
described above in paragraphs (a)(1) through (a)(2) shall be distributed in
the following order of priority:
(i) first, to the Class B-1 Certificates, Accrued Certificate
Interest thereon;
(ii) second, to the Class B-1 Certificates, as principal, their pro
rata share (based on their Class Principal Balance) of the Subordinate
Principal Distribution Amount for such Distribution Date, until their
Class Principal Balance has been reduced to zero;
(iii) third, to the Class B-2 Certificates, Accrued Certificate
Interest thereon;
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(iv) fourth, to the Class B-2 Certificates, as principal, their pro
rata share (based on their Class Principal Balance) of the Subordinate
Principal Distribution Amount for such Distribution Date, until their
Class Principal Balance has been reduced to zero;
(v) fifth, to the Class B-3 Certificates, Accrued Certificate
Interest thereon;
(vi) sixth, to the Class B-3 Certificates, as principal, their pro
rata share (based on their Class Principal Balance) of the Subordinate
Principal Distribution Amount for such Distribution Date, until their
Class Principal Balance has been reduced to zero;
(vii) seventh, to the Class B-4 Certificates, Accrued Certificate
Interest thereon;
(viii) eighth, to the Class B-4 Certificates, as principal, their
pro rata share (based on their Class Principal Balance) of the
Subordinate Principal Distribution Amount for such Distribution Date,
until their Class Principal Balance has been reduced to zero;
(ix) ninth, to the Class B-5 Certificates, Accrued Certificate
Interest thereon;
(x) tenth, to the Class B-5 Certificates, as principal, their pro
rata share (based on their Class Principal Balance) of the Subordinate
Principal Distribution Amount for such Distribution Date, until their
Class Principal Balance has been reduced to zero;
(xi) eleventh, to the Class B-6 Certificates, Accrued Certificate
Interest thereon;
(xii) twelfth, to the Class B-6 Certificates, as principal, their
pro rata share (based on their Class Principal Balance) of the
Subordinate Principal Distribution Amount for such Distribution Date,
until their Class Principal Balance has been reduced to zero; and
(xiii) thirteenth, to each Class of Certificates in order of
seniority (and among the Classes of Senior Certificates related to a Loan
Group, pro rata, based on the amount of unreimbursed Realized Losses
allocated to such Classes), up to the amount of unreimbursed Realized
Losses previously allocated to that Class, if any (unless the allocation
of Realized Losses has reduced any Class of Certificates to zero on a
previous Distribution Date, in which case no amounts shall be reimbursed
to that Class); provided, however, that any amounts distributed pursuant
to this paragraph (b)(xiii) shall not cause a further reduction in the
Class Principal Balance of any Class of Certificates;
(6) at such time as all Classes of Certificates have been paid in
full and all related Realized Losses previously allocated have been reimbursed
in full (unless the allocation of Realized Losses has reduced any Class of
Certificates to zero on a previous Distribution Date, in which case no amounts
shall be reimbursed to that Class), all remaining amounts shall be distributed
to the Class RC Certificates;
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(7) to the Supplemental Interest Trust, the amount of any Defaulted
Swap Termination Payment owed to the Swap Provider; and
(8) any amounts remaining in the Certificate Account on any
Distribution Date after all allocations and distributions required to be made
by this Trust Agreement have been made shall be paid to the Holders of the
Class R Certificates.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Prepayment Period
shall be distributed by the Securities Administrator to the holders of the
Class P Certificates.
(c) Notwithstanding the above, if the Subordination Level for any
Class of Subordinate Certificates on any Distribution Date is less than the
Subordination Level on the Closing Date for such Class of Certificates (such
Class, the "Affected Subordinate Certificates"), the aggregate portion of the
Principal Prepayment Amount otherwise payable on such Distribution Date to
Classes of Subordinate Certificates shall be allocated as follows:
(1) pro rata (based on their respective Class Principal
Balances) to each Class of Subordinate Certificates whose
Subordination Level equals or exceeds its initial Subordination
Level and the Class of Affected Subordinate Certificates having the
lowest numerical designation; or
(2) if no Class of Subordinate Certificates has a Subordination
Level equal to or in excess of its initial Subordination Level, to
the Class of Affected Subordinate Certificates having the lowest
numerical designation up to an amount sufficient to restore its
Subordination Level to its initial Subordination Level, and then to
the related Class of Affected Subordinate Certificates having the
next lowest numerical designation, in the same manner.
(d) All distributions or allocations made with respect to each Class
of Certificates on each Distribution Date shall be allocated pro rata among
the outstanding Certificates of such Class based on the outstanding principal
balance of each such Certificate. Payment shall be made either (1) by check
mailed to the address of each Certificateholder as it appears in the
Certificate Register on the Record Date immediately prior to such Distribution
Date or (2) with respect to the Regular Certificates, by wire transfer of
immediately available funds to the account of a Holder at a bank or other
entity having appropriate facilities therefor, if such Holder shall have so
notified the Securities Administrator in writing by the Record Date
immediately prior to such Distribution Date and such Holder is the registered
owner of Regular Certificates with an initial principal amount of at least
$1,000,000. The Securities Administrator may charge the Holder a fee for any
payment made by wire transfer. Final distribution on the Certificates shall be
made only upon surrender of the Certificates at the offices of the Certificate
Registrar set forth in the notice of such final distribution.
(e) In the event that the Mortgage Loans are purchased at the
election of the Master Servicer pursuant to the terms of Article XI, the
Securities Administrator shall remit the amount of any Fair Market Value
Excess by wire transfer of immediately available funds to the Holders of the
Class RC in accordance with the instructions of the applicable
Certificateholder.
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Section 4.02 Allocation of Realized Losses and Shortfalls.
(a) Realized Losses. On each Distribution Date, Realized Losses and
Special Losses (other than Excess Special Losses) realized during the prior
calendar month shall be allocated to reduce the Class Principal Balances of
the Subordinate Certificates in reverse numerical order, in each case until
the Class Principal Balance of each such Class has been reduced to zero. If
the Class Principal Balances of the Subordinate Certificates have been reduced
to zero, further Realized Losses and Special Losses shall be allocated to the
Senior Certificates related to the Loan Group in which such Realized Losses or
Special Losses occurred, based on the outstanding Class Principal Balances of
such Senior Certificates, in each case until each such Class Principal Balance
has been reduced to zero; provided, however, that Realized Losses (other than
Excess Special Losses) otherwise allocable to the Class 1A1 Certificates shall
first be allocated to the Class 1A2 Certificates, to reduce the Certificate
Balance of such Class until such Certificate Balance has been reduced to zero,
and thereafter such Realized Losses shall be allocated to the Class 1A1
Certificates, to reduce the Certificate Balance of such Class until such
Certificate Balance has been reduced to zero.
On any Distribution Date, any Excess Special Losses realized during
the prior calendar month shall be allocated, pro rata, to (x) all Classes of
Senior Certificates related to the Loan Group in which such losses occurred
and (y) the Subordinate Certificates, based on the aggregate Class Principal
Balance of such Senior Certificates and the related Group Subordinate Amount
of the Subordinate Certificates, respectively.
Whenever Realized Losses, Special Losses or Excess Special Losses are
required to be allocated to a Class of Certificates, the Realized Loss,
Special Loss or Excess Special Loss, as applicable, shall be allocated to
Certificates of such Class of the related Loan Group or Loan Groups, as the
case may be, based on their respective outstanding principal amounts.
(b) Interest Shortfall. Notwithstanding anything in this Agreement to
the contrary, on each Distribution Date, before any distributions are made on
the Certificates, any interest shortfall with respect to any Mortgage Loan
shall be allocated to reduce the Accrued Certificate Interest on each Class of
Senior Certificates related to the Loan Group of such Mortgage Loan and each
Class of Subordinate Certificates as follows: first, to each Class of
Subordinate Certificates, in reverse numerical order, in each case up to the
amount of Accrued Certificate Interest otherwise owing to such Class, and
second, to each Class of Senior Certificates related to the Loan Group of such
Mortgage Loan, pro rata, based on the amount of Accrued Certificate Interest
otherwise owing to such Class; provided, however, that any interest shortfall
otherwise allocable to the Class 1A1 Certificates shall first be allocated to
the Class 1A2 Certificates.
(c) Modification Losses. Notwithstanding anything in this Agreement
to the contrary, in the event that the Note Rate on a Mortgage Loan is reduced
as a result of a modification, waiver or amendment of the terms of such
Mortgage Loan, whether agreed to by any Servicer or resulting from a
bankruptcy, insolvency or similar proceeding involving the related Borrower,
such modification, waiver or amendment shall be disregarded for purposes of
calculating the Note Rate on any class of certificates.
57
(d) Subsequent Recoveries. With respect to any Subsequent Recoveries
received with respect to a Mortgage Loan, such Subsequent Recoveries shall be
treated as a Principal Prepayment. In addition, the Class Principal Balance of
each Class of Certificates to which Realized Losses have been allocated shall
be increased, sequentially in the order of payment priority, by the amount of
Subsequent Recoveries, but not by more than the amount of Realized Losses
previously allocated to reduce the Class Principal Balance of such Class.
Section 4.03 Crossover Amounts.
(a) If, on any Distribution Date, the aggregate Class Principal
Balance of the Group I Certificates, the Group II Certificates, the Group III
Certificates or the Group IV Certificates exceeds the outstanding aggregate
principal balance of the Mortgage Loans in the related Loan Group (such Class
or Classes, the related "Affected Senior Certificates"), then future principal
payments otherwise allocable to the Subordinate Certificates shall be "crossed
over" or used to repay principal of the Affected Senior Certificates by
increasing the Senior Principal Distribution Amount for the Loan Group related
to the Affected Senior Certificates in an amount equal to the lesser of (i)
the aggregate amount of principal otherwise payable to the Subordinate
Certificates on such Distribution Date and (ii) the amount required to be paid
to the Affected Senior Certificates so that their aggregate Class Principal
Balance is equal to the outstanding aggregate principal balance of the
Mortgage Loans in the related Loan Group.
(b) In addition, if, as a result of rapid prepayments, the aggregate
Class Principal Balance of the Group I Certificates, the Group II
Certificates, the Group III or the Group IV Certificates has been reduced to
zero and such Senior Certificates are retired, amounts with respect to the
Mortgage Loans otherwise distributable as principal on each Class of
Subordinate Certificates shall instead be distributed as principal to the
Senior Certificates related to the other Loan Groups that remain outstanding,
until the Class Principal Balances of the Senior Certificates related to such
Loan Group or Loan Groups have been reduced to zero. In order for the
distribution priority described in the foregoing sentence to apply on any
Distribution Date, it must also be true that either (a) the related
Subordinate Percentage for that Distribution Date is less than 200% of such
Subordinate Percentage as of the Cut-Off Date, or (b) the average outstanding
principal balance of the Mortgage Loans in Loan Group I, Loan Group II, Loan
Group III and Loan Group IV that are delinquent sixty (60) days or more
(including any such Mortgage Loans in foreclosure or bankruptcy and REO
properties) during the most recent three calendar months as a percentage of
the related Subordinate Percentage is greater than or equal to 50%.
(c) All distributions described in this Section 4.03 shall be made in
accordance with the priorities set forth in Section 4.01.
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
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Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or
unable to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation
with the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable
control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Securities Administrator shall (in the absence
of manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
Section 4.05 Supplemental Interest Trust. On the Closing Date, the
Securities Administrator on behalf of the Trustee shall establish and maintain
a separate non-interest bearing trust (the "Supplemental Interest Trust") to
which the Securities Administrator will transfer and assign the Interest Rate
Swap Agreement. The Supplemental Interest Trust shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Securities Administrator held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipt Amounts for that
Distribution Date will be deposited into the Supplemental Interest Trust.
Funds in the Supplemental Interest Trust will be distributed in the following
order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment, other than a Defaulted Swap Termination
Payment, to the Swap Provider, if any, owed for that Distribution Date;
(ii)to the LIBOR Certificateholders, to pay Accrued Certificate
Interest to the extent unpaid from other Available Distribution Amounts;
(iii) to the LIBOR Certificateholders, to pay Basis Risk Carry
Forward Amounts to the extent unpaid from other Available Distribution
Amounts (including funds on deposit in the Excess Reserve Fund Account);
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(iv)to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(v) to the holders of the Class 4A-IO Certificates, any remaining
amounts.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities
set forth in this Section 4.05.
The Securities Administrator shall account for the Supplemental
Interest Trust as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Supplemental Interest
Trust are the Class 4A-IO Certificateholders. For federal income tax purposes,
Net Swap Payments and Swap Termination Payments payable to the Swap Provider
shall be deemed to be paid to the Supplemental Interest Trust first, from the
Upper-Tier REMIC, by the Holder of the Class 4A-IO Certificates and second,
other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC
by the Holders of the applicable Class or Classes of LIBOR Certificates as and
to the extent provided in Section 8.14.
Any Basis Risk Carry Forward Amounts (defined solely for this purpose
as any excess of monies received for such Distribution Date over the REMIC
Cap) distributed by the Securities Administrator to the LIBOR
Certificateholders shall be accounted for by the Securities Administrator, for
federal income tax purposes, as amounts paid first to the Holders of the Class
4A-IO Certificates in respect of the Class 4A-IO Interest and (to the extent
remaining after payments to the Swap Provider) then to the respective Class or
Classes of LIBOR Certificates. In addition, the Securities Administrator shall
account for the rights of Holders of each Class of LIBOR Certificates to
receive payments of Basis Risk Carry Forward Amounts (defined solely for this
purpose as any excess of monies received for such Distribution Date over the
REMIC Cap) from the Supplemental Interest Trust (along with Basis Risk Carry
Forward Amounts (defined solely for this purpose as any excess of monies
received for such Distribution Date over the REMIC Cap) payable from the
Excess Reserve Fund Account) as rights in a separate limited recourse interest
rate cap contract written by the Class 4A-IO Certificateholders in favor of
Holders of each such Class.
The Supplemental Interest Trust shall be an "outside reserve fund"
for federal income tax purposes and will not be an asset of any Trust REMIC.
Furthermore, the Holders of the Class 4A-IO Certificates shall be the
beneficial owners of the Supplemental Interest Trust for all federal income
tax purposes, and shall be taxable on all income earned thereon.
Section 4.06 Trust's Obligations under the Interest Rate Swap
Agreement; Replacement and Termination of the Interest Rate Swap Agreement.
(a) Upon the Securities Administrator obtaining actual knowledge of
the rating of the Swap Provider falling below the Required Hedge Counterparty
Rating (as defined in the Interest Rate Swap Agreement), the Securities
Administrator, acting at the written direction of the Depositor, shall attempt
to negotiate an ISDA Credit Support Annex (as defined in the Interest Rate
Swap Agreement) with the Swap Provider that meets the terms of the Interest
Rate Swap Agreement. If an ISDA Credit Support Annex is negotiated, the
Securities Administrator,
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acting at the written direction of the Depositor, shall set up an account in
accordance with Section 3.01(c) to hold cash or other eligible investments
pledged under such ISDA Credit Support Annex. Any cash or other eligible
investments pledged under an ISDA Credit Support Annex shall not be part of
the Distribution Account, the Excess Reserve Fund Account or the Supplemental
Interest Trust unless they are applied in accordance with such ISDA Credit
Support Annex to make a payment due to the Trust pursuant to the Interest Rate
Swap Agreement.
(b) Upon the Securities Administrator obtaining actual knowledge of
an Event of Default (as defined in the Interest Rate Swap Agreement) or
Termination Event (as defined in the Interest Rate Swap Agreement) for which
the Trust has the right to designate an Early Termination Date (as defined in
the Interest Rate Swap Agreement), the Securities Administrator will act at
the written direction of the Depositor as to whether it will designate an
Early Termination Date; provided, however, that the Trust shall provide
written notice to each Rating Agency following the Event of Default or
Termination Event. Upon the termination of the Interest Rate Swap Agreement
under the circumstances contemplated by this Section 4.05(b), the Trust shall
use its reasonable best efforts to enforce the rights of the Trust and the
Securities Administrator thereunder as may be permitted by the terms of the
Interest Rate Swap Agreement and consistent with the terms hereof, and shall
apply the proceeds of any such efforts to enter into a replacement interest
rate swap agreement with another swap provider. To the extent such replacement
interest rate swap agreement can be entered into, any termination payments
received by the Trust in respect of the terminated interest rate swap
agreement shall be used, to the extent necessary, by the Trust for the purpose
of entering into such replacement interest rate swap agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to register
the Class 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 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 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
61
provided to the Securities Administrator or (y), in the event that no wire
instructions are provided to the Securities Administrator, by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time such signatures were affixed, authorized to sign on behalf
of the Securities Administrator shall bind the Securities Administrator,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of any such Certificates
or did not hold such office at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless authenticated by the Securities Administrator by manual
signature, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. Upon surrender for registration of transfer of any Certificate, the
Securities Administrator shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
holder thereof or his attorney duly authorized in writing.
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.
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(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 P Certificates on
the Closing Date, (ii) the transfer of the Class P Certificates to the NIM
Issuer or the NIM Trustee, or (iii) a transfer of the Class P Certificates to
the Depositor or any Affiliate of the Depositor, in the event that a transfer
of a Private Certificate which is a Physical Certificate is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "Transferor Certificate") and either (i) there shall
be delivered to the Securities Administrator a letter in substantially the
form of Exhibit I (the "Rule 144A Letter") or (ii) there shall be delivered to
the Securities Administrator at the expense of the transferor an Opinion of
Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is
a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer will be deemed to have made as of the transfer date each of the
certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Letter in respect
of such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor and each Servicer against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
Except with respect to (i) the initial transfer of the Class P
Certificates on the Closing Date, (ii) the transfer of the Class P
Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer of the
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
63
nor using the assets of any such plan or arrangement to effect such transfer
(each such investor a "Plan"), (ii) in the case of an ERISA-Restricted
Certificate (other than a Residual Certificate) that has been the subject of
an ERISA-Qualifying Underwriting, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption ("PTCE") 95-60) and that the
purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60 or (iii) in the case
of any ERISA-Restricted Certificate presented for registration in the name of
an employee benefit plan subject to Title I of ERISA, a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel
satisfactory to the Securities Administrator and the Depositor, which Opinion
of Counsel shall not be an expense of the Trustee, the Depositor, the
Securities Administrator or the Trust Fund, addressed to the Securities
Administrator and the Depositor, to the effect that the purchase and holding
of such ERISA-Restricted Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee, the Depositor,
the Master Servicer, any other servicer or the Securities Administrator to any
obligation in addition to those expressly undertaken in this Agreement or to
any liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the
preceding sentence is not furnished, such representation shall be deemed to
have been made to the Securities Administrator by the transferee's (including
an initial acquirer's) acceptance of the ERISA-Restricted Certificates. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA, a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement, without such Opinion of Counsel, such attempted transfer or
acquisition shall be void and of no effect.
During the period the Supplemental Interest Trust is in effect, no
transfer of a Certificate shall be made unless the Securities Administrator
shall have received either a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the
Securities Administrator to the effect that such transferee is not a Plan, or
(ii) a representation that the purchase and holding of the Certificate satisfy
the requirements for exemptive relief under PTCE 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60, PTCE 96-23 or a similar exemption, or in the case of a Plan
subject to Similar Law, will not constitute a non-exempt violation of such
Similar Law. In the event such a representation letter is not delivered, one
of the foregoing representations, as appropriate, shall be deemed to have been
made by the transferee's (including an initial acquirer's) acceptance of the
Certificate. In the event that such representation is violated, such transfer
or acquisition shall be void and of no effect.
Neither the Class R nor the Class RC Certificates may be sold to any
employee benefit plan subject to Title I of ERISA, any plan subject to Section
4975 of the Code, or any plan subject to any Similar Law or any person
investing on behalf of or with plan assets of such plan.
64
The Securities Administrator shall not have any duty to monitor
transfers of beneficial interests in any Book-Entry Certificate, and the
Securities Administrator 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 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 G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv)Any attempted or purported Transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Residual Certificate. 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,
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at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Securities Administrator
shall be paid and delivered by the Securities Administrator to the last
preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee, or the Securities Administrator, to the effect that the
elimination of such restrictions will not cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by
the Securities Administrator except to another Depository; (ii) the Depository
shall maintain book entry records with respect to the Certificate 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.
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All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or
(y) the Depositor notifies the Depository of its intent to terminate the book
entry system through the Depository, the Depository Participants holding
beneficial interests in the Book-Entry Certificates agree to initiate such
termination, the Securities Administrator shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to
the Securities Administrator of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Securities Administrator shall issue the Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The
Depositor shall provide the Securities Administrator with an adequate
inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder; provided, that
the Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his 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
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and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Securities Administrator may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Securities Administrator) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Securities Administrator and any agent of the Depositor, the Securities
Administrator or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and none of the Trustee, the Securities Administrator,
the Depositor or any agent of the Depositor, the Securities Administrator or
the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication which such Certificateholders propose
to transmit, or if the Depositor or a Servicer shall request such information
in writing from the Securities Administrator, then the Securities
Administrator shall, within ten (10) Business Days after the receipt of such
request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Securities Administrator, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree
that the Securities Administrator shall not be held accountable by reason of
the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where Certificates may be surrendered for registration
of transfer or exchange. The Securities Administrator initially designates its
office for such purposes, located at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services - GSAA Home
Equity Trust 2006-4. 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.
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Section 6.02 Merger or Consolidation of the Depositor. The Depositor
will keep in full effect its existence, rights and franchises as a corporation
or federally chartered savings bank, as the case may be, under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor may be merged or consolidated, or
any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any person succeeding to the business of the Depositor,
shall be the successor of the Depositor, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Depositor shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and which in its
opinion may involve it in any 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
the Servicer of its annual statement of compliance and accountant's report
described in the applicable Step 2 Assignment Agreements 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 Servicing
Agreement.
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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 Servicing Agreement and in and to the Mortgage Loans and
the proceeds thereof. The Holders of Certificates evidencing at least 66% of
the Voting Rights of Certificates affected by a Event of Default may waive
such Event of Default; provided, however, that (a) an Event of Default with
respect to any Servicer's obligation to make Monthly Advances may be waived
only by all of the holders of the Certificates affected by such Event of
Default and (b) no such waiver is permitted that would materially adversely
affect any non consenting Certificateholder. On and after the receipt by such
Servicer of such written notice of termination, all authority and power of
such Servicer hereunder, 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 applicable Servicer in its capacity as
servicer under the related 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
such 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 such 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 such Servicer would have been entitled to
charge to the Collection Account if such Servicer had continued to act under
the applicable Servicing Agreement including, if such Servicer was receiving
the Servicing Fee at the
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applicable Servicing Fee Rate set forth in the related Servicing Agreement (as
set forth in the Mortgage Loan Schedule with respect to the related Group I
Mortgage Loans, Group II Mortgage Loans, Group III Mortgage Loans and Group IV
Mortgage Loans, respectively) 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 related 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 Freddie Mac approved seller/servicer in good standing, which
has a net worth of at least $25,000,000, which is willing to service the
Mortgage Loans and which executes and delivers to the Depositor and the Master
Servicer an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such terminated Servicer, (other than
liabilities of such terminated Servicer incurred prior to termination of such
Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided, that each Rating Agency acknowledges that
its rating of the Certificates in effect immediately prior to such assignment
and delegation will not be qualified or reduced, as a result of such
assignment and delegation. Pending appointment of a successor to a Servicer
hereunder, the Master Servicer, unless the Master Servicer is prohibited by
law from so acting, shall, subject to this Section 7.02, act in such capacity
as hereinabove provided. In connection with such appointment and assumption,
the Master Servicer may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it, the Depositor and such
successor shall agree; provided, however, that no such compensation shall be
in excess of the applicable Servicing Fee Rate and amounts paid to the
applicable 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 the applicable Servicer is required to maintain
pursuant to the related Servicing Agreement.
Notwithstanding the foregoing, the Master Servicer may not terminate
a Servicer without cause.
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Section 7.03 Master Servicer to Act as Servicer. In the event that a
Servicer shall for any other reason no longer be the Servicer, the Master
Servicer or another successor Servicer, shall thereupon assume all of the
rights and obligations of the predecessor Servicer hereunder arising
thereafter pursuant to Section 7.02.
Section 7.04 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders
and to each Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such Event of Default shall have been cured
or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
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 each Custodian, 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 any Custodian 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 any Custodian 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
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certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine
and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 [Reserved].
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and each Custodian 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 each Custodian 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
each Custodian 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
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by the Trustee, shall be repaid by the applicable Servicer upon demand from
such 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 any Custodian shall be required to risk
or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security) or for the acts or omissions of the Custodians not affiliated with
the Trustee;
(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
a Servicing Agreement or the servicing rights thereunder to any other party;
(m) the Securities Administrator is authorized and directed to
execute the Interest Rate Swap Agreement;
(n) 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 any other party hereto; and
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(o) in no event shall the Trustee or any Custodian 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 any
Custodian 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 any Custodian shall be accountable for the
use or application by the Depositor, the Master Servicer, any Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, any Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, any Servicer, or
the Securities Administrator.
The Trustee shall have no responsibility (i) for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become and remains the
successor Master Servicer), (ii) to see to any insurance (unless the Trustee
shall have become the successor Master Servicer), or (iii) to confirm or
verify the contents of any reports or certificates of any Servicer, 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,
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(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of
any Servicer's obligations in connection with a Servicing Agreement for which
a Servicer has performed its obligation to indemnify the Trustee pursuant to
such Servicing Agreement, (ii) resulting from any breach of any Responsible
Party's obligations in connection with any Sale Agreement for which it has
performed its obligation to indemnify the Trustee pursuant to such 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 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 any Servicer and its affiliates; provided, however,
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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 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 (iii), the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which shall be delivered to the Trustee
and one copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which shall be
delivered to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any
removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.09.
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.
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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 each Custodian. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or any Custodian.
Any corporation into which the Trustee or any Custodian, as applicable, may be
merged or converted or with which it may be consolidated or any corporation
resulting from any merger, conversion or consolidation to which the Trustee or
any Custodian, as applicable, shall be a party, or any corporation succeeding
to the business of the Trustee or any Custodian, as applicable, shall be the
successor of the Trustee or a Custodian, 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
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or acts are to be performed (whether as Trustee hereunder or as successor to
the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.12 Tax Matters. [SUBJECT TO TAX REVISION] 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
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applicable state or local tax authorities income tax or information returns
for each taxable year with respect to each Trust REMIC containing such
information and at the times and in the manner as may be required by the Code
or state or local tax laws, regulations, or rules, and furnish to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby;
(b) within thirty (30) days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities and shall also furnish to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that
the holders of the Certificates may contact for tax information relating
thereto, together with such additional information as may be required by such
Form, and update such information at the time or times in the manner required
by the Code;
(c) make an election that each Trust REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) prepare and forward to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including the calculation of any original issue
discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non Permitted Transferee, or a pass through
entity in which a Non Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(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
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person as may be required to sign such returns by the Code or state or local
laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the fair market value and adjusted
basis of the assets determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
(k) as and when necessary and appropriate, represent each Trust REMIC
in any administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class R and
Class RC Certificates shall act as Tax Matters Person for the Lower-Tier
REMIC, the Middle-Tier REMIC and the Upper-Tier 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
4A-IO Certificateholders to receive amounts in the Excess Reserve Fund Account
and Supplemental Interest Trust (subject to the obligation to pay Basis Risk
Carry Forward Amounts) and the rights of the LIBOR Certificateholders to
receive Basis Risk Carry Forward Amounts (as calculated in the Preliminary
Statement) as the beneficial ownership interests in a grantor trust and not as
an obligations of any REMIC created hereunder, for federal income tax
purposes. The Securities Administrator shall file or cause to 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 4A-IO
Certificateholders, the Class P Certificateholders and the LIBOR
Certificateholders, the respective amounts described above that are received,
in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten 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
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price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account and the Supplemental Interest
Trust. Thereafter, the Depositor shall provide to the Securities Administrator
promptly upon written request therefor any additional information or data that
the Securities Administrator may, from time to time, reasonably request to
enable the Securities Administrator to perform its duties under this
Agreement. The Depositor hereby indemnifies the Securities Administrator for
any losses, liabilities, damages, claims, or expenses of the Securities
Administrator arising from any errors or miscalculations of the Securities
Administrator that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Securities
Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust REMIC
as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Master
Servicer, the Trustee or the Securities Administrator, as applicable if such
tax arises out of or results from negligence of the Master Servicer, the
Trustee or the Securities Administrator, as applicable in the performance of
any of its obligations under this Agreement, (ii) a Servicer, in the case of
any such minimum tax, and otherwise if such tax arises out of or results from
a breach by the Servicer of any of its obligations under the 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 Swap Agreement. [SUBJECT TO TAX REVISION] For federal
income tax purposes, the Securities Administrator shall treat the Excess
Reserve Fund Account and the
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Interest Rate Swap Agreement as beneficially owned by the holder of the Class
4A-IO Certificates and shall treat such portion of the Trust Fund as a grantor
trust under subpart E, Part I of subchapter J of the Code. The Securities
Administrator shall treat the rights that each Class of LIBOR Certificates has
to receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account and the Supplemental Interest Trust as rights to receive
payments under an interest rate cap contract written by the Class 4A-IO
Certificateholders in favor of each Class. Accordingly, each Class of LIBOR
Certificates will comprise two components--a regular interest in the
Upper-Tier REMIC and an interest in an interest rate cap contract, and the
Class 4A-IO Certificates will be comprised of four components--a regular
interest in the Upper-Tier REMIC, an interest in the Interest Rate Swap
Agreement, the Supplemental Interest Trust and the Excess Reserve Fund Account
subject to the obligation to pay Basis Risk ▇▇▇▇ Forward Amounts, Net Swap
Payments and Swap Termination Payments. The Securities Administrator shall
allocate the issue price for a Class of Certificates among these components
for purposes of determining the issue price of the Upper-Tier Regular Interest
component based on information received from the Depositor. Unless otherwise
advised by the Depositor in writing, for federal income tax purposes, the
Securities Administrator is hereby directed to assign a value of zero to the
right of each Holder of a LIBOR Certificate to receive the related Basis Risk
Carry Forward Amount for purposes of allocating the purchase price of an
initial LIBOR Certificateholder between such right and the related Upper-Tier
Regular Interest.
