EXECUTION COPY
EXHIBIT 99.1
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GSAA HOME EQUITY TRUST 2007-2
ASSET-BACKED CERTIFICATES
SERIES 2007-2
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION,
and
U.S. BANK NATIONAL ASSOCIATION,
Custodians
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
Dated February 1, 2007
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TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.........................................................................................8
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.......................................................................39
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.................................................42
Section 2.03 Execution and Delivery of Certificates.............................................................43
Section 2.04 REMIC Matters......................................................................................44
Section 2.05 Representations and Warranties of the Depositor....................................................44
Section 2.06 Representations and Warranties of BNY..............................................................45
Section 2.07 Representations and Warranties of Deutsche Bank....................................................46
Section 2.08 Representations and Warranties of U.S. Bank........................................................46
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account..................................................47
Section 3.02 Investment of Funds in the Distribution Account....................................................49
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution.........................................................................50
Section 4.02 Monthly Statements to Certificateholders...........................................................57
Section 4.03 Allocation of Applied Realized Loss Amounts........................................................59
Section 4.04 Certain Matters Relating to the Determination of LIBOR.............................................60
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...................................................................................60
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Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates........................61
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..................................................66
Section 5.04 Persons Deemed Owners..............................................................................67
Section 5.05 Access to List of Certificateholders' Names and Addresses..........................................67
Section 5.06 Maintenance of Office or Agency....................................................................67
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor.......................................................................67
Section 6.02 Merger or Consolidation of the Depositor...........................................................67
Section 6.03 Limitation on Liability of the Depositor and Others................................................68
Section 6.04 Servicing Compliance Review........................................................................68
Section 6.05 Option to Purchase Defaulted Mortgage Loans........................................................69
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default..................................................................................69
Section 7.02 Master Servicer to Act; Appointment of Successor...................................................69
Section 7.03 Master Servicer to Act as Servicer.................................................................71
Section 7.04 Notification to Certificateholders.................................................................71
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians...........................................................71
Section 8.02 [Reserved].........................................................................................72
Section 8.03 Certain Matters Affecting the Trustee and the Custodians...........................................72
Section 8.04 Trustee and Custodians Not Liable for Certificates or Mortgage Loans...............................74
Section 8.05 Trustee May Own Certificates.......................................................................74
Section 8.06 Trustee's Fees and Expenses........................................................................74
Section 8.07 Eligibility Requirements for the Trustee...........................................................75
Section 8.08 Resignation and Removal of the Trustee.............................................................76
Section 8.09 Successor Trustee..................................................................................76
Section 8.10 Merger or Consolidation of the Trustee or the Custodians...........................................77
Section 8.11 Appointment of Co-Trustee or Separate Trustee......................................................77
Section 8.12 Tax Matters........................................................................................78
Section 8.13 [Reserved].........................................................................................81
Section 8.14 Tax Classification of the Excess Reserve Fund Account..............................................82
Section 8.15 Custodial Responsibilities.........................................................................82
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's Obligations...............................83
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions Insurance....................................85
Section 9.03 Representations and Warranties of the Master Servicer..............................................85
Section 9.04 Master Servicer Events of Default..................................................................87
Section 9.05 Waiver of Default..................................................................................89
Section 9.06 Successor to the Master Servicer...................................................................89
Section 9.07 Compensation of the Master Servicer................................................................90
Section 9.08 Merger or Consolidation............................................................................90
Section 9.09 Resignation of the Master Servicer.................................................................90
Section 9.10 Assignment or Delegation of Duties by the Master Servicer..........................................91
Section 9.11 Limitation on Liability of the Master Servicer.....................................................91
Section 9.12 Indemnification; Third Party Claims................................................................92
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator............................................................93
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........................................................................................104
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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..........................................................................................107
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 8-K Filings.................................................................................111
Section 13.03 Form 10-D Filings................................................................................112
Section 13.04 Form 10-K Filings................................................................................113
Section 13.05 Form 15 Filing...................................................................................115
Section 13.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.....................................................................115
Section 13.07 Report on Assessment of Compliance and Attestation...............................................116
Section 13.08 Use of Subservicers and Subcontractors...........................................................117
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SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificates
Exhibit C Form of Class R, Class RC and Class RX Certificates
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of
Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J-1 Form of Back-up Certification (Master Servicer)
Exhibit J-2 Form of Back-up Certification (Securities Administrator)
Exhibit K Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
Exhibit L-1 Form of Request for Release of Documents (U.S. Bank National
Association)
Exhibit L-2 Form of Request for Release of Documents (Deutsche Bank
National Trust Company)
Exhibit L-3 Form of Request for Release of Documents (The Bank of New
York Trust Company, National Association)
Exhibit M Form 8-K Disclosure Information
Exhibit N Additional Form 10-D Disclosure
Exhibit O Additional Form 10-K Disclosure
Exhibit P Form of Master Loan Purchase Agreement, between various
sellers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
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Exhibit Q Flow Servicing Agreement, dated as of January 1, 2006,
between Avelo Mortgage, L.L.C. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit R Amended and Restated Master Mortgage Loan Purchase Agreement,
dated as of November 1, 2005, between GreenPoint Mortgage
Funding, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Exhibit S Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage
Company
Exhibit T Master Mortgage Loan and Servicing Agreement, dated as of
December 1, 2006, between HSBC Mortgage Corporation (USA) and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
Exhibit U Amended and Restated Flow Seller's Warranties and Servicing
Agreement, dated as of December 1, 2005, between SunTrust
Mortgage, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
Exhibit V Amendment No. 1 to the Amended and Restated Flow Seller's
Warranties and Servicing Agreement, dated as of July 1, 2006,
between SunTrust Mortgage, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company
Exhibit W Amended and Restated Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, between
▇▇▇▇▇▇▇ Sachs Mortgage Company and Ameriquest Mortgage
Company
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THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of February 1, 2007
(this "Agreement"), is hereby executed by and among GS MORTGAGE SECURITIES
CORP., a Delaware corporation (the "Depositor"), DEUTSCHE BANK NATIONAL TRUST
COMPANY ("Deutsche Bank"), as trustee (in such capacity, the "Trustee") and as
a custodian, U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank"), as a custodian, THE
BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION ("BNY"), as a custodian
(Deutsche Bank, BNY, and U.S. Bank, each a "Custodian" and together the
"Custodians"), and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇ Fargo"), as
master servicer (in such capacity, the "Master Servicer"), and as securities
administrator (in such capacity, the "Securities Administrator").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
[PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trust shall elect that
three segregated asset pools within the Trust Fund be treated for federal
income tax purposes as comprising three REMICs (each, a "Trust REMIC" or, in
the alternative, the "Lower-Tier REMIC", the "Upper-Tier REMIC" and the "Class
X REMIC", respectively). The Class X Interest and each Class of Principal
Certificates (other than the right of each Class of Principal Certificates to
receive Basis Risk Carry Forward Amounts), represents ownership of a regular
interest in the Upper-Tier REMIC for purposes of the REMIC Provisions. The
Class R Certificates represent ownership of the sole class of residual interest
in the Upper-Tier REMIC, the Class RC Certificates represent ownership of the
sole class of residual interest in the Lower-Tier REMIC and the Class RX
Certificates represent ownership of the sole class of residual interest in the
Class X REMIC for purposes of the REMIC Provisions. The Startup Day for each
REMIC described herein is the Closing Date. The latest possible maturity date
for each Certificate is the latest date referenced in Section 2.04. The Class X
REMIC shall hold as assets the Class X Interest as set out below. The
Upper-Tier REMIC shall hold as assets the several classes of uncertificated
Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC shall hold as
assets the assets described in the definition of "Trust Fund" herein (other
than the Prepayment Premiums and the Excess Reserve Fund Account). Each
Lower-Tier Regular Interest is hereby designated as a regular interest in the
Lower-Tier REMIC. The Class LT-AV1, Class LT-AF2, Class LT-AF3, Class LT-AF4A,
Class LT-AF4B, Class LT-AF5A, Class LT-AF5B, Class LT-AF6A, Class LT-AF6B,
Class LT-M1, Class LT-M2, Class LT-M3, Class LT-M4, Class LT-M5, Class LT-M6,
Class LT-B1, Class LT-B2 and Class LT-B3 Interests are hereby designated the
LT-Accretion Directed Classes (the "LT Accretion Directed Classes"). The Class
P Certificates represent beneficial ownership of the Prepayment Premiums, each
Class of Certificates (excluding the Class P, Class X and the Residual
Certificates) represents beneficial ownership of a regular interest in the
Upper-Tier REMIC and the right to receive Basis Risk Carry Forward Amounts and
the Class X Certificates represent beneficial ownership of a regular interest
in the Class X REMIC and the Excess Reserve Fund Account, which portions of the
Trust Fund shall be treated as a grantor trust.
The Lower-Tier REMIC
Lower-Tier Corresponding
Lower-Tier Interest Designation Interest Rate Initial Lower-Tier Principal Amount Upper-Tier REMIC Class
-------------------------------- ------------- ---------------------------------------- ----------------------
Class LT-AV1 (1) 1/2 initial Class Certificate Balance of AV1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF2 (1) 1/2 initial Class Certificate Balance of AF2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF3 (1) 1/2 initial Class Certificate Balance of AF3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF4A (1) 1/2 initial Class Certificate Balance of AF4A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF4B (1) 1/2 initial Class Certificate Balance of AF4B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF5A (1) 1/2 initial Class Certificate Balance of AF5A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF5B (1) 1/2 initial Class Certificate Balance of AF5B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF6A (1) 1/2 initial Class Certificate Balance of AF6A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF6B (1) 1/2 initial Class Certificate Balance of AF6B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M1 (1) 1/2 initial Class Certificate Balance of M1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M2 (1) 1/2 initial Class Certificate Balance of M2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M3 (1) 1/2 initial Class Certificate Balance of M3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M4 (1) 1/2 initial Class Certificate Balance of M4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M5 (1) 1/2 initial Class Certificate Balance of M5
Corresponding Upper-Tier REMIC Regular
Interest
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Lower-Tier Corresponding
Lower-Tier Interest Designation Interest Rate Initial Lower-Tier Principal Amount Upper-Tier REMIC Class
-------------------------------- ------------- ---------------------------------------- ----------------------
Class LT-M6 (1) 1/2 initial Class Certificate Balance of M6
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B1 (1) 1/2 initial Class Certificate Balance of B1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B2 (1) 1/2 initial Class Certificate Balance of B2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B3 (1) 1/2 initial Class Certificate Balance of B3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount
----------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
The Lower-Tier REMIC shall hold as assets all of the Lower-Tier REMIC
Regular Interests.
On each Distribution Date, 50% of the increase in the Overcollateralized
Amount will be payable as a reduction of the Lower-Tier Principal Amount of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Overcollateralized Amount that is
attributable to a reduction in the Class Certificate Balance of its
Corresponding Class) and will be accrued and added to the Lower-Tier Principal
Amount of the Class LT-Accrual Interest. On each Distribution Date, the
increase in the Lower-Tier Principal Amount of the Class LT-Accrual Interest
may not exceed interest accruals for such Distribution Date for the Class
LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class
LT-Accrual Interest for such Distribution Date, the excess for such
Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes
on the next Distribution Date pursuant to the first sentence of this paragraph.
All payments of scheduled principal and prepayments of principal generated by
the Mortgage Loans shall be allocated (i) 50% to the Class LT-Accrual Interest
and (ii) 50% to the LT-Accretion Directed Classes (principal payments shall be
allocated among such LT-Accretion Directed Classes in an amount equal to 50% of
the principal amounts allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Interest that result in the reduction in the Overcollateralized
Amount shall be allocated to the Class LT-Accrual Interest (until paid in
full). Realized Losses shall be applied so that after all distributions have
been made on each Distribution Date (i) the Lower-Tier Principal Amount of each
of the LT-Accretion Directed Classes is equal to 50% of the Class Certificate
Balance of its Corresponding
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Class, and (ii) the Class LT-Accrual Interest is equal to 50% of the aggregate
Stated Principal Balance of the Mortgage Loans plus 50% of the
Overcollateralized Amount.
In addition to issuing the Lower-Tier Regular Interests, the Lower-Tier
REMIC shall issue the Class LT-R Interest which shall be the sole class of
residual interests in the Lower-Tier REMIC. The Class RC Certificates will
represent ownership of the Class LT-R Interest and will be issued as a single
certificate in definitive form in a principal amount of $100 and shall have no
interest rate. Amounts received by the Class LT-R Interest shall be deemed paid
from the Lower-Tier REMIC.