Holders of LIBOR Certificates shall also be treated as having agreed
to pay, on each Distribution Date, to the Holders of the Class 4A-IO
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other that Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class 4A-IO Interest as
provided in the Preliminary Statement hereof (such excess, a "Class IO
Shortfall"), first from interest and then from principal distributable on the
LIBOR Certificates. A Class IO Shortfall payable from interest collections
shall be allocated pro rata among such LIBOR Certificates based on the amount
of interest otherwise payable to such Class of LIBOR Certificates, and a Class
IO Shortfall payable from principal collections shall be allocated in reverse
sequential order beginning with the most subordinate Class of LIBOR
Certificates then outstanding.
Any payments of Class IO Shortfalls shall be treated for tax purposes
as having been received by the Holders of such Class of LIBOR Certificates in
respect of the corresponding Upper-Tier Regular Interest and as having been
paid by such Holders to the Holders of the Class 4A-IO Certificates through
the Supplemental Interest Trust.
Section 8.15 Custodial Responsibilities. Each Custodian shall provide
access to the Mortgage Loan documents in the 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 Custodian shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
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provide equipment for that purpose at the expense of the Trust that covers
such Custodian's actual costs.
Upon receipt of a Request for Release by a Servicer, the 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 Custodian may resign at any time or may be terminated by the
Trustee, with cause, upon sixty (60) days written notice to the 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 each Custodian for its activities under this
Agreement. The Custodians shall have no lien on the Trust Fund for the payment
of such fees. Each Custodian shall be entitled to be reimbursed, from funds on
deposit in the Distribution Account, amounts sufficient to indemnify and hold
harmless such Custodian and any director, officer, employee, or agent of such
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 ▇▇▇▇▇▇▇▇▇'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 such
Servicer has performed its obligation to indemnify such Custodian pursuant to
such Servicing Agreement, (ii) resulting from any breach of the Servicer's
obligations in connection with a Servicing Agreement for which such Servicer
has performed its obligation to indemnify such Custodian pursuant to such
Servicing Agreement, or (iii) incurred because of willful misfeasance, bad
faith, or negligence in the performance of any of such Custodian's duties
under this Agreement. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of the applicable Custodian.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicers'
Obligations. (a) The Master Servicer, on behalf of the Trustee, the Securities
Administrator, the Depositor and the Certificateholders, shall monitor the
performance of each Servicer under the
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related Servicing Agreement, and (except as set forth below) shall use its
reasonable good faith efforts to cause each Servicer 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.
(a) The Master Servicer shall pay the costs of monitoring each
Servicer 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 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.
(b) 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 the 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)
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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 ▇▇▇▇▇▇ ▇▇▇ or Freddie 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 a 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.
(a) The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and
other Persons acting on such Master ▇▇▇▇▇▇▇▇'s behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in
such form and amount generally acceptable for entities serving as master
servicers or trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
(ii)the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding
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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 Step 2
Assignment Agreements provide that the Master Servicer may, at its option,
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) and all rights and obligations under the Servicing Agreements at
the Termination Price (the Master Servicer shall accommodate such request at
its sole discretion). 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.
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(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 the Servicer or required to be made by
the Master Servicer under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in any
material respect, any other covenants, obligations or agreements of the Master
Servicer as set forth in this Agreement (including any obligation to cause any
subservicer or Reporting Subcontractor (except as specified below) to take any
action specified in Article XIII) which failure continues unremedied for a
period of thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee or to the Master Servicer and the Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
provided, that the thirty (30) day cure period shall not apply so long as the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the failure to comply with the requirements set forth in Article XIII,
for which the grace period shall not exceed the lesser of 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;
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(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 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
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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 is reporting
obligation under Item 6.02 of Form 8-K with respect to a successor master
servicer in the event the Trustee should succeed to the duties of the Master
Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least 51% of the
Voting Rights waive any default by the Master Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Master Servicer Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Master Servicer
under this Agreement prior to the termination of the Master Servicer. Any
successor shall be a ▇▇▇▇▇▇ ▇▇▇ and Freddie 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
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
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powers and be subject to all the responsibilities, duties and liabilities
relating thereto, including the obligation to make Monthly Advances; provided,
however, that any failure to perform any duties or responsibilities caused by
the Master Servicer's failure to provide information required by this
Agreement shall not be considered a default by the Trustee hereunder. In the
Trustee's capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer. As
compensation therefor, the Trustee shall be entitled to receive the
compensation, reimbursement and indemnities otherwise payable to the Master
Servicer, including the fees and other amounts payable pursuant to Section
9.07 hereof.
At least fifteen (15) calendar days prior to the effective date of
such appointment, the Trustee shall provide written notice to the Depositor of
such successor pursuant to this Section 9.06.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Master Servicer or termination of this
Agreement shall not affect any claims that the Trustee may have against the
Master Servicer arising out of the Master Servicer's actions or failure to act
prior to any such termination or resignation or in connection with the
Trustee's assumption 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 ▇▇▇▇▇▇ ▇▇▇ 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
▇▇▇▇▇▇▇▇'s duties hereunder are no longer
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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, the Securities Administrator and the Depositor. 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
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 Servicer 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
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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
the Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master Servicer
agrees to indemnify the Depositor, the Securities Administrator and the
Trustee, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liability, fees and expenses that the Depositor, the Securities
Administrator or the Trustee may sustain as a result of the Master Servicer's
willful malfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of its reckless disregard for its obligations and
duties under this Agreement. The Depositor, the Securities Administrator, the
Servicers, 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, any 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
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Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled
to reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the
Securities Administrator, after so requesting, does not receive a
satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Securities Administrator and
conforming to the requirements of this Agreement which it believed in
good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii)the Securities Administrator shall not be liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities 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
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any remedy available to the Securities Administrator, or exercising or
omitting to exercise any trust or power conferred upon the Securities
Administrator under this Agreement; and
(iv)the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities Administrator.
Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature
of any such party or parties;
(ii)the Securities Administrator may consult with counsel, financial
advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any advice or Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv)the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Securities Administrator, not
reasonably assured to the Securities Administrator by the security
afforded to it by the terms of this Agreement, the Securities
Administrator may require reasonable indemnity against such expense or
liability as a condition to so proceeding. Nothing in this clause (iv)
shall derogate from the obligation of the Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors, provided that the Master Servicer shall have no liability for
disclosure required by this Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any
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misconduct or negligence on the part of any such agent, attorney or
custodian appointed by the Securities Administrator with due care;
(vi)the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities
Administrator reasonable security or indemnity satisfactory to the
Securities Administrator against the costs, expenses and liabilities
which may be incurred therein or thereby;
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities
Administrator may in its discretion undertake any such action that it may
deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and the interests of the Trustee, the
Securities Administrator and the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust
Fund, and the Securities Administrator shall be entitled to be reimbursed
therefor out of the Collection Account; and
(ix)in no event shall the Securities Administrator be liable for
special, indirect or consequential damages.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing thereof,
(B) to see to the provision of any insurance or (C) to see to the payment or
discharge of any tax, 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
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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 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
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reimburse it or the Master Servicer for any previously unreimbursed Advances
and any Advances the Master Servicer deems to be non-recoverable from the
related Mortgage Loan proceeds, (iii) an aggregate annual amount to indemnify
the Master Servicer and itself for amounts due in accordance with this
Agreement, and (iv) any other amounts which it or the Master Servicer is
entitled to receive hereunder for reimbursement, indemnification or otherwise,
including the amount to which the Securities Administrator is entitled
pursuant to Section 3.02 hereof. The Securities Administrator shall be
required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as
provided in this Agreement.
Section 10.06 Eligibility Requirements for the Securities
Administrator. The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 10.06 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Securities Administrator shall
cease to be eligible in accordance with the provisions of this Section 10.06,
the Securities Administrator shall resign immediately in the manner and with
the effect specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the
Depositor and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator functions are operated through
an institutional trust department of the Securities Administrator, (ii) must
be authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, and (iii) must be rated at least "A/F1" by
Fitch, if Fitch is a Rating Agency and if rated by Fitch, or the equivalent
rating by S&P or ▇▇▇▇▇'▇. If no successor Securities Administrator shall have
been appointed and shall have accepted appointment within 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 30 days after
the giving of such notice of resignation, the resigning Securities
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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 (iii), the
Depositor may remove the Securities Administrator and appoint a successor
Securities Administrator by written instrument, in triplicate, one copy of
which instrument shall be delivered to the Securities Administrator so
removed, one copy of which shall be delivered to the Master Servicer and one
copy to the successor Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
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
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herein. The Depositor, the Trustee, the Master Servicer and the predecessor
Securities Administrator shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Securities Administrator all such
rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency and has provided to the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a replacement Securities Administrator.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within ten (10) days
after acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of the Securities
Administrator. Any corporation or other entity into which the Securities
Administrator may be merged or converted or with which it may be consolidated
or any corporation or other entity resulting from any merger, conversion or
consolidation to which the Securities Administrator shall be a party, or any
corporation or other entity succeeding to the business of the Securities
Administrator, shall be the successor of the Securities Administrator
hereunder, provided that such corporation or other entity shall be eligible
under the provisions of Section 10.06 hereof, without the execution or filing
of any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities
Administrator shall not assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Securities Administrator;
provided, however, that the Securities Administrator shall have the right with
the prior written consent of the Depositor (which shall not be unreasonably
withheld or delayed), and upon delivery to the Trustee and the Depositor of a
letter from each Rating Agency to the effect that such action shall 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
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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 Servicer, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) the Master Servicer exercising its
option to solicit bids in a commercially reasonable manner 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 (such event,
the "Auction Call") and the sale of all of the Property of the Trust Fund, on
or after the Optional Termination Date, 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 (the "Termination Price"); provided, that to effectuate such
sale, the Master Servicer or its designee, in communication with the
Depositor, shall have made reasonable efforts to sell all of the property of
the Trust Fund for its fair market value in a commercially reasonable manner
and on commercially reasonable terms, which includes the good faith
solicitation of competitive bids to prospective purchasers that are recognized
broker/dealers for assets of this type and provided further that (i) such sale
price shall not be less than the Par Value as certified by the Depositor, (ii)
the Master Servicer receives bids from no fewer than three prospective
purchasers (which may include the Majority Class 4A-IO 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.
The proceeds of the sale of such assets of the Trust pursuant to the
Auction Call described in Section 11.01 (other than an amount equal to the
excess, if any, of the proceeds of the sale over the Par Value (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 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
by the Master Servicer of its option to solicit bids therefore will result in
the final distribution on the Certificates on that Distribution Date.
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Section 11.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicer notify the Securities Administrator that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Collection Account, the Securities
Administrator shall promptly send a Notice of Final Distribution to the
applicable Certificateholders. If the Master Servicer exercises its option to
terminate the Trust Fund pursuant to clause (a) of Section 11.01, by no later
than the [10th] day of the month of the final distribution, the Master
Servicer, pursuant to the Step 2 Assignment Agreements, shall notify the
Trustee 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 sold pursuant to Section
11.01 and pursuant to the applicable Step 2 Assignment Agreement, the
Securities Administrator on behalf of the Trustee is required thereunder to
remit to the Master Servicer the applicable Termination Price on the
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 Custodian of a Request for Release therefor,
the Master Servicer shall direct the Custodian to release and the Custodian
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 Master Servicer, the
Securities Administrator and the Trustee 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 4A-IO Certificates), the Certificate
Balance thereof plus for each such Class and the Class 4A-IO 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
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actual Class Certificate Balances or notional principal balances set forth in
the Preliminary Statement upon liquidation of the Trust Fund.
In the event that any affected 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 RC 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
Master Servicer exercises its option to solicit bids in a commercially
reasonable manner for the purchase of the Mortgage Loans 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
a Servicing Agreement, or to supplement any provision in this Agreement which
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may be inconsistent with any other provision herein or in a Servicing
Agreement, (iii) to add to the duties of the Depositor, or the Trustee (or
with respect to a Servicing Agreement, of the applicable Servicer) the Master
Servicer, the Securities Administrator or any Custodian, (iv) to add any other
provisions with respect to matters or questions arising hereunder or under a
Servicing Agreement, or (v) to modify, alter, amend, add to or rescind any of
the terms or provisions contained in this Agreement or in a Servicing
Agreement; provided, that any action pursuant to clause (iv) or (v) above
shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel
shall be an expense of the requesting party, but in any case shall not be an
expense of the Trustee, the Master Servicer, the Securities Administrator, the
Custodians or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests
of the Certificateholders if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of 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
applicable Servicer amend a Servicing Agreement), 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
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.
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Notwithstanding any contrary provision of this Agreement, the Trustee
and the Master Servicer shall not consent to any amendment to this Agreement
or the Servicing Agreement unless (i) each shall have first received an
Opinion of Counsel, which opinion shall not be an expense of the Trustee, the
Master Servicer or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders
or cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such
notice to the Trustee and the Master Servicer) of such amendment, stating the
provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities
of the Trustee or a Servicer under the 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 any
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 a 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.
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Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation shall be
effected by the 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;
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(iii) The resignation or termination of a Servicer, Master Servicer,
Securities Administrator or the Trustee and the appointment of any
successor;
(iv)The repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the Sale Agreements; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section 4.02;
(ii)Each Servicer's annual statement of compliance and the
accountant's report described in the related Servicing Agreement; and
(iii) Any notice of a purchase of a Mortgage Loan pursuant to this
Agreement or any Sale Agreement.
(c) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case
of the Depositor or GS Mortgage Securities Corp. or ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or
the Goldman Conduit, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Countrywide or Countrywide Servicing, to Countrywide Home Loans
Servicing LP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Investor Accounting, or such other address as may be hereafter furnished to
the Depositor and the Securities Administrator by Countrywide in writing; (c)
in the case of Avelo, to 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; (d) in the case of the Trustee
and Deutsche Bank as Custodian to its Corporate Trust Office, or such other
address as the Trustee may hereafter furnish to the Depositor; (f) in the case
of the Master Servicer and the Securities Administrator, to ▇▇▇▇▇ Fargo Bank,
N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: GSAA 2006-4, or such
other address as may be hereafter furnished to the Depositor by the Master
Servicer in writing; (g) in the case of U.S. Bank, as Custodian, to U.S. Bank
National Association at the Corporate Trust Office, Attention: GSAA Home
Equity Trust 2006-4, or such other address as may be hereafter furnished to
the Depositor by such Custodian in writing; (h) in the case of JPMorgan, as
Custodian, to JPMorgan Chase Bank, National Association, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: GSAA Home Equity Trust
2006-4, or such other address as may be hereafter furnished to the Depositor
by such Custodian in writing; (i) in the case of the Swap Provider, to the
related Swap Provider addressed to it at the address specified in the Interest
Rate Swap Agreement or at any other address previously furnished in writing to
the Trust by the related Swap Provider; and (j) 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
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shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 12.07 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for sixty (60) days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly
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.
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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
the Custodians 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 the Custodians shall (and the Master Servicer shall cause each Servicer
and subservicer to) provide the Depositor with (a) such information which is
available to such Person without unreasonable effort or expense and within
such timeframe as may be reasonably requested by the Depositor to comply with
the Depositor's reporting obligations under the Exchange Act and (b) to the
extent such Person is a party (and the Depositor is not a party) to any
agreement or amendment required to be filed, copies of such agreement or
amendment in ▇▇▇▇▇-compatible form.
In the event that the Securities Administrator is 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 immediately notify the Depositor. In the case of
Form 10-D and 10-K, the parties to this Agreement and the Servicers will
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 information with
respect to Reportable Events and upon the approval and direction of the
Depositor, include such disclosure information on the next Form 10-D. In the
event that any previously filed Form 8-K, 10-D or 10-K needs to be amended,
the Securities Administrator will notify the Depositor and such parties will
cooperate to prepare any necessary 8-KA, 10-DA or 10-KA. Any Form 12b-25 or
any
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amendment to Form 8-K, 10-D or 10-K shall be signed by the Master Servicer.
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 12b-25 or any amendment to Form 8-K, 10-D or
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, claim arising out of or with respect to any failure to
properly prepare and/or timely file any such Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto needed to prepare, arrange for
execution or file such 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 Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon written request, such further
information, reports and financial statements within its control related to
the Agreement and the Mortgage Loans as the Depositor reasonably deems
appropriate to prepare and file all necessary reports with the Commission.
Upon filing with the Commission and upon request by the Depositor, the
Securities Administrator shall promptly deliver to the Depositor a copy of any
such reports.
Section 13.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Securities Administrator
shall prepare for filing and file within 15 days after each Distribution Date
commencing March 2006 (subject to permitted extensions under the Exchange Act
and until a Form 15 is filed pursuant to Section 13.06) with the Commission
with respect to the Trust Fund, a Form 10-D with copies of the Monthly
Statement and, to the extent delivered to the Securities Administrator, no
later than 10 days following the Distribution Date, such other information
identified by the Depositor, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor
directs that any Additional Designated Information is to be filed with any
Form 10-D, the Depositor shall specify the Item on Form 10-D to which such
information is responsive and, with respect to any Exhibit to be filed on Form
10-D, the Exhibit number. Any information to be filed on Form 10-D shall be
delivered to the Securities Administrator in ▇▇▇▇▇-compatible form or as
otherwise agreed upon by the Securities Administrator and the Depositor at the
Depositor's expense, and any necessary conversion to ▇▇▇▇▇-compatible format
will be at the Depositor's expense. At the reasonable request of, and in
accordance with the reasonable directions of, the Depositor, the Securities
Administrator shall prepare for filing and file an amendment to any Form 10-D
previously filed with the Commission with respect to the Trust Fund. The
Master Servicer shall sign the Form 10-D filed on behalf of the Trust Fund.
(b) No later than each Distribution Date, each of the Master
Servicer, the Securities Administrator, the Trustee (solely as to itself and
as a Custodian) and the Custodians, shall notify (and the Master Servicer
shall cause the applicable Servicer, to the extent such Servicer is required
to make such disclosure under its Servicing Agreement, to notify) the
Depositor of any Form 10-D Disclosure Item, together with a description of any
such Form 10-D Disclosure Item in form and substance reasonably acceptable to
the Depositor and as applicable to such party. In addition to such information
as the Master Servicer, the Securities Administrator and the Trustee are
obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Depositor, each of the Master Servicer and the Securities
Administrator shall provide such information which is available to the Master
Servicer and the Securities Administrator, as applicable, without unreasonable
effort or expense regarding the performance or servicing of the
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Mortgage Loans as is reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB.
(c) The Securities Administrator shall not have any responsibility to
file any items (other than those generated by it) that have not been received
in a format suitable (or readily convertible into a format suitable) for
electronic filing via the ▇▇▇▇▇ system and shall not have any responsibility
to convert any such items to such format (other than those items generated by
it or that are readily convertible to such format). The Securities
Administrator shall have no liability to the Certificateholders, the Trust
Fund, the Master Servicer or the Depositor with respect to any failure to
properly prepare or file any of Form 10-D to the extent that such failure is
not the result of any negligence, bad faith or willful misconduct on its part.
Section 13.03 Form 8-K Filings.
The Securities Administrator shall prepare and file, within four (4)
Business Days after the Reportable Event (via ▇▇▇▇▇), any Form 8-K (other than
the initial Current Report on Form 8-K) required by the Exchange Act and the
Rules and Regulations of the Commission thereunder as requested and signed by
the Depositor. Each of the Master Servicer (and the Master Servicer shall
cause the Servicer to promptly notify), the Securities Administrator and the
Trustee shall promptly notify the Depositor, but in no event later than one
(1) Business Day after its actual knowledge of the occurrence of any
Reportable Event, as applicable to it, of which a Responsible Officer of such
entity has actual knowledge.
Section 13.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2007 (or such earlier
date as may be required by the Exchange Act and the Rules and Regulations of
the Commission and until a Form 15 is filed pursuant to Section 13.06), the
Securities Administrator shall prepare and file on behalf of the Trust Fund a
Form 10-K, in form and substance as required by applicable law or the Exchange
Act. The Depositor shall sign each Form 10-K filed on behalf of the Trust
Fund. Such Form 10-K shall include as exhibits each (i) annual statement of
compliance described in the paragraph below, (ii) annual report on assessments
of compliance with servicing criteria described under Section 13.07 and (iii)
accountant's report described under Section 13.07. Each Form 10-K shall also
include any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be included therewith, as
described in Section 13.05. The Securities Administrator shall have no
liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith.
The Master Servicer shall, and shall cause each Servicer to cause any
subservicer used by such Servicer to, deliver to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing with
its 2007 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of such Person during the
preceding calendar year (or applicable portion thereof) and of the performance
of the Master Servicer under this Agreement, or in the
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case of a Servicer or subservicer, the applicable servicing agreement, has
been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, such Person has fulfilled all its
obligations under this Agreement, or in the case of a Servicer or subservicer,
the applicable servicing agreement, in all material respects throughout such
year (or applicable portion thereof), or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof.
No later than March [10th] of each year, commencing in 2007, and
until a Form 15 is filed pursuant to Section 13.06, the Master Servicer, the
Securities Administrator and the Trustee (as to item (a) in the definition of
Form 10-K Disclosure Item) shall notify (and the Master Servicer shall cause
each Servicer to notify) the Depositor of any Form 10-K Disclosure Item,
together with a description of any such Form 10-K Disclosure Item in form and
substance reasonably acceptable to the Depositor. Additionally, each of the
Master Servicer, the Securities Administrator and a Custodian to the extent it
is holding Mortgage Files for more than 5% of the Mortgage Loans in the Trust
Fund, shall provide, and shall cause each Reporting Subcontractor retained by
the Master Servicer, the Securities Administrator or the Custodians as
applicable, and in the case of the Master Servicer shall cause each Servicer,
to provide, the following information no later than March [10th] of each year
in which a Form 10-K is required to be filed on behalf of the Trust Fund: (i)
if such Person's report on assessment of compliance with servicing criteria
described under Section 13.07 or related registered public accounting firm
attestation report described under Section 13.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person's report on assessment of compliance with servicing
criteria or related registered public accounting firm attestation report is
not provided to be filed as an exhibit to such Form 10-K, information
detailing the explanation why such report is not included.
Section 13.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Master Servicer and the Securities
Administrator shall (unless such person is the Certifying Person), and the
Master Servicer shall cause the Servicer to, provide to the Person who signs
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying Person") a certification
(each, a "Performance Certification"), in the form attached hereto as Exhibit
N (in the case of the Master Servicer) and Exhibit O (in the case of the
Securities Administrator), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The Depositor will serve as the
Certifying Person on behalf of the Trust and will not request delivery of a
certification under this clause unless the Depositor is required under the
Exchange Act to file an annual report on Form 10-K with respect to the Trust
Fund. In the event that prior to the filing date of the Form 10-K in March of
each year, the Securities Administrator or the Master Servicer has actual
knowledge of information material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, the
Securities Administrator or the Master Servicer, as the case may be, shall
promptly notify the Depositor. The respective parties hereto agree to
cooperate with all reasonable requests made by any Certifying Person or
Certification Party in connection with such Person's attempt to conduct any
due diligence that
112
such Person reasonably believes to be appropriate in order to allow it to
deliver any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or portion thereof with respect to
the Trust Fund.
Section 13.06 Form 15 Filing.
Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall 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 13.07 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 (unless with respect to a Custodian, such Custodian is acting with
respect to less than 5% of the Mortgage Loans in the Trust Fund) shall deliver
to the Depositor and the Securities Administrator a report regarding the
Master Servicer's, the Securities Administrator's or a Custodian's, as
applicable, assessment of compliance with the Servicing Criteria applicable to
it during the immediately preceding calendar year, as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB;
provided, however, the Securities Administrator and the Custodian 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
P 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 that that effect.
113
(3) The Master Servicer shall cause the 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 a Custodian pursuant to Section
13.07(a)(1) shall address each of the Servicing Criteria applicable to it
specified on Exhibit P 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).
Section 13.08 Use of Subservicer and Subcontractors.
(a) The Master Servicer shall cause any subservicer used by the
Master Servicer and shall cause the 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, the 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, the Servicer or any
subservicer) for the benefit of the Depositor to comply with the provisions of
114
Sections 13.07 and 13.09 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.
* * * * * * *
115
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:
---------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY, solely
in its capacity as Trustee and a Custodian and
not in its individual capacity
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, solely in
its capacity as a Custodian and not in its
individual capacity
By:
---------------------------------------
Name:
Title:
Master Servicing and Trust Agreement
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
solely in its capacity as a Custodian and
not in its individual capacity
By:
---------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK, N.A., as Master Servicer
and Securities Administrator
By:
---------------------------------------
Name:
Title:
2
SCHEDULE I
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
S-I-1
EXHIBIT A
FORM OF CLASS 1A1, CLASS 1A2, CLASS 2A1, CLASS 3A1, CLASS 4A1, CLASS 4A2,
CLASS 4A3, CLASS B-1, CLASS B-2, CLASS B-3, CLASS B-4, CLASS B-5, CLASS B-6
CERTIFICATES
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL
BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
[To be added to the Class B-4, Class B-5 and Class B-6 Certificates while they
remain non-investment grade 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 WILL NOT SUBJECT THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, THE SERVICER 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
A-1
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, Class B-5 and Class B-6 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.]
Certificate No. :
Cut-off Date : February 1, 2006
First Distribution Date : March 27, 2006
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of ----------------- -----------------
A-2
all Certificates of this Class :
CUSIP
ISIN
A-3
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates, Series 2006-4
[Class 1A1][Class 1A2][Class 2A1][Class 3A1] [Class
4A1][Class 4A2][Class 4A3]
[Class B-1][Class B-2][Class B-3][Class B-4][B-5][B-6][B-7]
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 (in such capacity, the "Trustee") and a custodian (in such
capacity, a "Custodian"), U.S. Bank National Association, as a custodian (a
"Custodian"), JPMorgan Chase Bank, National Association, as a custodian (a
"Custodian", and together with Deutsche Bank National Trust Company and U.S.
Bank National Association, the "Custodians") and ▇▇▇▇▇ Fargo Bank, N.A., as
Master Servicer (in such capacity, the "Master Servicer") and Securities
Administrator (in such capacity, the "Securities Administrator"). 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, N.A.,
not in its individual capacity, but solely as
Securities Administrator
By:
---------------------------------
Authenticated:
By:
----------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
A-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-4 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
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, all property acquired in respect of the Mortgage
Loans, and all rights and obligations under the Servicing Agreements, at a
purchase price determined and in the manner as provided in the Agreement. The
obligations and responsibilities created by the 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 ▇▇▇▇▇▇ ▇▇▇▇(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 4A-IO CERTIFICATES
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR 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 CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
IF SUCH CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING,
A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN, OR THAT SUCH TRANSFEREE IS AN INSURANCE
COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE
COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION V(e) OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THE PURCHASE
AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND III OF PTCE
95-60 OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE CERTIFICATE REGISTRAR AS DESCRIBED ABOVE SHALL BE
VOID AND OF NO EFFECT.
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTION IN RESPECT OF PRINCIPAL.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
Certificate No. :
Cut-off Date : February 1, 2006
First Distribution Date : March 27, 2006
Initial Notional Balance of
this Certificate
B-1
("Denomination") :
Initial Notional Amounts of
all Certificates of this Class :
CUSIP
ISIN
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates, Series 2006-4
Class 4A-IO
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Interest in respect of this Certificate is distributable as set forth
herein. Accordingly, the Notional Amount at any time may be less than the
Notional Amount 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ & 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 (in such capacity, the "Trustee") and a custodian (in such
capacity, a "Custodian"), U.S. Bank National Association, as a custodian (a
"Custodian"), JPMorgan Chase Bank, National Association, as a custodian (a
"Custodian", and together with Deutsche Bank National Trust Company and U.S.
Bank National Association, the "Custodians") and ▇▇▇▇▇ Fargo Bank, N.A., as
Master Servicer (in such capacity, the "Master Servicer") and Securities
Administrator (in such capacity, the "Securities Administrator"). 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.
No transfer of a Certificate of this Class shall be made unless the
Certificate Registrar, on behalf of the Trustee, shall have received either
(i) a representation letter from the transferee of such Certificate,
acceptable to and in form and substance satisfactory to the Certificate
Registrar, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
nor a person acting on behalf of or investing plan assets of any such plan,
which representation letter shall not be an expense of the Trust Fund, the
Certificate Registrar, the Trustee, the Master Servicer, the Seller, the
Depositor or the Securities Administrator, (ii) if such Certificate has been
the subject of an ERISA Qualifying Underwriting and the purchaser is an
insurance company, a representation that the purchaser is an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, or (iii) in the case of any such Certificate presented for
registration in the name of an employee benefit plan
B-3
subject to ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Certificate Registrar to the effect that the purchase or holding of such
Certificate will not result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code, will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the
Certificate Registrar, the Trustee, the Master Servicer, the Depositor or the
Securities Administrator to any obligation in addition to those undertaken in
the Agreement, which Opinion of Counsel shall not be an expense of the Trust
Fund, the Certificate Registrar, the Trustee, the Master Servicer, the Seller,
the Depositor or the Securities Administrator. Notwithstanding anything else
to the contrary herein, any purported transfer of a Certificate of this Class
to or on behalf of an employee benefit plan subject to ERISA or to the Code
without the opinion of counsel satisfactory to the Certificate Registrar as
described above shall be void and of no effect.
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, N.A.,
not in its individual capacity, but solely as
Securities Administrator
By:
------------------------------------------------
Authenticated:
By:
------------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-4 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
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
B-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, all property acquired in respect of the Mortgage
Loans, and all rights and obligations under the Servicing Agreements, at a
purchase price determined and in the manner as provided in the Agreement. The
obligations and responsibilities created by the 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 ▇▇▇▇▇▇ ▇▇▇▇(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 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.
C-1
Certificate No. : 1
Cut-off Date : February 1, 2006
First Distribution Date : March 27, 2006
Percentage Interest of this
Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
C-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates, Series 2006-4
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 (in such capacity, the "Trustee") and a custodian (in such
capacity, a "Custodian"), U.S. Bank National Association, as a custodian (a
"Custodian"), JPMorgan Chase Bank, National Association, as a custodian (a
"Custodian", and together with Deutsche Bank National Trust Company and U.S.
Bank National Association, the "Custodians") and ▇▇▇▇▇ Fargo Bank, N.A., as
Master Servicer (in such capacity, the "Master Servicer") and Securities
Administrator (in such capacity, the "Securities Administrator"). 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 therefore, from
the
C-3
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 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.
* * *
C-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
By:
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
C-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-4 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
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
C-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
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to effectuate the repurchase, in whole, from the Trust Fund
all remaining Mortgage Loans, all property acquired in respect of the Mortgage
Loans, and all rights and obligations under the Servicing Agreements, at a
purchase price determined and in the manner as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇▇ ▇▇▇▇(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
------------------------------------------------------------------------------
Dated:
-------------------------------------
Signature by or on behalf of assignor
C-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to ____________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ______________________________________________,
the assignee named above, or__________________________________________________,
as its agent.
C-9
EXHIBIT D
FORM OF CLASS R AND CLASS RC 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]
Cut-off Date : February 1, 2006
First Distribution Date : March 27, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
Initial Certificate Balance of all
Certificates of this Class: : $100
CUSIP :
ISIN :
D-1
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates, Series 2006-4
Class [R][RC]
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] 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 (in such capacity, the "Trustee") and a
custodian (in such capacity, a "Custodian"), U.S. Bank National Association,
as a custodian (a "Custodian"), JPMorgan Chase Bank, National Association, as
a custodian (a "Custodian", and together with Deutsche Bank National Trust
Company and U.S. Bank National Association, the "Custodians") and ▇▇▇▇▇ Fargo
Bank, N.A., as Master Servicer (in such capacity, the "Master Servicer") and
Securities Administrator (in such capacity, the "Securities Administrator").
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]
Certificate at the office designated by the Securities Administrator for such
purposes.
No transfer of a Class [R][RC] 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
D-2
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.
Each Holder of this Class [R][RC] Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class [R][RC]
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]
Certificate are expressly subject to the following provisions: (i) each Person
holding or acquiring any Ownership Interest in this Class [R][RC] 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] 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] 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] 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] Certificate, (C) not to cause income with respect to the Class [R][RC]
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] Certificate or to cause the Transfer of the Ownership Interest
in this Class [R][RC] 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] 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.
D-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, N.A., not in its individual
capacity, but solely as Securities Administrator
By:_______________________________________________
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity,
but solely as Securities Administrator
D-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-4
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-4 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
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
D-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 repurchase, in whole, from the Trust
Fund all remaining Mortgage Loans, all property acquired in respect of the
Mortgage Loans, and all rights and obligations under the Servicing Agreements
at a purchase price determined and in the manner as provided in the Agreement.
The obligations and responsibilities created by the 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-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇▇ ▇▇▇▇(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-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.
D-8
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as of February 1,
2006, among GS Mortgage Securities Corp., as depositor,
Deutsche Bank National Trust Company, as trustee and as
custodian and ▇▇▇▇▇ Fargo Bank, N.A., as master servicer and
securities administrator.
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, a duly executed assignment
of the Mortgage (which may be included in a blanket assignment or
assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability, recordability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no determination and makes no representations
as to whether (i) any endorsement is sufficient to transfer all right, title
and interest of the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note or (ii) any assignment is in recordable form or
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates.
E-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Servicer]
[Originator]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as of February 1,
2006, among GS Mortgage Securities Corp., as depositor,
Deutsche Bank National Trust Company, as trustee and as
custodian and ▇▇▇▇▇ Fargo Bank, N.A., as master servicer and
securities administrator.
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, hereby certifies, subject to any exceptions listed on the exception
report attached hereto, that as to each Mortgage Loan listed in the Mortgage
Loan Schedule for which the undersigned is specified as the Custodian (other
than any Mortgage Loan paid in full or listed on the attached exception
report) it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Loan;
(c) personal endorsement and/or guaranty agreements executed in
connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if any);
(d) the related original Mortgage and evidence of its recording or,
in certain limited circumstances, a certified copy of the mortgage with
evidence of recording with the standard ▇▇▇▇▇▇ ▇▇▇/FHLMC Condominium
Rider or PUD Rider be attached if the mortgaged property is a condominium
or is located in a PUD;
F-1
(e) except with respect to a MERS Loan, originals of any intervening
Mortgage assignment or certified copies in either case evidencing
recording; provided that the assignment may be in the form of a blanket
assignment or assignments, a copy of which with evidence of recording
shall be acceptable;
(f) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording if
required to maintain the lien of the mortgage or if otherwise required,
or, if recordation is not required, an original or copy of the agreement;
(g) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(h) to the extent applicable, (1) an original power of attorney, or
a certified copy thereof, in either case with evidence of recordation if
the document to which such power of attorney relates is recorded, and (2)
an original or copy of any surety agreement or guaranty agreement;
(i) for each Mortgage Loan with respect to which the ▇▇▇▇▇▇▇▇▇'s
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so required,
an original or copy of such assumption agreement;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if any.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items 2, 8, 33 and 34 of
the Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
F-2
DEUTSCHE BANK NATIONAL TRUST
COMPANY, 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 2006-4,
Asset-Backed Certificates, Series 2006-4
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] Certificate (the
"Certificate") issued pursuant to the Master Servicing and Trust Agreement
(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 custodian (in such capacity, the "Custodian")
and ▇▇▇▇▇ Fargo Bank, N.A., as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"). Capitalized terms used, but not defined herein, shall have
the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor, the Securities Administrator and the
Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass through entity an
affidavit that such record holder is a Permitted Transferee and the pass
through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a
G-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash
flow with respect thereto in some or all periods and intends to pay such taxes
as they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other
U.S. person.
12. Check one of the following:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
G-2
(i) the present value of any consideration given to the Transferee to
acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of
the highest rate specified in Section 11(b) of the Code if the Transferee has
been subject to the alternative minimum tax under Section 55 of the Code in
the preceding two years and will compute its taxable income in the current
taxable year using the alternative minimum tax rate) and (ii) present values
are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and
the compounding period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from the
Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the
U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including, but
not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any federal, state or local law that is substantially similar
to Title I of ERISA or Section 4975 of the Code, and the Transferee is not
acting on behalf of or investing plan assets of such a plan.
G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _______, 20__.
-------------------------------
Print Name of Transferee
By:______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and
to be the ___________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20__.
---------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ Fargo Bank, N.A.
[Address]
Re: GSAA Home Equity Trust 2006-4, Asset-Backed Certificates
Series 2006-4, Class
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Residual Certificate, (A) we have no knowledge the Transferee is not a
Permitted Transferee and (B) after conducting a reasonable investigation of
the financial condition of the Transferee, we have no knowledge and no reason
to believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (C) we have no reason to believe
that the statements made in paragraphs 7, 10 and 11 of the Transferee's
Residual Transfer Affidavit are false.
Very truly yours,
-------------------------------------
Print Name of Transferor
By:
----------------------------------
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ Fargo Bank, N.A.
[Address]
Re: GSAA Home Equity Trust 2006-4, Asset-Backed Certificates,
Series 2006-4, Class [ ]
---------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either we are purchasing a Class
1A1 Certificate, Class 1A2 Certificate, Class 2A1 Certificate, Class 2A2
Certificate, Class 2A3 Certificate, Class 2A4 Certificate, 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-3, Class 4A-IO Certificate or
Class P Certificate that has been the subject of an ERISA-Qualifying
Underwriting, the purchaser is an insurance company that is purchasing this
certificate with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and the purchase and holding of such Certificates
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with
I-1
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates
and (f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $___________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
-------------------------------
(1) Buyer must own and/or invest on a discretionary basis at least
$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.
I-3
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
I-4
-----------------------------
Print Name of Transferee
By:
--------------------------
Name:
Title:
Date:
------------------------
I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
____ The Buyer owned $___________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the
aggregate $__________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
I-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
---------------------------------
Print Name of Transferee
By:_______________________________
Name:
Title:
IF AN ADVISER:
----------------------------------
Print Name of Buyer
Date:______________________________
I-7
EXHIBIT J
Servicing Agreement, dated as of July 1, 2004, between Countrywide Home Loans
Servicing LP and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.3 to Form 8-k filed with the commission on
March 14, 2006, Accession No. 0000905148-06-002297]
J-1
EXHIBIT K
Master Mortgage Loan Purchase Agreement, dated July 1, 2004, between
Countrywide Home Loans, Inc. and ▇▇▇▇▇▇▇
Sachs Mortgage Company
[See Exhibit 99.3 to Form 8-k filed with the commission on
March 14, 2006, Accession No. 0000905148-06-002297]
K-1
EXHIBIT L
Amendment Reg AB, dated as of January 1, 2006,
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, Countrywide Home Loans, Inc.
and Countrywide Home Loans Servicing LP.
[See Exhibit 99.1 to Form 8-k filed with the commission on
March 14, 2006, Accession No. 0000905148-06-002297]
L-1
EXHIBIT M
Flow Servicing Agreement, dated as of May 1, 2005, between
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company and Countrywide Home
Loans Servicing LP.
M-1
==============================================================================
FLOW SERVICING AGREEMENT
between
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY,
Owner
and
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer
Dated as of May 1, 2005
FIXED AND ADJUSTABLE RATE, RESIDENTIAL MORTGAGE LOANS
==============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..............................................1
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer.............................17
Section 2.02 Liquidation of Mortgage Loans...........................20
Section 2.03 Collection of Mortgage Loan Payments....................22
Section 2.04 Establishment of and Deposits to Custodial Account......22
Section 2.05 Permitted Withdrawals From Custodial Account............24
Section 2.06 Establishment of and Deposits to Escrow Account.........25
Section 2.07 Permitted Withdrawals From Escrow Account...............26
Section 2.08 Payment of Taxes, Insurance and Other Charges...........26
Section 2.09 Protection of Accounts..................................27
Section 2.10 Maintenance of Hazard Insurance.........................27
Section 2.11 Maintenance of Mortgage Impairment Insurance............29
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance...............................................29
Section 2.13 Inspections.............................................30
Section 2.14 Restoration of Mortgaged Property.......................30
Section 2.15 Title, Management and Disposition of REO Property.......31
Section 2.16 Permitted Withdrawals with Respect to REO Property......32
Section 2.17 Real Estate Owned Reports...............................32
Section 2.18 Liquidation Reports.....................................32
Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property................................................32
Section 2.20 Notification of Adjustments.............................32
Section 2.21 Recordation of Assignments of Mortgage..................33
Section 2.22 Additional Servicing Requirements.......................33
Section 2.23 Credit Reporting........................................33
Section 2.24 [Reserved]..............................................34
Section 2.25 Early Payment Default and Repurchase Obligations........34
Section 2.26 Tax and Flood Service Contracts.........................34
-i-
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances.............................................34
Section 3.02 Monthly Reports to Owner...............................35
Section 3.03 Advances by Servicer....................................35
Section 3.04 Principal and Interest Advances by Servicer.............36
Section 3.05 Charge off and Advance Analysis.........................36
ARTICLE IV
Section 4.01 Transfers of Mortgaged Property.........................37
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files...................................................37
Section 4.03 Servicing Compensation..................................38
Section 4.04 Annual Statement as to Compliance.......................39
Section 4.05 Annual Independent Public Accountants' Servicing
Report..................................................39
Section 4.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification............................40
Section 4.07 Right to Examine Servicer Records.......................40
Section 4.08 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999..........41
Section 4.09 On-Line Access..........................................41
Section 4.10 Assessment of Servicing Compliance......................42
Section 4.11 Subservicing............................................42
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information................................42
Section 5.02 Financial Statements; Servicing Facilities..............43
ARTICLE VI
TERMINATION
Section 6.01 Termination.............................................43
Section 6.02 Transfer of Servicing...................................45
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date...........................................47
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ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.........................................48
Section 8.02 Limitation on Liability of Servicer and Others..........49
Section 8.03 Limitation on Resignation and Assignment by Servicer....49
Section 8.04 Assignment by Owner.....................................50
Section 8.05 Merger or Consolidation of the Servicer.................50
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
Section 9.01 Organization and Good Standing; Licensing...............51
Section 9.02 Authorization; Binding Obligations......................51
Section 9.03 No Consent Required.....................................51
Section 9.04 No Violations...........................................52
Section 9.05 Litigation..............................................52
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
Section 10.01 Due Organization and Authority..........................52
Section 10.02 Ordinary Course of Business.............................52
Section 10.03 No Conflicts............................................53
Section 10.04 Ability to Service......................................53
Section 10.05 Ability to Perform......................................53
Section 10.06 No Litigation Pending...................................53
Section 10.07 No Consent Required.....................................53
Section 10.08 No Untrue Information...................................54
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.......................................54
Section 11.02 Waiver of Defaults......................................55
ARTICLE XII
CLOSING
Section 12.01 Closing Documents.......................................56
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.................................................56
Section 13.02 Waivers.................................................57
Section 13.03 Entire Agreement; Amendment.............................57
Section 13.04 Execution; Binding Effect...............................57
Section 13.05 Headings................................................57
Section 13.06 Applicable Law..........................................58
Section 13.07 Relationship of Parties.................................58
Section 13.08 Severability of Provisions..............................58
Section 13.09 Recordation of Assignments of Mortgage..................58
Section 13.10 Exhibits................................................58
Section 13.11 Counterparts............................................58
Section 13.12 No Solicitation.........................................58
Section 13.13 Cooperation of Servicer with a Reconstitution...........59
Section 13.14 Trademarks..............................................62
Section 13.15 Confidentiality of Information..........................63
Section 13.16 Seller Representations and Warranties...................63
Section 13.17 Waiver of Trial by Jury.................................63
Section 13.18 LIMITATION OF DAMAGES...................................63
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS.....................63
EXHIBITS
EXHIBIT 1 FORM OF MONTHLY REPORTS
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
EXHIBIT 7 FORM OF OFFICER'S CERTIFICATE
EXHIBIT 8 MORTGAGE LOAN DOCUMENTS
EXHIBIT 9 REPORTING REQUIREMENTS
EXHIBIT 10 FORM OF CONFIDENTIALITY AGREEMENT
EXHIBIT 11 FORM OF ANNUAL CERTIFICATION
EXHIBIT 12 FORM OF POWER OF ATTORNEY
EXHIBIT 13 HELLO AND GOODBYE LETTER FORMS
EXHIBIT 14 SUBPRIME DEFAULT AND REO SERVICING STANDARDS
EXHIBIT 15 REO SERVICING STANDARDS
EXHIBIT 16 FORM OF COMMITMENT LETTER
-iv-
FLOW SERVICING AGREEMENT
This Flow Servicing Agreement ("Flow Servicing Agreement" or
"Agreement") is entered into as of May 1, 2005, by and between COUNTRYWIDE
HOME LOANS SERVICING LP, a Texas limited partnership (the "Servicer"), and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York limited partnership (the "Owner").
WHEREAS, the Owner has purchased and may, from time to time,
purchase conventional, residential, fixed and adjustable rate, first and
second lien mortgage loans (the "Mortgage Loans") from various originators to
be delivered as whole loans on a servicing released basis pursuant to the
related Purchase Agreement (as defined below) by and between the Owner and
Seller (as defined below);
WHEREAS, the Servicer regularly services residential mortgage loans
and is or will be servicing the Mortgage Loans pursuant to one or more other
servicing agreements between the Owner and Servicer; and
WHEREAS, the Owner may from time to time desire that some or all of
the Mortgage Loans be serviced pursuant to the terms of this Agreement, and
the Servicer has agreed to service and administer the Mortgage Loans that
become subject to this Agreement on an "at-will" basis, and the parties desire
to provide the terms and conditions of such servicing by the Servicer.
NOW, THEREFORE, in consideration of the mutual premises and
agreements set forth herein and for other good and valuable consideration, the
receipt and the sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows: ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms are defined as
follows:
Accepted Servicing Practices: With respect to any Mortgage Loan or
REO Property, each of (a) those mortgage servicing practices (including
collection procedures) of prudent mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located and in compliance with all
applicable federal, state and local laws which (i) servicing practices are in
compliance with all federal, state and local laws and regulations, (ii) shall
be in accordance with the Servicer's policies and procedures as amended from
time to time for mortgage loans of the same type, (iii) are in accordance with
the terms of the Mortgage and the Mortgage Note and (iv) at a minimum based on
the requirements set forth from time to time by ▇▇▇▇▇▇ ▇▇▇.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a Freddie Mac Transfer.
Ancillary Income: All income derived from the Mortgage Loans (other
than payments or other collections in respect of principal, interest, Escrow
Payments and Prepayment Penalties) including, but not limited, to all late
charges, interest received on funds deposited in the Custodial Account or any
Escrow Account (subject to applicable law), assumption fees, reconveyance
fees, subordination fees, SpeedPay fees, Mortgage Pay on the Web, ACH fees,
demand statement fees, modification fees, if any, reinstatement fees, fees
received with respect to checks on bank drafts returned by the related bank
for insufficient funds, assumption fees and other similar types of fees
arising from or in connection with any Mortgage Loan to the extent not
otherwise payable to the Mortgagor under applicable law or pursuant to the
terms of the related Mortgage Note.
Assignment, Assumption, and Recognition Agreement: The document
substantially in the form of Exhibit 6, to be executed by the Owner, the
Servicer, and the assignee of the Owner in connection with the transfer,
conveyance, grant, sale or assignment, of a Mortgage Loan.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
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 Owner.
Best's: The current Best's Key Rating Guide.
BPO: A broker price opinion.
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 States of
New York or New Jersey, or (b) the state(s) in which the Servicer's servicing
operations are located.
Code: Internal Revenue Code of 1986, as amended.
Commission: The federal Securities and Exchange Commission.
Commitment Letter: With respect to each Mortgage Loan Package, that
certain letter agreement, substantially in the form of Exhibit 16 hereto, to
be entered into between Owner and the Servicer setting forth certain business
terms relating to the Mortgage Loans in the
-2-
Mortgage Loan Package subject to this Agreement and when such Mortgage Loans
are subject to a Reconstitution Agreement for the Mortgage Loan Package.
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.
Cut-off Date: The date set forth in the related Purchase Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: The custodian of the Mortgage Loan Documents as specified
under the related Custodial Agreement.
Determination Date: The last day of the month preceding the related
Remittance Date.
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 amounts collected by the Servicer and
required to be remitted to the Owner on each Remittance Date, 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.
Early Payment Default: With respect to the Mortgage Loan purchased
under any Purchase Agreement, the failure of the related Mortgagor to make the
first two Scheduled Payments due the Owner within thirty (30) days of each Due
Date, or such other provision as specified by the Owner to the Servicer.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories) incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the
time of such investment or the
-3-
contractual commitment providing for such investment the commercial paper
or other short term debt obligations of such depository institution or
trust company (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt or deposit obligations of such
holding company or deposit institution, as the case may be) have been
rated by each Rating Agency in its highest short-term rating category or
one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by ▇▇▇▇▇▇ ▇▇▇ or Freddie Mac with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which have a credit rating from each Rating Agency,
at the time of investment or the contractual commitment providing for
such investment, at least equal to one of the two highest long term
credit rating categories of each Rating Agency; provided, however, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation to
exceed 20% of the aggregate principal amount of all Eligible Investments
in the Custodial Accounts and the Escrow Accounts; provided, further,
that such securities will not be Eligible Investments if they are
published as being under review with negative implications from either
Rating Agency;
(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 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and
(vii) any other demand, money market, common trust fund or time
deposit or obligation, or interest bearing or other security or
investment rated in the highest rating category by each Rating Agency;
provided, however, that (a) any such instrument shall be acceptable to the
Rating Agencies, and (b) no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a
-4-
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations.
Eligible Mortgage Loan: Either (a) a mortgage loan which meets any
of the following loan characteristics: A conventional fixed rate mortgage loan
or adjustable rate mortgage loan that is either a 1st lien or closed-end 2nd
lien prime, Alt-A or subprime single family residential mortgage loan which
mortgaged property is located in the United States or (b) such other mortgage
loan products as are mutually agreed upon by the Servicer and the Owner in
writing.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 2.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
▇▇▇▇▇▇ ▇▇▇: Federal National Mortgage Association, or any successor
thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 2.12.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Flood Zone Service Contract: A transferable contract maintained for
a Mortgaged Property with a nationally recognized flood zone service provider
for the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
Foreclosure Commencement: The delivery of the applicable file to the
Servicer's foreclosure counsel for initiation of foreclosure proceedings.
-5-
Freddie Mac: Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: Shall have the meaning set forth in Section
13.13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, as amended, or (b) classified as 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).
HOEPA: The federal Home Ownership and Equity Protection Act of 1994,
as amended.
HOEPA Loan: A Mortgage Loan which (a) the Owner has identified to
the Servicer in the Mortgage Loan Schedule as being subject to HOEPA, or (b)
which the Servicer discovers is subject to HOEPA.
Index: With respect to each Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan, to the
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lesser of (a) the appraised value of the Mortgaged Property at origination or
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related
mortgage or assignment of Mortgage has been recorded in the name of MERS, as
agent for the holder from time to time of the Mortgage Note and which is
identified as a MERS Mortgage Loan on the related Mortgage Loan Schedule.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS(R) System.
MOM Loan: Any Mortgage Loan where MERS acts as the mortgagee of
record of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: Any advance made by the Servicer pursuant to
Section 3.04.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien, as applicable, on an
unsubordinated estate in fee simple in real property securing the Mortgage
Note; except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the mortgage, deed of trust or other instrument
securing the Mortgage Note may secure and create a first or second lien, as
applicable, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to as the Mortgage File in Exhibit 8 annexed hereto, and any
additional documents required to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket hazard insurance policy as described in Section 2.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
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Mortgage Loan: An individual mortgage loan to be serviced pursuant
to this Agreement, as identified on the Mortgage Loan Schedule, which mortgage
loan shall be an Eligible Mortgage Loan and includes without limitation the
Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing Rights 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 listed on Exhibit 8 attached
hereto pertaining to any Mortgage Loan.
Mortgage Loan Package: A pool of Mortgage Loans to be serviced by
the Servicer hereunder and subject to the applicable Commitment Letter.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee.
Mortgage Loan Schedule: The schedule of Mortgage Loans with respect
to a Mortgage Loan Package, in a form mutually agreed upon by the Owner and
the Servicer, to be delivered by the Owner to the Servicer, which schedule
shall include, but not be limited to, the following information with respect
to each Mortgage Loan: (1) the [name of the Seller and the] Seller's Mortgage
Loan identifying number; (2) the Mortgagor's name; (3) the street address of
the Mortgaged Property including the city, state and zip code; (4) a code
indicating whether the Mortgaged Property is owner-occupied, a second home or
investment property; (5) the number and type of residential units constituting
the Mortgaged Property (i.e. a single family residence, a 2-4 family
residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based
on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule;
(7) the Loan-to-Value Ratio at origination; (8) with respect to First Lien
Loans, the LTV and with respect to Second Lien Loans, the CLTV; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10) 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; (11) the
stated maturity date; (12) the amount of the Monthly Payment as of the related
Cut-off Date; (13) the last payment date on which a Monthly Payment was
actually applied to pay interest and the outstanding principal balance; (14)
the original principal amount of the Mortgage Loan; (15) the principal balance
of the Mortgage Loan as of the close of business on the related Cut-off Date,
after deduction of payments of principal due and collected on or before the
related Cut-off Date; (16) with respect to Adjustable Rate Mortgage Loans, the
Interest Rate Adjustment Date; (17) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (18) with respect to Adjustable Rate Mortgage Loans,
the Lifetime Rate Cap under the terms of the Mortgage Note; (19) with respect
to Adjustable Rate Mortgage Loans, a code indicating the type of Index; (20)
with respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap under
the terms of the Mortgage Note; (21) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Floor under the terms of the Mortgage Note; (22) the
type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien, Second
Lien); (23) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance); (24) a code indicating the
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documentation style (i.e. full, alternative or reduced); (25) the loan credit
classification (as described in the Underwriting Guidelines); (26) whether
such Mortgage Loan provides for a Prepayment Penalty; (27) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (28) a description of the
Prepayment Penalty, if applicable; (29) the Mortgage Interest Rate as of
origination; (30) the credit risk score (FICO score) at origination; (31) the
date of origination; (32) the Mortgage Interest Rate adjustment period; (33)
the Mortgage Interest Rate adjustment percentage; (34) the Mortgage Interest
Rate floor; (35) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other); (36) a code indicating whether the Mortgage Loan is a
Section 32 Mortgage Loan; (37) a code indicating whether the Mortgage Loan is
assumable; (38) a code indicating whether the Mortgage Loan has been modified;
(39) the one year payment history; (40) the Due Date for the first Monthly
Payment; (41) the original Monthly Payment due; (42) with respect to the
related Mortgagor, the debt-to-income ratio; (43) the Appraised Value of the
Mortgaged Property; (44) the sales price of the Mortgaged Property if the
Mortgage Loan was originated in connection with the purchase of the Mortgaged
Property; (45) the MERS identification number, (46) if the Mortgage Loan has
borrower paid, lender paid or deep primary mortgage insurance coverage and, if
so, (i) the insurer's name, (ii) the policy or certification number, (iii) the
premium rate and (iv) the coverage percentage, (47) with respect to Second
Lien Loans, the outstanding principal balance of the superior lien, (48) a
code indicating whether the Mortgage Loan is a HOEPA Loan, (49) a code
indicating whether the Mortgage Loan is a High Cost Loan, (50) a code
indicating whether the Mortgage Loan is a subject to a buydown and (51) flood
zone and flood insurance coverage information with respect to each Mortgage
Loan (to the extent known by the Owner). With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverability Analysis: As defined in Section 3.05.
Nonrecoverable Advance: Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the good faith judgment of the Servicer, will not or, in
the case of a proposed advance, would not, be ultimately recoverable from
related Insurance Proceeds, Liquidation Proceeds or otherwise from such
Mortgage Loan or REO Property. The determination by the Servicer that it has
made a Nonrecoverable Advance or that any proposed Servicing Advance or
Monthly Advance, if made, would constitute a Nonrecoverable Advance shall be
evidenced by an Officer's Certificate delivered to the Owner.
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Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Servicer, and delivered to the Owner.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Servicer, reasonably acceptable to the Owner, provided that any
Opinion of Counsel relating to (a) the qualification of any account required
to be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with 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 related Servicer
and any master servicer of the related Mortgage Loans, (ii) does not have any
material direct or indirect financial interest in the related Servicer or any
master servicer of the related Mortgage Loans or in an Affiliate of either and
(iii) is not connected with the related Servicer or any master servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Originator: With respect to a Mortgage Loan, the originator of the
related Mortgage Loan.
Other Fees: With respect to each Mortgage Loan, those fees set forth
in Commitment Letter for the specific services described therein.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase on an
Interest Rate Adjustment Date above the Mortgage Interest Rate previously in
effect.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during the
Principal Prepayment Period, the amount, if any, by which one month's interest
at the related Mortgage Loan Remittance Rate on such Principal Prepayment
exceeds the amount of interest paid in connection with such Principal
Prepayment.
Prepayment Penalty: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of such
Mortgage Loan.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
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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 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 Period: The month preceding the month in which
the related Remittance Date occurs.
Purchase Agreement: The agreement pursuant to which the Owner
purchased the related Mortgage Loans from the related Seller.
Qualified Depository: A depository the accounts of which are insured
by the FDIC or is otherwise acceptable to the Rating Agencies.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ or Standard & Poor's, or their
respective successors designated by the Owner.
Reconstitution: Either a Whole Loan Transfer or a Securitization
Transfer.
Reconstitution Agreements: As defined in Section 13.13 hereof.
Reconstitution Date: As defined in Section 13.13 hereof.
Regulation AB: Regulation AB under the Securities Act and the
Securities Exchange Act, as such regulation may be amended from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: With respect to each Mortgage Loan, the 18th day of
any month, or if such 18th day is not a Business Day, the following Business
Day.
REO Management Fee: With respect to each REO Property being managed
by the Servicer, that fee set forth in the applicable Commitment Letter.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Owner through foreclosure or by deed in lieu of foreclosure, as
described in Section 2.15.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (i) the outstanding principal balance of the Mortgage Loan as of the date
of repurchase plus (ii) interest on such outstanding principal balance at the
Mortgage Interest Rate from the date on which interest has last been paid and
distributed to the Owner to the date of repurchase, less (y) amounts received
in respect of such repurchased Mortgage Loan which are being held in the
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Custodial Account for distribution in connection with such Mortgage Loan plus
(z) any costs and damages incurred by the related trust with respect to any
securitization of the Mortgage Loan in connection with any violation by such
Mortgage Loan of any predatory- or abusive-lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securities Act: The federal Securities Act of 1933, as amended.
Securities Exchange Act: The federal Securities Exchange Act of
1934, 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 offered or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: With respect to each Mortgage Loan, the Seller set forth in
the related Purchase Agreement.
Servicer: Countrywide Home Loans Servicing LP or any entity which
services the Mortgage Loans pursuant to this Agreement or its successor in
interest or any successor or assign to or designee of Servicer under this
Agreement as herein provided. Unless the context requires otherwise, all
references to "Servicer" in this Agreement shall be deemed to include such
Servicer's successors in interest, assignees or designees.