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 Class Corresponding Class of
Class Designation Class Pass-Through Rate Certificate Balance Certificates
--------------------------------- ----------------------- ------------------------------ -----------------------------
Class AV1 (1) $ 240,623,000 Class AV1(20)
Class AF2 (2) $ 32,032,000 Class AF2 (20)
Class AF3 (3) $ 115,066,000 Class AF3 (20)
Class AF4A (4) $ 53,131,000 Class AF4A(20)
Class AF4B (5) $ 12,000,000 Class AF4B(20)
Class AF5A (6) $ 48,351,000 Class AF5A(20)
Class AF5B (7) $ 5,373,000 Class AF5B(20)
Class AF6A (8) $ 50,658,000 Class AF6A(20)
Class AF6B (9) $ 5,629,000 Class AF6B(20)
Class M1 (10) $ 7,627,000 Class M1(20)
Class M2 (11) $ 6,711,000 Class M2(20)
Class M3 (12) $ 4,271,000 Class M3(20)
Class M4 (13) $ 3,661,000 Class M4(20)
Class M5 (14) $ 3,661,000 Class M5(20)
Class M6 (15) $ 3,661,000 Class M6(20)
Class B1 (16) $ 3,051,000 Class B1(20)
Class B2 (17) $ 4,576,000 Class B2(20)
Class B3 (18) $ 3,051,000 Class B3(20)
Class X (19) (19) Class X(19)
(1) The Class AV1 certificates will have a pass-through rate equal to the
lesser of (i) one-month LIBOR plus 0.80000% per annum and (ii) the WAC
Cap.
(2) The Class AF2 certificates will have a pass-through rate equal to the
lesser of (i) 5.76016% and (ii) the WAC Cap.
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(3) The Class AF3 certificates will have a pass-through rate equal to the
lesser of (i) 5.91693% and (ii) the WAC Cap.
(4) The Class AF4A certificates will have a pass-through rate equal to the
lesser of (i) 5.98320% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(5) The Class AF4B certificates will have a pass-through rate equal to the
lesser of (i) 6.03286% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(6) The Class AF5A certificates will have a pass-through rate equal to the
lesser of (i) 6.09907% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(7) The Class AF5B certificates will have a pass-through rate equal to the
lesser of (i) 6.14847% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(8) The Class AF6A certificates will have a pass-through rate equal to the
lesser of (i) 5.79955% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(9) The Class AF6B certificates will have a pass-through rate equal to the
lesser of (i) 5.83919% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(10) The Class M1 certificates will have a pass-through rate equal to the
lesser of (i) 6.05417% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(11) The Class M2 certificates will have a pass-through rate equal to the
lesser of (i) 6.10381% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(12) The Class M3 certificates will have a pass-through rate equal to the
lesser of (i) 6.15343% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(13) The Class M4 certificates will have a pass-through rate equal to the
lesser of (i) 6.25265% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(14) The Class M5 certificates will have a pass-through rate equal to the
lesser of (i) 6.30224% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(15) The Class M6 certificates will have a pass-through rate equal to the
lesser of (i) 6.35183% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
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(16) The Class B1 certificates will have a pass-through rate equal to the
lesser of (i) 6.79000% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(17) The Class B2 certificates will have a pass-through rate equal to the
lesser of (i) 6.79000% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(18) The Class B3 certificates will have a pass-through rate equal to the
lesser of (i) 6.79000% (plus 0.50% after the first distribution date on
which the optional clean-up call is exercisable) and (ii) the WAC Cap.
(19) The Class X Interest will have a principal balance to the extent of any
Overcollateralized Amount. The Class X Interest will not accrue interest
on such balance but will accrue interest on a notional principal balance.
As of any Distribution Date, the Class X Interest shall have a notional
principal balance equal to the aggregate of the principal balances of the
Lower-Tier Regular Interests as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of
the WAC Cap over the product of (i) 2 and (ii) the weighted average
Lower-Tier Interest Rate of the Lower-Tier Regular Interests, where the
Lower-Tier Interest Rates on the Class LT-Accrual Interest is subject to
a cap equal to zero and each LT-Accretion Directed Class is subject to a
cap equal to the Pass-Through Rate on its Corresponding Class. With
respect to any Distribution Date, interest that so accrues on the
notional principal balance of the Class X Interest shall be deferred in
an amount equal to any increase in the Overcollateralized Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
The Class X Certificates will represent beneficial ownership of a regular
interest issued by the Class X REMIC and amounts in the Excess Reserve
Fund Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk Carry Forward Amounts. For
federal income tax purposes, the Securities Administrator will treat the
Class X Certificateholders' obligation to make payments from the Excess
Reserve Fund Account as payments made pursuant to an interest rate cap
contract written by the Class X Certificateholders in favor of each Class
of Principal Certificates. Such rights of the Class X Certificateholders
and Principal Certificateholders shall be treated as held in a portion of
the Trust Fund that is treated as a grantor trust under subpart E, Part I
of subchapter J of the Code.
(20) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to
receive payments from the Excess Reserve Fund Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders.
In addition to issuing the Upper-Tier Regular Interests, the Upper-Tier
REMIC shall issue the Class R Certificates, which shall be the sole class of
residual interests in the Upper-Tier REMIC. The Class R Certificates will be
issued as a single certificate in definitive 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.
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Class X REMIC
The Class X REMIC shall issue the following classes of interests. The
Class X Certificates shall represent a regular interest in the Class X REMIC
and the Class RX Certificates shall represent the sole class of residual
interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
----------------------------------- ------------- ----------------
Class X Certificates (1) (1)
Class RX Certificates (2) (2)
-----------------
(1) The Class X Certificates are entitled to 100% of the interest and
principal on the Class X Interest on each Distribution Date.
(2) The Class RX Certificates do not have an interest rate or principal
amount.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC and the Class X
REMIC as cash flow on a REMIC regular interest, without creating any actual or
potential shortfall (other than for credit losses) to any Trust REMIC regular
interest. It is not intended that the Class R, Class RC or Class RX
Certificates be entitled to any cash flow pursuant to this Agreement except as
provided in Section 4.01(a)(ii)(A)(1) hereunder.
For any purpose for which the Pass-Through Rates are calculated,
the interest rate on the Mortgage Loans shall be appropriately adjusted to
account for the difference between the monthly day count convention of the
Mortgage Loans and the monthly day count convention of the regular interests
issued by each of the REMICs. For purposes of calculating the Pass-Through
Rates for each of the interests issued by the Lower-Tier REMIC such rates shall
be adjusted to equal a monthly day count convention based on a 30 day month for
each Due Period and a 360-day year so that the Mortgage Loans and all regular
interests will be using the same monthly day count convention.
The minimum denomination for each Class of the Offered Certificates
will be $50,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for (a) the Class R and Class RC
Certificates will each be $100 and each will be a 100% Percentage Interest in
such Class, (b) the Class RX Certificates will be a 100% Percentage Interest in
such Class (c) the Class P Certificates will be a $10 initial notional balance,
with integral multiples of $1 in excess thereof and (d) the Class X
Certificates will be equal to 10% of their initial notional balance, with
integral multiples of $1 in excess thereof.
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 AV1, Class AF2, Class AF3, Class AF4A,
7
Class AF4B, Class AF5A, Class AF5B, Class AF6A and Class AF6B Certificates,
collectively.
Class B Certificates......................... The Class B1, Class B2 and Class B3 Certificates, collectively.
Class M Certificates......................... The Class M1, Class M2, Class M3, Class M4, Class M5 and Class M6
Certificates, collectively.
Residual Certificates........................ The Class R, Class RC and Class RX Certificates.
ERISA Restricted The Private Certificates, the Physical Certificates and any Certificate
Certificates................................. with a rating below the lowest applicable permitted rating under the
Underwriters' Exemption.
Fixed Rate Certificates...................... The Class A Certificates (other than the Class AV1 Certificates), the
Class M Certificates and the Class B Certificates.
LIBOR Certificates........................... The Class AV1 Certificates.
Offered Certificates......................... All Classes of Certificates other than the Private Certificates.
Private Certificates......................... Class P and Class X Certificates.
Physical Certificates........................ The Class R, Class RC and Class RX Certificates.
Principal Certificates....................... The Fixed Rate Certificates and LIBOR Certificates.
Rating Agencies.............................. ▇▇▇▇▇'▇ and S&P.
Regular Certificates......................... All Classes of Certificates other than the Residual Certificates.
Subordinated Certificates.................... The Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the applicable Servicing
Agreement or Sale Agreement. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
10-K Filing Deadline: As defined in Section 13.04.
8
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to which any portion of a Monthly Payment is, as of the last day of the prior
Due Period, two months or more past due (without giving effect to any grace
period), each Mortgage Loan in foreclosure, all REO Property and each Mortgage
Loan for which the Mortgagor has filed for bankruptcy.
Account: Any of the Distribution Account or the Excess Reserve Fund
Account. Each such Account shall be a separate Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.01.
Additional Form 10-D Disclosure: As defined in Section 13.03.
Additional Form 10-K Disclosure: As defined in Section 13.04.
Additional Servicer: Each affiliate of each Servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and
at any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Master Servicing and Trust Agreement and all
amendments or supplements hereto.
Ameriquest: Ameriquest Mortgage Company, a Delaware corporation,
and its successors in interest.
Ameriquest Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the Ameriquest Sale Agreement.
Ameriquest Sale Agreement: The Amended and Restated Flow Mortgage
Loan Purchase and Warranties Agreement, dated as of June 1, 2005, between the
Purchaser and Ameriquest.
9
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the Principal Certificates after distributions of principal on such
Distribution Date exceeds the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Assignment Agreement: A Step 1 Assignment Agreement or a Step 2
Assignment Agreement.
Auction Call: As defined in Section 9.03(b).
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer (x) the sum of
(without duplication) (i) all scheduled installments of interest (net of the
related Expense Fees) and principal due on the Due Date on such Mortgage Loans
in the related Due Period and received on or prior to the related Determination
Date, together with any Monthly Advances in respect thereof; (ii) all
Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds received
during the related Principal Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments
(excluding Prepayment Premiums) on the Mortgage Loans received during the
related Principal Prepayment Period together with all Compensating Interest
paid in connection therewith; (iv) all amounts received with respect to such
Distribution Date in connection with a purchase or repurchase of a Deleted
Mortgage Loan; (v) all amounts received with respect to such Distribution Date
in connection with the operation of the Primary Mortgage Insurance Policy; (vi)
all amounts received with respect to such Distribution Date as a Substitution
Adjustment Amount received in connection with the substitution of a Mortgage
Loan; and (vii) all proceeds received with respect to the termination of the
Trust Fund pursuant to clause (a) of Section 11.01; reduced by (y) all amounts
in reimbursement for Monthly Advances and Servicing Advances previously made
with respect to the Mortgage Loans, and other amounts as to which the
Servicers, the Depositor, the Master Servicer, the Securities Administrator,
the Trustee (or co-trustee) or the Custodians are entitled to be paid or
reimbursed pursuant to this Agreement.
Avelo: Avelo Mortgage, L.L.C., a Delaware limited liability
company, and its successors in interest.
Avelo Servicing Agreement: The Flow Servicing Agreement, dated as
of January 1, 2006, between Avelo and the Purchaser, as modified by the related
Assignment Agreements.
Back-Up Certification: As defined in Section 13.06.
10
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal Certificates
is based upon the WAC Cap, the excess, if any, of (i) the amount of interest
such Class of Certificates would otherwise be entitled to receive on such
Distribution Date had such Pass-Through Rate not been subject to the WAC Cap,
over (ii) the amount of interest that Class of Certificates received on such
Distribution Date taking into account the WAC Cap and (B) the Basis Risk Carry
Forward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to
the applicable Pass-Through Rate for such Class of Certificates for such
Distribution Date, without giving effect to the WAC Cap).
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for
such Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
BNY: The Bank of New York Trust Company, National Association, a
national banking association, and its successors in interest.
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, Minnesota, Maryland or California, (b) with respect to a Servicer,
the State in which such Servicer's servicing operations are located, or (c) the
State in which the Trustee's operations are located, are authorized or
obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Principal
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class X Certificates and the Class P
Certificates have no Certificate Balance. The Class P Certificates have a $100
notional certificate balance. The Class P Certificates will not receive
payments on their notional balance and their notional balances will not change
for so long as such Class is outstanding. The notional balance of the Class X
Certificates is equal to the Cut-off Date Pool Principal Balance and thereafter
to the Pool Stated Principal Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
11
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided,
however, that if any such Person (including the Depositor) owns 100% of the
Percentage Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof that
requires the consent of the Holders of Certificates of a particular Class as a
condition to the taking of any action hereunder. The Securities Administrator
is entitled to rely conclusively on a certification of the Depositor or any
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
Certification Parties: As defined in Section 13.06.