Servicer Employees: As defined in Section 2.12.
Servicer Information: As defined in Section 13.13.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred (regardless if any such advance is not, in the
reasonable determination of the Servicer, a Nonrecoverable Servicing Advance
when made but, thereafter, becomes a Nonrecoverable Servicing Advance) in the
performance by the Servicer of its servicing obligations, including, but not
limited to, the cost of (a) the preservation, restoration and protection of
the Mortgaged Property or REO Property, (b) any fees relating to any
enforcement or judicial proceedings, excluding foreclosures, (c) any
appraisals, valuations, broker price opinions, inspections, or environmental
assessments, (d) foreclosure actions per FNMA attorney fees and costs
guidelines, (e) the management and liquidation of the Mortgaged Property if
the Mortgaged Property is acquired in satisfaction of the Mortgage, (f) taxes,
assessments, water rates, sewer rents and other charges which are or may
become a lien upon the Mortgaged Property, and (g) executing and recording
instruments of satisfaction, deeds of reconveyance.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the date hereof consists of the
following:
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(A) General servicing considerations.
(1) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
(2) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
such servicing activities.
(3) Any requirements in the transaction agreements to maintain
a back-up servicer for the mortgage loan are maintained.
(4) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount of
coverage required by and otherwise in accordance with the
terms of the transaction agreements.
(B) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days of
receipt.
(2) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
(3) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
(4) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
transaction agreements.
(5) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect to
a foreign financial institution means a foreign financial
institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
(6) Unissued checks are safeguarded so as to prevent
unauthorized access.
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(7) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
(C) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
(3) Disbursements made to an investor are posted within two
business days to the Servicer's investor records.
(4) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
custodial bank statements.
(D) Mortgage loan administration.
(1) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
loan documents.
(2) Mortgage Loans and related documents are safeguarded as
required by the transaction agreements.
(3) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
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(4) 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 and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
(5) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
(6) Changes with respect to the terms or status of an
obligor's mortgage loan (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
and related mortgage loan documents.
(7) 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 established by the
transaction agreements.
(8) 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 example, phone calls,
letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
(9) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
the related mortgage loan documents.
(10) 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 loan, or
such other number of days specified in the transaction
agreements.
(11) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration
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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 transaction agreements.
(12) 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
(13) charged to the obligor, unless the late payment was due to
the obligor's error or omission.
(14) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer.
(15) Delinquencies, charge-offs and uncollectable accounts are
recognized and recorded in accordance with the transaction
agreements.
(16) 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 transaction agreements.
Servicing Fee: With respect to each Mortgage Loan and any Remittance
Date, an amount equal to the product of (i) one-twelfth of the Servicing Fee
Rate, and (ii) the Stated Principal Balance of such Mortgage Loan as of the
first day of the calendar month preceding the month in which such Distribution
Date occurs. Such fee shall be payable monthly and shall be pro rated for any
portion of a month during which the Mortgage Loan is serviced by the Servicer
under this Agreement. With respect to each Mortgage Loan, the Servicer shall
be entitled to receive accrued and unpaid Servicing Fees upon disposition of
any related REO Property or the date on which the Mortgage Loan is no longer
serviced by Servicer. The Servicer shall be entitled to the Servicing Fee
applicable to foreclosures through and including the month following the
filing of the claim.
Servicing Fee Rate: With respect to each Mortgage Loan, the
servicing fee rate set forth in the applicable Commitment Letter.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals, if provided, or copies of
all documents in the Mortgage File which are not delivered to the Owner, its
designee or the Custodian and copies of the Mortgage Loan Documents.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
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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 Servicer for servicing the Mortgage Loans; (c) any Ancillary Income
with respect to the Mortgage Loans; (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 Servicer thereunder; (e) any and
all rights to and in the Escrow Payments or other similar payments with
respect to the Mortgage Loans and any amounts actually collected by the
Servicer 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.
Special Deposit Account: An account which the Owner and Servicer
agree shall be a special deposit account for the benefit of the related Owner
under applicable law.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the related Cut-off Date after
giving effect to payments of principal due on or before such date, whether or
not received, minus (ii) all amounts previously distributed to the Owner with
respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
Tax Service Contract: A life-of-loan tax service contract maintained
for the Mortgaged Property with a tax service provider for the purpose of
obtaining current information from local taxing authorities relating to such
Mortgaged Property.
Transfer Date: With respect to a Mortgage Loan, the date on which
the physical servicing of the Mortgage Loans is transferred from the Servicer
pursuant to this Agreement to a successor servicer.
Underwriting Guidelines: The underwriting guidelines of the
Originator, as identified or specified in the related Purchase Agreement.
Whole Loan Transfer: The sale or transfer by Owner of some or all of
the Mortgage Loans in a whole loan or participation format (including, without
limitation, a ▇▇▇▇▇▇ ▇▇▇ Transfer or Freddie Mac Transfer).
ARTICLE II
SERVICING
Section 2.01 Servicer to Act as Servicer.
With respect to the Mortgage Loans in each Mortgage Loan Package,
from and after the date set forth in the applicable Commitment Letter, the
Servicer, as an independent
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contractor, shall service and administer the Mortgage Loans, pursuant to the
terms of this Agreement, under the Servicer's name on a scheduled/scheduled
basis, and shall have full power and authority to do any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Servicer shall acknowledge by email to the
Owner its receipt of each Mortgage Loan Schedule and the Servicer's assumption
of the servicing responsibilities with respect to the related Mortgage Loan
Package; provided, that each Mortgaged Loan Package will become subject to
this Agreement only upon the execution and delivery of the Commitment Letter
by both the Owner and the Servicer.
The Servicer shall provide the Owner with a description of its
modification plan types. The Servicer shall not enter into any modification
plan which is not a modification plan type approved by the Owner.
Unless provided herein, Owner shall delegate authority to the
Servicer to carry out its servicing and administration duties without
obtaining Owner's prior written approval. Notwithstanding anything in this
Agreement to the contrary, the Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest
Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for (A) a reduction of interest payments
resulting from the application of the Servicemembers' Civil Relief Act or any
similar state laws, or (B) as provided in the following paragraph, the
Mortgagor is in default with respect to the Mortgage Loan or such default is,
in the judgment of the Servicer, reasonably foreseeable) or (ii) except as
provided in the following paragraph, waive any Prepayment Penalty.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided, that any extension pursuant to clause (ii) above shall not affect
the amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Servicer shall make timely advances on such
Mortgage Loan during such extension pursuant to Section 3.04 and in accordance
with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements, provided that the Servicer shall not
be required to make any such advances that are Nonrecoverable Advances.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth in this
Agreement and Accepted Servicing Practices, may also waive, modify or vary any
term of such Mortgage Loan (including modifications that would change the
Mortgage Rate, forgive the payment of principal or interest, extend the final
maturity date of such Mortgage Loan or waive, in whole or in part, a
Prepayment Penalty), accept payment from the related Mortgagor of an amount
less than the Stated Principal Balance in final satisfaction of such Mortgage
Loan, or consent to the postponement of strict compliance with any such term
or otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as "forbearance"); provided,
however, that the terms of any Mortgage Loan may only be waived,
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modified, varied or forgiven once without the consent of the Owner while the
Mortgage Loan remains outstanding. The Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
this section shall be reflected in writing in the Servicing File. The Servicer
is hereby authorized and empowered to execute and deliver on behalf of itself
and the Owner, all instruments of satisfaction or cancellation, or of partial
or full release, discharge and all other comparable instruments, with respect
to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Servicer, the Owner shall furnish the Servicer with
a fully executed Power of Attorney and other documents necessary or
appropriate to enable Servicer to carry out its servicing and administrative
duties under this Agreement. Servicer may request the consent of Owner in
writing by certified mail, overnight courier or such other means as may be
agreed to by the parties to a course of action that Servicer proposes to take
under this Agreement. Unless Owner shall give written notice to Servicer that
it objects to any recommended course of action within ten (10) Business Days
immediately following the day on which Owner received Servicer's written
consent request (together with its recommended course of action and relevant
supporting documentation), Owner shall be deemed to have consented to such
recommended course of action, and Servicer may take the action recommended to
Owner, unless Servicer determines, in its reasonable discretion, that such
action is no longer prudent or applicable and the Servicer notifies the Owner
of such decision not to act. In the event that Owner shall object to
Servicer's recommended course of action, Servicer shall take such action as is
required by Owner, and Servicer shall have no liability therefor if it is not
negligent in performing such action. Further, to the extent Servicer has
provided Owner with reasonably timely notice, Owner shall indemnify and hold
harmless Servicer from and against any penalty, fine or damages that may
result from Owner's decision to wait for any period of time up to ten (10)
Business Days before providing Servicer with direction as to the course of
action to be taken as permitted in the second immediately preceding sentence.
In addition, notwithstanding the foregoing, the Servicer may also waive, in
whole or in part, a Prepayment Penalty if such Prepayment Penalty is (i) not
permitted to be collected by applicable law, or (ii) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership or
other similar laws relating to creditor's rights or (2) due to acceleration in
connection with a foreclosure or other involuntary payment. If a Prepayment
Penalty is waived other than as permitted above, then the Servicer is required
to deposit the amount of such waived Prepayment Penalty into the Custodial
Account together with and at the time that the amount prepaid on the related
Mortgage Loan is required to be deposited into the Custodial Account;
provided, however, that the Servicer shall not have an obligation to pay the
amount of any uncollected Prepayment Penalty if the failure to collect such
amount is the direct result of inaccurate or incomplete information on the
Mortgage Loan Schedule in effect at such time. In servicing and administering
the Mortgage Loans, the Servicer shall employ procedures (including collection
procedures) and exercise the same care that it customarily employs and
exercises in servicing and administering mortgage loans for its own account,
where such procedures do not conflict with the requirements of this Agreement,
and the Owner's reliance on the Servicer. In addition, the Servicer shall
retain adequate personnel to effect such servicing and administration of the
Mortgage Loans.
The Owner may sell and transfer, in whole or in part, some or all of
the Mortgage Loans at any time and from time to time (including, without
limitation, in connection with a Securitization Transfer). Upon any such sale,
the Servicer shall execute and deliver an Assignment, Assumption and
Recognition Agreement; provided, that the Servicer shall not be
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obligated to recognize the transferee of such Mortgage Loans as the assignee
of the rights of the Owner hereunder with respect to such Mortgage Loans
unless such transferee executes and delivers such Assignment, Assumption and
Recognition Agreement. Upon such execution, the Servicer shall mark its books
and records to reflect the ownership of the Mortgage Loans by such transferee.
Upon such assignment of rights and assumption of obligations, the assignee or
designee shall accede to the rights and obligations hereunder of the Owner
with respect to the transferred Mortgage Loans, except as otherwise set forth
in the Assignment, Assumption and Recognition Agreement, and the Owner shall
be released from its obligations hereunder accruing on and after the date of
such transfer, but shall remain liable for any obligations hereunder accruing
prior to the date of such transfer. Notwithstanding the foregoing, there shall
not be more than three Owners of the Mortgage Loans with respect to any
particular Mortgage Loan Package inclusive of the Mortgage Loans included in a
Securitization Transfer.
The Servicer shall notify MERS of the ownership interest of Owner in
each MOM Loan through the MORNET system or MIDANET system, as applicable, or
any other comparable system acceptable to MERS. At any time during the term of
this Agreement, Owner may direct Servicer to cause any MOM Loan to be
deactivated from the MERS System.
The Servicing File maintained by the Servicer pursuant to this
Agreement shall be appropriately marked and identified in the Servicer's
computer system to clearly reflect the ownership of the related Mortgage Loan
by the Owner. The Servicer shall release from its custody the contents of any
Servicing File maintained by it only in accordance with this Agreement.
The Servicer shall be responsible for the actions of any vendors
which the Servicer utilizes to carry out its obligations hereunder and any
fees paid to such vendors shall be paid by the Servicer from its own funds.
Section 2.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 2.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Servicer shall take such action as the Servicer
shall determine reasonably to be in the best interest of the Owner in
accordance with Accepted Servicing Practices. In the event that any payment
due under any Mortgage Loan is not postponed pursuant to Section 2.01 and
remains delinquent for a period of 90 days or any other default continues for
a period of 90 days beyond the expiration of any grace or cure period (or such
other period as is required by law in the jurisdiction where the related
Mortgaged Property is located) or earlier as determined by the Servicer, the
Servicer shall cause a Foreclosure Commencement in accordance with Accepted
Servicing Practices. In such connection, the Servicer shall from its own funds
make all necessary and proper Servicing Advances, provided, however, that the
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Owner after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation
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Proceeds (respecting which it shall have priority for purposes of withdrawals
from the Custodial Account pursuant to Section 2.05) or through Insurance
Proceeds (respecting which it shall have similar priority). Notwithstanding
anything herein to the contrary, no Servicing Advance shall be required to be
made hereunder if such Servicing Advance would, if made, constitute a
Nonrecoverable Advance. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Servicing Advance would constitute
a Nonrecoverable Advance shall be evidenced by an Officers' Certificate of the
Servicer, delivered to the Owner which details the reasons for such
determination.
The Servicer acknowledges and agrees that it shall take and initiate
any legal actions with respect to any Mortgage Loans and REO Properties,
including, without limitation, any foreclosure actions, acceptance of
deeds-in-lieu of foreclosure, and any collection actions with respect to any
Mortgage Loans or REO Properties on behalf of the Owner, but only in the name
of the Servicer or its nominee and without reference to the Owner. Except as
otherwise required by law or with the consent of the Owner, under no
circumstances shall any such action be taken in the name of, or with any
reference to, the Owner. The Servicer shall provide prior written notice to
the Owner if the Servicer is required by applicable law to take any legal
actions with respect to the Mortgage Loan or REO Properties in the name of, or
with reference to, the Owner.
Notwithstanding the foregoing, all actions must be approved by the
Owner relating to any Mortgaged Property that is determined to be contaminated
by hazardous or toxic substances or wastes.
With respect to any HOEPA Loan which is in default, but prior to the
commencement of any loss mitigation procedures or foreclosure proceedings if a
Loan is known to be a HOEPA Loan at time of commencement of such proceedings,
the Servicer shall (A) review the related Mortgage File to determine whether
or not the Mortgage File contains the disclosure documents required by ▇▇▇▇▇,
whether or not such documents were executed by the related Mortgagor(s), and
whether or not such documents were executed three or more days in advance of
closing and (B) inform the Owner if such timely and executed disclosure
documents are not in the Mortgage File.
Further, prior to the commencement of any loss mitigation procedures
with respect to a HOEPA Loan, the Servicer shall notify those servicing
personnel involved in loss mitigation related to the Mortgage Loan as to
whether or not any such disclosure documentation is defective or missing.
In addition, once the Servicer determines to commence a foreclosure
proceeding with respect to a HOEPA Loan, but prior to such commencement, the
Servicer and its outside counsel shall review the Mortgage File to determine
whether or not the requirements of HOEPA shall have been satisfied in
connection with the origination, underwriting, servicing and sale of such
HOEPA Loan, including whether or not required and accurate disclosures were
made to and acknowledged by the related Mortgagor(s). Finally, the Servicer
shall notify the Owner within 3 Business Days of receipt of notice by the
Servicer's proper servicing department if at any time the Mortgagor asserts a
claim or defense based on HOEPA, whether in a written notice, as a defense to
a foreclosure proceeding, or otherwise.
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Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure, in the event the Servicer has reasonable cause
to believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector the Servicer shall cause the Mortgaged Property to be so inspected.
Upon completion of the inspection, the Servicer shall promptly provide the
Owner with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Owner shall
determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Owner directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall
be entitled to be reimbursed from amounts in the Custodial Account pursuant to
Section 2.05 hereof. In the event the Owner directs the Servicer not to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed for all Servicing Advances made with respect to
the related Mortgaged Property from the Custodial Account pursuant to Section
2.05 hereof.
Section 2.03 Collection of Mortgage Loan Payments.
The Servicer shall proceed diligently to collect all payments due
under each of the related Mortgage Loans when the same shall become due and
payable and shall take special care in ascertaining and estimating Escrow
Payments, to the extent applicable, and all other charges that will become due
and payable with respect to the Mortgage Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Notwithstanding anything herein to the contrary, Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, PMI Policy or otherwise or
against any public or governmental authority with respect to a taking or
condemnation) if in its reasonable judgment it believes that it will be unable
to enforce the provision of the Mortgage or other instrument pursuant to which
payment is required.
Section 2.04 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its own
funds and general assets and shall establish one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Countywide Home Loans
Servicing LP, in trust for [Name of Owner]". The Custodial Account shall be
established with a Qualified Depository acceptable to the Owner as a Special
Deposit Account. Any funds deposited in the Custodial Account shall at all
times be fully insured to the full extent permitted by the FDIC and as
otherwise acceptable to the Rating Agencies and any amounts therein may be
invested in Eligible Investments. The creation of any Custodial Account shall
be evidenced by a certification in the form of Exhibit 2 hereto, in the case
of an account
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established with the Servicer, or by a letter agreement in the form of Exhibit
3 hereto, in the case of an account held by a depository other than the
Servicer. A copy of such certification or letter agreement shall be furnished
to the Owner and, upon request, to any subsequent Owner.
The Servicer shall deposit in the Custodial Account on or prior to
the second Business Day following receipt thereof, and retain therein, the
following collections received by the Servicer and payments made by the
Servicer pursuant to this Agreement:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage adjusted to
the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds and any amount received with respect
to REO Property;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section 2.14),
and Section 2.11;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 2.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.15, 3.01, or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to the related Purchase Agreement;
(viii) with respect to each Principal Prepayment in full or in part,
the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Servicer's own funds,
without any right of reimbursement therefor up to a maximum amount per
month of one-half of the Servicing Fee actually received for such month
for the Mortgage Loans;
(ix) any Prepayment Penalties received with respect to any Mortgage
Loan; and
(x) any amounts required to be deposited by the Servicer pursuant to
Section 2.11 in connection with the deductible clause in any blanket
hazard insurance policy.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, unless otherwise provided herein, payments in the
nature of Ancillary Income need not be
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deposited by the Servicer into the Custodial Account. Any interest paid on
funds deposited in the Custodial Account by the depository institution shall
accrue to the benefit of the Servicer and the Servicer may retain any such
interest.
With respect to any Mortgage Loan subject to a Securitization
Transfer, the Servicer shall establish a separate custodial account for the
related securitization and deposit all amounts that have been or are
subsequently received with respect to such Mortgage Loan into the custodial
account created for the securitization on the date of the Securitization
Transfer, or as soon as possible thereafter (but not to exceed 48 hours after
such date).
Section 2.05 Permitted Withdrawals From Custodial Account.
Subject to Section 3.01, the Servicer shall be entitled to withdraw
funds from the Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided Section 3.01;
(ii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 3.04, the Servicer's right to reimburse
itself pursuant to this subclause (ii) being limited to amounts received
on the related Mortgage Loan (including without limitation, late
recoveries of payments from the Mortgagor, Liquidation Proceeds and
Insurance Proceeds with respect to such Mortgage Loan to the extent
collected) which represent late payments of principal and/or interest
respecting which any such advance was made; it being understood that, in
the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Owner;
(iii) to pay itself the Servicing Fee from Liquidation Proceeds,
Insurance Proceeds or other amounts received with respect to the related
Mortgage Loan (to the extent the Servicer has not retained the Servicing
Fee);
(iv) to reimburse itself for unreimbursed Servicing Advances (except
to the extent reimbursed pursuant to Section 2.07), any accrued but
unpaid Servicing Fees, Other Fees and for unreimbursed advances of
Servicer funds made pursuant to Section 2.15, the Servicer's right to
reimburse itself pursuant to this subclause (iv) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected
by the Servicer from the Mortgagor or otherwise relating to the Mortgage
Loan, it being understood that, in the case of any such reimbursement,
the Servicer's right thereto shall be prior to the rights of the Owner;
(v) following the liquidation of a Mortgage Loan, to reimburse
itself for (a) any unpaid Servicing Fees to the extent not recoverable
from Liquidation Proceeds, Insurance Proceeds or other amounts received
with respect to the related Mortgage Loan under Section 2.05(iii) and (b)
any unreimbursed Nonrecoverable Advances made by the Servicer in
accordance with this Agreement;
(vi) to invest funds in Eligible Investments in accordance with
Section 2.09;
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(vii) to withdraw funds deposited in the Custodial Account in error;
(viii) to pay to itself any interest earned on funds deposited in
the Custodial Account (all such interest to be withdrawn monthly not
later than each Remittance Date); and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 2.06 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled "Countrywide Home Loans Servicing LP, in trust for [Name of
Owner] and various Mortgagors". The Escrow Account shall be established with a
Qualified Depository as a Special Deposit Account, in a manner which shall
provide maximum available insurance by the FDIC and as otherwise acceptable to
the Rating Agencies. Funds deposited in the Escrow Accounts may be drawn on by
the Servicer in accordance with Section 2.07. The creation of any Escrow
Account shall be evidenced by a certification in the form of Exhibit 4 hereto,
in the case of an account established with the Servicer, or by a letter
agreement in the form of Exhibit 5 hereto, in the case of an account held by a
depository other than the Servicer. A copy of such certification shall be
furnished to the Owner and, upon request, to any subsequent Owner.
The Servicer shall deposit in the Escrow Account or Accounts on or
prior to the second Business Day following receipt thereof, and retain
therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.07. Any interest paid on funds deposited in the Escrow Account by
the depository institution shall accrue to the benefit of the Servicer, other
than interest on escrowed funds required by law to be paid to the Mortgagor.
To the extent required by law, the Servicer shall be responsible to pay from
its own funds interest on escrowed funds to the Mortgagor notwithstanding that
the Escrow Account may be non-interest bearing or that interest paid thereon
is insufficient for such purposes.
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Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance made by the
Servicer pursuant to Section 2.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan or
applicable federal or state law or judicial or administrative ruling;
(iv) for transfer to the Custodial Account in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.14;
(vi) to pay the Servicer, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to reimburse itself for any amounts deposited in the Escrow
Account in error; and (viii) to clear and terminate the Escrow Account on
the termination of this Agreement.
Section 2.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan that provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status
of ground rents, taxes, assessments, water rates, sewer rents, and other
charges which are or may become a lien upon the Mortgaged Property and the
status fire and hazard insurance coverage and shall obtain, from time to time,
all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage.
To the extent that any Mortgage Loan does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the
Mortgagor. With respect to each Mortgage Loan, subject to Accepted Servicing
Practices, the Servicer assumes full responsibility for the payment of all
such bills and shall effect payments of all such bills
-26-
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its
own funds to effect such payments within the time period required to avoid the
loss of the related Mortgaged Property by foreclosure from a tax or other
lien. Notwithstanding the foregoing, if the Servicer reasonably determines
that such Servicing Advance would be a Nonrecoverable Advance, the Servicer
shall have no obligation to make such Servicing Advance. If Servicer fails to
make a Servicing Advance with respect to any payment prior to the date on
which any late payment penalties or costs related to protecting the lien
accrue, the Servicer shall pay any such penalties or costs within the time
period required to avoid the loss of the related Mortgaged Property by
foreclosure from a tax or other lien; provided, however, that if the Servicer
reasonably determines that such Servicing Advance would be a Nonrecoverable
Advance, the Servicer shall have no obligation to make such Servicing Advance.
Section 2.09 Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon notice to the Owner, which notice shall be provided
prior to such transfer unless such transfer is due to an emergency.
The Servicer shall bear any expenses, losses or damages sustained by
the Owner because the Custodial Account and/or Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account or Escrow Account may at
the option of the Servicer be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than one day prior to the Remittance
Date in each month; provided, however, that if such Eligible Investment is an
obligation of a Qualified Depository (other than the Servicer) that maintains
the Custodial Account or the Escrow Account, then such Eligible Investment may
mature on the related Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer in trust for the benefit of the Owner. All
income on or gain realized from any such Eligible Investment shall be for the
benefit of the Servicer and may be withdrawn at any time by the Servicer. Any
losses incurred in respect of any such investment shall be deposited in the
Custodial Account or the Escrow Account, by the Servicer out of its own funds
immediately as realized. If, at any time, the amount on deposit in the
Custodial Account or the Escrow Account exceeds the amount of the applicable
FDIC insurance, such excess above the amount of the applicable FDIC insurance
shall be invested in Eligible Investments.
Section 2.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan,
hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer acceptable under the ▇▇▇▇▇▇ ▇▇▇
Guides against loss by fire, hazards of extended coverage and such other
hazards as are required to be insured pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides, in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Mortgage Loan and (ii) the greater of
(a) the outstanding principal balance of the Mortgage Loan or (b) an amount
such that the proceeds
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thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer.
If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is, and shall continue to be, covered by a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with a generally acceptable insurance carrier
acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides in an amount representing coverage not
less than the lesser of (i) the aggregate unpaid principal balance of the
Mortgage Loan, (ii) maximum amount of insurance which is available under the
National Flood Insurance Act of 1968, as amended (regardless of whether the
area in which such Mortgaged Property is located is participating in such
program), or (iii) the full replacement value of the improvements which are
part of such Mortgaged Property. If a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered
in an amount less than the amount required by the National Flood Insurance Act
of 1968, as amended, the Servicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails to obtain the required flood insurance coverage within forty-five (45)
days after such notification, the Servicer shall immediately force place the
required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current ▇▇▇▇▇▇ ▇▇▇ requirements, and secure from the
owner's association its agreement to notify the Servicer promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
The Servicer shall cause to be maintained on each Mortgaged Property
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Servicer shall in accordance with
the ▇▇▇▇▇▇ ▇▇▇ Guides make commercially reasonable efforts to communicate and
consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the desirability of protection of the
Mortgaged Property.
All policies required hereunder shall name the Servicer and its
successors and assigns as a mortgagee and loss payee and shall be endorsed
with non contributory standard or New York mortgagee clauses which shall
provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are
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acceptable under the ▇▇▇▇▇▇ ▇▇▇ Guides and are licensed to do business in the
jurisdiction in which the Mortgaged Property is located. The Servicer shall
determine that such policies provide sufficient risk coverage and amounts as
required pursuant to the ▇▇▇▇▇▇ ▇▇▇ Guides, that they insure the property
owner, and that they properly describe the property address. The Servicer
shall furnish to the Mortgagor a formal notice of expiration of any such
insurance in sufficient time for the Mortgagor to arrange for renewal coverage
by the expiration date; provided, however, that in the event that no such
notice is furnished by the Servicer, the Servicer shall ensure that
replacement insurance policies are in place in the required coverages and the
Servicer shall be solely liable for any losses in the event coverage is not
provided.
Pursuant to Section 2.04, any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer's normal servicing
procedures as specified in Section 2.14) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 2.05. Section 2.11
Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 2.10 and otherwise complies with all other requirements of Section
2.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 2.10. Any amounts collected by the Servicer under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 2.05. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
2.10, and there shall have been a loss which would have been covered by such
policy, the Servicer shall deposit in the Custodial Account at the time of
such loss the amount not otherwise payable under the blanket policy because of
such deductible clause, such amount to be deposited from the Servicer's funds,
without reimbursement therefor. Upon request of the Owner, the Servicer shall
cause to be delivered to the Owner a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Owner.
Section 2.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Servicer Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions
and negligent acts of such Servicer Employees. Such Fidelity Bond and Errors
and Omissions Insurance Policy also shall
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protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby. No provision of this Section 2.12 requiring
such Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ ▇▇▇ Mortgage-Backed Securities
Selling and Servicing Guide. Upon the request of the Owner, the Servicer shall
cause to be delivered to the Owner a certified true copy of such Fidelity Bond
and Errors and Omissions Insurance Policy.
Section 2.13 Inspections.
The Servicer shall inspect the Mortgaged Property as often as is
deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. In addition, if any Mortgage Loan is
more than 90 days delinquent, the Servicer shall promptly inspect the
Mortgaged Property and shall conduct subsequent inspections in accordance with
Accepted Servicing Practices; provided further that if the Servicer determines
that any Mortgaged Property is vacant, the Servicer shall promptly inspect to
the Mortgaged Property and should conduct subsequent inspections every 30
days. The Servicer shall document on its servicing system each such
inspection. The costs of such inspections shall be treated as Servicing
Advances for which the Servicer shall be entitled to full reimbursement for in
accordance with Section 2.05(iii).
Section 2.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to
be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices and the terms of
this Agreement. At a minimum, the Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Owner is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Owner.
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Section 2.15 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Servicer on behalf of the Owner and without
reference to the Owner except as otherwise required by law. The Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter. The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same
(and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the
Servicer deems to be in the best interest of the Owner in accordance with
Accepted Servicing Practices. The Servicer shall provide the Owner on a
monthly basis a report on the status of each REO Property.
In consideration therefor, the Owner shall pay the Servicer the REO
Management Fee per month as set forth in the applicable Commitment Letter.
The Servicer shall use commercially reasonable efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within one year after title has been taken to such REO Property, unless
the Servicer determines, and gives an appropriate notice to the Owner to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Servicer
shall report monthly to the Owner as to the progress being made in selling
such REO Property.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage in an amount which is at least equal
to the maximum insurable value of the improvements which are a part of such
property, liability insurance and, to the extent required and available under
the National Flood Insurance Act of 1968, as amended, flood insurance in the
amount required in Section 2.10 hereof.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Owner in accordance with Accepted Servicing
Practices. The proceeds of sale of the REO Property shall be promptly
deposited in the Custodial Account pursuant to the terms of this Agreement but
not later than the second Business Day following receipt thereof. As soon as
practical thereafter, the expenses of such sale shall be paid and the Servicer
shall reimburse itself for any related unreimbursed Servicing Advances and
unpaid Servicing Fees made pursuant to this Section.
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With respect to each REO Property, the Servicer shall hold all funds
collected and received in connection with the operation of the REO Property in
the Custodial Account. The Servicer shall cause to be deposited on or prior to
the second Business Day following the receipt thereof in each Custodial
Account all revenues received with respect to the conservation and disposition
of the related REO Property.
Section 2.16 Permitted Withdrawals with Respect to REO Property.
The Servicer shall withdraw funds on deposit in the Custodial
Account with respect to each related REO Property necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 2.10 and the fees of
any managing agent acting on behalf of the Servicer. The Servicer shall make
monthly distributions on each Remittance Date to the Owner of the net cash
flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in Section 2.15 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 2.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 2.19, the
Servicer shall furnish to the Owner on or before the 5th Business Day of each
month a report with respect to any REO Property covering the operation of such
REO Property for the previous month and the Servicer's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information available to the Servicer as the Owner
shall reasonably request.
Section 2.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Owner pursuant to a deed in lieu of foreclosure,
the Servicer shall submit to the Owner a liquidation report with respect to
such Mortgaged Property.
Section 2.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Section 2.20 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer
shall adjust the Mortgage Interest Rate on the related Interest Rate
Adjustment Date in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
the Monthly Payment adjustments. The Servicer shall promptly upon Owner's
reasonable written request,
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deliver to the Owner such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate
and implement such adjustments. Upon the discovery by the Servicer, or the
Owner that the Servicer has failed to adjust a Mortgage Interest Rate or a
Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Servicer shall immediately deposit in the Custodial Account from
its own funds the amount of any interest loss caused the Owner thereby.
Section 2.21 Recordation of Assignments of Mortgage.
Except in connection with Accepted Servicing Practices for defaulted
Mortgage Loans, the Servicer shall not be responsible for the preparation or
recording of the Assignments of Mortgage relating to the Mortgage Loans to the
Owner, the securitization trustee or any other party; provided, however, that
in the event the Servicer agrees to record any mortgage assignment, any
expense, including the fees of third party service providers, incurred by the
Servicer in connection with the preparation and recordation of Assignments of
Mortgage shall be reimbursable by the Owner, or if not reimbursed by the
Owner, as a Servicing Advance. The Servicer shall not be liable for, and shall
be indemnified by the Owner, against any losses, costs, penalties and damages
incurred as a result of incorrect or incomplete, or untimely submission of,
Assignments of Mortgage and applicable recording information.
Section 2.22 Additional Servicing Requirements.
The Servicer shall comply with the following additional
requirements:
(a) Get updated FICO scores quarterly for the entire portfolio at
the Owner's expense.
(b) Apply all payments received from borrowers to principal and
interest prior to any application of advances or fees.
(c) Make staff available to participate in weekly calls to discuss
loans in default including foreclosures, bankruptcy and REO Properties.
(d) the additional requirements set forth in Exhibit 14 (in the case
of subprime Mortgage Loans) and Exhibit 15.
Section 2.23 Credit Reporting.
The Servicer shall fully furnish, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information on the Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company (or their respective successors) on a monthly basis
and in accordance with applicable federal, state and local laws.
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Section 2.24 [Reserved].
Section 2.25 Early Payment Default and Repurchase Obligations.
With respect to each Mortgage Loan, the Servicer agrees deliver to
the Owner, on or prior to the fifth Business Day of each month, a report
setting forth information with respect to (a) any Early Payment Default
provisions or (b) any prepayments in full of the Mortgage Loan.
Section 2.26 Tax and Flood Service Contracts.
The Servicer, at Owner's expense, shall cause each Mortgage Loan
which is transferred to the Servicer for servicing to be covered by (a) a Tax
Service Contract and (b) Flood Zone Service Contract. Servicer shall place
such Tax Service Contracts and Flood Service Contracts in place, and shall
bill the Owner the fee associated with acquiring such contracts as set forth
in the applicable Commitment Letter.
ARTICLE III
PAYMENTS TO OWNER
Section 3.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account related to the Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 2.05), plus (b) all
amounts, if any, which the Servicer is obligated to remit pursuant to Section
3.04, minus (c) any amounts attributable to Principal Prepayments received
after the applicable Principal Prepayment Period which amounts shall be
remitted on the following Remittance Date, together with any additional
interest required to be deposited in the Custodial Account in connection with
such Principal Prepayment in accordance with Section 2.04(viii), and minus (d)
any amount attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the first day of the month in which such Remittance Date
occurs, which amounts shall be remitted on the following Remittance Date.
With respect to any funds remitted after the Business Day following
the date on which such remittance was required to be made, the Servicer shall
pay to the Owner interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three (3)
percentage points, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be deposited in the Custodial Account
by the Servicer on the date such late payment is made and shall cover the
period commencing with the Business Day following the Business Day on which
such payment was due and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding Remittance Date. The payment by
the Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
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Section 3.02 Monthly Reports to Owner.
Not later than each Remittance Date, the Servicer shall furnish to
the Owner standard monthly reports as set forth on Exhibit 1 attached hereto
in electronic medium mutually acceptable to the parties as of the related
Determination Date. Such monthly reports shall be in electronic format and
include mortgage loan information electronically generated through Servicer's
loan administration servicing system including: (i) the actual balance as of
the last day of the related Due Period; (ii) all Principal Prepayments applied
to the Mortgagor's account during the related Principal Prepayment Period
(separately stating all related Prepayment Premiums); (iii) principal and
interest collections received during the related Due Period; (iv) the amounts
of the monthly collection that are to be remitted to Owner; (v) an
identification of Mortgage Loans that are thirty (30), sixty (60) or ninety
(90) days or more delinquent as of the end of the prior month with respect to
Monthly Payments; Mortgage Loans that are in foreclosure or bankruptcy; and
(vi) Mortgage Loans that have become REO Properties. For all purposes of this
Agreement, delinquency status shall be determined in accordance with standard
ABS or RMBS methodology, as is appropriate, as determined by the Owner for the
applicable Mortgage Loan type.
In addition, on or before March 15th of each calendar year, the
Servicer shall furnish to each Person who was a Owner at any time during such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for the
applicable portion of such year.
Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer pursuant to any requirements of the Internal Revenue
Code as from time to time are in force.
The Servicer shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby.
In addition, the Servicer shall provide the Owner with such information
concerning the Mortgage Loans as is necessary for the Owner to prepare its
federal income tax return as the Owner may reasonably request from time to
time and which is reasonably available to the Servicer.
On the 5th Business Day of each month (the "Data Dictionary Delivery
Date"), the Servicer shall deliver to the Owner by FTP an electronic data file
incorporating the fields set forth in the on Exhibit 9 hereto (the "Data
Dictionary").
Section 3.03 Advances by Servicer.
Except as otherwise provided herein, the Servicer shall be entitled
to first priority reimbursement pursuant to Section 2.05 for Servicing
Advances and Monthly Advances from recoveries from the related Mortgagor or
from all Liquidation Proceeds and other payments or recoveries (including
Insurance Proceeds and Condemnation Proceeds) with respect to the related
Mortgage Loan.
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Section 3.04 Principal and Interest Advances by ▇▇▇▇▇▇▇▇.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to all Monthly
Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which
were due on the Mortgage Loans during the applicable Due Period and which were
delinquent on the Business Day immediately preceding such Remittance Date or
which were deferred pursuant to Section 4.01. Any amounts held for future
distribution and so used shall be replaced by the Servicer by deposit in the
Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than remittances to
the Owner required to be made on such Remittance Date. The Servicer shall keep
appropriate records of such amounts. The Servicer's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last
Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; provided, that the Servicer shall not be obligated to make
Monthly Advances which the Servicer determines to be Nonrecoverable Advances.
The Servicer shall not be obligated to advance shortfalls of interest
resulting from the application of the Servicemembers' Civil Relief Act or any
similar state laws.
Section 3.05 Charge off and Advance Analysis.
Once a month, the Servicer will analyze, utilizing its internal
proprietary models, all first lien Mortgage Loans that are greater than 90
days delinquent (excluding those on a forbearance plan or court approved
bankruptcy payment plan) to determine if any such Mortgage Loans should be
charged off or if future Servicing Advances should be deemed to be
Nonrecoverable Advances based on the projections of such proprietary models
(the "Nonrecoverability Analysis"). The Servicer will charge off Mortgage
Loans and will not make Servicer Advances that are deemed to be Nonrecoverable
Advances based on such Nonrecoverability Analysis; provided, however, that
with respect to Mortgage Loans included in a Reconstitution, such actions are
permitted under the related Reconstitution Agreement.
Upon reasonable prior request and without limitation on Sections
4.07 and 5.02 hereof), the Owner may during normal business hours review the
Servicer's policies and procedures related to the Nonrecoverability Analysis
and may no more than twice a year perform an audit to determine whether the
Servicer is taking actions consistent with the Nonrecoverability Analysis. The
Servicer agrees to make such reasonable changes to the Nonrecoverability
Analysis as requested by the Owner; provided, however, that with respect to
Mortgage Loans included in a Reconstitution, such changes are permitted under
the related Reconstitution Agreement.
The Servicer shall retain the Nonrecoverability Analysis for a
period of one year from the date such analysis was undertaken and shall make
such analysis available upon request to the Owner during such period.
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property.
The Servicer shall be required to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise
such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Servicer, shall, to the extent
permitted by applicable law, enter into (i) an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable
under the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guarantee insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Servicer for entering into an assumption
agreement, such fee will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan nor the outstanding principal amount of the Mortgage Loan shall be
changed.
To the extent that any Mortgage Loan is assumable, the Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall follow Accepted Servicing Practices and the underwriting practices
and procedures of prudent mortgage lenders in the respective states where the
Mortgage Properties are located including but not limited to Servicer
conducting a review of the credit and financial capacity of the individual
receiving the property, and may approve the assumption if it believes the
recipient is capable of assuming the mortgage obligations. If the credit of
the proposed transferee does not satisfy the relevant underwriting criteria
and the transfer of ownership actually occurs, the Servicer diligently shall,
to the extent permitted by the Mortgage or the Mortgage Note and by applicable
law, accelerate the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the
Monthly Remittance Advice as provided in Section 3.02,
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and may request the release of any Mortgage Loan Documents from the Owner in
accordance with this Section 4.02 hereof. The Servicer shall obtain discharge
of the related Mortgage Loan as of record within any related time limit
required by applicable law.
In connection with any instrument of satisfaction or deed of
reconveyance, the Servicer shall be entitled to a reconveyance fee. Such
reconveyance fee shall only be reimbursable to Servicer by Owner to the extent
the reconveyance fee is uncollectible from the Mortgagor based on the terms of
the security instrument or in the Servicer's reasonable opinion that such fee
is not allowable by statute.
Servicer shall have no liability for third party delays (unless such
third party is an affiliate of the Servicer) that may result in assessed
penalties. To the extent applicable, Servicer shall bill Owner for any
reconveyance fees and recording fees uncollectible from the Mortgagor in
connection with any instrument of satisfaction or deed of reconveyance. Upon
receipt of such request, the Owner or its designee shall within five (5)
Business Days release or cause to be released the related Mortgage Loan
Documents to Servicer and Servicer shall prepare and process any satisfaction
or release. If Owner or its designee or the Custodian does not release the
related Mortgage Loan Documents to Servicer within five (5) Business Days of
receipt of request to do so, Servicer may retain a third party to complete the
reconveyance and charge Owner the actual cost of services provided by such
third party. Servicer shall have no liability for third party delays that may
result in assessed penalties.
If the Servicer satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
(or such lesser amount in connection with a discounted payoff accepted by the
Servicer with respect to a defaulted Mortgage Loan) or should the Servicer
otherwise prejudice any rights the Owner may have under the mortgage
instruments, upon written demand of the Owner, the Servicer shall purchase the
related Mortgage Loan at an amount equal to (a) Repurchase Price, minus (b)
any costs and damages incurred by the related trust with respect to any
securitization of the Mortgage Loan in connection with any violation by such
Mortgage Loan of any predatory- or abusive-lending law by deposit thereof in
the Custodial Account within five (5) Business Days of receipt of such demand
by the Owner if the Servicer is unable to demonstrate that it will be able to
cause the amount of the unpaid indebtedness to be reinstated and secured under
the related Mortgage. The Servicer shall maintain the Fidelity Bond and Errors
and Omissions Insurance Policy as provided for in Section 2.12 insuring the
Servicer against any loss it may sustain with respect to any Mortgage Loan not
satisfied in accordance with the procedures set forth herein.
Section 4.03 Servicing Compensation.
As consideration for servicing the Mortgage Loans hereunder, the
Servicer shall be entitled to retain the applicable Servicing Fee from
payments on the Mortgage Loans or to withdraw the applicable Servicing Fee
with respect to each Mortgage Loan from the Custodial Account pursuant to
Section 2.05. The obligation of the Owner to pay, and the Servicer's right to
withdraw, 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, to the extent permitted by Section 2.05)
of such Monthly Payment collected by the Servicer, or as
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otherwise provided under Section 2.05. The Servicer shall be entitled to all
accrued and unpaid Servicing Fees upon the termination of its servicing of the
related Mortgage Loans.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer to the extent not required to be deposited
in the Custodial Account. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement thereof except as specifically provided for
herein.
Notwithstanding anything set forth in this section related to
Ancillary Income, the Servicer shall not collect from the Mortgagor, pass
through as an advance or as a liquidation expense any charges other than bona
fide fees, which fees must be in compliance with local law. Servicer can not
add on a processing, or review fee or any additional fee, mark up or otherwise
directly make a profit on or from services or activities rendered by a third
party or affiliate (examples include but not limited to: letters and notices,
force placed insurance, BPOs, appraisals, inspections, property preservation
costs). Servicer may collect any third party fees which are charged in
accordance with Accepted Servicing Practices.
Section 4.04 Annual Statement as to Compliance.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, the Servicer shall deliver
to the Owner, (a) on or before March 15, 2006, and, if applicable, on the
related Transfer Date an Officer's Certificate, stating that (i) a review of
the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and
the nature and status thereof and the action being taken by the Servicer to
cure such default and (b) on or before March 15th of each year beginning March
15, 2007, the servicer compliance statement required by Item 1123 of
Regulation AB, which as of the date hereof requires a statement to the effect
that (i) an authorized officer of the Servicer has reviewed (or a review has
been made under its supervision) of the Servicer's activities under this
Agreement during the prior calendar year and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all of
its obligations under the Agreement in all material respects throughout the
period covered by the prior calendar year or, if there has been a failure to
fulfill any such obligation in any material respect, a statement of such
failure known to such officer and the nature and the status thereof.
Section 4.05 Annual Independent Public Accountants' Servicing
Report.
So long as any Mortgage Loans are being serviced hereunder, or were
serviced hereunder during the prior calendar year, (a) on or before March 15,
2006, the Servicer, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Owner to the effect that such firm
has examined certain documents and records relating to the servicing of the
Mortgage Loans and this Agreement and that such firm is of the opinion that
the provisions of
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Article II and Article III have been complied with, and that, on the basis of
such examination conducted substantially in compliance with the Single Audit
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and (ii) such other exceptions as shall be set forth in such statement and (b)
on or before March 15th of each year beginning March 15, 2007 a report by a
registered public accounting firm that attests to, and reports on, the
assessment made by the Servicer pursuant to Section 4.10, as required by Rules
13a-18 and 15d-18 of the Securities Exchange Act, which attestation shall be
in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X under
the Securities Act and the Securities Exchange Act.
Section 4.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
With respect to any Mortgage Loans sold in a Securitization Transfer
in which the Servicer is a servicer, the Servicer agrees that on or before
March 15th of each year beginning March 15, 2005, the Servicer shall deliver
to the depositor, the master servicer (if any) and the trustee for the
securitization trust created in the Securitization Transfer, and their
officers, directors and affiliates, a certification in the form attached as
Exhibit 12 hereto, executed by the senior officer in charge of servicing at
the Servicer for use in connection with any Form 10-K to be filed with the
Securities and Exchange Commission with respect to the securitization trust.
The Servicer shall indemnify and hold harmless the depositor in the
Securitization Transfer, the master servicer (if any), and the trustee, and
their respective officers, directors and Affiliates, from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of
or based upon any breach of the Servicer's obligations under this paragraph or
any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for in the preceding sentence is unavailable or insufficient to hold
harmless any indemnified party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in
such proportion as is appropriate to reflect the relative fault of such
indemnified party, on the one hand, and the Servicer, on the other, in
connection with a breach of the Servicer's obligations under this paragraph or
any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith.
Section 4.07 Right to Examine Servicer Records.
The Owner shall have the right during the term of this Agreement to
examine and audit any and all of the books, records, or other information of
the Servicer, whether held by the Servicer or by another on its behalf, with
respect to or concerning this Agreement or the Mortgage Loans, during normal
business hours or as otherwise acceptable to the Servicer, upon reasonable
advance notice and at the sole cost and expense of the Owner; provided,
however, that unless otherwise required by law, the Servicer shall not be
required to provide access to such information if the provision thereof would
violate any law or legal obligation of the Servicer including the legal right
to privacy of any Mortgagor.
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Section 4.08 Compliance with ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999.
With respect to each Mortgage Loan and the related Mortgagor, the
Servicer shall comply with Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and
all applicable regulations and guidelines promulgated thereunder, and the
Servicer shall provide all notices required thereunder using the notice
language supplied by the Owner.
Section 4.09 On-Line Access.
The Servicer shall permit the Owner as owner of the servicing
rights, internet access to certain computer screens in the Servicer's loan
administration computer system which contain Mortgage Loan information. The
Servicer shall update such Mortgage Loan information on a "real time" basis.
The Servicer shall provide the Owner with access to the system, as well as the
tools to create and administer log-in identifications and passwords for each
of its authorized users. In accessing the Servicer's computerized loan
administration system, the Owner agrees that it will: (i) only log-in with the
identification assigned by the Servicer; (ii) correctly and completely log-off
the system immediately upon completion of each session of service; (iii) not
allow any unauthorized employee or agent of the Owner to use the assigned
log-in identification or improperly access the Servicer's computer system;
(iv) keep the assigned log-in identification and all other information
enabling such access strictly confidential; (v) not access, or attempt to
access any Servicer systems or data other than that which is specifically
authorized; (vi) not intentionally spread viruses or other malicious computer
codes to the Servicer's computer systems; (vii) not copy or infringe upon any
content contained on the Servicer's loan administration computer system;
(viii) designate in writing an administrator (an "Owner Administrator") who
shall review on an annual basis the list of employees or agents of the Owner
who have been authorized to access the Servicer's loan administration computer
system and assigned log-in identifications and passwords (each an "Authorized
User"); (ix) require the Owner Administrator in conducting its review to
ensure that each Authorized User is currently an employee or agent of the
Owner and whose employment or function as agent of the Owner requires the
Authorized User to have continued access to the Servicer's loan administration
computer system; (x) require the Owner Administrator to remove from the list
of Authorized Users, and deny access to, any individual who is not currently
an employee or agent of the Owner or whose employment or function as agent no
longer requires such employee or agent of the Owner to remain an Authorized
User and to have access to the Servicer's loan administration computer system,
and (xi) deliver to the Servicer on or before the end of the month following
each anniversary of the date of execution of this Agreement, beginning on the
first such anniversary following the execution of this Agreement, a notice
stating that the Owner Administrator has conducted the review of the list of
Authorized Users required by clause (viii) above, and has updated the list of
Authorized Users as required by clause (ix) above.
The Servicer shall have no liability to the Owner in the event that
access to the Servicer's loan administration system becomes limited or
otherwise unavailable during periods of heavy use, upgrades, maintenance to
address security concerns or otherwise. The Servicer shall ensure any periods
of unavailability are limited as much as possible in frequency and amount of
time.
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Section 4.10 Assessment of Servicing Compliance.
The Servicer shall deliver to the Owner or its designee on or before
March 15th of each year beginning March 15, 2007 a report reasonably
satisfactory to the Owner regarding its assessment of compliance with
Servicing Criteria as required by Rules 13a-18 and 15d-18 of the Securities
Exchange Act and Item 1122 of Regulation AB, which as of the date hereof
require a report by an authorized officer of the Servicer that contains the
following:
(a) A statement by such officer of its responsibility of assessing
the Servicing Criteria applicable to the Servicer;
(b) A statement by such officer that it used the Servicing Criteria
to assess compliance with the Servicing Criteria applicable to the Servicer;
(c) A statement by such officer of the Servicer's compliance with
the applicable Servicing Criteria as of the immediately preceding December 31
and for the period covered by the preceding calendar year and disclosure of
any material instance of noncompliance with respect thereto;
(d) A statement that a registered public accounting firm has issued
an attestation report on the Servicer's compliance with the applicable
Servicing Criteria as of the immediately preceding December 31, and for the
period covered by the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are
not applicable to the Servicer (which statement shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Servicer that are backed by the same asset type
as the Mortgage Loans).
Section 4.11 Subservicing.
The Servicer shall not hire or otherwise utilize a subservicer
hereunder without the prior written consent of the Owner and its designee. Any
such subservicer must agree in writing to comply with Sections 4.04, 4.05,
4.10 and 4.11.
ARTICLE V
SERVICER TO COOPERATE
Section 5.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the
Owner all reports required hereunder, and such other periodic, special, or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable, or appropriate with respect to the Owner or the
purposes of this Agreement to the extent such reports or information are
readily accessible to the Servicer without undue expense. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions which the
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Owner may give and to the extent the Servicer incurs any material cost or
expense related to this Section 5.01 not otherwise required to be incurred
pursuant to this Agreement, such expense shall be at the sole cost and expense
of the Owner.
The Servicer shall execute and deliver all such instruments and take
all such action as the Owner may reasonably request from time to time to the
extent such action is in accordance with Accepted Servicing Practices, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 5.02 Financial Statements; Servicing Facilities.
In connection with marketing the Mortgage Loans or a proposed
Reconstitution, the Owner shall make available to a prospective purchaser
audited financial statements of the consolidated group that includes the
Servicer for the most recently completed three fiscal years for which such
statements are available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years for which such statements are available
covered by any Consolidated Statement of Operations. The Servicer also shall
make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the corporate group that
includes the Servicer (and are available upon request to the public at large).
The Servicer shall furnish to the Owner or a prospective purchaser copies of
the statements specified above.
The Servicer shall make available to the Owner or any prospective
purchaser a knowledgeable representative for the purpose of answering
questions respecting recent developments affecting the Servicer or the
financial statements of the corporate group that includes the Servicer, and to
permit any prospective purchaser (upon reasonable notice) to inspect the
Servicer's servicing facilities (no more than 12 times per year unless
mutually agreed to between the parties) for the purpose of satisfying such
prospective purchaser that the Servicer has the ability to service the
Mortgage Loans as provided in this Agreement provided that such access is
necessary, reasonable, or appropriate with respect to the Owner or the
purposes of this Agreement to the extent such access or information are
readily accessible to the Servicer without undue expense.
ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) This Agreement shall terminate upon the earlier of: (i) the
termination of the Servicer pursuant to this Section 6.01, 8.03 or 11.01, (ii)
the later of the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan or the disposition of any REO
Property with respect to the last Mortgage Loan and the remittance of all
funds due hereunder; (iii) mutual consent of the Servicer and the Owner in
writing; or (iv) one year from the date hereof, unless mutually extended by
the Owner and the Servicer before the end of such one year period; provided,
however, that this Agreement shall not be terminable
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pursuant to this clause (iv) with respect to any Mortgage Loans that have been
subject to a Securitization Transfer.
(b) With respect to any Mortgage Loans serviced by Servicer for more
than one year that have been subject to a Securitization Transfer, Servicer
shall be entitled to a market Servicing Fee Rate for mortgage loans similar to
the Mortgage Loans, but not in excess of the servicing fee rate as set forth
or described in the pooling & servicing agreement, trust agreement, assignment
agreement or other similar document for such Securitization Transfer.
(c) The Owner may terminate, at its sole option, any rights the
Servicer may have hereunder, without cause. Any such notice of termination
shall be in writing and delivered to the Servicer by registered mail at least
30 days prior to the effective date of termination. The Owner shall have the
right to receive and retain any proceeds upon the subsequent sale of the
Servicing Rights to any successor servicer. In the event the Owner terminates
the Servicer without cause with respect to some or all of the Mortgage Loans,
with respect to each such Mortgage Loan the Owner shall be required to pay the
Servicer any termination fee set forth in the applicable Commitment Letter. In
addition, with respect to each Mortgage Loan released from servicing, the
Servicer shall be entitled to any accrued and unpaid Servicing Fee, any
outstanding and unreimbursed Servicing Advances and Monthly Advances, and any
accrued and unpaid Ancillary Income.
(d) Notwithstanding and in addition to the foregoing, in the event
that (i) a Mortgage Loan becomes delinquent for a period of 120 days or more
(a "Delinquent Mortgage Loan") or (ii) a Mortgage Loan becomes an REO
Property, the Owner may at its election terminate this Agreement with respect
to such Delinquent Mortgage Loan or REO Property upon 30 days' written notice
to the Servicer, provided, however, upon such transfer and assignment which
shall be in accordance with all applicable laws, the Owner shall reimburse the
Servicer for its Servicing Fee, any outstanding and unreimbursed Servicing
Advances, and any other outstanding, unreimbursed fees and costs of the
Servicer with respect to such Delinquent Mortgage Loan or REO Property.
(e) In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof (provided, that the Servicer
shall have no obligations to service the Mortgage Loan after the date which is
180 days from the 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 or
financial condition of its successor. Following any such termination, the
Owner shall act diligently to retain a successor servicer. The resignation or
removal of the Servicer pursuant to the aforementioned sections shall not
become effective until a successor shall be appointed by the Owner.
Notwithstanding anything to the contrary contained herein, in no event shall a
termination of this Agreement or the Servicer hereunder terminate any
indemnification obligations of the Servicer, which obligations shall survive
any such termination.
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Section 6.02 Transfer of Servicing.
On the Transfer Date or upon any termination of the Servicer as
Servicer pursuant to Section 6.01, the Owner, or its designee, shall assume
all servicing responsibilities related to, and the Servicer shall cease all
servicing responsibilities related to the Mortgage Loans.
On or prior to the related Transfer Date, the Servicer shall, at its
sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Successor Servicer, including but not limited to the following:
(a) Notice to Mortgagors. The Servicer 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 Owner, or its designee,
in accordance with RESPA; provided, however, such letters shall be
substantially in the form attached hereto as Exhibit 14.
(b) Mortgage Loans in Foreclosure. The servicing with respect to
Mortgage Loans in foreclosure on or before the related Transfer Date shall not
be transferred from the Servicer to the Owner or the successor servicer, as
the case may be, and such Mortgage Loans shall continue to be serviced by the
Servicer pursuant to the terms of this Agreement. However, if the Owner so
elects, the Owner may waive the provisions of this paragraph (a) and accept
transfer of servicing of such Mortgage Loans and all amounts received by the
Servicer thereunder.
(c) Servicing Advances. Subject to the limitations set forth in the
definition of "Nonrecoverable Advances", the Servicer shall be entitled to be
reimbursed for all unreimbursed Servicing Advances and any other advances made
by the Servicer pursuant to this Agreement with respect to any Mortgage Loan
on the related Transfer Date, but only if the servicer after the related
Transfer Date is not the Servicer or an affiliate. In addition, the Owner
shall cause the Servicer to be reimbursed for any accrued and unpaid Servicing
Fees, Other Fees and for any trailing expenses representing Servicing Advances
for which invoices are received by the Servicer after the Transfer Date;
provided, that the Owner shall not be liable for any amounts pursuant to this
paragraph unless the Servicer has requested reimbursement and delivered
appropriate evidence of such reimbursable expense. The Owner shall cause the
Servicer to be reimbursed for such trailing expenses within ten (10) Business
Days of receipt of such documentation.
(d) Notice to Taxing Authorities and Insurance Companies. The
Servicer 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 Owner, or its designee, and instructions to deliver all notices, tax bills
and insurance statements, as the case may be, to the Owner from and after the
related Transfer Date.
(e) Delivery of Servicing Records. The Servicer shall forward to the
Owner, or its designee, all servicing records and the Servicing File in the
Servicer's possession relating to each related Mortgage Loan.
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(f) Escrow Payments. The Servicer shall provide the Owner, 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 Servicer shall also provide
the Owner with an accounting statement of Escrow Payments and suspense
balances and loss draft balances sufficient to enable the Owner to reconcile
the amount of such payment with the accounts of the Mortgage Loans.
Additionally, the Servicer shall wire transfer to the Owner the amount of any
agency, trustee or prepaid Mortgage Loan payments and all other similar
amounts held by the Servicer.
(g) Payoffs and Assumptions. The Servicer shall provide to the
Owner, or its designee, copies of all assumption and payoff statements
generated by the Seller or the Servicer on the related Mortgage Loans from the
related Cut-off Date to the related Transfer Date.
(h) Mortgage Payments Received Prior to the Related Transfer Date.
Prior to the related Transfer Date all payments received by the Servicer on
each related Mortgage Loan shall be properly applied to the account of the
particular Mortgagor.
(i) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Servicer after the related
Transfer Date shall be forwarded to the Owner or its designee within two (2)
Business Days after the date of receipt. The Servicer shall notify the Owner
or its designee of the particulars of the payment, which notification
requirement shall be satisfied if the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Owner or its designee. The Servicer shall assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received
by the Servicer 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 Owner with the particulars of the payment such as the account
number, dollar amount, date received and any special Mortgagor application
instructions and the Servicer shall comply with the foregoing requirements
with respect to all Monthly Payments received by the it after the related
Transfer Date.
(j) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) 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;
(iii) 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, and such
misapplied payment was the direct result of the Servicer's error, the
Servicer shall be liable for the amount of such shortage. In such case,
the Servicer shall reimburse the Owner for the amount of such shortage
within thirty (30) days after receipt of written demand therefor from the
Owner;
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(iv) 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 and such misapplied payment was
the direct result of the Servicer's error, a check shall be issued to the
party shorted by the improper payment application within thirty (30) days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 6.02(j)
shall be accompanied by a statement indicating the Owner Mortgage Loan
identification number and an explanation of the allocation of any such
payments.