Certifying Person: As defined in Section 13.06.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 84.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class AF2 Certificates: All Certificates bearing the class
designation of "Class AF2."
Class AF3 Certificates: All Certificates bearing the class
designation of "Class AF3."
Class AF4A Certificates: All Certificates bearing the class
designation of "Class AF4A."
Class AF4B Certificates: All Certificates bearing the class
designation of "Class AF4B."
Class AF5A Certificates: All Certificates bearing the class
designation of "Class AF5A."
Class AF5B Certificates: All Certificates bearing the class
designation of "Class AF5B."
12
Class AF6A Certificates: All Certificates bearing the class
designation of "Class AF6A."
Class AF6B Certificates: All Certificates bearing the class
designation of "Class AF6B."
Class AF6A and AF6B Calculation Percentage: With respect to any
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the aggregate Class Certificate Balance of the Class AF6A and Class
AF6B Certificates and the denominator of which is the aggregate Class
Certificate Balance of all of the Class A Certificates, in each case before
giving effect to distribution of principal on that Distribution Date.
Class AF6A and AF6B Lockout Distribution Amount. With respect to
any Distribution Date, an amount equal to the product of (i) the applicable
Class AF6A and AF6B Calculation Percentage for that Distribution Date, (ii) the
Class AF6A and AF6B Lockout Percentage for that Distribution Date and (iii) the
Class A Principal Distribution Amount for that Distribution Date. In no event
shall the Class AF6A and AF6B Lockout Distribution Amount exceed the lesser of
the outstanding Class Certificate Balance of the Class AF6A and AF6B
Certificates or the Class A Principal Distribution Amount for the applicable
Distribution Date.
Class AF6A and AF6B Lockout Percentage. For any Distribution Date,
the following:
Class AF6A and
AF6B Lockout
Distribution Date (Months) Percentage
1 to 36 0%
37 to 60 45%
61 to 72 80%
73 to 84 100%
85 and thereafter 300%
Class AV1 Certificates: All Certificates bearing the class
designation of "Class AV1."
Class B Certificates: As specified in the Preliminary Statement.
Class B1 Certificates: All Certificates bearing the class
designation of "Class B1."
Class B1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1 Certificates (after
taking into account the distribution of the Class M1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M2
13
Certificates (after taking into account the distribution of the Class M2
Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M3 Certificates (after taking into account the
distribution of the Class M3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M4 Certificates (after
taking into account the distribution of the Class M4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M5 Certificates (after taking into account the distribution of the Class
M5 Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M6 Certificates (after taking into account the
distribution of the Class M6 Principal Distribution Amount on such Distribution
Date) and (H) the Class Certificate Balance of the Class B1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 95.20% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class B2 Certificates: All Certificates bearing the class
designation of "Class B2."
Class B2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1 Certificates (after
taking into account the distribution of the Class M1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M2 Certificates (after taking into account the distribution of the Class
M2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M3 Certificates (after taking into account the
distribution of the Class M3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M4 Certificates (after
taking into account the distribution of the Class M4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M5 Certificates (after taking into account the distribution of the Class
M5 Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class M6 Certificates (after taking into account the
distribution of the Class M6 Principal Distribution Amount on such Distribution
Date), (H) the Class Certificate Balance of the Class B1 Certificates (after
taking into account the distribution of the Class B1 Principal Distribution
Amount on such Distribution Date) and (I) the Class Certificate Balance of the
Class B2 Certificates immediately prior to that Distribution Date over (ii) the
lesser of (A) the product of (x) 96.70% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class B3 Certificates: All Certificates bearing the class
designation of "Class B3."
Class B3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution
14
Amount on such Distribution Date), (B) the Class Certificate Balance of the
Class M1 Certificates (after taking into account the distribution of the Class
M1 Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M2 Certificates (after taking into account the
distribution of the Class M2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M3 Certificates (after
taking into account the distribution of the Class M3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M4 Certificates (after taking into account the distribution of the Class
M4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M5 Certificates (after taking into account the
distribution of the Class M5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M6 Certificates (after
taking into account the distribution of the Class M6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B1 Certificates (after taking into account the distribution of the Class
B1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B2 Certificates (after taking into account the
distribution of the Class B2 Principal Distribution Amount on such Distribution
Date) and (J) the Class Certificate Balance of the Class B3 Certificates
immediately prior to that Distribution Date over (ii) the lesser of (A) the
product of (x) 97.70% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M Certificates: As specified in the Preliminary Statement.
Class M1 Certificates: All Certificates bearing the class
designation of "Class M1."
Class M1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 87.00% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M2 Certificates: All Certificates bearing the class
designation of "Class M2."
Class M2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1
15
Certificates (after taking into account the distribution of the Class M1
Principal Distribution Amount on such Distribution Date) and (C) the Class
Certificate Balance of the Class M2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 89.20% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M3 Certificates: All Certificates bearing the class
designation of "Class M3."
Class M3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1 Certificates (after
taking into account the distribution of the Class M1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M2 Certificates (after taking into account the distribution of the Class
M2 Principal Distribution Amount on such Distribution Date) and (D) the Class
Certificate Balance of the Class M3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 90.60% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M4 Certificates: All Certificates bearing the class
designation of "Class M4."
Class M4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1 Certificates (after
taking into account the distribution of the Class M1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M2 Certificates (after taking into account the distribution of the Class
M2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M3 Certificates (after taking into account the
distribution of the Class M3 Principal Distribution Amount on such Distribution
Date) and (E) the Class Certificate Balance of the Class M4 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 91.80% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M5 Certificates: All Certificates bearing the class
designation of "Class M5."
Class M5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution
16
Amount on such Distribution Date), (B) the Class Certificate Balance of the
Class M1 Certificates (after taking into account the distribution of the Class
M1 Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balance of the Class M2 Certificates (after taking into account the
distribution of the Class M2 Principal Distribution Amount on such Distribution
Date), (D) the Class Certificate Balance of the Class M3 Certificates (after
taking into account the distribution of the Class M3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M4 Certificates (after taking into account the distribution of the Class
M4 Principal Distribution Amount on such Distribution Date) and (F) the Class
Certificate Balance of the Class M5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 93.00% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M6 Certificates: All Certificates bearing the class
designation of "Class M6."
Class M6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M1 Certificates (after
taking into account the distribution of the Class M1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M2 Certificates (after taking into account the distribution of the Class
M2 Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M3 Certificates (after taking into account the
distribution of the Class M3 Principal Distribution Amount on such Distribution
Date), (E) the Class Certificate Balance of the Class M4 Certificates (after
taking into account the distribution of the Class M4 Principal Distribution
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M5 Certificates (after taking into account the distribution of the Class
M5 Principal Distribution Amount on such Distribution Date) and (G) the Class
Certificate Balance of the Class M6 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 94.20% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class R Certificates: All Certificates bearing the class
designation of "Class R."
Class RC Certificates: All Certificates bearing the class
designation of "Class RC."
Class RX Certificates: All Certificates bearing the class
designation of "Class RX."
Class X Certificates: All Certificates bearing the class
designation of "Class X."
17
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus, without duplication, (ii) as
a distribution in respect of principal, any portion of the principal balance of
the Class X Interest which is distributable as an Overcollateralization
Reduction Amount, minus (iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Closing Date: February 23, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: The "Custodial Account" as defined in the
applicable Servicing Agreement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and Servicer,
other than SunTrust, the lesser of (a) the Prepayment Interest Shortfall, if
any, for the Distribution Date, with respect to voluntary Principal Prepayments
in full or in part by the Mortgagor (excluding any payments made upon
liquidation of the Mortgage Loan), and (b) (i) one-half of its aggregate
Servicing Fee received for the related Distribution Date in the case of Avelo
and GreenPoint or (ii) its aggregate Servicing Fee received for the related
Distribution Date in the case of HSBC. SunTrust will provide Compensating
Interest equal to the aggregate of the prepayment interest shortfalls on the
mortgage loans for the related distribution date resulting from the voluntary
principal prepayments of the mortgage loans during the related prepayment
period.
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, the principal office of the Securities Administrator is located
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its office for
certificate transfer services is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services, GSAA Home
Equity Trust 2007-2, or at such other address as the Securities Administrator
may designate from time to time by notice to the Certificateholders. With
respect to the Trustee, to the principal office of the Trustee at ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration
- GS0702, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders.
18
Custodial File: With respect to each Mortgage Loan, any Mortgage
Loan Document which is delivered to the applicable Custodian or which at any
time comes into the possession of that Custodian.
Custodians: BNY, Deutsche Bank and U.S. Bank.
Cut-off Date: February 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balance of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on that date, whether or not
received).
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by any Responsible Party, the Purchaser or the Depositor in
accordance with the terms of any Sale Agreement, any Assignment Agreement or
this Agreement, as applicable, or which is, in the case of a substitution by
any Servicer (if permitted under the applicable Servicing Agreement) or by
19
the Purchaser pursuant to the Assignment Agreements or this Agreement, replaced
or to be replaced with a substitute mortgage loan.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof; provided
that with respect to the Class P and Class X Certificatews, the Denomination
will be expressed as the initial notional balnce of such class.
Depositor: GS Mortgage Securities Corp., a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee and the Securities Administrator, that (a) is
incorporated under the laws of the United States of America or any State
thereof, (b) is subject to supervision and examination by federal or state
banking authorities and (c) has outstanding unsecured commercial paper or other
short-term unsecured debt obligations that are rated "P-1" by Moody's and "A-1"
by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
Business Day immediately preceding the Remittance Date.
Deutsche Bank: Deutsche Bank National Trust Company, a national
banking association, and its successors in interest.
Distribution Account: The separate Eligible Account created by the
Securities Administrator pursuant to Section 3.01(b) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and the
Certificateholders and designated "▇▇▇▇▇ Fargo Bank, National Association, as
paying agent, in trust for registered holders of GSAA Home Equity Trust 2007-2,
Asset-Backed Certificates, Series 2007-2." 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 2007.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
20
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
that Distribution Date occurs and ending on the first day of the calendar month
in which that Distribution Date occurs, except, in the case of the Goldman
Conduit Mortgage Loans, the period commencing on the first day of the month and
ending on the last day of the month preceding the month of the Remittance Date.
▇▇▇▇▇: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Either (i) an account maintained with a federal
or state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated "A-1+"
by Standard & Poor's, "F1" by Fitch and "P-1" by Moody's (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer) at the time any amounts are held on deposit therein, (ii) a
trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity or
(iii) any other account acceptable to each Rating Agency. Eligible Accounts may
bear interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Securities Administrator or the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Event of Default: As defined in the applicable Servicing Agreement.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.01(a) in
the name of the Securities Administrator as paying agent for the benefit of the
Regular Certificateholders and designated "▇▇▇▇▇ Fargo Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2007-2, Asset-Backed Certificates, Series 2007-2." Funds in the
Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
21
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Filing Obligation: The obligations of the Master
Servicer under Section 9.04 and Article XIII (except Section 13.07) with
respect to notice and information to be provided to the Depositor.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund under
the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and, if set forth on the Mortgage Loan
Schedule, the applicable Primary Mortgage Insurance Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for that Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Fair Market Value Excess: As defined in Section 11.01.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in March
2037.
Fitch: Fitch, Inc.
Fixed Rate Certificates: As specified in the Preliminary Statement.
Form 8-K Disclosure Information: As defined in Section 13.02.
▇▇▇▇▇▇▇ 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: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Residential Mortgage Conduit
Program.
Goldman Conduit Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the applicable Goldman Conduit Sale Agreements.
Goldman Conduit Sale Agreements: The Master Loan Purchase
Agreements, between various mortgage loan sellers and the Purchaser, dated as
of their respective dates.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York
corporation, and its successors in interest.
22
GreenPoint Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the GreenPoint Sale Agreement.
GreenPoint Sale Agreement: Amended and Restated Master Mortgage
Loan Purchase Agreement, dated as of November 1, 2005, between GreenPoint and
GSMC, as modified by the related Assignment Agreements.
GreenPoint Servicing Agreement: Servicing Agreement, dated as of
November 1, 2005, between GreenPoint and GSMC, as modified by the related
Assignment Agreements.
HSBC: HSBC Mortgage Corporation (USA), a Delaware corporation, and
its successors in interest.
HSBC Mortgage Loans: The Mortgage Loans acquired by the Purchaser
pursuant to the HSBC Sale and Servicing Agreement.