(k) Books and Records. On the related Transfer Date, the books,
records and accounts of the Servicer with respect to the related Mortgage
Loans shall be in accordance with all Accepted Servicing Practices.
On the related Transfer Date, the Servicer shall comply with all of
the provisions of this Agreement to effect a complete transfer of the
servicing with respect to the related Mortgage Loans. Except as otherwise
provided in this Agreement, on the related Transfer Date for each related
Mortgage Loan, this Agreement, except for Articles VI, VIII, IX, X and Section
13.12 which shall survive the related Transfer Date, shall terminate with
respect to such Mortgage Loan.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the related
Transfer Date.
Prior to the related Transfer Date, the contents of each Servicing
File are and shall be held in trust by the Servicer for the benefit of the
Owner as the owner thereof. The Servicer shall maintain in the Servicing File
a hard or electronic copy, if available, of each Mortgage Loan Document
received by Owner or Owner's designee and the originals or copies of documents
not delivered to the Owner in Servicer's possession received during the term
of this Agreement. The possession of the Servicing File by the Servicer is at
the will of the Owner for the sole purpose of servicing the related Mortgage
Loan, pursuant to this Agreement, and such retention and possession by the
Servicer is in its capacity as Servicer only and at the election of the Owner.
The Servicer shall release its custody of the contents of any Servicing File
only in accordance with written instructions from the Owner, unless such
release is required as incidental to the Servicer's servicing of the Mortgage
Loans pursuant to this Agreement, or is in connection with a repurchase of any
Mortgage Loan by the related Seller pursuant to the related Purchase
Agreement.
The Servicer 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
Owner. In particular, the Servicer shall maintain in its possession, available
for inspection by the Owner or its designee, and shall deliver to the Owner or
its designee upon written demand, evidence of compliance with all federal,
state and local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇,
including but not limited to
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documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by ▇▇▇▇▇▇ ▇▇▇ and periodic
inspection reports as required by Section 2.13, as applicable.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the
Servicer shall note transfers of Mortgage Loans.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification.
(a) The Servicer agrees to indemnify and hold the Owner and any
successor servicer harmless from any liability, claim, loss or damage
(including, without limitation, any reasonable legal fees, judgments or
expenses relating to such liability, claim, loss or damage) to the Owner
directly or indirectly resulting from the Servicer's failure:
(i) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations
contained in this Agreement including, without limitation, Sections 4.04,
4.05, 4.12 and 4.13; or
(ii) to comply with all applicable requirements with respect to the
servicing of the Mortgage Loans as set forth herein.
The Servicer immediately shall notify the Owner if a claim is made
by a third party with respect to this Agreement. For purposes of this Section
8.01(a), "Owner" shall mean the Person then acting as the Owner under this
Agreement and any and all Persons who previously were "Owners" under this
Agreement.
(b) The Owner agrees to indemnify and hold the Servicer harmless
from any liability, claim, loss or damage (including without limitation, any
reasonable legal fees, judgments or expenses relating to such liability,
claim, loss or damage) to the Servicer (a) directly or indirectly resulting
from the Owner's failure to observe and perform any or all of the Owner's
duties, obligations, covenants, agreements, warranties or representations
contained in this Agreement or (b) directly resulting from the Servicer taking
any legal actions with respect to any Mortgage Loans and/or REO Properties in
the name of the Servicer and without reference to the Owner, or (c) any act or
omission on the part of the Owner, any prior servicer or any other third party
which occurred in connection with the prior servicing of a Mortgage Loan, but,
in each case, only to the extent such loss does not result from the failure of
the Servicer (i) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations contained in
this Agreement or in any other agreement pursuant to which the Servicer
services or has serviced any such Mortgage Loan; or (ii) to comply with all
applicable requirements with respect to the servicing of the Mortgage Loans as
set forth herein or
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in any other agreement pursuant to which the Servicer services or has serviced
any such Mortgage Loan.
Section 8.02 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees
or agents of the Servicer shall be under any liability to the Owner 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 Servicer or any such person against any
breach of warranties or representations made herein, its own negligent
actions, or failure to perform its obligations in compliance with any standard
of care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve
it in any expense or liability, provided, however, that the Servicer may
undertake any such action which it may deem necessary or desirable in respect
to this Agreement and the rights and duties of the parties hereto. In such
event, the Servicer shall be entitled to reimbursement from the Owner of the
reasonable legal expenses and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Servicer, and the representations as to the adequacy
of its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall not assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof or
sell or otherwise dispose of all or substantially all of its property or
assets without the prior written consent of the Owner, which consent shall be
granted or withheld in the reasonable discretion of the Owner.
The Servicer may, without the consent of the Owner, retain third
party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such
contractors by Servicer shall not limit the obligation of the Servicer to
service the Mortgage Loans pursuant to the terms and conditions of this
Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall
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become effective until a successor shall have assumed the Servicer's
responsibilities and obligations hereunder in the manner provided in Section
6.02.
Without in any way limiting the generality of this Section 8.03, in
the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of
its property or assets to without the prior written consent of the Owner, then
the Owner shall have the right to terminate this Agreement upon notice given
as set forth in Section 6.01(a)(ii), without any payment of any penalty or
damages and without any liability whatsoever to the Servicer or any third
party.
Notwithstanding any provision in this Agreement to the contrary, the
Servicer may at any time upon notice to the Owner, or trustee in the case of a
Reconstitution, and without the consent of any party, solely in connection
with a financing or other facility (any such arrangement, an "Advance
Facility"), assign as collateral security or pledge to another Person all its
rights, title and interest under this Agreement to its rights to reimbursement
of Servicing Advances.
Section 8.04 Assignment by Owner.
Subject to the limitations and requirements set forth in the fifth
paragraph of Section 2.01, the Owner shall have the right, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of
the Mortgage Loans, and designate any person to exercise any rights of the
Owner hereunder, by executing an Assignment, Assumption and Recognition
Agreement substantially in the form of Exhibit 6 attached hereto.
Section 8.05 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state of its filing
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 Servicer may be
merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation (including by means of the sale of all or
substantially all of the Servicer's assets to such Person) to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer (whether or not related to loan servicing), shall be the successor of
the 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 Servicer shall not,
without the prior written approval of the Owner, be a party to any such
merger, conversion or consolidation, or sell or otherwise dispose of all or
substantially all of its business or assets if, (i) as a result of such
merger, conversion or consolidation, sale or other disposition, an Event of
Default under Section 11.01 hereof would exist with respect to such successor
Servicer or (ii) such successor has (a) a residential primary servicer rating
for servicing of mortgage loans issued by Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., Fitch, Inc. or ▇▇▇▇▇'▇ Investors
Service, Inc. below "average" or its equivalent or (b) a net worth of less
than $25,000,000.
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The Servicer shall give 90 days' prior written notice to the Owner
to the extent permitted by applicable law of any such merger, conversion,
consolidation, sale or other disposition to which the Servicer proposes to be
a party. In the event that any successor entity to the Servicer fails to meet
the requirements set forth in this Section 8.04 and the Owner does not consent
to such successor becoming the servicer hereunder, then the Servicer shall
have the right to terminate this Agreement with respect to the Servicer and
any such successor upon notice given as set forth in Section 6.01, without any
payment of any termination penalty or termination damages and without any
additional liability whatsoever to the Servicer or any third party, except for
liabilities accrued under this Agreement prior to the date of termination and
for liabilities resulting from Owner's obligations hereunder, including the
payment of the Servicing Fee pursuant to Section 4.03.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF OWNER
As of the date hereof and on each date on which a Mortgage Loan
Package becomes subject to the terms of this Agreement, the Owner warrants and
represents to, and covenants and agrees with, the Servicer as follows:
Section 9.01 Organization and Good Standing; Licensing.
The Owner is a New York limited partnership duly organized, validly
existing and has the power and authority to own its assets and to transact the
business in which it is currently engaged.
Section 9.02 Authorization; Binding Obligations.
The Owner has the power and authority to make, execute, deliver and
perform this Agreement, and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Owner enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
Section 9.03 No Consent Required.
The Owner is not required to obtain the consent of any other party
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the
failure to obtain or make will not materially adversely affect the ability of
the Owner to perform all obligations hereunder.
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Section 9.04 No Violations.
The execution, delivery and performance of this Agreement by the
Owner will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Owner, except for violations
that will not adversely affect the Owner's ability to perform its obligations
under this Agreement or the certificate of incorporation of the Owner, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Owner is a party or by which the Owner may be bound.
Section 9.05 Litigation.
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or to the knowledge of the
Owner threatened, against the Owner or with respect to this Agreement, which
if adversely determined would have a material adverse effect on the
transactions contemplated by this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SERVICER
As of the date hereof and on each date on which a Mortgage Loan
Package becomes subject to the terms of this Agreement, the Servicer warrants
and represents to, and covenants and agrees with, the Owner as follows:
Section 10.01 Due Organization and Authority.
The Servicer is a Texas limited partnership duly organized, validly
existing and in good standing under the laws of the United States as now being
conducted and is licensed, qualified and in good standing in each state 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
Servicer, and in any event the Servicer 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 Servicer has
the full power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of
this Agreement (including all instruments or transfer to be delivered pursuant
to this Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer; and
all requisite action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms;
Section 10.02 Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
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Section 10.03 No Conflicts.
Neither the execution and delivery of this Agreement, 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 Servicer's organizational documents or any legal restriction
or any agreement or instrument to which the Servicer 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 Servicer or its property is subject, or
impair the ability of the Owner to realize on the Mortgage Loans, or impair
the value of the Mortgage Loans.
Section 10.04 Ability to Service.
The Servicer has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans. The Servicer is in good standing to enforce and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties are
located.
Section 10.05 Ability to Perform.
The Servicer 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.
Section 10.06 No Litigation Pending.
There is no action, suit, proceeding or investigation pending or to
the best of Servicer's knowledge threatened against the Servicer, before any
court, administrative agency or other tribunal asserting the invalidity of
this Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Servicer, or in
any material impairment of the right or ability of the Servicer to carry on
its business substantially as now conducted, or in any material liability on
the part of the Servicer, 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 Servicer contemplated herein, or which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Agreement.
Section 10.07 No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement, or the servicing of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the date hereof.
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Section 10.08 No Untrue Information.
No statement, report or other document relating to the Servicer
furnished or to be furnished by the Servicer pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary to make
the statements contained therein not misleading.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default.
The following shall constitute an Event of Default under this
Agreement on the part of the Servicer:
(a) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days after the date upon which
notice of such failure is given to the Servicer, requiring the same to be
remedied, shall have been given to the Servicer by the Owner; or
(b) the failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement or in the Custodial Agreement which
continues unremedied for a period of 30 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner (the date of delivery of such notice, the "Notice
Date"); provided, however, that in the case of a failure that cannot be cured
within thirty (30) days after the Notice Date, the cure period may be extended
if the Servicer can demonstrate to the reasonable satisfaction of the Owner
that the failure can be cured and the Servicer is diligently pursuing remedial
action; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for
a period of 60 days; or
(d) the 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 Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
or
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(f) the Servicer fails to maintain its license to do business or
service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located for more than thirty (30) days after receiving notice
from any Person thereof; or
(g) Any reduction, withdrawal or qualification of the servicing
credit of the Servicer by any Rating Agency which results in the inability of
the Servicer to act as a primary or special servicer for any mortgage-backed
or asset-backed transaction rated or to be rated by any such Rating Agency; or
(h) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof in a manner not permitted under this Agreement.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatsoever rights the Owner may have at law or
equity to damages, including injunctive relief and specific performance, the
Owner, by notice in writing to the Servicer, may terminate without
compensation all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 6.02. Upon written request from the Owner, the
Servicer shall prepare, execute and deliver any and all documents and other
instruments, place in such successor's possession all Mortgage Files to the
extent initially provided to the Servicer, and 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, at the Servicer's sole
expense or as otherwise provided under Accepted Servicing Practices. The
Servicer agrees to cooperate with the Owner and such successor in effecting
the termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
Section 11.02 Waiver of Defaults.
The Owner may waive any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any 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.
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ARTICLE XII
CLOSING
Section 12.01 Closing Documents.
The Closing Documents shall consist of fully executed originals of
the following documents:
1. this Agreement;
2. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 2 or 3 hereto;
3. an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, as required hereunder, in the
form of either Exhibit 4 or 5 hereto;
4. an Officer's Certificate, in the form of Exhibit 7 hereto, with
respect to the Servicer, including all attachments thereto.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Notices.
All notices, requests, demands and other communications which are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon the delivery or mailing thereof,
as the case may be, sent by registered or certified mail, return receipt
requested:
(a) If to Owner to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
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(b) If to Servicer:
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇-▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇
With a copy to:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
Section 13.02 Waivers.
Any of the Servicer or the Owner may upon consent of all parties, by
written notice to the others:
(a) Waive compliance with any of the terms, conditions or covenants
required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the
others hereunder.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 13.03 Entire Agreement; Amendment.
This Agreement, including all documents and exhibits incorporated by
reference herein, constitutes the entire agreement between the parties with
respect to servicing of the Mortgage Loans. This Agreement may be amended and
any provision hereof waived, but, only in writing signed by the party against
whom such enforcement is sought.
Section 13.04 Execution; Binding Effect.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Sections 8.02 and
8.03, this Agreement shall inure to the benefit of and be binding upon the
Servicer and the Owner and their respective permitted successors and assigns.
Section 13.05 Headings.
Headings of the Articles and Sections in this Agreement are for
reference purposes only and shall not be deemed to have any substantive
effect.
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Section 13.06 Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES 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 13.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties. The duties and
responsibilities of the Servicer shall be rendered by it as an independent
contractor and not as an agent of the Owner. The Servicer shall have full
control of all of its acts, doings, proceedings, relating to or requisite in
connection with the discharge of its duties and responsibilities under this
Agreement.
Section 13.08 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, 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.
Section 13.09 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 other 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 by the Owner or the Owner's designee.
Section 13.10 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are integral parts of this Agreement.
Section 13.11 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 13.12 No Solicitation.
The Owner and the Servicer each agree that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors
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on its behalf, to personally, by telephone or mail, solicit the borrower or
obligor under any Mortgage Loan for the purpose of refinancing such Mortgage
Loan, provided, that the Servicer may solicit any mortgagor for whom the
Servicer has received a mortgagor initiated request for verification of
mortgage, a request for demand for payoff, a mortgagor initiated written or
verbal communication indicating a desire to prepay the related Mortgage Loan,
or the mortgagor initiates a title search, provided further, that the Servicer
is not prohibited from responding to unsolicited requests or inquiries made by
a mortgagor or an agent of a mortgagor. Notwithstanding the foregoing, the
following solicitations, if undertaken by the or Servicer or any affiliate of
the Servicer, shall not be prohibited: (i) solicitations which are directed to
the general public at large, including, without limitation, mass mailing based
on commercially acquired mailing lists, newspaper, radio and television
advertisements and other mass media advertisements, (ii) promotions undertaken
by the Servicer or any of its affiliates which concern optional insurance
products (other than single premium credit life insurance) and (iii) borrower
messages included on, and statement inserts provided with, the monthly
statements sent to mortgagors; provided, however, that similar messages and
inserts are sent to the borrowers of other mortgage loans owned by a multitude
of Persons other than the Owner which are serviced by the Servicer.
Section 13.13 Cooperation of Servicer with a Reconstitution.
(a) The Servicer and the Owner agree that with respect to some or
all of the Mortgage Loans, on one or more dates (each a "Reconstitution Date")
at the Owner's sole option, the Owner may effect a sale (each, a
"Reconstitution") of some or all of the Mortgage Loans then subject to this
Agreement, without recourse, to:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "▇▇▇▇▇▇ ▇▇▇ Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
With respect to each Whole Loan Transfer, Agency Transfer or
Securitization Transfer, as the case may be, entered into by the Owner:
(b) The Servicer agrees to execute (i) in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Servicer among the Owner, the Servicer, ▇▇▇▇▇▇ ▇▇▇ or
Freddie Mac (as the case may be) and any servicer, (ii) in connection with a
Whole Loan Transfer, a warranties and servicing agreement or a participation
and servicing agreement in form and substance reasonably acceptable to the
Servicer, and (iii) in connection with a Securitization Transfer, a pooling
and servicing agreement or other similar agreement in form and substance
reasonably acceptable to the Servicer (collectively the agreements referred to
herein are designated, the "Reconstitution Agreements"); provided that
provisions of such Reconstitution Agreements will not contain any
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substantially greater obligations of, or any substantially lower benefits to,
the Servicer than those contained in this Agreement and each of the Servicer
and Owner is given an opportunity to review and reasonably negotiate in good
faith the content of such provisions (which shall not be more onerous than
those required under this Agreement) including, but not limited to servicing
representations and warranties (dated as of the settlement or closing date in
connection with such Reconstitution (each, a "Reconstitution Date")) related
to the Mortgage Loans for the period of time from the date on which the
Servicer began servicing the Mortgage Loans through the Reconstitution Date to
the effect that (a) the Servicer has serviced the Mortgage Loans in accordance
with this Agreement and has provided accurate "paid through" data with respect
to the Mortgage Loans to the Owner, (b) except as reflected in the "paid
through" data delivered to the Owner, there is no payment default existing
under any Mortgage or any Mortgage Note as of the cut-off date for the
Reconstitution, and (c) to the best of the Servicer's knowledge, there is no
non-payment default existing under any Mortgage or Mortgage Note, or any event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a non-payment default, breach, violation or
event which would permit acceleration as of the closing date for the
Reconstitution; and representations and warranties (dated as of the
Reconstitution Date); and, provided, further, that each of the Servicer and
the Owner is given an opportunity to review and reasonably negotiate in good
faith the content of any such documents not specifically referenced or
provided for herein. Servicer shall cooperate in good faith in negotiating any
delinquency and cumulative loss termination triggers in the Reconstitution
Agreement.
(c) With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Owner, the Servicer agrees (1) to cooperate with
the Owner and any prospective purchaser with respect to all reasonable
requests and due diligence procedures including participating in meetings with
rating agencies, bond insurers and such other parties as the Owner shall
designate and participating in meetings with prospective purchasers of the
Mortgage Loans or interests therein and providing information reasonably
requested by such purchasers; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Owner; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the
Reconstitution Date which shall not be more onerous than those required under
this Agreement or (b) make the representations and warranties with respect to
the servicing of the Mortgage Loans set forth in the related selling/servicing
guide of the master servicer or issuer, as the case may be, or such
representations and warranties with respect to the servicing of the Mortgage
Loans as may be required by any Rating Agency or prospective purchaser of the
related securities or such Mortgage Loans, in connection with such
Reconstitution; provided, however, that such representations and warranties
shall not be more onerous than those required under this Agreement. The
Servicer shall use its reasonable best efforts to provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Servicer or its
affiliates, whether through letters of its auditors and counsel or otherwise,
as the Owner or any such other participant shall reasonably request and (ii)
subject to the provisions of Section 13.13(b), to execute, deliver and satisfy
all conditions set forth in any indemnity agreement required by the Owner or
any such participant.
(d) In connection with any Securitization Transfer, the Servicer
shall, if requested by the Owner or its designee, deliver to the Owner or its
designee within 7 Business
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Days after such request information with respect to such Servicer information
reasonably requested by the Owner or its designee and the information set
forth under Item 1108(b) of Regulation AB (collectively, the "Servicer
Information"), which as of the date hereof includes:
(i) a description of the Servicer's form of organization;
(ii) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for the
servicing function it will perform under the Servicing Agreement;
material information regarding the size, composition and growth of the
Servicer's portfolio of mortgage loans of the type similar to the
Mortgage Loans and information on factors related to the Servicer that
may be material to any analysis of the servicing of the Mortgage Loans or
the related asset-backed securities, as applicable (including, without
limitation, whether any prior securitizations of mortgage loans of the
type similar to the Mortgage Loans involving the Servicer have defaulted
or experienced an early amortization or other performance triggering
event because of servicing, the extent of outsourcing the Servicer
utilizes or if there has been previous disclosure of material
noncompliance with Servicing Criteria with respect to other
securitizations involving the Servicer);
(iii) a description of any material changes to the Servicer's
policies or procedures in the servicing function it will perform in under
the Agreement for mortgage loans of the type similar to the Mortgage
Loans during the past three years; and
(iv) information regarding the Servicer's financial condition to the
extent that there is a material risk that the effect on one or more
aspects of servicing resulting from such financial condition could have a
material impact on the performance of the pool of Mortgage Loans or
performance of the related asset-backed securities.
(e) The Servicer shall indemnify the Owner, any party acting as
depositor in any Securitization Transfer, each Person who controls the Owner
or such depositor, and each underwriter and placement agent in any
Securitization Transfer, and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
each of them may sustain in any way related to any information provided by or
on behalf of the Servicer regarding the Servicer Information. For purposes of
the previous sentence, "Owner" shall mean the Person then acting as the Owner
under this Agreement and any and all Persons who previously were "Owners"
under this Agreement. The Owner shall indemnify the Servicer and each Person
who controls the Servicer and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
each of them may sustain in any way related to any information provided by the
Owner in any offering document prepared in connection with any Reconstitution.
(f) The Servicer shall execute one or more subservicing agreements
between the Servicer and the Owner and/or any master servicer which is
generally considered to be a
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prudent master servicer in the secondary mortgage market, designated by the
Owner in its sole discretion after consultation with the Servicer and/or one
or more custodial and servicing agreements among the Owner, the Servicer and a
third party custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the Owner in
its sole discretion after consultation with the Servicer, in either case for
the purpose of pooling the Mortgage Loans with other mortgage loans not the
subject of this Agreement in connection with a Reconstitution; and
(g) Any execution of a subservicing agreement or Reconstitution
Agreement by the Servicer shall be conditioned on the Servicer receiving the
Servicing Fee or such other servicing fee acceptable to Servicer.
Notwithstanding any provision to the contrary in this Agreement, in the event
that the Servicer is the master servicer, servicer or sub-servicer with
respect to a Reconstitution, the Owner agrees that in such Reconstitution any
servicing performance termination triggers shall be approved by the Servicer
in its reasonable discretion; provided, that in the event that the Servicer
does not approve any servicing performance termination triggers, the Owner
shall have the right to terminate the Servicer hereunder (a "Servicing
Performance Trigger Termination") and designate a successor servicer to act as
master servicer, servicer or sub-servicer with respect to the Reconstitution,
subject to payment of any termination fee as set forth in the applicable
Commitment Letter, pursuant to Section 6.01(b). All Mortgage Loans not sold or
transferred pursuant to a Whole Loan Transfer or Pass-Through Transfer shall
be subject to this Agreement and shall continue to be serviced in accordance
with the terms of this Agreement and with respect thereto this Agreement shall
remain in full force and effect.
(h) All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect. Any execution of a
Reconstitution Agreement by the Servicer shall be conditioned on the Servicer
receiving the Servicing Fee or such other servicing fee acceptable to
Servicer. Notwithstanding any provision to the contrary in this Agreement, in
the event that the Servicer is the master servicer, servicer or sub-servicer
with respect to a Reconstitution, the Owner agrees that in such Reconstitution
any servicing performance termination triggers shall be included upon approved
by the Servicer in its reasonable discretion.
(i) The Owner agrees to execute a confidentiality agreement in the
form of Exhibit 10 hereto prior to any Securitization Transfer and that its
obligation under this clause (i) may not be assigned.
Section 13.14 Trademarks.
The Owner and the Servicer agree that they and their employees,
subcontractors and agents, shall not, without the prior written consent of the
other party in each instance, (i) use in advertising, publicity or otherwise
the name of each and every other party to this Agreement or their Affiliates
or any of their managing directors, partners or employees, nor any trade name,
trademark, trade device, service mark, symbol or any abbreviation, contraction
or simulation thereof owned by the other party or their Affiliates, or (ii)
represent, directly or indirectly, any product or any service provided by the
Owner and the Servicer as approved or endorsed by the other parties to this
Agreement or their Affiliates.
-62-
Section 13.15 Confidentiality of Information.
If, during the term of this Agreement, Owner requests that Servicer
provide to Owner non-public, confidential information related to Servicer and
other affiliates of Servicer (collectively, "Countrywide"), and if
Countrywide, in its sole discretion agrees to provide this information, the
parties agree that they shall enter into a confidentiality agreement in form
and substance mutually agreeable to the parties prior to the release of such
information (which obligation shall not be assigned by the Owner).
Section 13.16 Seller Representations and Warranties
The Owner hereby covenants that, as of the date of the related
Commitment Letter, the Servicer shall be the successor servicer of the
Mortgage Loans under the related Purchase Agreement or the Seller shall have
executed an acknowledgment agreement and in both cases, without further steps
having to be taken by the Owner, the Seller or the Servicer, the Servicer is
entitled to (a) the benefit of the representations and warranties made by the
Seller to the Owner in the related Purchase Agreement and (b) the rights and
remedies available to the Owner under such Purchase Agreement with respect to
such representations and warranties (including, but not limited to, the right
to enforce the Seller's indemnification obligations under the Purchase
Agreement). Upon request of the Servicer, the Owner shall deliver to the
Servicer the related acknowledgment agreement, Purchase Agreement or any
revisions to the Owner's seller guide.
Section 13.17 Waiver of Trial by Jury.
THE SERVICER AND THE OWNER 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 13.18 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE APPLICABLE
WITH RESPECT TO THIRD PARTY CLAIMS MADE AGAINST A PARTY.
Section 13.19 SUBMISSION TO JURISDICTION; WAIVERS.
The Servicer and the Owner hereby irrevocably and unconditionally:
(a) SUBMITS FOR 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
-63-
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 NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO SUE IN ANY OTHER JURISDICTION.
[SIGNATURES APPEAR ON NEXT PAGE]
-64-
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
(Owner)
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL ESTATE FUNDING
CORP., its General Partner
By: ___________________________________
Name:______________________________
Title:_____________________________
COUNTRYWIDE HOME LOANS SERVICING LP,
a Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By: ___________________________________
Name:______________________________
Title:_____________________________
EXHIBIT 1
MONTHLY REPORTS
Trial Balance
Remittance
Delinquency
Exh. 1-1
EXHIBIT 2
CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 200_
The Servicer hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 2.04 of the Flow
Servicing Agreement, dated as of May 1, 2005, Fixed and Adjustable Rate
Mortgage Loans. The Custodial Account shall be a Special Deposit Account.
Title of Account: Countrywide Home Loans Servicing LP, in
trust for "▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company."
Account Number: _____________________
Address of office or branch
of the Servicer at
which Account is maintained: ______________________________
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer
By: ________________________________
Name:___________________________
Title:__________________________
Date:___________________________
Exh. 2-1
EXHIBIT 3
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of May 1,
2005, Fixed and Adjustable Rate Mortgage Loans (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 2.04 of the Agreement, to be designated "Countrywide Home
Loans Servicing LP, as servicer, in trust for [Name of Owner]" All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter
is submitted to you in duplicate. Please execute and return one original to
us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 3-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Custodial Account shall be a Special
Deposit Account. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation.
_______________________________________
Depository
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 3-2
EXHIBIT 4
ESCROW ACCOUNT CERTIFICATION
_________ ___, 200_
________________________ hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 2.06 of
the Flow Servicing Agreement, dated as of May 1, 2005, Fixed and Adjustable
Rate Residential Mortgage Loans. The Escrow Account shall be a Special Deposit
Account.
Title of Account: "Countrywide Home Loans Servicing LP, in
trust for [Name of Owner], and various
Mortgagors."
Account Number: ___________________
Address of office or branch
of the Servicer at
which Account is maintained: _________________________
_______________________________________
_______________________________________
_______________________________________
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 4-1
EXHIBIT 5
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 200_
To:___________________________________
___________________________________
___________________________________
(the "Depository")
As Servicer under the Flow Servicing Agreement, dated as of May 1,
2005, Fixed and Adjustable Rate Residential Mortgage Loans (the "Agreement"),
we hereby authorize and request you to establish an account, as an Escrow
Account pursuant to Section 2.06 of the Agreement, to be designated as
"Countrywide Home Loans Servicing LP, in trust for [Name of Owner], and
various Mortgagors." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. You may refuse any
deposit which would result in violation of the requirement that the account be
fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
COUNTRYWIDE HOME LOANS SERVICING LP
Servicer
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 5-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The Escrow Account shall be a Special Deposit
Account. The full amount deposited at any time in the account will be insured
by the Federal Deposit Insurance Corporation.
_______________________________________
Depository
By: ___________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
Exh. 5-2
EXHIBIT 6
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
______________("Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
("Assignor"), GS Mortgage Securities Corp. ("Assignee") and Countrywide Home
Loans Servicing LP (the "Company").
For and in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Assignment, Assumption and Conveyance
The Assignor hereby conveys, sells, grants, transfers and assigns to
the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans
listed on the schedule (the "Mortgage Loan Schedule") attached hereto as
Exhibit A (the "Mortgage Loans"), and (b) solely insofar as it relates to the
Mortgage Loans, that certain Flow Servicing Agreement, dated as of May [__]
2005 (the "Servicing Agreement"), by and between the Assignor (in such
capacity, the "Owner") and the Company. The Assignor hereby agrees that it
will (i) deliver possession of notes evidencing the Mortgage Loans to, or at
the direction of, the Assignee or its designee and (ii) take in a timely
manner all necessary steps under all applicable laws to convey and to perfect
the conveyance of the Mortgage Loans as required under the Pooling Agreement
(as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Servicing Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement, (ii) any
rights and obligations of the Assignor pursuant to the Servicing Agreement
arising prior to the date hereof, (iii) the rights and obligations of the
Owner under Section 6.01(b) (relating to the Owner's right to terminate the
Company), Section 4.09 (relating to the Owner's right to receive information
from the Servicer) and Sections 13.13(i) and 13.15 (relating the Owner's
obligation to execute certain confidentiality agreements) or (iv) any rights
of the Assignor under the Commitment Letter, dated as of [_____ __], 200[_]
(the "Commitment Letter") between the Owner and the Company, which rights
shall survive the execution and delivery of this Agreement.