HSBC Sale and Servicing Agreement: Master Mortgage Loan and
Servicing Agreement, dated as of December 1, 2006, between HSBC and GSMC.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date, (i)
with respect to the LIBOR Certificates, the period commencing on the
immediately preceding Distribution Date (or commencing on the Closing Date in
the case of the first Distribution Date) and ending on the day immediately
preceding the current Distribution Date and (ii) with respect to the Fixed Rate
Certificates, the calendar month immediately preceding the month in which such
Distribution Date occurs. For purposes of computing interest accruals on each
Class of LIBOR Certificates, each Interest Accrual Period has the actual number
of days in such period and each year is assumed to have 360 days. For purposes
of computing interest accruals on the Fixed Rate Certificates, each Interest
Accrual Period has 30 days in such period and each year is assumed to have 360
days.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds attributable to interest relating to the
Mortgage Loans.
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.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator on the
related LIBOR Determination Date on the basis of the offered rate for one month
U.S. dollar deposits as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such date; provided, that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such
23
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 the applicable Servicer has certified that it has received all
amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: As described in the Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
Master Servicer: ▇▇▇▇▇ Fargo, and if a successor master servicer is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
24
Master Servicing Fee: As to any Distribution Date, an amount equal
to the investment income earned on amounts on deposit in the Distribution
Account during the Master Servicer Float Period.
Master Servicer Float Period: As to any Distribution Date and each
Mortgage Loan, the period commencing on the related Remittance Date immediately
preceding such Distribution Date and ending on such Distribution Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: As defined in the applicable Servicing Agreement.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(b) the address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors Service,
Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential
Mortgage Pass-Through Group, or such other address as Moody's may hereafter
furnish to the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
a Sale Agreement and a Servicing Agreement, each Mortgage Loan originally sold
and subject to any Sale Agreement being identified on the Mortgage Loan
Schedule, which Mortgage Loan includes without limitation the Mortgage File,
the Servicing File, the Monthly Payments, Principal Prepayments, Prepayment
Premiums, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition proceeds and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
25
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I (which shall be delivered to the Custodians in an electronic
format acceptable to the Custodians), such schedule setting forth the following
information with respect to each Mortgage Loan: (1) Responsible Party's
Mortgage Loan number; (2) the address, city, state and zip code of the
Mortgaged Property; (3) a code indicating whether the Mortgagor is
self-employed; (4) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (5) a code indicating
whether the Mortgaged Property is a single family residence, two family
residence, three-family residence, four family residence, condominium,
manufactured housing or planned unit development; (6) the purpose of the
Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest Rate at
origination; (9) the current Mortgage Interest Rate; (10) the name of the
applicable Servicer; (11) the applicable Servicing Fee Rate; (12) the current
Monthly Payment; (13) the original term to maturity; (14) the remaining term to
maturity; (15) the principal balance of the Mortgage Loan as of the Cut-off
Date after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (16) the LTV at origination and if the Mortgage Loan
has a second lien, combined LTV at origination; (17) the actual principal
balance of the Mortgage Loan as of the Cut-off Date; (18) social security
number of the Mortgagor; (19) a code indicating whether the Mortgage Loan had a
second lien at origination; (20) if the Mortgage Loan has a second lien,
combined loan balance as of the Cut-off Date; (21) a code indicating whether
the Mortgaged Property is a leasehold estate; (22) the due date of the Mortgage
Loan; (23) whether the Mortgage Loan is insured by the 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, if it is a lender-paid Primary Mortgage
Insurance Policy or a Primary Mortgage Insurance Policy paid for on behalf of
the Trust Fund, the premium rate; (26) the premium tax information for each
Mortgage Loan covered by the Primary Mortgage Insurance Policy; (27) the type
of appraisal; (28) a code indicating whether the Mortgage Loan is a MERS Loan;
(29) documentation type (including asset and income type); (30) first payment
date; (31) the schedule of the payment delinquencies in the prior 12 months;
(32) FICO score; (33) the Mortgagor's name; (34) the stated maturity date; (35)
the original principal amount of the Mortgage Loan and (36) the name of the
applicable Custodian.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made on such Distribution Date.
26
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non Permitted Transferee: As defined in Section 8.12(e).
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer (in accordance with the
related Servicing Standard set forth in the related Servicing Agreement), the
Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Monthly Advance, would not
be ultimately recoverable from related late payments, Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds on such Mortgage Loan or REO
Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer (in accordance with
the related Servicing Standard set forth in the related Servicing Agreement),
the Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Servicing Advance, would
not, be ultimately recoverable from related Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or otherwise.
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.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President or
an Assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of any Servicer or any
Responsible Party, and delivered to the Trustee and the Securities
Administrator, as required by any Servicing Agreement or Sale Agreement or, in
the case of any other Person, signed by an authorized officer of such Person.
Opinion of Counsel: A written opinion of counsel, who may be in
house counsel for a Servicer, reasonably acceptable to the Trustee and/or the
Securities Administrator, as applicable (and/or such other Persons as may be
set forth herein); provided, that any Opinion of Counsel relating to (a)
qualification of any Trust REMIC or (b) compliance with the REMIC Provisions,
must be (unless otherwise stated in such Opinion of Counsel) an opinion of
counsel who (i) is in fact independent of the applicable Servicer or the Master
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the applicable Servicer or the Master Servicer
of the Mortgage Loans or in an affiliate of either and (iii) is not
27
connected with the applicable Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10.00% or less of the Cut-off Date Pool
Principal Balance.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the Principal Certificates as of such Distribution Date (after giving effect
to the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Par Value: 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 Monthly Advances, fees and expenses of the
Master Servicer, the Securities Administrator and the Trustee and (4) any
expenses incurred during the exercise of the Auction Call and (5) with
28
respect to any REO Property, the lesser of (x) the appraised value of each REO
Property, as determined by the higher of two appraisals completed by two
independent appraisers selected by the Master Servicer or its designee, and (y)
the unpaid principal balance of each Mortgage Loan related to any REO Property,
and (b) the sum of (1) the aggregate unpaid Class Certificate Balance of each
class of certificates then outstanding, (2) interest accrued and unpaid on the
certificates and (3) any unreimbursed Monthly Advances, fees and expenses of
the Master Servicer, the Securities Administrator and the Trustee.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee, the Securities Administrator or
any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than ninety (90) days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than thirty (30) days) denominated in United
States dollars and issued by any Depository Institution and rated F1+ by
Fitch, P-1 by Moody's and A-1+ by S&P;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than thirty (30) days after the date of
acquisition thereof) that is rated by each Rating Agency that rates such
securities in its highest short-term unsecured debt rating available at
the time of such investment;
29
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or the Trustee or
an Affiliate thereof, that have been rated "Aaa" by Moody's, "AAAm" or
"AAAm-G" by Standard & Poor's and, if rated by Fitch, at least "AA" by
Fitch; and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to the
Rating Agencies as a permitted investment of funds backing "Aaa" or "AAA"
rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect
to any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based
upon an Opinion of Counsel that the Transfer of an Ownership Interest in a
Residual Certificate to such Person may cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the ▇▇▇▇▇▇▇ Mac, a
majority of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
PMI Commitment Agreement: The PMI Commitment Agreement, dated as of
February 23, 2007, among the Purchaser, the Depositor and the Trustee.
30
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Principal
Prepayment Period the subject of a Principal Prepayment that was applied by the
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding the Due Date in the succeeding Principal Prepayment Period, an
amount equal to the product of (a) the Mortgage Interest Rate net of the
applicable Servicing Fee Rate for such Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of
days commencing on the date on which such Principal Prepayment was applied and
ending on the last day of the related Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
Primary Mortgage Insurance Policy: The GSAA Home Equity Trust
2007-2 Bulk Primary First Lien Mortgage Insurance Policy No. ▇▇▇▇▇-▇▇▇▇-▇ PMI
Bulk Deal No.: 2007-0057, dated February 23, 2007.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, including any
Prepayment Premium, and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any Distribution Date,
the calendar month preceding the month in which that Distribution Date occurs.
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of principal due on the Due
Date on such Mortgage Loans in the related Due Period and received on or prior
to the related Determination Date, together with any Monthly Advances in
respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and
Liquidation Proceeds allocable to principal and received during the related
Principal Prepayment Period; (iii) all Principal Prepayments allocable to
principal and received during the related Principal Prepayment Period; (iv) all
amounts received with respect to such Distribution Date
31
representing the portion of the purchase price allocable to principal in
connection with a purchase or repurchase of a Deleted Mortgage Loan; (v)
principal portion of all amounts received with respect to such Distribution
Date as a Substitution Adjustment Amount and received in connection with the
substitution of a Mortgage Loan and (vi) the allocable portion of the proceeds
received with respect to the termination of the Trust Fund pursuant to clause
(a) of Section 11.01 (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated February
21, 2007, relating to the Offered Certificates.
PTCE: Prohibited Transaction Class Exemption, issued by the U.S.
Department of Labor.
PUD: A planned unit development.
Purchaser: ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited
partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers. For purposes of Section 12.05(b), the addresses for
notices to each Rating Agency shall be the address specified therefor in the
definition corresponding to the name of such Rating Agency, or such other
address as either such Rating Agency may hereafter furnish to the Depositor and
the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of any amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the related Interest Accrual Period;
provided, however, that for any Definitive Certificate issued pursuant to
Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
32
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers' Civil Relief Act of 1940 or any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, (i) with
respect to the Mortgage Loans serviced by Avelo, the 18th day (or if such 18th
day is not a Business Day, the first Business Day immediately following such
18th day) of the month in which such Distribution Date occurs and (ii) with
respect to the Mortgage Loans serviced by GreenPoint, HSBC and SunTrust the
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such 18th day) of the month in which such Distribution
Date occurs.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: As defined in Section 13.02.
Reporting Party: The Depositor, any Originator, the Master
Servicer, any Servicer, any originator identified in the Prospectus Supplement,
any swap or corridor contract counterparty, any credit enhancement provider
described herein and any other material transaction party (excluding the
Trustee and the Custodians) as may be mutually agreed between the Depositor and
the Master Servicer from time to time for the purpose of complying with the
requirements of the Commission.
Reporting Servicer: As defined in Section 13.04.
Reporting Subcontractor: With respect to the Master Servicer or the
Securities Administrator, any Subcontractor determined by such Person pursuant
to Section 13.08(b) to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB.
33
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.
Responsible Party: GreenPoint, HSBC, Ameriquest and SunTrust, each
in its capacity as seller under the applicable Sale Agreement. With respect to
the Goldman Conduit Mortgage Loans, the Purchaser.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the GreenPoint Sale Agreement, the HSBC
Sale and Servicing Agreement, the Ameriquest Sale Agreement, the SunTrust Sale
and Servicing Agreement and the Goldman Conduit Sale Agreements.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 13.06.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: ▇▇▇▇▇ Fargo, and if a successor
securities administrator is appointed hereunder, such successor.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate
Class Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the month in which such Distribution Date occurs.
Senior Specified Enhancement Percentage: As of any date of
determination, 15.50%.
Sequential Trigger Event: With respect to any Distribution Date (a)
before the 37th Distribution Date, the circumstances in which the aggregate
amount of Realized Losses incurred since the Cut-off Date through the last day
of the related Principal Prepayment Period divided by
34
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date exceeds 0.500%, or (b) on or after the 37th Distribution Date, if a
Trigger Event is in effect.
Servicer: Each of Avelo, GreenPoint, HSBC and SunTrust, in its
capacity as servicer under the related Servicing Agreement, or any successor
servicer appointed pursuant to such Servicing Agreement.
Servicing Advances: As defined in the related Servicing Agreement.
Servicing Agreement: Each of the Avelo Servicing Agreement, the
GreenPoint Servicing Agreement, the HSBC Sale and Servicing Agreement and the
SunTrust Sale and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: As defined in the applicable Servicing Agreement.
Servicing Function Participant: Any Subservicer, Subcontractor or
any other Person, other than each Servicer, the Master Servicer, the Trustee,
the Securities Administrator and any Custodian, that is performing activities
addressed by the Servicing Criteria.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 1.15% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 2.30% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Principal Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance of
the Mortgage Loans but instead will remain the same as the prior period's
Specified Overcollateralized Amount until the Distribution Date on which a
Trigger Event is no longer occurring. When the Class Certificate Balance of
each Class of Principal Certificates has been reduced to zero, the Specified
Overcollateralized Amount will thereafter be zero.
Standard & Poor's or S&P: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(b) the address for notices to Standard & Poor's shall be Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential
Mortgage Surveillance Group - GSAA Home Equity Trust 2007-2, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Servicer.
35
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 February 23, 2007, among the Purchaser,
Avelo and the Depositor, (ii) Assignment, Assumption and Recognition Agreement,
dated as of February 23, 2007, among the Purchaser, GreenPoint and the
Depositor, (iii) Assignment, Assumption and Recognition Agreement, dated as of
February 23, 2007, among the Purchaser, HSBC and the Depositor, (iv)
Assignment, Assumption and Recognition Agreement, dated as of February 23,
2007, among the Purchaser, SunTrust and the Depositor and (v) Assignment,
Assumption and Recognition Agreement, dated as of February 23, 2007, among the
Purchaser, Ameriquest and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment, Assumption
and Recognition Agreement, dated as of February 23, 2007, among the Depositor,
the Trustee and Avelo, (ii) Assignment, Assumption and Recognition Agreement,
dated as of February 23, 2007, among the Depositor, the Trustee and GreenPoint,
(iii) Assignment, Assumption and Recognition Agreement, dated as of February
23, 2007, among the Depositor, the Trustee and HSBC, (iv) Assignment,
Assumption and Recognition Agreement, dated as of February 23, 2007, among the
Depositor, the Trustee and SunTrust and (v) Assignment, Assumption and
Recognition Agreement, dated as of February 23, 2007, among the Purchaser, the
Trustee and Ameriquest.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balance of the Class A Certificates has been
reduced to zero and (b) the later to occur of (i) the Distribution Date in
March 2010 and (ii) the first Distribution Date on which the Senior Enhancement
Percentage is greater than or equal to the Senior Specified Enhancement
Percentage.
Subcontractor: Any vendor, subcontractor or other Person that is
not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Master Servicer, any Servicer, any subservicer or the
Securities Administrator, as the case may be.
36
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Substitution Adjustment Amount: With respect to any Servicing
Agreement or Sale Agreement, as applicable, in which substitution is permitted,
or with respect to a Mortgage Loan substituted by the Purchaser, an amount of
cash received from the applicable Servicer or the Purchaser, as applicable, in
connection with a substitution for a Deleted Mortgage Loan.
SunTrust: SunTrust Mortgage, Inc., a Virginia corporation, and its
successor in interest.
SunTrust Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the SunTrust Sale and Servicing Agreement.
SunTrust Sale and Servicing Agreement: Amended and Restated Flow
Seller's Warranties and Servicing Agreement, dated as of December 1, 2005, as
amended by Amendment No. 1 thereto, dated as of July 1, 2006, between SunTrust
Mortgage, Inc. and the Purchaser.
Tax Matters Person: The Holder of the Class R, Class RC and Class
RX Certificates is designated as "tax matters person" of the Lower-Tier REMIC,
Middle-Tier REMIC and the Upper-Tier REMIC, respectively, in the manner
provided under Treasury Regulations Section 1.806F-4(d) and Treasury
Regulations Section 301.6234(a)(7)-1.
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 11.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the related
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees) over (ii) the sum of the interest
payable to the Principal Certificates on such Distribution Date pursuant to
Section 4.01(a)(i).
Transaction Documents: This Agreement, the Assignment Agreements
and any other document or agreement entered into in connection with the Trust
Fund, the Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c)(ii).
Transferor Certificate: As defined in Section 5.02(b).
37
Trigger Event: With respect to any Distribution Date, the
circumstances in which (i) the 60 Day+ Rolling Average equals or exceeds 45.15%
of the prior period's Senior Enhancement Percentage for the Class A
certificates (the 60+ Rolling Average will equal the rolling three (3) month
average percentage of Mortgage Loans that are sixty (60) or more days
delinquent, including loans in foreclosure, all REO Property and Mortgage
Loans where the Mortgagor has filed for bankruptcy) or (ii) the aggregate
amount of Realized Losses incurred since the Cut-off Date through the last day
of the related Principal Prepayment Period divided by the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds the
applicable percentages described below with respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------ ---------------
March 2009 - February 2010 0.200% for the first month, plus an additional 1/12th
of 0.300% for each month thereafter (e.g.,
approximately 0.225% in April 2009)
March 2010 - February 2011 0.500% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 0.529% in April 2010)
March 2011 - February 2012 0.850% for the first month, plus an additional 1/12th
of 0.350% for each month thereafter (e.g.,
approximately 0.879% in April 2011)
March 2012 - February 2013 1.200% for the first month, plus an additional 1/12th
of 0.250% for each month thereafter (e.g.,
approximately 1.221% in January 2012)
March 2013 and thereafter 1.450%
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
Primary Mortgage Insurance Policy, and all amounts received thereunder; (iii)
the Excess Reserve Fund Account, the Distribution Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (iv)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed-in-lieu of foreclosure or otherwise; (v) the rights of the Trust under the
Step 2 Assignment Agreements; and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing. The Trust Fund created
hereunder is referred to as the GSAA Home Equity Trust 2007-2.
Trust REMIC: As specified in the Preliminary Statement.
38
Trustee: Deutsche Bank, and its successors in interest, and, if a
successor trustee is appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates remaining unpaid prior to the
current Distribution Date and (b) interest on the amount in clause (a) at the
applicable Pass-Through Rate (to the extent permitted by applicable law).
U.S. Bank: U.S. Bank National Association, a national banking
association, and its successors in interest.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (c) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, a per annum rate equal to the product of (A) the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Mortgage Loans,
39
and (B) 30 divided by the actual number of days in the related Interest Accrual
Period, in the case of the LIBOR Certificates, and 30 divided by 360, in the
case of the Fixed Rate Certificates.
▇▇▇▇▇ Fargo: ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, and its successors in interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the applicable
Custodian on behalf of the Trustee for the benefit of the Certificateholders
the following documents or instruments with respect to each applicable Mortgage
Loan so assigned:
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) The original Assignment of Mortgage in blank (or, in the case
of the Goldman Conduit Mortgage Loans, in form and substance acceptable
for recording or if the Mortgage is to be recorded, assigned to the
Purchaser), unless the Mortgage Loan is a MERS Loan;
(iii) personal endorsement, surety and/or guaranty agreements
executed in connection with all non individual Mortgage Loans
(corporations, partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its recording or
a certified copy of the mortgage with evidence of recording;
(v) originals of any intervening Mortgage assignment or certified
copies in either case necessary to show a complete chain of title from
the original mortgagee to the seller and evidencing recording; provided,
that, except in the case of the Goldman Conduit Mortgage Loans, the
assignment may be in the form of a blanket assignment or assignments, a
copy of which with evidence of recording shall be acceptable;
(vi) originals of all assumption, modification, consolidation or
extension agreements or certified copies thereof, in either case with
evidence of recording if required to maintain the lien of the mortgage or
if otherwise required, or, if recordation is not required, an original or
copy of the agreement; provided, that, in the case of the
40
Goldman Conduit Mortgage Loans, an original with evidence of recording
thereon is always required;
(vii) if applicable to the files held by the applicable Custodian,
an original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
(ix) for each Mortgage Loan (if applicable to the files held by the
applicable Custodian) with respect to which the Mortgagor's name as it
appears on the note does not match the borrower's name on the Mortgage
Loan Schedule, one of the following: the original of the assumption
agreement or a certified copy thereof;
(x) if applicable to the files held by the applicable Custodian, a
security agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage, if any; and
(xi) with respect to each Mortgage Loan, the complete Custodial
File (as defined below) including all items as set forth in the
applicable Servicing Agreement to the extent in the possession of the
Depositor or the Depositor's Agents.
The Depositor shall deliver or cause each Responsible Party to
deliver to each Custodian the applicable recorded document promptly upon
receipt from the respective recording office but in no event later than 120
days from the Closing Date.
From time to time, pursuant to the applicable Sale Agreement, the
Responsible Party may forward to the applicable Custodian additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
the applicable Sale Agreement. All such mortgage documents held by the
Custodians as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians Assignments of Mortgages (except in the case of MERS Loans), in
blank, for each applicable Mortgage Loan. On the Closing Date, the Depositor
shall provide a written request to each Responsible Party to submit the
Assignments of Mortgage for recordation, at the Responsible Party's expense,
pursuant to the applicable Sale Agreement. Each Custodian shall deliver the
Assignment of Mortgages to be submitted for recordation to the applicable
Responsible Party upon receipt of a written request for release in standard and
customary form as set forth in Exhibit ▇-▇, ▇-▇ ▇▇ ▇-▇, as applicable.
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians and the Master Servicer a copy of the Mortgage Loan Schedule in
electronic, machine readable medium in a form mutually acceptable to the
Depositor, the applicable Custodian, the Master Servicer and the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time
41
period and in the manner specified in the applicable Sale Agreement, the
Trustee shall take or cause to be taken such remedial actions under the Sale
Agreement against the applicable Responsible Party as may be permitted to be
taken thereunder, including without limitation, if applicable, the repurchase
by the applicable Responsible Party of such Mortgage Loan. The foregoing
repurchase remedy shall not apply in the event that the Responsible Party
cannot deliver such original or copy of any document submitted for recordation
to the appropriate public recording office within the specified period due to a
delay caused by the recording office in the applicable jurisdiction; provided,
that the applicable Responsible Party shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
Officer's Certificate of an officer of the applicable Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the applicable Custodian prior to the Closing Date of
a copy of such Mortgage or assignment, as the case may be, certified (such
certification to be an original thereof) by the public recording office to be a
true and complete copy of the recorded original thereof.
(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
2007-2" and Deutsche Bank is hereby appointed as Trustee in accordance with the
provisions of this Agreement.
(d) It is the policy and intention of the Trust that none of the
Mortgage Loans included in the Trust is (a) covered by the Home Ownership and
Equity Protection Act of 1994, or (b) considered a "high cost home,"
"threshold," "predatory" or "covered" loan (excluding "covered home loans" as
defined under clause (1) of the definition of "covered home loans" in the New
Jersey Home Ownership Security Act of 2002) under applicable state, federal or
local laws.
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.
Each Custodian acknowledges receipt of the documents identified in the Initial
Certification, subject to any exceptions listed on the exception report
attached thereto, in the form annexed hereto as Exhibit E, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. Deutsche Bank, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of California, unless otherwise permitted by the Rating Agencies,
BNY, 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 and U.S. Bank, as Custodian, acknowledges that it will maintain
possession of the related Mortgage Notes in the States of Minnesota and
California, unless otherwise permitted by the Rating Agencies.
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Prior to and as a condition to the Closing, each Custodian shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor an Initial Certification prior to the Closing Date, or as the
Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage Note
and Assignment of Mortgage, subject to any exceptions listed on the exception
report attached thereto, for each Mortgage Loan. None of the Custodians shall
be responsible for verifying the validity, sufficiency or genuineness of any
document in any Custodial File.
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it on or prior to the Closing Date are in
its possession, subject to any exceptions listed on the exception report
attached thereto, and shall deliver to the Depositor and the Trustee an Initial
Certification, in the form annexed hereto as Exhibit E, and shall deliver to
the Depositor and the Trustee a Document Certification and Exception Report, in
the form annexed hereto as Exhibit F, within ninety (90) days after the Closing
Date to the effect that, as to each applicable Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception and
not covered by such certification): (i) all documents required to be delivered
to it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, as to Deutsche Bank,
the information set forth in items 2, 8, 34, and 35 of the Mortgage Loan
Schedule respecting such Mortgage Loan is correct; (iv) based on its
examination and only as to the foregoing documents, as to BNY, the information
set forth in items 2, 8, 34, and 35 of the Mortgage Loan Schedule respecting
such Mortgage Loan is correct; (v) based on its examination and only as to the
foregoing documents, as to U.S. Bank, the information set forth in items 2, 8,
34, and 35 of the Mortgage Loan Schedule respecting such Mortgage Loan is
correct; and (vi) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. None of the Custodians shall be responsible for
verifying the validity, sufficiency or genuineness of any document in any
Custodial File.
Each Custodian shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The Servicer shall promptly deliver to the
applicable Custodian, upon the execution or receipt thereof, the originals of
such other documents or instruments constituting the Custodial File as come
into the possession of the Servicer from time to time.
Each Custodian shall notify the Trustee and the Depositor of any
Mortgage Loans that do not conform to the requirements of Sections 2.01 and
2.02 hereof by delivery of the Document Certification and Exception Report. In
its capacity as "Assignee" under the Step 2 Assignment Agreements, the Trustee
shall enforce the obligation of the Responsible Parties to cure or repurchase
Mortgage Loans that do not conform to such requirements as determined in the
applicable Custodian's review as required herein, or based upon notification
from the Master Servicer (who shall be entitled to rely on information
regarding any such defaults by a Responsible Party that has been provided by
the applicable Servicer for purposes of providing such notification to the
Trustee), by notifying the applicable Responsible Party to correct or cure such
default. In its capacity as Assignee under the Step 2 Assignment Agreements,
the Trustee shall also enforce the obligation of the Responsible Parties under
the Sale Agreements, and to the extent applicable, of any Servicer under the
Servicing Agreements and of the Purchaser under the Step 1 Assignment
Agreements to cure or repurchase Mortgage Loans for which there is a
43
defect or a breach of a representation or warranty thereunder of which a
Responsible Officer of the Trustee has actual knowledge, by notifying the
applicable party to correct or cure such default. If the Trustee obtains actual
knowledge that any Servicer, any Responsible Party or the Purchaser, as the
case may be, fails or is unable to correct or cure the defect or breach within
the period set forth in the applicable agreement, the Trustee shall notify the
Depositor of such failure to correct or cure. Unless otherwise directed by the
Depositor within five (5) Business Days after notifying the Depositor of such
failure by the applicable party to correct or cure, the Trustee shall notify
such party to repurchase the Mortgage Loan. If, within ten (10) Business Days
of receipt of such notice by such party, such party fails to repurchase such
Mortgage Loan, the Trustee shall notify the Depositor of such failure. The
Trustee shall pursue all legal remedies available to the Trustee against the
Servicers, the Responsible Parties and the Purchaser, as applicable, under this
Agreement, if the Trustee has received written notice from the Depositor
directing the Trustee to pursue such remedies and the Trustee shall be entitled
to reimbursement from the Trust Fund for any reasonable expenses incurred in
pursuing 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 November 25, 2036, which
is the Distribution Date following the latest Mortgage Loan maturity date.