The Assignee hereby assumes all of the Assignor's obligations under
the Mortgage Loans and the Servicing Agreement solely insofar as such
obligations relate to the Mortgage Loans, other than the obligations set forth
in clauses (ii) and (iii) of the preceding paragraph.
The parties hereto agree that, notwithstanding anything to the
contrary contained in the Commitment Letter, with respect to the Mortgage
Loans being serviced under the
Exh. 6-1
Servicing Agreement: (a) the Servicing Fee Rate for the Mortgage Loans shall
be the rate set forth on the Mortgage Loan Schedule, (b) the REO Management
Fee for the Mortgage Loans shall be [__], (c) [the Other Fees with respect to
the Mortgage Loans shall include ___] and (d) the fee upon termination of the
Company as Servicer of the Mortgage Loans shall be [__]%.
2. Recognition of the Company
From and after the date hereof (the "Securitization Closing Date"),
the Company shall and does hereby recognize that the Assignee will transfer
the Mortgage Loans and assign its rights under the Servicing Agreement (solely
to the extent set forth herein) and this Agreement to _____________________,
as trustee (including its successors in interest and any successor trustees
under the Pooling Agreement, the "Trustee"), of the __________________ (the
"Trust") created pursuant to a Pooling and Servicing Agreement or Trust
Agreement, dated as of _________________ (the "Pooling Agreement"), among the
Assignee, the Trustee and ____________________, as servicer (including its
successors in interest and any successor servicer under the Pooling Agreement,
the "Servicer"). The Company hereby acknowledges and agrees that from and
after the date hereof (i) the Trust will be the owner of the Mortgage Loans
and the Servicer will be the servicer of the Mortgage Loans on or after the
applicable Transfer Date pursuant to the terms set forth in the Pooling
Agreement, (ii) the Company shall look solely to the Trust (including the
Trustee and the Servicer acting on the Trust's behalf) for performance of any
obligations of the Assignor under the Mortgage Loans and the Servicing
Agreement (solely insofar as it relates to the Mortgage Loans) (except for
such obligations of the Assignor retained by the Assignor hereunder), (iii)
the Trust (including the Trustee and the Servicer acting on the Trust's
behalf) shall have all the rights and remedies available to the Assignor,
insofar as they relate to the Mortgage Loans, under the Purchase Agreement and
the Servicing Agreement, including, without limitation, the enforcement of the
document delivery requirements set forth in Section 6.03 of the Purchase
Agreement, and shall be entitled to enforce all of the obligations of the
Company thereunder insofar as they relate to the Mortgage Loans, including
without limitation, the remedies for breaches of representations and
warranties set forth in Article 10 of the Servicing Agreement (except for the
rights and remedies retained by the Assignor hereunder), (iv) all references
to the Owner under the Servicing Agreement insofar as they relate to the
Mortgage Loans shall be deemed to refer to the Trust (except to the extent of
the rights and obligations retained by the Assignor hereunder) (including the
Trustee and the Servicer acting on the Trust's behalf) and (v) the Mortgage
Loans will be part of a REMIC, and the Company shall service the Mortgage
Loans and any real property acquired upon default thereof (including, without
limitation, making or permitting any modification, waiver or amendment of any
term of any Mortgage Loan) prior to the applicable Transfer Date in accordance
with the Servicing Agreement but in no event in a manner that would (A) cause
the REMIC to fail to qualify as a REMIC or (B) result in the imposition of a
tax upon the REMIC (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code, the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code, and the tax
on "net income from foreclosure property" as set forth in Section 860G(c) of
the Code). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Servicing Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Servicing Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Exh. 6-2
3. Representations and Warranties of the Company
The Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under this Agreement and the
Servicing Agreement The execution by the Company of this Agreement is in
the ordinary course of the Company's business and will not conflict with,
or result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by which
it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject. The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all necessary corporate action on
part of the Company. This Agreement has been duly executed and delivered
by the Company, and, upon the due authorization, execution and delivery
by the Assignor and the Assignee, will constitute the valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
by general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement or the
consummation by it of the transaction contemplated hereby;
(d) The Company shall establish a Custodial Account and an Escrow
Account under the Servicing Agreement in favor of the Trust with respect
to the Mortgage Loans separate from the Custodial Account and Escrow
Account previously established under the Servicing Agreement in favor of
the Assignor;
(e) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency
or other tribunal, which would draw into question the validity of this
Agreement or the Servicing Agreement, or which, either in any one
instance or in the aggregate, is likely to result in any material adverse
change in the ability of the Company to perform its obligations under
this Agreement or the Servicing Agreement, and the Company is solvent;
(f) The Company has serviced the Mortgage Loans in accordance with
the Servicing Agreement and has provided accurate "paid through" data
(assuming the correctness of all "paid through" data provided by the
Assignor to the Company at the
Exh. 6-3
time the Company began servicing the Mortgage Loans) with respect to the
Mortgage Loans to the Assignor;
(g) Except as reflected in the "paid through" data delivered to the
Assignor (assuming the correctness of all "paid through" data provided by
the Assignor to the Company at the time the Company began servicing the
Mortgage Loans), there is no payment default existing under any Mortgage
or any Mortgage Note as of the Securitization Closing Date; and
(h) To the Company's knowledge, there is no non-payment default
existing under any Mortgage or Mortgage Note, or any event which, with
the passage of time or with notice and the termination of any grace or
cure period, would constitute a non-payment default, breach, violation or
event which would permit acceleration as of the Securitization Closing
Date.
Pursuant to Section 13.13 of the Servicing Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Article X
of the Servicing Agreement are true and correct as of the date hereof as if
such representations and warranties were made on the date hereof.
4. Representations and Warranties of the Assignor
The Assignor warrants and represents to the Assignee and the Trust
as of date hereof that:
(a) The Assignor is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Assignor has good,
indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Assignee 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 Assignee will own such Mortgage Loan
free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Assignor intends to
relinquish all rights to possess, control and monitor the Mortgage Loan;
(b) The Assignor 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 Company waived any
default resulting from any action or inaction by the Mortgagor;
(c) With respect to the Mortgage Loans, any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws, all applicable
predatory and abusive lending laws or unfair and deceptive practices laws
applicable to the Mortgage Loan, including, without limitation, any
Exh. 6-4
provisions related to Prepayment Premiums, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations; and
(d) With respect to the Mortgage Loans, none of the Mortgage Loans
are (a) subject to the Home Ownership and Equity Protection Act of 1994
or (b) classified as "high cost," "threshold," "covered" or "predatory"
loans under any other applicable federal, state 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).
5. Remedies for Breach of Representations and Warranties of the
Assignor
The Assignor hereby acknowledges and agrees that in the event of any
breach of the representations and warranties made by the Assignor set forth in
Section 4 hereof that materially and adversely affects the value of the
Mortgage Loans or the interest of the Assignee or the Trust therein, within 60
days of the earlier of either discovery by or notice to the Assignor of such
breach of a representation or warranty, it shall cure, purchase, cause the
purchase of, or substitute for the applicable Mortgage Loan in the same manner
and subject to the conditions set forth in Section [___] of the Pooling
Agreement with respect to the Assignee's obligations to provide certain
representations and warranties for the Mortgage Loans.
6. Miscellaneous
(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
(b) 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, with
the prior written consent of the Trustee.
(c) This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the
Trustee and the Servicer acting on the Trust's behalf). Any entity into
which the Assignor, Assignee or Company may be merged or consolidated
shall, without the requirement for any further writing, be deemed
Assignor, Assignee or Company, respectively, hereunder.
(d) Each of this Agreement and the Servicing Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement and the Servicing Agreement (to the extent assigned hereunder)
by the Assignor to the Assignee and by Assignee to the Trust and nothing
contained herein shall supersede or amend the terms of the Purchase
Agreement and the Servicing Agreement.
Exh. 6-5
(e) 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.
(f) In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement or the Servicing Agreement with
respect to the Mortgage Loans, the terms of this Agreement shall control.
(g) Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given
to such terms in the
Purchase Agreement or the Servicing Agreement, as applicable.
[SIGNATURE PAGE FOLLOWS]
Exh. 6-6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By: ___________________________________
Name:______________________________
Title:_____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New
York limited partnership
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL ESTATE FUNDING
CORP., a New York corporation, as
General Partner
By: ___________________________________
Name:______________________________
Title:_____________________________
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By: ___________________________________
Name:______________________________
Title:_____________________________
Exh. 6-7
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
Exh. 6-8
EXHIBIT 7
FORM OF OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of [Servicer], a federal savings bank organized under the
laws of the United States (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the partnership agreement 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 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.
3. Attached hereto as Exhibit 3 is a true, correct and complete copy
of the resolutions of the partnership of the Company authorizing the
Company to execute and deliver the Flow Servicing Agreement, dated as of
May 1, 2005, between the Company, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the
"Owner"), (the "Flow Servicing Agreement") and such resolutions are in
effect on the date hereof.
4. Each person listed on Exhibit 4 attached hereto who, as an
officer or representative of the Company, signed (a) the Flow Servicing
Agreement, and (b) 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 4, and the signatures of such persons appearing on such
documents are their genuine signatures.
Exh. 7-1
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 [Servicer],
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:______________________________
[Seal] Title: [Vice] President
Exh. 7-2
EXHIBIT 4 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
________________________ ________________________ __________________________
________________________ ________________________ __________________________
________________________ ________________________ __________________________
________________________ ________________________ __________________________
________________________ ________________________ __________________________
________________________ ________________________ __________________________
________________________ ________________________ __________________________
Exh. 7-3
EXHIBIT 8
MORTGAGE LOAN DOCUMENTS
The following documents shall constitute the Mortgage Loan Documents
with respect to each Mortgage Loan:
(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 Owner 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]"; 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 Owner cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon
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 Owner (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 Owner; 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;the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) 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 Owner as provided in this Agreement. If the Assignment
of Mortgage is to be recorded, the Mortgage shall be assigned to the
Owner or as directed
Exh. 8-1
by the Owner. 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 Owner 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 Originator to the
Last Endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Seller shall
deliver or cause to be delivered to the Custodian, a photocopy of such
intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officers Certificate of the Owner (or
certified by the title company, escrow agent, or closing attorney)
stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true
and complete by the title insurance company (provided, that the original
mortgagee policy of title insurance shall be added when available);
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original power of attorney with evidence of recording
thereon, if applicable, because of a delay caused by the public recording
office, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such power of attorney, together with an
Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) stating that such power of attorney
has been dispatched to the appropriate public recording office for
recordation and that the original recorded power of attorney or a copy of
such power of attorney certified by such public recording office to be a
true and complete copy of the original recorded power of attorney will be
promptly delivered to the Custodian upon receipt thereof by the Seller;
and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
Exh. 8-2
The following documents, together with the Mortgage Loan Documents,
shall constitute the Mortgage File with respect to each Mortgage Loan:
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
ie., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence,
current and historical computerized data files, and all other processing,
underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.
(o) Amortization schedule, if applicable.
Exh. 8-3
EXHIBIT 9
DATA DICTIONARY
Field
Loan Number
Prior Loan Number
Custodian File Number
Custodian Loan Number
Origination Date
Original Balance
First Payment Date
Original Maturity Date
Original Term
Balloon Flag
Loan Type
Amortization Type
Original Amortization Term
Interest Calculation Method
Daily Simple Interest Flag
Original Principal and Interest
Original Interest Rate
Arm Index Description
Margin
ARM Rounding Feature
Lookback Days
First Payment Reset Date
First Rate Reset Date
Initial Rate Reset Period
Rate Reset Period
Initial Payment Reset Period
Payment Reset Period
Initial Rate Adjustment Cap
Rate Adjustment Cap
Lifetime Caps
Lifetime Floor
Max Rate
Min Rate
Negative Amortization Flag
Negam Percent Cap
Payment Cap
Servicing Fee
Property Type
Property Address
Property City
Property State
Property Zip
Exh. 9-1
Borrower Name
CoBorrower Name
Original FICO score
Original Credit Grade
Original Loan To Value Ratio
Original Appraised Value
Original Appraisal Date
Original Appraisal Firm
Original Purchase Price
Purchase BPO
Purchase BPO Date
Lien Position
Original Senior Lien Amount
PMI Provider
PMI Coverage Percentage
PMI Certificate ID
Occupancy Type
Purpose of Loan
Prepayment Flag
Prepayment Penalty Type
Prepayment Term
As Of Date
Loan Number
Investor Number
Investor Category
Current Maturity Date
Remaining Term
Current Principal & Interest Payment
Current Interest Rate
Next Payment Reset Date
Next Rate Reset Date
Next Due Date
Interest Paid To Date
Last Payment Date
Current Balance
Days Past Due
Delinquency Status
Status of Loan
12 Month Pay String
Time 30 Days Delinquent in Past 12 Months
Time 60 Days Delinquent in Past 12 Months
Time 90 Days Delinquent in Past 12 Months
Last Modification Date
Property Sale Date
Debt To Income Ratio
Senior Lien Amount
Exh. 9-2
Recent Property Valuation
Recent Property Valuation Date
Valuation Method
Current FICO
FICO Date
Total Monthly Payment
Total Monthly Payment Principal
Total Monthly Payment Interest
Total Monthly Payment Penalties / Fee
Total Monthly Escrow Payment
Total Monthly Prepayment Amount
Payment Date
Scheduled P&I
REO Rent Collection
Monthly Escrow Advances
Monthly Corporate Advances
Monthly Non Recoverable Corporate Advances
Principal Advances
Interest Advances
Account Balances
Beginning Scheduled Balance
Ending Scheduled Balance
Escrow Balance
Escrow Advance Balance
Recoverable Corporate Advance Balance
Non Recoverable Corporate Advance Balance
Suspense Account Balance
Accrued Interest
Forced Placed Insurance Flag
Annual Forced Placed Insurance
Last Contact Date
Last Attempt Date
Bankruptcy Flag
Bankruptcy Chapter
Bankruptcy Start Date
Bankruptcy End Date
Bankruptcy Post Petition Due Date
Motion for Relief Request Date
Motion for Relief Filing Date
Motion for Relief Hearing Date
Motion for Relief Granted Date
In Demand Flag
In Demand Start Date
In Demand End Date
Foreclosure Start Date
Due Date At Referral
Exh. 9-3
Foreclosure Estimated End Date
Foreclosure Sale Date
Foreclosure end date
First Legal Date
Foreclosure Resolution Flag
Foreclosure Resolution Type
Foreclosure On Hold
Foreclosure Hold Start Date
Forbearance Start Date
Forbearance Payment
Forbearance End Date
Eviction Start Date
Eviction End Date
REO Start Date
REO End Date
REO Sub Status
Eviction Date
Listed Date
Estimated Sale Date
Days In REO
Estimated Sales Price
Possession Date
Redemption End Date
Initial Listing Price
Initial Listing Date
Current List Price
Current List Date
Reason For Default
Termination Type
Balance at Termination
Scheduled Sale Date
Property Sales Price
Liquidation Date
Gross Total Proceeds
Net Total Proceeds
Principal Advanced
Interest Advanced
Corporate Advances Recovered at Termination
Escrow Advances Recovered at Termination
Commission
Seller Concession
Taxes
Repairs
Water and Sewer
Expenses Recovered at Termination
Corporate Advances at Termination
Exh. 9-4
Days from Acquisition to Close
Days from Possession to Close
Charge-off amount
Severity
Severity Formula
Hazard Insurance Claim Date
Hazard Insurance Claim Due Date
Hazard Insurance Claim Amount
Hazard Insurance Claim Paid Amount
MI Insurance Claim Date
MI Insurance Claim Due Date
MI Insurance Claim Amount
MI Insurance Claim Paid Amount
The original term in months before the balloon term
Buydown Flag
IO Flag
IO Term
Number of Units
Convertible Flag
Documentation Type
Amortization Term
Credit Grade
Convertible Term
Principal at termination
Net Interest at termination
Gross Interest at termination
initial set-up fee
other fees
Curtailment Adjustment
Total Remit Amount
Interest Adjustment
Principal Adjustment
Map Panel Number
Flood Zone
Certificate Number
Exh. 9-5
EXHIBIT 10
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT dated __________ (the "Agreement"),
by and between Countrywide Home Loans Servicing LP ("Countrywide"), a Texas
limited partnership, having its executive office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company (the "Investor"),
a New York Limited Partnership, having its principal place of business located
at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WITNESSETH
WHEREAS, the Investor has requested that it be furnished with
certain Confidential Information (as defined below) relating to certain
mortgage related securities issued or serviced, or to be issued or serviced,
by Countrywide, as described on Schedule A hereto (the "Securities"), and the
mortgage loans in which the Securities represent an ownership interest (the
"Mortgage Loans");
WHEREAS, the Investor is an affiliate of an owner or a beneficial
owner of one or more of the classes of the Securities not registered under the
Securities Act of 1933, as amended (the "Subject Securities") or a prospective
purchaser thereof;
WHEREAS, Countrywide is willing to provide the Confidential
Information to the Investor subject to the Investor executing and delivering
this Agreement; and
WHEREAS, this Agreement is intended to facilitate the disclosure of
information by Countrywide to the Investor without Countrywide's having an
obligation to disclose the same information publicly under Regulation FD of
the United States Securities and Exchange Commission, 17 CFR ss.243.100-103.
NOW THEREFORE, in consideration of being granted the right to
receive and review the Confidential Information, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and upon the promises and mutual covenants contained herein, the
parties agree as follows:
1. Confidential Information. The term "Confidential Information"
shall mean all written, oral or electronic information or material related to
the Securities or the Mortgage Loans as set forth on Exhibit 10 to the Flow
Servicing Agreement between Countrywide and the Investor, or similar
information related to the Securities or the Mortgage Loans, which is
furnished by Countrywide to the Investor. The term "Confidential Information"
shall not include information that: (i) is or becomes generally available to
and known by the public other than as a result of disclosure by the Investor
or its Representatives or Advisors (as defined below) in violation of this
Agreement (or in the case of Advisors, violation of their Agreement); (ii) was
available to the Investor prior to its disclosure to the Investor by or at the
Exh. 10-▇
▇▇▇▇▇▇▇▇▇ of Countrywide; (iii) becomes available to the Investor from a
source other than Countrywide, provided that the Investor has no
knowledge that such source is prohibited from disclosing such information
to the Investor by a contractual, legal or fiduciary obligation to
Countrywide or any affiliate of Countrywide; or (iv) is independently
developed by the Investor without reliance on the Confidential
Information.
2. Nondisclosure of Information. (a) As a condition to the Investor
being furnished with the Confidential Information, the Investor agrees to
treat the Confidential Information in accordance with the provisions of this
Agreement and agrees to take or abstain from taking certain actions with
respect thereto as set forth herein. The Investor agrees not to use any of the
Confidential Information for any purpose other than the purpose of evaluating
the Investor's or its affiliate's investment in, and the value of, the Subject
Securities and the underlying Mortgage Loans (including evaluating compliance
with the terms of the related pooling and servicing agreement). Except as
otherwise expressly provided herein, the Investor agrees that the Confidential
Information will be kept confidential by the Investor and its affiliates,
directors, officers and employees who have access to, obtain, or receive the
Confidential Information either directly or indirectly from the Investor under
this Agreement (collectively, its "Representatives").
(b) The Investor may disclose the Confidential Information to
its Representatives and its affiliates' Representatives and agents,
partners and representatives, including without limitation any
accountants, attorneys, and financial advisors (collectively "Advisors")
who need to know such information for the purpose of evaluating the
Investor's or its affiliate's investment in, and valuing, the Subject
Securities and the underlying Mortgage Loans, provided that any such
Representatives are informed of the confidential nature of the
Confidential Information and any such Advisors (with the exception of
counsel who have professional obligations of confidentiality and who the
Investor will direct to maintain the confidentiality of the information)
first execute a substantially similar form of confidentiality agreement
as this Agreement with Investor with respect to the Confidential
Information, which agreement shall name Countrywide as a third party
beneficiary thereto. The Investor agrees that, except as permitted herein
it will not, and will direct its Representatives not to, disclose to any
person any Confidential Information. The Investor will be responsible for
any breach of this Agreement by its affiliates' and its Representatives.
In addition, the Investor may disclose the Confidential Information to a
prospective purchaser of the Mortgage Loans or the Securities (in the
case of Securities in particular as may be necessary to comply with
securities laws, including without limitation, Regulation AB under the
Securities Act of 1933 and the Securities Exchange Act of 1934, each as
amended, or any similar successor rule or regulation), provided that such
prospective purchaser shall have executed a similar form confidentiality
agreement as this Agreement with Investor with respect to the
Confidential Information.
(c) Notwithstanding anything herein to the contrary, the Investor
and Countrywide agree that they (and their employees, representatives,
and other agents) may disclose to any and all persons, without limitation
of any kind from the commencement of discussions, the U.S. federal and
state income tax treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax analyses) that
Exh. 10-2
are provided to it in relation to the tax treatment and tax structure.
For this purpose, "tax structure" is limited to facts relevant to the
U.S. federal and state income tax treatment of the transaction and does
not include information relating to the identity of the parties, their
affiliates, agents or advisors.
3. Compelled Disclosure. If the Investor or any of its
Representatives are requested or required to disclose any Confidential
Information as a matter of law, regulation, legal process or by regulatory
authority, the Investor will promptly notify Countrywide (so long as legally
permitted to provide such notification) in order to permit Countrywide to seek
a protective order to take other appropriate action. The Investor also will
reasonably cooperate in Countrywide's efforts, at Countrywide's expense, to
obtain a protective order or other reasonable assurance that confidential
treatment will be accorded to the Confidential Information. If, in the absence
of a protective order or receipt of a waiver hereunder, the Investor or any of
its Representatives is so compelled to disclose any portion of the
Confidential Information, the Investor may disclose to the party compelling
disclosure only the part of such Confidential Information that is so required,
based on consultation and advice of its counsel, to be disclosed.
4. Purchase of Securities; Disclosure Related to Resale of
Securities. The Investor hereby acknowledges that it may receive material
non-public information under this Agreement and that it is aware and
understands that United States securities laws prohibit any person with
material, non-public information about an issuer from purchasing or selling
securities of such issuer or, subject to certain limited exceptions, from
communicating such information to any other person. The Investor further
agrees to use any Confidential Information in compliance with all applicable
laws and regulations promulgated by the United States Securities and Exchange
Commission.
5. Debtor Contact. The Investor agrees not to knowingly, as a result
of knowledge obtained from the Confidential Information, communicate (except
for the communications made in the ordinary course of business unrelated to
the subject matter hereof) with any borrower, debtor, guarantor, appraiser
under any Mortgage Loan or any such borrower's, debtor's or guarantor's
accountant or attorney, or any other person or party having an interest in any
of the Mortgage Loans, including any tenant, managing or leasing agent, whose
name is obtained from the Confidential Information, in each case with respect
to its investment in the Subject Securities and/or the underlying Mortgage
Loans without the prior written consent of Countrywide, which consent can be
arbitrarily withheld; provided, however, to the extent the Investor or any of
its affiliates is servicing such Mortgage Loan, Countrywide shall be deemed to
have given consent to any such communication subject to the terms and
conditions contained in any agreement (to which Investor or any of its
affiliates, as applicable, is a party) governing the terms of such servicing.
6. Not an Offer to Buy or Sell Securities. The Investor acknowledges
and agrees that the Confidential Information does not constitute an offer to
buy or sell or a solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy.
7. Entire Agreement. This Agreement represents the entire agreement
between the Investor and Countrywide relating to the treatment of the
Confidential Information
Exh. 10-3
hereupon or hereafter reviewed or inspected by the Investor. This Agreement
supersedes all other agreements relating to the Confidential Information that
have previously been executed by the Investor in favor of Countrywide.
8. General Provisions. No failure or delay in exercising any right
hereunder will operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right. The parties acknowledge and agree that, in the
event of any breach of this Agreement, Countrywide might be irreparably harmed
and unable to be made whole by monetary damages. It is accordingly agreed that
Countrywide, in addition to any other remedy to which it may be entitled in
law or equity, will be entitled to seek an injunction to remedy breaches of
this Agreement and/or to compel specific performance of this Agreement. This
Agreement (a) may not be assigned by Countrywide or the Investor without the
prior written consent of the other party; (b) cannot be amended, nor can any
of its provisions be waived, except by a writing signed by Countrywide and the
Investor; and (c) will be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and assigns. The Investor
consents to personal jurisdiction in any action brought in any federal or
state court within the State of New York located in the County of New York
having subject matter jurisdiction in the matter for purposes of any action
arising out of this Agreement. This Agreement will be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflict of laws thereof.
9. Purpose of Review. The Investor represents and warrants that it
is reviewing the Confidential Information in connection with evaluating the
Investor's or an affiliate's investment in, and the value of, the Subject
Securities and the underlying Mortgage Loans (including evaluating compliance
with the terms of the related pooling and servicing agreement); provided,
however, this shall not prohibit the Investor's future purchase of any other
instrument or security.
10. Indemnification. The Investor agrees to indemnify and hold
harmless Countrywide, its officers, directors and each person, if any, who
controls Countrywide within the meaning of either Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (each, an
"Indemnified Party"), from and against any and all losses, penalties, fines,
forfeitures, judgments, claims, damages, expenses, and any related costs
(including, without limitation, attorney's fees and costs) and liabilities
incurred by or on behalf of any Indemnified Party related to, based upon or
arising out of any breach of any provision of this Agreement by the Investor
or any of its Representatives. The parties hereto agree that neither party
will claim punitive, consequential, indirect or special damages against the
other party under this Agreement.
Promptly after receipt by the Investor under the immediately previous
paragraph of notice of the commencement of any action, Countrywide shall, if a
claim in respect thereof is to be made against the Investor under such
subsection, notify the Investor in writing of the commencement thereof. In
case any such action shall be brought against Countrywide and it shall notify
the Investor of the commencement thereof, the Investor shall be entitled to
participate therein and, to the extent that it shall wish, to assume the
defense thereof, with counsel reasonably satisfactory to Countrywide, and,
after notice from the Investor to Countrywide of its election so to assume the
defense thereof, the Investor shall not be liable to Countrywide under the
immediately
Exh. 10-4
previous paragraph for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by Countrywide, in connection
with the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, Countrywide shall have the right to employ
separate counsel, the reasonable fees and expenses of such counsel to be paid
by Investor, in any action and to participate in the defense thereof if the
named parties to any such action (including any impleaded parties) include
both the Investor and Countrywide, and Countrywide shall have been advised by
such counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Investor and
that joint representation may be inappropriate under professional standards,
in which case the Investor shall not have the right to assume the defense of
such action on behalf of Countrywide, it being understood, however, that the
Investor shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for Countrywide
(including controlling persons), and any such firm shall be designated in
writing by Countrywide.
11. Non-public Personal Information. The Investor understands that
the Confidential Information may contain "nonpublic personal information" as
that term is defined in Section 6809(4) of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (the
"Act") and the Investor agrees to maintain such nonpublic personal information
that it receives hereunder in accordance with the Act and other applicable
federal and state privacy laws.
12. Ongoing Provision of Confidential Information. This Agreement
shall apply to any and all Confidential Information provided by Countrywide to
the Investor at any time on or after the date hereof relating to the
Securities or the Mortgage Loans. In the event of any transfer of the
Securities by the Investor, this Agreement shall not result in any obligation
on the part of Countrywide to provide any similar information to any
transferee. The obligations of the Investor pursuant to the terms of this
Agreement shall terminate three years from the date hereof.
13. Prohibition on Sale Transfer of Information. The Investor hereby
covenants that it shall not transfer or make available any Confidential
Information directly or indirectly to any third parties (except as permitted
herein or to service providers, rating agencies, agents and subcontractors
solely in their capacity as such and to Representatives, Advisors and
prospective purchasers as set forth in Section 2(b) above), without the
express prior written consent of Countrywide.
14. Tax Disclaimer. Notwithstanding anything herein to the contrary,
Investor (and each employee, representative or agent of Investor) may disclose
to any and all persons, without limitation of any kind, the tax treatment and
tax structure of the potential investment and all materials of any kind
(including tax opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure. However, any information
relating to the U.S. federal income tax treatment or tax structure shall
remain subject to the confidentiality provisions hereof (and the foregoing
sentence shall not apply) to the extent reasonably necessary to enable any
person to comply with applicable securities laws. For this purpose, "tax
treatment"
Exh. 10-5
means U.S. federal income tax treatment, and "tax structure" is limited to any
facts relevant to the U.S. federal income tax treatment of the potential
investment but shall not include information regarding the identity of the
parties thereto.
15. Offering of Securities. Notwithstanding any of the foregoing, in
connection with any offering of securities by Countrywide or an affiliate (the
"Issuer"), in which Investor or an affiliate (the "GS Entity") is involved as
underwriter, dealer, agent or other similar participant, nothing in this
letter agreement shall (i) prevent either the Issuer or the GS Entity from
complying with all applicable disclosure laws, regulations and principles in
connection with such offering or sale of securities, (ii) restrict the ability
of the GS Entity to consider information for due diligence purposes or to
share information with other underwriters participating in such offering or
sale of securities, (iii) prevent the GS Entity from retaining documents or
other information in connection with due diligence or (iv) prevent the GS
Entity from using any such documents or other information in investigating or
defending itself against claims made or threatened by purchasers, regulatory
authorities or others in connection with such an offering or sale of
securities.