Amounts paid to the Class X Certificates (prior to any reduction for any Basis
Risk Payment) shall be deemed paid from the Upper-Tier REMIC to the Class X
REMIC in respect of the Class X Interest and from the Class X REMIC to the
holders of the Class X Certificates prior to distribution of Basis Risk
Payments to the Principal Certificates.
Amounts distributable to the Class X Certificates shall be deemed
paid from the Master REMIC to the Holders of the Class X Certificates prior to
distribution of any Basis Risk Payments to the Principal Certificates.
For federal income tax purposes, any amount distributed on the
Principal Certificates on any such Distribution Date in excess of their Pass
Through Rate shall be treated as having been paid from the Excess Reserve Fund
Account.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
44
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by
the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) any term,
condition or provision of any material indenture, deed of trust, contract or
other agreement or instrument to which the 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
45
Note and each Mortgage as and in the manner contemplated by this Agreement is
sufficient either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 12.04
hereof.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
respective Custodial Files to the Custodians, and shall inure to the benefit
and to Certificateholders.
Section 2.06 Representations and Warranties of BNY. BNY, as
Custodian, hereby represents and warrants to the Depositor, the Master Servicer
and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such state, to the extent necessary to
perform any of its obligations under this Agreement in accordance with the
terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of association or by
laws of such Custodian.
Section 2.07 Representations and Warranties of Deutsche Bank.
Deutsche Bank, in its capacity as a Custodian, hereby represents and warrants
to the Depositor, the Master Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is
46
in compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such Custodian and will not result in a
material breach of any term or provision of the articles of association or by
laws of such Custodian.
Section 2.08 Representations and Warranties of U.S. Bank. U.S. Bank
hereby represents and warrants to the Depositor, the Master Servicer and the
Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by such Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in compliance
with the doing business laws of any such state, to the extent necessary to
perform any of its obligations under this Agreement in accordance with the
terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of such
47
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 Principal Certificateholders any Basis Risk
Carry Forward 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.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of Principal Certificates, the
Securities Administrator shall (1) withdraw from the Distribution Account, to
the extent of funds available therefor in the Distribution Account, and deposit
in the Excess Reserve Fund Account, as set forth in Section 4.01(a)(iii)(K),
the lesser of (x) the Class X Distributable Amount (without regard to the
reduction in clause (iii) of the definition thereof with respect to Basis Risk
Payments) (to the extent remaining after the distributions specified in
Sections 4.01(a)(iii)(A)-(J)) and (y) the aggregate Basis Risk Carry Forward
Amount of the Principal Certificates for such Distribution Date and (2)
withdraw from the Excess Reserve Fund Account amounts necessary 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 X Certificateholders. For all federal income tax
purposes, amounts transferred to the Excess Reserve Fund Account shall be
treated as distributions by the Securities Administrator from the Class X REMIC
to the Class X Certificates and then contributed by the Class X
Certificateholders to the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Securities
Administrator to the Principal Certificateholders shall be accounted for by the
Securities Administrator, for federal income tax purposes, as amounts paid
first to the Holders of the Class X Certificates and then to the respective
Class or Classes of Principal Certificates in accordance with the priority of
payments in this Section 3.01. In addition, the Securities Administrator shall
account for the Principal Certificateholders' rights to receive payments of
Basis Risk Carry Forward Amounts as rights in a limited recourse interest rate
cap contract written by the Class X Certificateholders in favor of the Holders
of each such Class.
Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any distributions from
the Excess Reserve Fund Account except as expressly set forth in this Section
3.01(a).
48
(b) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The amount remitted
by the Servicer to the Master Servicer on each Remittance Date shall be
credited to the Distribution Account within two (2) Business Days once the
amounts are identified as a remittance in connection with the Trust and
reconciled to the reports provided by the Servicer. The Securities
Administrator shall establish and maintain the Distribution Account on behalf
of the Certificateholders. The Master Servicer shall, promptly upon receipt on
the Business Day received, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicers to the Master
Servicer pursuant to the Servicing Agreements;
(ii) any amounts remitted as a result of the operation of the
Primary Mortgage Insurance Policy; 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 the
applicable Servicer. All funds deposited in the Distribution Account shall be
held by the Securities Administrator in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 4.01.
(c) From time to time, the Securities Administrator may also
establish any other accounts for the purposes of carrying out its duties
hereunder.
Section 3.02 Investment of Funds in the Distribution Account. (a)
Other than during the Master Servicer Float Period, the Depositor shall direct
the investment of funds held in the Distribution Account in one or more
Permitted Investments. Absent such direction, the Securities Administrator
shall invest such funds during such period in the ▇▇▇▇▇ Fargo Advantage Prime
Investment Money Market Fund so long as such fund is a Permitted Investment.
The Securities Administrator may (but shall not be obligated to) invest funds
in the Distribution Account during the Master Servicer Float Period (for
purposes of this Section 3.02, such Account is referred to as an "Investment
Account"), in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, or maturing on such
Distribution Date, in the case of an investment that is an obligation of ▇▇▇▇▇
Fargo, no later than the Business Day immediately preceding the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Securities Administrator. The Securities Administrator
shall be entitled to sole possession over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator or its agent, together with
any document of transfer necessary to transfer title to such investment to the
Securities Administrator. In the event amounts on deposit in an
49
Investment Account are at any time invested in a Permitted Investment payable
on demand, the Securities Administrator may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Securities Administrator
during the Master Servicer Float Period shall be subject to the Securities
Administrator's withdrawal in the manner set forth in Section 10.05.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Securities Administrator shall take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. Notwithstanding the
foregoing, the Depositor shall be liable to the Trust for any loss on any
investment of funds in the Distribution Account other than during the Master
Servicer Float Period and the Securities Administrator shall be liable to the
Trust for any such loss on any funds it has invested under this Section 3.02
only during the Master Servicer Float Period, and the Depositor or the
Securities Administrator, as the case may be, shall deposit funds in the amount
of such loss in the Distribution Account promptly after such loss is incurred.
(d) The Securities Administrator or its Affiliates are permitted to
receive additional compensation that could be deemed to be in the Securities
Administrator's economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or sub-custodian with
respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation is not payable
or reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA Patriot Act of
2001, U.S. Bank and BNY, in each case in their capacity as a Custodian, may
obtain and verify certain information and documentation from the other parties
to this Agreement including, but not limited to, each such party's name,
address and other identifying information.
(f) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, Deutsche Bank as Trustee and a Custodian is
required to obtain, verify and record certain information relating to
individuals and entities which maintain a business relationship with
50
Deutsche Bank. Accordingly, each of the parties agrees to provide to Deutsche
Bank upon its request from time to time such party's complete name, address,
tax identification number and such other identifying information together with
copies of such party's constituting documentation, securities disclosure
documentation and such other identifying documentation as may be available for
such party.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall make the disbursements and transfers
from amounts then on deposit in the Distribution Account in the following order
of priority and to the extent of the Available Funds remaining:
(i) from the Interest Remittance Amount, to the holders of each
Class of Principal Certificates in the following order of priority:
(A) to the Class A Certificates, their respective Accrued
Certificate Interest Distribution Amount and Unpaid Interest
Amounts (allocated pro rata based on their entitlement to those
amounts);
(B) from any remaining Interest Remittance Amounts to the
Class M Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class; and
(C) from any remaining Interest Remittance Amounts to the
Class B Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class.
(ii) (A) on each Distribution Date (x) prior to the Stepdown Date
or (y) with respect to which a Trigger Event is in effect, to the holders
of the Class or Classes of Principal Certificates and Residual
Certificates then entitled to distributions of principal, from Available
Funds remaining after making distributions pursuant to clause (a)(i)
above, an amount equal to the Principal Distribution Amount in the
following order of priority:
(1) concurrently, to the Class R, Class RC and Class RX
Certificates, pro rata, until their respective Class Certificate
Balances have been reduced to zero;
(2) sequentially,
(a) concurrently, to the Class AF6A Certificates and
Class AF6B Certificates, allocated pro rata based on their
respective Class Certificate Balances, an amount equal to the
Class AF6A and Class AF6B Lockout Distribution Amount, until
their respective Class Certificate Balances have been reduced
to zero;
51
with the exception that if a Sequential Trigger Event is in
effect, principal distributions to the Class AF6A and Class
AF6B Certificates will be allocated first, to the Class AF6A
Certificates, until its Class Certificate Balance has been
reduced to zero, and then to the Class AF6B Certificates
until its Class Certificate Balance has been reduced to zero;
(b) to the Class AV1 Certificates, until its Class o
Certificate Balance has been reduced to zero;
(c) to the Class AF2 Certificates, until its Class
Certificate Balance has been reduced to zero;
(d) to the Class AF3 Certificates, until its Class
Certificate Balance has been reduced to zero;
(e) concurrently, to the Class AF4A and Class AF4B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero, with the
exception that if a Sequential Trigger Event is in effect,
principal distributions to the Class AF4A and Class AF4B
Certificates will be allocated first, to the Class AF4A
Certificates, until its Class Certificate Balance has been
reduced to zero, and then to the Class AF4B Certificates
until its Class Certificate Balance has been reduced to zero;
(f) concurrently, to the Class AF5A and Class AF5B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero, with the
exception that if a Sequential Trigger Event is in effect,
principal distributions to the Class AF5A and Class AF5B
Certificates will be allocated first, to the Class AF5A
Certificates, until its Class Certificate Balance has been
reduced to zero, and then to the Class AF5B Certificates
until its Class Certificate Balance has been reduced to zero;
(g) concurrently, to the Class AF6A and Class AF6B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, without regard to the Class AF6A
and Class AF6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been reduced to
zero; with the exception that if a Sequential Trigger Event
is in effect, principal distributions to the Class AF6A and
Class AF6B Certificates will be allocated first, to the Class
AF6A Certificates, until its Class Certificate Balance has
been reduced to zero, and then to the Class AF6B Certificates
until its Class Certificate Balance has been reduced to zero;
52
(3) the portion of the available Principal Distribution
Amount remaining after making the distributions set forth in clause
(ii)(A)(2) above will be distributed sequentially, to the Class M1,
Class M2, Class M3, Class M4, Class M5, Class M6, Class B1, Class
B2 and Class B3 Certificates, in that order, until their respective
Class Certificate Balances have been reduced to zero;
(B) on each Distribution Date (x) on and after the Stepdown Date
and (y) as long as a Trigger Event is not in effect, to the holders of
the Class or Classes of Principal Certificates then entitled to
distribution of principal from Available Funds remaining after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount allocated sequentially as follows:
(a) concurrently, to the Class AF6A and Class AF6B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, the Class AF6A and Class AF6B
Lockout Distribution Amount, until their respective Class
Certificate Balances have been reduced to zero;
(b) to the Class AV1 Certificates, until its Class
Certificate Balance has been reduced to zero;
(c) to the Class AF2 Certificates, until its Class
Certificate Balance has been reduced to zero;
(d) to the Class AF3 Certificates, until its Class
Certificate Balance has been reduced to zero;
(e) concurrently, to the Class AF4A and Class AF4B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero;
(f) concurrently, to the Class AF5A and Class AF5B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero;
(g) concurrently, to the Class AF6A and Class AF6B
Certificates, allocated pro rata based on their respective
Class Certificate Balances, without regard to the Class AF6A
and Class AF6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been reduced to
zero;
53
(2) to the Class M1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above and (y) the Class M1 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to zero;
(3) to the Class M2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above and to the Class M1 Certificates in clause (ii)(B)(2) above
and (y) the Class M2 Principal Distribution Amount, until their
Class Certificate Balance has been reduced to zero;
(4) to the Class M3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above and
to the Class M2 Certificates in clause (ii)(B)(3) above and (y) the
Class M3 Principal Distribution Amount, until their Class
Certificate Balance has been reduced to zero;
(5) to the Class M4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above and to the
Class M3 Certificates in clause (ii)(B)(4) above and (y) the Class
M4 Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(6) to the Class M5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above, to the Class
M3 Certificates in clause (ii)(B)(4) above and to the Class M4
Certificates in clause (ii)(B)(5) above and (y) the Class M5
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(7) to the Class M6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above, to the Class
M3 Certificates in clause (ii)(B)(4) above, to the Class M4
Certificates in clause (ii)(B)(5) above and to the Class M5
Certificates in clause (ii)(B)(6) above and (y) the Class M6
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
54
(8) to the Class B1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above, to the Class
M3 Certificates in clause (ii)(B)(4) above, to the Class M4
Certificates in clause (ii)(B)(5) above, to the Class M5
Certificates in clause (ii)(B)(6) above and to the Class M6
Certificates in clause (ii)(B)(7) above and (y) the Class B1
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(9) to the Class B2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above, to the Class
M3 Certificates in clause (ii)(B)(4) above, to the Class M4
Certificates in clause (ii)(B)(5) above, to the Class M5
Certificates in clause (ii)(B)(6) above, to the Class M6
Certificates in clause (ii)(B)(7) above and to the Class B1
Certificates in clause (ii)(B)(8) above and (y) the Class B2
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero; and
(10) to the Class B3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause (ii)(B)(1)
above, to the Class M1 Certificates in clause (ii)(B)(2) above, to
the Class M2 Certificates in clause (ii)(B)(3) above, to the Class
M3 Certificates in clause (ii)(B)(4) above, to the Class M4
Certificates in clause (ii)(B)(5) above, to the Class M5
Certificates in clause (ii)(B)(6) above, to the Class M6
Certificates in clause (ii)(B)(7) above, to the Class B1
Certificates in clause (ii)(B)(8) above and to the Class B2
Certificates in clause (ii)(B)(9) above and (y) the Class B3
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(iii) from the Available Funds remaining after the distributions in
clauses (a)(i) and (a)(ii) above, the following amounts shall be distributed in
the following order of priority:
(A) if and to the extent that the Interest Remittance Amounts
distributed pursuant to clauses (a)(i) and (a)(ii) above were
insufficient to make full distributions in respect of interest set forth
in such clauses, (x) to the holders of each Class of Class A
Certificates, any unpaid Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amounts, pro rata among such Classes
based on their respective entitlement to those amounts, and then (y) to
the holders of each Class of the Class M and Class B Certificates, any
unpaid Accrued Certificate Interest Distribution Amount, in the order of
priority for such classes set forth in clause (i) above;
55
(B) to the holders of the Class M1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M3 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M4 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M5 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class M6 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B1 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B2 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the holders of the Class B3 Certificates, any Unpaid
Interest Amount for such Class;
(K) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment for such Distribution Date;
(L) from funds on deposit in the Excess Reserve Fund Account with
respect to that Distribution Date, an amount equal to any Basis Risk
Carry Forward Amount with respect to the Principal Certificates for that
Distribution Date in the same order and priority in which accrued
certificate interest is allocated among those Classes of Certificates,
with the allocation to the Class A Certificates being pro rata based on
their respective Class Certificate Balances; provided, however, for any
Distribution Date, after the remaining Basis Risk Carry Forward Amount
for any of the Class A Certificates has been reduced to zero, any
remaining Basis Risk Carry Forward Amount that would have been allocated
to such Class A Certificates for that Distribution Date will be
allocated, pro rata, to the remaining Class A Certificates based on their
respective remaining unpaid Basis Risk Carry Forward Amounts;
(M) to the holders of the Class X Certificates, the remainder of
the Class X Distributable Amount not distributed pursuant to Sections
4.01(a)(iii)(A)-(L);
56
(N) to the holders of the Class R and Class RC Certificates,
pro rata, any remaining amount; and
(O) to the holders of the Class RX Certificates, any
remaining amount, in respect of the Class X REMIC.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Principal Certificates does not receive the related
Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then that unpaid amount will be recoverable by
the holders of those Classes, with interest thereon, on future
Distribution Dates, as an Unpaid Interest Amount, subject to the
priorities described above. In the event the Class Certificate Balance of
any Class of Principal Certificates has been reduced to zero, that Class
of Certificates shall no longer be entitled to receive any related unpaid
Basis Risk Carry Forward Amounts except to the extent the Class
Certificate Balance is increased as a result of any Subsequent Recovery.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Principal
Prepayment Period shall be distributed by the Securities Administrator to the
holders of the Class P Certificates.
(c) Notwithstanding the foregoing description of allocation of
principal distributions to the Class A Certificates, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Subordinated Certificates and the Overcollateralized Amount have been reduced
to zero, any principal distributions allocated to the Class A Certificates are
required to be allocated pro rata to the Class A Certificates, based on their
respective Class Certificate Balances, except that so long as a Sequential
Trigger Event is in effect, (i) principal distributions to the Class AF4A and
Class AF4B Certificates will be allocated first to the Class AF4A Certificates,
until its Class Certificate Balance has been reduced to zero, and then to the
Class AF4B Certificates, until its Class Certificate Balance has been reduced
to zero, (ii) principal distributions to the Class AF5A and Class AF5B
Certificates will be allocated first to the Class AF5A Certificates, until its
Class Certificate Balance has been reduced to zero, and then to the Class AF5B
Certificates, until its Class Certificate Balance has been reduced to zero and
(iii) principal distributions to the Class AF6A and Class AF6B Certificates
will be allocated first to the Class AF6A Certificates, until its Class
Certificate Balance has been reduced to zero, and then to the Class AF6B
Certificates, until its Class Certificate Balance has been reduced to zero.
(d) On any Distribution Date, any Relief Act Interest Shortfalls
and Net Prepayment Interest Shortfalls for such Distribution Date shall be
allocated first to excess interest on the Mortgage Loans for the related
Distribution Date and thereafter, pro rata, as a reduction of the Accrued
Certificate Interest for the Class A, Class M and Class B Certificates, based
on the Accrued Certificate Interest to which such Classes would otherwise be
entitled on such Distribution Date.
(e) Upon any exercise of the purchase option set forth in Section
11.01(a) or Section 11.01(b), the Securities Administrator shall distribute to
the holders of the Class RC Certificates any amounts required to be distributed
on the Class RC Certificates pursuant to Section 11.01 or 11.02.
57
Section 4.02 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Securities Administrator shall make
available to each Certificateholder, the Depositor, the Trustee and each Rating
Agency a statement based, in part, upon the information provided by the
Servicers setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis
Risk Carry Forward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk Carry Forward Amount not covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
and the notional amount of the Class P Certificates after giving effect
to the distribution of principal on such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans
for the following Distribution Date;
(vi) the amount of the expenses and fees paid to or retained by the
Servicer and paid to or retained by the Trustee with respect to such
Distribution Date;
(vii) the amount of any Master Servicer Fees paid to the Master
Servicer or Securities Administrator with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(ix) the amount of Monthly Advances included in the distribution on
such Distribution Date and the aggregate amount of Monthly Advances
reported by the Servicers (and the Master Servicer, the Trustee as
successor master servicer and any other successor master servicer, if
applicable) as outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(x) the number and aggregate Stated Principal Balances of Mortgage
Loans as reported to the Securities Administrator by the applicable
Servicer, (i) as to which the Monthly Payment is delinquent 31 to 60
days, 61 to 90 days and 91 or more days (each to be calculated using the
OTS method), (2) that have become REO Property, (3) that are in
58
foreclosure and (4) that are in bankruptcy, in each case as of the close
of business on the last Business Day of the immediately preceding month;
(xi) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event and the aggregate outstanding balance of all 60+ Day Delinquent
Mortgage Loans);
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xvi) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xvii) the Prepayment Premiums collected by or paid by the
Servicers;
(xviii) the percentage equal to the aggregate realized losses
divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date;
(xix) the amount distributed on the Class X and Class P
Certificates;
(xx) the amount of any Subsequent Recoveries for such Distribution
Date; and
(xxi) updated Mortgage Loan information, such as weighted average
interest rate, and weighted average remaining term.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Trustee and
the Depositor is limited to the availability, timeliness and accuracy of the
information derived from the Master Servicer, the Servicers and the Responsible
Parties. The Securities Administrator shall provide the above statement via the
Securities Administrator's internet website. Assistance in using the website
can be obtained by calling the Securities Administrator's investor relations
desk at (▇▇▇) ▇▇▇-▇▇▇▇. The Securities Administrator will also make a paper
copy of the above statement available upon request.
(c) Upon request, within a reasonable period of time after the end
of each calendar year, the Securities Administrator shall cause to be furnished
to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set
59
forth in clauses (a)(i), (a)(ii), (a)(iii) and (a)(vii) of this Section 4.02
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
Section 4.03 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event, Applied Realized Loss Amounts are
allocated to any Class of Certificates, their Class Certificate Balance shall
be reduced by the amount so allocated and no funds shall be distributed with
respect to the written down amounts or with respect to interest or Basis Risk
Carry Forward Amounts on the written down amounts on that Distribution Date or
any future Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of
each Class of Subordinated Certificates that has been previously reduced by
Applied Realized Loss Amounts will be increased, in the order of seniority, by
the amount of the Subsequent Recoveries (but not in excess of the Applied
Realized Loss Amount allocated to the applicable Class of Subordinated
Certificates).
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the Securities Administrator in accordance
with the definition of "LIBOR." Until all of the LIBOR Certificates are paid in
full, the Securities Administrator will at all times retain at least four
Reference Banks for the purpose of determining LIBOR with respect to each LIBOR
Determination Date. The Securities Administrator initially shall designate the
Reference Banks (after consultation with the Depositor). Each "Reference Bank"
shall be a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Securities Administrator and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Securities Administrator should
terminate its appointment as Reference Bank, the Securities Administrator shall
promptly appoint or cause to be appointed another Reference Bank (after
consultation with the Depositor). The Securities Administrator shall have no
liability or responsibility to any Person for (i) the selection of any
Reference Bank for purposes of determining LIBOR or (ii) any inability to
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
60
shall not have any liability or responsibility to any Person for its inability,
following a good faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Securities Administrator shall (in the absence of
manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of Cede & Co. On a
date as to which the Depositor notifies the Securities Administrator, the
Depositor hereby directs the Securities Administrator to transfer the Class X
and Class P Certificates in the name of the NIM Trustee or such other name or
names as the Depositor shall request, and to deliver the Class X and Class P
Certificates to the NIM Trustee, or to such other person or persons as the
Depositor shall request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such holder at a bank or other entity having appropriate facilities therefor as
directed by that Certificateholder by written wire instructions provided to the
Securities Administrator or (y), in the event that no wire instructions are
provided to the Securities Administrator, by check mailed by first class mail
to such Certificateholder at the address of such holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time such signatures were affixed, authorized to sign on behalf of
the Securities Administrator shall bind the Securities Administrator,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of any such Certificates or
did not hold such 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.
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Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain or
cause to be maintained a Certificate Register for the Trust Fund in which,
subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Securities Administrator shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Securities Administrator shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
holder thereof or his attorney duly authorized in writing. In the event, the
Depositor or an Affiliate transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the Securities Administrator in
writing of the affiliated status of the transferee. The Securities
Administrator shall have no liability regarding the lack of notice with respect
thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to (i) the initial transfer of the Class X or Class P Certificates
on the Closing Date, (ii) the transfer of the Class X or Class P Certificates
to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the Class X or
Class P Certificates to the Depositor or any Affiliate of the Depositor, in the
event that a transfer of a Private Certificate which is a Physical Certificate
is to be made in reliance upon an exemption from the Securities 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
62
an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer will be deemed to have made as of the transfer
date each of the certifications set forth in the Transferor Certificate in
respect of such Certificate and the transferee will be deemed to have made as
of the transfer date each of the certifications set forth in the Rule 144A
Letter in respect of such Certificate, in each case as if such Certificate were
evidenced by a Physical Certificate. The Depositor shall provide to any Holder
of a Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor and each Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
Except with respect to (i) the initial transfer of the Class X or
Class P Certificates on the Closing Date, (ii) the transfer of the Class X or
Class P Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer
of the Class X or Class P Certificates to the Depositor or any Affiliate of the
Depositor, no transfer of an ERISA-Restricted Certificate shall be made unless
the Securities Administrator shall have received either (i) a representation
from the transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator (in the event such Certificate is
a Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Securities Administrator's receipt of a representation letter from
the transferee substantially in the form of Exhibit G), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA, a plan subject to Section 4975 of the Code or a plan subject to
any Federal, state or local law ("Similar Law") materially similar to the
foregoing provisions of ERISA or the Code, nor a person acting on behalf of any
such plan or arrangement nor using the assets of any such plan or arrangement
to effect such transfer (each such investor a "Plan"), (ii) in the case of an
ERISA-Restricted Certificate (other than a Residual Certificate) that has been
the subject of an ERISA-Qualifying Underwriting, a representation that the
purchaser is an insurance company that is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60) and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under 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
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Depositor, to the effect that the purchase and holding of such ERISA-Restricted
Certificate will not constitute or result in a non-exempt prohibited
transaction within the meaning of ERISA, Section 4975 of the Code or any
Similar Law and will not subject the Trustee, the Depositor, the Master
Servicer, any other servicer or the Securities Administrator to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the
preceding sentence is not furnished, such representation shall be deemed to
have been made to the Securities Administrator by the transferee's (including
an initial acquirer's) acceptance of the ERISA-Restricted Certificates. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA, a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement, without such Opinion of Counsel, such attempted transfer or
acquisition shall be void and of no effect.