[Signature Page Follows]
Exh. 10-6
IN WITNESS WHEREOF, this Agreement has been executed as of the
____day of ______________.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
By: ___________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership
(Servicer)
By: COUNTRYWIDE GP, INC., general
partner
By: ___________________________________
Name:
Title:
Exh. 10-7
SCHEDULE A
For Deal: ___________________________________________
Exh. 10-8
EXHIBIT 11
FORM OF ANNUAL CERTIFICATION
[_______________] (the "Trust"), Mortgage Pass-Through Certificates,
Series [_____], issued pursuant to the Pooling and Servicing Agreement, dated
as of [_____], 200[_] (the "Pooling and Servicing Agreement"), among [_____],
as depositor (the "Depositor"), [_____], as trustee (the "Trustee"), [_____],
as servicer (the "Servicer"), and [_____], as responsible party
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to the Trustee
by the Servicer under the Pooling and Servicing Agreement has been so
provided;
2. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed in the annual compliance
statement required to be delivered to the Trustee in accordance with the
terms of the Pooling and Servicing Agreement (which has been so delivered
to the Trustee), the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
3. [If the Securitization Transfer occurs in 2005.] All significant
deficiencies relating to the Servicer's compliance with the minimum
servicing standards for purposes of the report provided by an independent
public accountant, after conducting a review conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers or similar
procedure, as set forth in the Pooling and Servicing Agreement, have been
disclosed to such accountant and are included in such reports.
4. [If the Securitization Transfer occurs in 2006 or thereafter.]
The report on assessment of compliance with servicing criteria required
to be delivered by us under the Pooling and Servicing Agreement has been
delivered to the Trustee and complied with the requirements thereunder
and any material instance of non-compliance with the Servicing Criteria
has been disclosed on such report.
Date:__________________________________
____________________________________
[Signature]
[Title]
Exh. 11-1
EXHIBIT 12
FORM OF POWER OF ATTORNEY
FORM OF LIMITED POWER OF ATTORNEY
LIMITED POWER OF ATTORNEY
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, a New York limited partnership,
organized under the laws of the United States and having its principal place
of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as Owner
(hereinafter called "Owner") hereby appoints Countrywide Home Loans Servicing
LP (hereinafter called "Countrywide"), as its true and lawful attorney-in-fact
to act in the name, place and stead of Owner solely for the purposes set forth
below.
The said attorney-in-fact is hereby authorized and empowered, solely
with respect to the Mortgage Loans and REO Properties, as defined in, and
subject to the terms of, that certain Flow Servicing Agreement, between
Countrywide and Owner, dated as of May 1, 2005 (the "Servicing Agreement"), as
follows:
1. To execute, acknowledge, seal and deliver deed of trust/mortgage
note endorsements, lost note affidavits, assignments of deed of trust/mortgage
and other recorded documents, satisfactions/releases/reconveyances of deed of
trust/mortgage, subordinations and modifications, tax authority notifications
and declarations, deeds, bills of sale, and other instruments of sale,
conveyance, and transfer, appropriately completed, with all ordinary or
necessary endorsements, acknowledgments, affidavits, and supporting documents
as may be necessary or appropriate to effect its execution, delivery,
conveyance, recordation or filing.
2. To execute and deliver insurance filings and claims, affidavits
of debt, substitutions of trustee, substitutions of counsel, non-military
affidavits, notices of rescission, foreclosure deeds, transfer tax affidavits,
affidavits of merit, verifications of complaints, notices to quit, bankruptcy
declarations for the purpose of filing motions to lift stays, and other
documents or notice filings on behalf of Owner in connection with insurance,
foreclosure, bankruptcy and eviction actions.
3. To endorse any checks or other instruments received by
Countrywide and made payable to Owner.
4. To pursue any deficiency, debt or other obligation, secured or
unsecured, including but not limited to those arising from foreclosure or
other sale, promissory note or check. This power also authorizes Countrywide
to collect, negotiate or otherwise settle any deficiency claim, including
interest and attorney's fees.
5. To do any other act or complete any other document that arises in
the normal course of servicing of all Mortgage Loans and REO Properties, as
defined in, and subject to the terms of the Servicing Agreement.
Exh. 12-1
This Limited Power of Attorney shall expire on _____ __, 200_.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Dated:______________________, 200___.
By: ___________________________________
Witness: Name:
Title:
__________________________________
Name:
__________________________________
Name
Exh. 12-2
[LOGO OMITTED] Countrywide (R)
Home Loans
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇. Send Correspondence to:
Simi Valley CA 93063-6712 P.O. Box 5170
Simi Valley CA 93062-5170
Business Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Account No.: Acct No
Borrower & Co-Borrower Property Address:
address Address
City, State Zip City, State Zip
EXHIBIT 13
HELLO AND GOODBYE LETTER FORMS
Welcome! The servicing of your mortgage loan, that is, the right to collect
payments from you, is being assigned, sold or transferred from Previous
Servicer to Countrywide Home Loans Servicing LP, effective July 01, 2004.
Countrywide is one of the nation's largest independent home mortgage lenders,
and we are looking forward to providing you with both superior customer
service and an extensive network of mortgage services.
--------------------------------------------------------------------------------
NOTICE OF ASSIGNMENT, SALE, OR TRANSFER OF SERVICING RIGHTS
The transfer of servicing is a common practice in today's home loan market and
does not affect any terms or conditions of your loan, other than those
provisions directly related to the servicing of your loan. Except in limited
circumstances, the law requires that your present servicer send you this
notice at least 15 days before the effective date of transfer, or at closing.
Your new servicer must also send you this notice no later than 15 days after
this effective date or at closing. Please note that the transfer of servicing
functions will not affect any term or condition of the mortgage instruments of
your mortgage loan, other than terms directly related to the servicing of your
loan.
--------------------------------------------------------------------------------
YOUR PRESENT SERVICER:
Your present servicer is Previous Servicer. If you have any questions relating
to the transfer of servicing from Previous Servicer, call Customer Service,
toll-free, at ▇-▇▇▇-▇▇▇-▇▇▇▇ between 7:00 a.m. and 6:00 p.m. Pacific Time on
the following days: Monday through Friday.
--------------------------------------------------------------------------------
YOUR NEW SERVICER CONTACT AND PAYMENT REMITTANCE ADDRESS:
Your new servicer will be Countrywide. The business address for Countrywide
is: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. The address to send
correspondence is: P.O. Box 5170, Simi Valley, CA 93062-5170. The address to
send your first payment is: P.O. Box 10334, ▇▇▇ ▇▇▇▇, CA 91410-0334. The
toll-free telephone number of Countrywide is ▇-▇▇▇-▇▇▇-▇▇▇▇. If you have any
questions relating to the transfer of servicing to your new servicer, call
Countrywide Customer Service, toll-free, at ▇-▇▇▇-▇▇▇-▇▇▇▇ between 6:00 a.m.
and 5:00 p.m., Pacific Time, Monday through Friday. Please write the
Countrywide account number on all checks and correspondence and have your
account number available when you call. Your complete loan file is being
transferred to your new servicer.
--------------------------------------------------------------------------------
INFORMATION CONCERNING YOUR PAYMENTS AND OPTIONAL INSURANCE:
The date that Previous Servicer will stop accepting payments from you is June
14, 2004. The date that your new servicer, Countrywide, will start accepting
payments from you is June 15, 2004. Send all payments on or after that date to
Countrywide. Countrywide will send you new billing statements. If you have a
payment due before you receive your new billing statement, write your
Countrywide account number (Acct No) on your check and mail it to Countrywide
at the payment address shown above. Please note that your account information
is subject to change to reflect disbursements that are made by, and payments
that are due to, your prior lender. If your previous servicer was
automatically drafting/deducting your monthly payment from your bank account,
please be advised that this service will be discontinued.
If the terms of your loan provide for an escrow account to pay taxes and/or
insurance, Countrywide may elect to re-analyze the escrow payment amount and
make any necessary adjustments. In compliance with the Real Estate Settlement
Procedures Act (RESPA), Countrywide analyzes escrow accounts utilizing the
aggregate method.
--------------------------------------------------------------------------------
OTHER INFORMATION FROM Previous Servicer:
This communication is from a debt collector.
SEE REVERSE SIDE FOR IMPORTANT INFORMATION AQCMBO6 - 8/29/2002
Account Number: Acct No-5
Borrower & Co-Borrower Next Payment amount
Address
A fee up to $25.00 ($40.00 in FL) will be charged for
each returned payment except as
otherwise limited by law.
AQCMBO6
Prior Loan # Xref
SRCCD 10157
Countrywide
P.O. Box 10334 Van Nuys, CA 91410-0334
S914100334348S
064381364500000281619000000000
Exh. 13-1
If any check or other instrument received by Previous Servicer is/was returned
unpaid, you remain liable to Previous Servicer for the amount unpaid. If you
have any questions, please contact Previous Servicer at the toll-free number
listed above.
--------------------------------------------------------------------------------
HELPFUL TIP - NOTIFY YOUR INSURANCE CARRIER:
You should notify your insurance company to list Countrywide as the mortgagee
on your policy. The Mortgagee Clause should read as follows:
Countrywide Home Loans
Its Successors and/or Its Assigns ATIMA
Insurance Department, SV-22
P.O. Box 10212
Van Nuys, CA 91410-0212
--------------------------------------------------------------------------------
BORROWER'S RIGHTS
--------------------------------------------------------------------------------
You should be aware of the following information, which is set out in more
detail in Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12
U.S.C. 2605):
During the 60-day period following the effective date of the transfer of the
loan servicing, a loan payment received by your old servicer before its due
date may not be treated by the new loan servicer as late, and a late fee may
not be imposed on you.
Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you
send a "qualified written request" to your loan servicer concerning the
servicing of your loan, your servicer must provide you with a written
acknowledgment within 20 Business Days of receipt of your request. A
"qualified written request" is a written correspondence, other than notice on
a payment coupon or other payment medium supplied by the servicer, which
includes your name and account number, and your reasons for the request. If
you want to send a "qualified written request" regarding Countrywide's
servicing of your loan, it must be sent to the following address:
Countrywide Home Loans Servicing LP
Customer Service Correspondence, SV314B
P.O. Box 5170
Simi Valley, CA 93062-5170
Not later than 60 Business Days after receiving your request, your servicer
must make any appropriate corrections to your account, and must provide you
with a written clarification regarding any dispute. During this
60-Business-Day period, your servicer may not provide information to a
consumer reporting agency concerning any overdue payment related to such
period or qualified written request. However, this does not prevent the
servicer from initiating foreclosure if proper grounds exist under the
mortgage documents.
A Business Day is a day on which the offices of the business entity are open
to the public for carrying on substantially all of its business functions.
Section 6 of RESPA also provides for damages and costs for individuals or
classes of individuals in circumstances where servicers are shown to have
violated the requirements of that Section. You should seek legal advice if you
believe your rights have been violated.
--------------------------------------------------------------------------------
Exh. 13-2
[LOGO OMITTED] Countrywide (R)
Home Loans
Acquisitions Department, SV-103 Send Correspondence to: Business Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ P.O. Box 5170 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-5170 Simi Valley CA 93065-6285
Internet Address:
Borrower & Co-Borrower Account No.: Acct No
address Property Address:
City, State Zip Address
The servicing of your mortgage loan, that is, the right to collect payments
from you, is being assigned, sold or transferred from Countrywide, to New
Servicer, who will be servicing your loan in the name of and on behalf of
Countrywide. The transfer will be effective July 01, 2004. New Servicer is
looking forward to providing you with superior customer service.
--------------------------------------------------------------------------------
NOTICE OF ASSIGNMENT, SALE, OR TRANSFER OF SERVICING RIGHTS
The transfer of servicing is a common practice in today's home loan market and
does not affect any terms or conditions of your loan, other than those
provisions directly related to the servicing of your loan. Except in limited
circumstances, the law requires that your present servicer send you this
notice at least 15 days before the effective date of transfer, or at closing.
Your new servicer must also send you this notice no later than 15 days after
this effective date or at closing. In this case, all necessary information is
combined in this one notice
--------------------------------------------------------------------------------
YOUR PRESENT SERVICER:
Your present servicer is Countrywide. If you have any questions relating to
the transfer of servicing from Countrywide, call Customer Service, toll-free,
at ▇-▇▇▇-▇▇▇-▇▇▇▇ between 7:00 A.M. and 6:00 P.M. Pacific Time on the
following days: Monday through Friday.
--------------------------------------------------------------------------------
INFORMATION CONCERNING YOUR PAYMENTS:
The date that Countrywide will stop receiving payments, at the current
remittance address, is June 14, 2004. The date that your new servicer will
start accepting payments from you, on behalf of Countrywide is June 15, 2004.
IMPORTANT: Please continue to make your checks payable to Countrywide. Send
all payments on or after June 15, 2004 to: P.O. Box 10334, ▇▇▇ ▇▇▇▇, CA
91410-0334. If you have a payment due before you receive your new billing
statement, write your new account number (Acct No), on your check, payable to
Countrywide, and mail it to the payment address shown on the coupon below.
Please note that your account information is subject to change to reflect
disbursements that were made by, and payments that were due prior to the
effective date of the transfer.
If your previous servicer was automatically drafting/deducting your monthly
payment from your bank account, please disregard the coupon attached below
because your new servicer will provide a one time courtesy draft. You will
receive more information about continuing this service within a few days. If
you wish to discontinue this service, please contact Countrywide's Customer
Service Department at ▇▇▇-▇▇▇-▇▇▇▇.
If the terms of your loan provide for an escrow account to pay taxes and/or
insurance, your new servicer may elect to re-analyze the escrow payment amount
and make any necessary adjustments. In compliance with the Real Estate
Settlement Procedures Act (RESPA), your new servicer analyzes escrow accounts
utilizing the aggregate method.
--------------------------------------------------------------------------------
HELPFUL TIP - NOTIFY YOUR INSURANCE CARRIER:
We suggest that you contact your insurance company to advise them of your new
account number, Acct No, and address for our Insurance Department: P.O. Box
1960, SV-22, Simi Valley, CA 93062-1960.
--------------------------------------------------------------------------------
HOW YOUR NEW SERVICER WILL COMMUNICATE WITH YOU:
You will continue to receive monthly billing statements and other
correspondence that are on Countrywide's letterhead. All correspondence sent
to you regarding your loan will in fact be sent by New Servicer. New Servicer
will be servicing your account in the name of Countrywide.
Please be advised that this communication is from a debt collector
SEE REVERSE SIDE FOR IMPORTANT INFORMATION AQWLGB 04/02/2001
Account Number: Acct No-5
Borrower Payment Due: amount
Address
A fee up to $25.00 ($40.00 in FL) will be charged for each
returned payment except as otherwise
limited by law.
AQWLGB
Prior Account # xref
SRCCD 10157
Countrywide
P.O. Box 10334 Van Nuys, CA 91410-0334
S914100334348S
064381364500000281619000000000
Exh. 13-3
--------------------------------------------------------------------------------
(d) BORROWER'S RIGHTS
--------------------------------------------------------------------------------
You should be aware of the following information, which is set out in more
detail in Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12
U.S.C. 2605):
During the 60-day period following the effective date of the transfer of the
loan servicing, a loan payment received by your previous servicer before its
due date may not be treated by the new loan servicer as late, and a late fee
may not be imposed on you.
Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you
send a "qualified written request" to your loan servicer concerning the
servicing of your loan, your servicer must provide you with a written
acknowledgment within 20 Business Days of receipt of your request. A
"qualified written request" is a written correspondence, other than notice on
a payment coupon or other payment medium supplied by the servicer, which
includes your name and account number, and your reasons for the request. If
you want to send a "qualified written request" regarding the servicing of your
loan, it must be sent to the following address:
Customer Service Correspondence Department
CA
P.O. Box 5170
Simi Valley, CA 93062-5170
Not later than 60 Business Days after receiving your request, your servicer
must make any appropriate corrections to your account, and must provide you
with a written clarification regarding any dispute. During this 60-Business
Day period, your servicer may not provide information to a consumer reporting
agency concerning any overdue payment related to such period or qualified
written request. However, this does not prevent the servicer from initiating
foreclosure if proper grounds exist under the mortgage documents.
A Business Day is a day on which the offices of the business entity are open
to the public for carrying on substantially all of its business functions.
Section 6 of RESPA also provides for damages and costs for individuals or
classes of individuals in circumstances where servicers are shown to have
violated the requirements of that Section. You should seek legal advice if you
believe your rights have been violated.
--------------------------------------------------------------------------------
PAYMENT INSTRUCTIONS
--------------------
Please
o Make your check payable to Countrywide Home Loans
o Don't attach your check to the payment coupon
o Write your loan number on your check or money order
o Don't include correspondence
o Don't send cash
o Write in any additional amounts you are including. (If total is more than
$5000, please send certified check.)
Payments: All payments will be applied to the longest outstanding installment
due, unless otherwise expressly prohibited by law. All premium payments for
credit life insurance will be applied after application of any principal and
interest payments due, but before any other amounts due on your loan are
applied.
Additional amounts. If you submit an additional principal amount, an
additional escrow amount and/or an "other" amount with your regular home loan
payment of principal and interest, Countrywide will first apply your home loan
payment before any additional amount is applied. If your home loan payments
are not current, Countrywide will first apply any additional principal amount
and/or additional escrow amount to outstanding principal and interest payments
due before either additional amount is applied. Any additional amount
specified as "other" will be applied first to past due principal and interest
payments, then escrow deficiencies, then late charges, then fees and costs
due, then outstanding principal.
Exh. 13-4
EXHIBIT 14
Subprime Default and REO Servicing Standards
o Right Party Contact Rate of twenty-seven and a half percent (27.50%)
per month. Termination standard is twenty-two and a half percent
(22.50%), after Servicer has failed to respond to the notice
provisions contained in the Flow Servicing Agreement
o Servicer shall meet the foreclosure timeline requirements as set
forth in the FNMA guidelines
Time Zones
----------
All accounts should be called until 9:00 p.m. in each time zone Monday through
Thursday.
Collection Call Statistics
--------------------------
With respect to only loans owned by GS ("GS Loans"), Servicer shall report
monthly to GS to the extent permitted by applicable law the following dialer
statistical information broken out by delinquency bucket and on a loan level
basis:
o Number of attempts made; ACD, predictive and non-predictive ;
o Number of right party contacts ;
o Number of commitments obtained; and
o Number of performing commitments.
The reports provided by Servicer to Owner will stratify the collection work
efforts and/or results in such a manner as to reasonably assure Owner that
Servicer is in material compliance with the agreed upon service levels.
Skip Tracing Statistics
-----------------------
A minimum of 50% of the accounts referred to skip tracing should result in a
good phone number for the borrower.
Broken Repayment Plans or Broken Promise to Pay
-----------------------------------------------
Follow-up with the Mortgagor within seventy-two (72) hours of the repayment
plan being broken.
FICO's
------
Updated FICO scores must be ordered, at GS's sole cost and expense, on all GS
Loans on a quarterly basis and reported to GS on the following month end tape.
VALUATIONS
----------
BPO should be ordered on the day in which a loan becomes sixty-five (65) days
delinquent if such loan is not cash flowing through a forbearance plan or
bankruptcy plan. Servicer should receive the requested BPO within twenty-one
(21) days of such BPO order with the
Exh. 14-1
understanding that such BPOs may be received at any time depending on the
totality of the circumstances; provided, however, the Servicer shall provide
GS with notice and weekly updates of any developments with respect to any BPO
which is not received by the Servicer within twenty-one (21) days of such BPO
order. Reconciliation should be performed on a BPO within five (5) business
days of receipt thereof. Servicer system should reflect reconciled value upon
receipt of the BPO. The reconciled value should then be reported to GS with
the next month end data tape.
BANKRUPTCY
----------
All bankruptcy actions will be managed according to FNMA guidelines including,
without limitation, bankruptcy set-up, filing proofs of claims, monitoring
plans, referring loans to an attorney, filing motions for relief, and/or
releasing bankruptcies back to foreclosure/normal servicing.
All loans owned by GS should be run though ▇▇▇▇▇ or a similar system once
every thirty (30) days.
FORECLOSURE
-----------
Servicer shall follow FNMA timelines for all GS loans in foreclosure.
Allowable delays shall include bankruptcy filings, litigation, loss mitigation
which results in cash being applied to the loan. Assignment delays should be
no longer than thirty (30) days. Title issues should be no longer than sixty
(60) days. Any delays that shall exceed these estimated timelines should be
reported to GS on a monthly basis. GS loans will not be referred to
foreclosure until the reconciled value has been received and evaluated.
Servicer shall maintain a foreclosure resolution rate of fifty percent (50%).
Exh. 14-2
EXHIBIT 15
REO Servicing Standards
Purpose: The purpose of these standards is to serve as a guideline for
valuations, reporting and overall management of Goldman REO Assets.
Property Valuations:
o BPO - As soon as the REO property in possession, by our attached
definition an interior BPO should be ordered by the servicer. The
BPO should state a Value as-is and a Repaired Value. It should
include interior photos, photos of outbuildings, and deferred
maintenance. Upon completion an original copy of the BPO is to be
forwarded to the REO Department of ▇▇▇▇▇▇▇ ▇▇▇▇▇ either in PDF
format or overnight hard copy. Sale and listing information on the
BPO should be in a grid format acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇.
o APPRAISAL - (Only on new REO acquisitions) As soon as the property
is re-keyed and trashed out the servicer will at Goldman request,
order a full interior appraisal on form 1004 from an Appraiser
acceptable to ▇▇▇▇▇▇▇ ▇▇▇▇▇. The appraiser should be given the
access instructions by the servicer. The full appraisal will include
interior photos, photos of all outbuildings and deferred
maintenance. Required is "The Supplemental REO Addendum Form" giving
3 listing comps, itemization of needed repairs, and as-is and
as-repaired value. Upon completion an original copy of the Appraisal
is to be forwarded or made available to the REO Department of
▇▇▇▇▇▇▇ ▇▇▇▇▇ either in PDF format or overnight hard copy.
o OTHER - Any and all subsequent BPO's, CMA's Appraisals, AVM's or
other evaluations ordered during the course of the REO term are to
be made available in the same manner.
Vendors:
o From time to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ will provide the Servicer with a
published list of Appraisers, Appraisal Vendors, Realtors, Brokers
and other service providers with whom they prefer not to do
business. The Servicer will make commercially reasonable efforts to
refrain from using anyone named on such a list and ▇▇▇▇▇▇▇ ▇▇▇▇▇
reserves the right to refuse any product or service and payment for
that product or service provided by such listed Appraisers,
Appraisal Vendors, Realtors, Brokers and other service providers -
if, and only if, such product or service does not comply with
reasonable standards as determined by generally accepted 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.
Exh. 15-1
Possession:
o RE-KEYING - The property should be Re-keyed as soon as it is in our
possession both to keep prior occupants out and allow access to new
service providers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ personnel. ▇▇▇▇▇▇▇ ▇▇▇▇▇
suggests that the door be re-keyed to a master key code (key code to
be furnished to REO personnel at ▇▇▇▇▇▇▇ ▇▇▇▇▇) and the new keys be
placed in a combo lock box. The servicer will keep REO personnel at
▇▇▇▇▇▇▇ ▇▇▇▇▇ informed with proper access information.
o TRASH OUT - Defined as but not limited to; grass cut, shrubs and
trees trimmed, all debris cleared from interior and exterior,
appliances emptied, cleaned and secured, all trash removed from
premises, windows and doors secured, any fire or safety hazard
removed. The property should be trashed out before the full
appraisal is ordered and the "For Sale" sign is placed on the
property.
o CASH FOR KEYS - The maximum allowable payment to either an owner or
tenant to vacate the property without ▇▇▇▇▇▇▇ ▇▇▇▇▇' prior consent
should be one thousand five hundred dollars ($1,500). If the
servicer intends to pay either an owner or tenant to vacate the
property an amount in excess of one thousand five hundred dollars
($1,500), the servicer should make commercially reasonable efforts
to obtain ▇▇▇▇▇▇▇ ▇▇▇▇▇' prior consent. Every advance should be cost
justified and that data available to ▇▇▇▇▇▇▇ ▇▇▇▇▇ upon request. The
exact amount of the advance should be proportional to the benefit
and made to avoid a lengthily eviction process. Payments should be
made only after the property is actually vacated and inspected by
designated agents of the servicer. The servicer will report each
month on all cash for keys transactions.
o INSURANCE CLAIMS- The servicer will report on a monthly basis all
Insurance claims filed, claims denied and claims aged over ninety
(90) days during the reporting period.
On the Market:
o LISTING -
o All properties are expected to be listed within thirty (30)
days of possession.
o Properties not listed within thirty (30) days will require an
exceptions report at month end.
o All listings should be in the local MLS.
o Listing Agreements should not be for more than six (6) months.
o All listing agreements are subject to cancellation at any time
without penalty of liability to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Exh. 15-2
o SIGNAGE -
o All listed properties are to have a sign that is conspicuous
and readable from the street which clearly indicates the
property is available for sale and contact information for
prospective buyers.
o From the date of acquisition through the date of listing , the
broker/agent/servicer is to reasonably inspect the property
until a sale sign is posted.
Exh. 15-3
EXHIBIT 16
FORM OF COMMITMENT LETTER
[OWNER]
[DATE]
Countrywide Home Loans Servicing LP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇-▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Portfolio Services
Re: Flow Servicing Agreement dated May __ , 2005 (the "Servicing
Agreement"), between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company ("Owner") and
Countrywide Home Loans Servicing LP, as servicer ("Countrywide").
Gentlemen and Ladies:
This letter (this "Commitment Letter") and the Term Sheet attached
hereto as Exhibit A, identifies certain mortgage loans (the "Added Mortgage
Loans") which Owner proposes to add and make subject to the Servicing
Agreement and the business terms under which Servicer agrees to service the
Added Mortgage Loans.
Upon the mutual execution of this Commitment Letter, the Added
Mortgage Loans shall be deemed to have been made subject to the terms and
conditions of the Servicing Agreement. The transfer and servicing of the Added
Mortgage Loans shall, unless otherwise agreed, occur on the dates specified
herein.
All exhibits hereto are incorporated herein in their entirety. In
the event there exists any inconsistency between the Servicing Agreement and
this Commitment Letter, the latter shall be controlling notwithstanding
anything contained in the Servicing Agreement to the contrary. All capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Servicing Agreement.
[SIGNATURE PAGE FOLLOWS]
Exh. 16-1
IN WITNESS WHEREOF, this Agreement has been executed as of the
____day of ______________.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY, as
Owner
By: ___________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited partnership, as
Servicer
By: COUNTRYWIDE GP, INC., general
partner
By: ___________________________________
Name:
Title:
Exh. 16-2
EXHIBIT N
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]
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EXHIBIT O
[RESERVED]
O-1
EXHIBIT P
FORM OF PERFORMANCE CERTIFICATION
(Master Servicer)
Re: Master Servicing and Trust Agreement, dated as of February
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 custodian (in such capacity, the
"Custodian") and ▇▇▇▇▇ Fargo Bank, N.A., as master servicer
(the "Master Servicer") and securities administrator (the
"Securities Administrator").
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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EXHIBIT Q
FORM OF PERFORMANCE CERTIFICATION
(Securities Administrator)
Re: Master Servicing and Trust Agreement, dated as of February
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 custodian (in such capacity, the
"Custodian") and ▇▇▇▇▇ Fargo Bank, N.A., as master servicer
(the "Master Servicer") and securities administrator (the
"Securities Administrator").
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;
(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
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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 R
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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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
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 in
accordance with the transaction
agreements.
1122(d)(1)(ii) If any material servicing activities are
outsourced to third parties, policies
and procedures are instituted to monitor
the third party's performance and
compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the transaction
agreements to maintain a back-up
servicer for the mortgage loans are
maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the
amount of coverage required by and X
otherwise in accordance with the terms
of the transaction agreements.
Cash Collection and Administration
1122(d)(2)(i) Payments on mortgage loans are deposited
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business days
following receipt, or such other number X
of days specified in the transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on
behalf of an obligor or to an investor
are made only by authorized personnel. X
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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iii) 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 transaction agreements.
1122(d)(2)(iv) The related accounts for the
transaction, such as cash reserve
accounts or accounts established as a
form of overcollateralization, are
separately maintained (e.g., with X
respect to commingling of cash) as set
forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at
a federally insured depository
institution as set forth in the
transaction agreements. For purposes of
this criterion, "federally insured
depository institution" with respect to X
a foreign financial institution means a
foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of
the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to
prevent unauthorized access.
X
1122(d)(2)(vii) Reconciliations are prepared on a
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and related
bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30
calendar days after the bank statement
cutoff date, or such other number of
days specified in the transaction
agreements; (C) reviewed and approved by X
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 specified in the
transaction agreements.
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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to
be filed with the Commission, are
maintained in accordance with the
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the terms
specified in the transaction agreements; X X
(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 serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated
and remitted in accordance with
timeframes, distribution priority and X X
other terms set forth in the transaction
agreements.
1122(d)(3)(iii) Disbursements made to an investor are
posted within two business days to the
Servicer's investor records, or such
other number of days specified in the X
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the
investor reports agree with cancelled
checks, or other form of payment, or X
custodial bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans X
is maintained as required by the
transaction agreements or related
mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are X
safeguarded as required by the
transaction agreements.
1122(d)(4)(iii) Any additions, removals or substitutions
to the asset pool are made, reviewed and
approved in accordance with any
conditions or requirements in the
transaction agreements.
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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) 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 accordance with the related mortgage
loan documents.
1122(d)(4)(v) The Servicer's records regarding the
mortgage loans agree with the Servicer's
records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) 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 documents.
1122(d)(4)(vii) 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
established by the transaction
agreements.
1122(d)(4)(viii) 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
example, phone calls, letters and
payment rescheduling plans in cases
where delinquency is deemed temporary
(e.g., illness or unemployment).
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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates
of return for mortgage loans with
variable rates are computed based on the
related mortgage loan documents.
1122(d)(4)(x) 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 agreements.
1122(d)(4)(xi) 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 transaction agreements.
1122(d)(4)(xii) 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
obligor's error or omission.
1122(d)(4)(xiii) 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
days specified in the transaction
agreements.
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Master Securities
Servicing Criteria Servicer Administrator Custodian
-------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and
uncollectible accounts are recognized
and recorded in accordance with the X
transaction agreements.
1122(d)(4)(xv) 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
transaction agreements.
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