The Residual Certificates may not be sold to any employee benefit
plan subject to Title I of ERISA, any plan subject to Section 4975 of the Code,
or any plan subject to any Similar Law or any person investing on behalf of or
with plan assets of such plan.
The Securities Administrator shall have no duty to monitor
transfers of beneficial interests in any Book-Entry Certificate and shall not
be under liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b) or
for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement so long as the transfer was registered by the Securities
Administrator in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to
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obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of a
Residual Certificate and (C) not to Transfer its Ownership Interest in a
Residual Certificate or to cause the Transfer of an Ownership Interest in
a Residual Certificate to any other Person if it has actual knowledge
that such Person is not a Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Residual Certificate. Neither the Securities
Administrator nor the Trustee shall have any liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement. The Securities Administrator shall be entitled but not
obligated to recover from any Holder of a Residual Certificate that was
in fact not a Permitted Transferee at the time it became a Holder or, at
such subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Securities Administrator shall be
paid and delivered by the Securities Administrator to the last preceding
Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee, or the Securities Administrator, to the effect that the
elimination of such restrictions will not cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of 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.
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(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository
shall maintain book entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by
the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee and the
Securities Administrator shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of exercising
the rights of holders under this Agreement, and requests and directions for and
votes of such representatives shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; and (vi) the Securities
Administrator may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and persons shown on the books of such indirect participating firms as
direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or
(y) the Depositor notifies the Depository of its intent to terminate the book
entry system through the Depository, the Depository Participants holding
beneficial interests in the Book-Entry Certificates agree to initiate such
termination, the Securities Administrator shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to the
Securities Administrator of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Securities Administrator shall issue the Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be 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
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Definitive Certificates as Certificateholders hereunder; provided, that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Securities Administrator in accordance with its customary
practice. No service charge shall be made for any registration of transfer or
exchange of Private Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator,
or the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Trustee and the Securities Administrator such security or
indemnity as may be required by them to hold each of them harmless, then, in
the absence of notice to the Securities Administrator that such Certificate has
been acquired by a protected purchaser, the Securities Administrator shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Securities Administrator may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Securities Administrator) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor, the
Securities Administrator and any agent of the Depositor, the Securities
Administrator or the Trustee may treat the Person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Trustee, the Securities Administrator, the
Depositor or any agent of the Depositor, the Securities Administrator or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities 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
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recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Securities Administrator, if any. The Depositor and
every Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange. The Securities Administrator initially designates for
such purposes its office located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - GSAA Home
Equity Trust 2007-2. The Securities Administrator will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by it herein.
Section 6.02 Merger or Consolidation of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation or federally chartered savings bank, as the case may be, under the
laws of the United States or under the laws of one of the states thereof and
will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the Depositor
shall be a party, or any person succeeding to the business of the Depositor,
shall be the successor of the Depositor, as the case may be, hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor and any
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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 and the Depositor (or the Trustee to the extent
it has been directed by the Depositor to undertake such actions) shall be
entitled to be reimbursed therefor out of the Distribution Account.
Section 6.04 Servicing Compliance Review. Promptly upon receipt
from each Servicer of its annual statement of compliance and accountant's
report described in the applicable Step 2 Assignment Agreement the Master
Servicer shall furnish a copy thereof to the Depositor. Promptly after the
Depositor's receipt thereof, the Depositor shall review the same and, if
applicable, consult with such Servicer as to the nature of any defaults by such
Servicer in the fulfillment of any of its Servicer's obligations under the
applicable Servicing Agreement.
Section 6.05 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is ninety (90) days or more delinquent. The
purchase price therefor shall be 100% of the unpaid principal balance of such
Mortgage Loan, plus all related accrued and unpaid interest, and the amount of
any unreimbursed Servicing Advances made by the Servicers or the Master
Servicer related to the Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described in
any Servicing Agreement shall occur with respect to the related Servicer then,
and in each and every such case, so long as such Event of Default shall not
have been remedied, the Master Servicer may, or at the direction of
Certificateholders entitled to a majority of the Voting Rights the Master
Servicer shall, by notice in writing to the applicable Servicer (with a copy to
each Rating Agency), terminate all of the rights and obligations of such
Servicer under the applicable Servicing Agreement and in and to the Mortgage
Loans and the proceeds thereof. The Holders of Certificates evidencing at least
66% of the Voting Rights of Certificates affected by a Event of Default may
waive such Event of Default; provided, however, that (a) an Event of Default
with respect to any Servicer's obligation to make Monthly Advances may be
waived only by all of the holders of the Certificates affected by such Event of
Default and (b) no such waiver is permitted that would materially adversely
affect any non consenting Certificateholder. On and after the
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receipt by such Servicer of such written notice of termination, all authority
and power of such Servicer hereunder or under the applicable Servicing
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Master Servicer. The Master Servicer is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and endorsement or assignment of the Mortgage Loans and related documents, or
otherwise.
Section 7.02 Master Servicer to Act; Appointment of Successor.
Within 120 days after the Master Servicer gives, and the applicable Servicer
receives a notice of termination pursuant to Section 7.01, the Master Servicer
shall, subject to and to the extent provided in Section 7.03, and subject to
the rights of the Master Servicer to appoint a successor Servicer pursuant to
this Section 7.02, be the successor to the Servicer in its capacity as servicer
under the applicable Servicing Agreement and the transactions set forth or
provided for herein and in such Servicing Agreement and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions of such Servicing Agreement and applicable
law including the obligation to make Monthly Advances or Servicing Advances
pursuant to such Servicing Agreement (it being understood and agreed that if
any Servicer fails to make an Advance, the Master Servicer shall do so unless a
determination has been made that such Advance would constitute a Nonrecoverable
Monthly Advance or a Nonrecoverable Servicing Advance). As compensation
therefor, the Master Servicer shall be entitled to all funds relating to the
Mortgage Loans that the Servicer would have been entitled to charge to the
Collection Account if the Servicer had continued to act under the Servicing
Agreement including, if the Servicer was receiving the Servicing Fee at the
Servicing Fee Rate set forth in the Servicing Agreement (as set forth in the
Mortgage Loan Schedule with respect to the related Mortgage Loans) such
Servicing Fee and the income on investments or gain related to the Collection
Account.
Notwithstanding the foregoing, the Master Servicer may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Monthly Advances and Servicing Advances pursuant to the applicable
Servicing Agreement, or if it is otherwise unable to so act, or, at the written
request of Certificateholders entitled to a majority of the Voting Rights,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to such Servicer under the applicable Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of such Servicer. No such appointment of a successor to a
Servicer hereunder shall be effective until the Depositor shall have consented
thereto. Any successor to such Servicer shall be an institution which is a
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, which has
a net worth of at least $25,000,000, which is willing to service the Mortgage
Loans and which executes and delivers to the Depositor and the Master Servicer
an agreement 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
70
immediately prior to such assignment and delegation will not be qualified or
reduced, as a result of such assignment and delegation. Pending appointment of
a successor to a Servicer hereunder, the Master Servicer, unless the Master
Servicer is prohibited by law from so acting, shall, subject to this Section
7.02, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Master Servicer may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it, the
Depositor and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee Rate and amounts paid to
the Servicer from investments. The Master Servicer and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer nor any other
successor to a Servicer shall be deemed to be in default hereunder by reason of
any failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the predecessor Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor Servicer shall give notice to the Mortgagors of such
change of Servicer, in accordance with applicable federal and state law, and
shall, during the term of its service as servicer, maintain in force the policy
or policies that each Servicer is required to maintain pursuant to the
applicable Servicing Agreement.
Notwithstanding the foregoing, the Master Servicer may not
terminate a Servicer without cause.
Section 7.03 Master Servicer to Act as Servicer. In the event that
a Servicer shall for any other reason no longer be the Servicer, the Master
Servicer or another successor Servicer, shall thereupon assume all of the
rights and obligations of the predecessor Servicer hereunder arising thereafter
pursuant to Section 7.02.
Section 7.04 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders
and to each Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such Event of Default shall have been cured or
waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians. The Trustee,
before the occurrence of a Master Servicer Event of Default and after the
curing of all Master Servicer Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case a Master Servicer Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers
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vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee and the Custodians, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or the Custodians, as applicable, that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether on their face they are in the
form required by this Agreement, or with respect to the documents in the
respective Custodial Files whether they satisfy the review criteria set forth
in Section 2.02. Neither the Trustee nor the Custodians shall be responsible
for the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee or the Custodians from liability for its own negligent action, its own
negligent failure to act or its own bad faith or willful misfeasance; provided,
however, that:
(a) unless a Master Servicer Event of Default of which a
Responsible Officer of the Trustee obtains actual knowledge has occurred and is
continuing, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically
set forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee, and the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of
the Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 [Reserved]
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and the
Trustee and
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the Custodians shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(b) before taking any action under this Agreement, the Trustee and
the Custodians may consult with counsel, financial advisers or accountants and
the advice of any such counsel, financial advisers or accountants and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(c) the Trustee and the Custodians shall not be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require indemnity satisfactory to the
Trustee against such cost, expense or liability as a condition to taking any
such action. The reasonable expense of every such examination shall be paid by
the applicable Servicer or, if paid by the Trustee, shall be repaid by the
Servicer upon demand from the applicable Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) neither the Trustee nor the Custodians shall be required to
risk or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of a Master Servicer Event of Default or an Event
of Default, the Trustee shall not be deemed to have knowledge of a Master
Servicer Event of Default or an Event of Default, until a Responsible Officer
of the Trustee shall have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders,
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pursuant to this Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be incurred therein or
thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder;
(l) notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to a Servicer's request of assigning
the Servicing Agreement or the servicing rights thereunder to any other party;
(m) the Trustee and the Custodians shall not be accountable and
shall have no liability for any acts or omissions by the Securities
Administrator, the Master Servicer or other party hereto;
(n) in no event shall Deutsche Bank, in its capacity as Trustee and
a Custodian hereunder, or any other Custodian hereunder, be liable for special,
indirect or consequential damages; and
(o) the Trustee is authorized and directed to execute the PMI
Commitment Agreement on behalf of the Trust.
Section 8.04 Trustee and Custodians Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and neither the Trustee nor the
Custodians assumes any responsibility for their correctness. The Trustee and
the Custodians make no representations as to the validity or sufficiency of
this Agreement or of the Certificates or of any Mortgage Loan or related
document. Neither the Trustee nor the Custodians shall be accountable for the
use or application by the Depositor, the Master Servicer, any Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, any Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, any Servicer, or
the Securities Administrator.
The Trustee shall have no responsibility (i) for filing or
recording any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee shall have become
and remains the successor Master Servicer) (ii) to see to any insurance (unless
the Trustee shall have become the successor Master Servicer), or (iii) to
confirm or verify the contents of any reports or certificates of the Servicers,
Securities Administrator or Master Servicer delivered to the Trustee pursuant
to this Agreement believed by the Trustee to be genuine and to have been signed
or presented by the proper party or parties.
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The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Securities Administrator on behalf of the
Trust Fund in the Certificates is made and intended not as a personal
undertaking or agreement by the Securities Administrator but is made and
intended for the purpose of binding only the Trust Fund.
Section 8.05 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Trustee.
Section 8.06 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid an on-going monthly
or annual fee, as applicable, by the Securities Administrator pursuant to a
separate agreement. The Trustee shall have no lien on the Trust Fund for the
payment of such fees. The Trustee shall be entitled to be reimbursed, from
funds on deposit in the Distribution Account, amounts sufficient to indemnify
and hold harmless the Trustee and any director, officer, employee, or agent of
the Trustee against any loss, liability, or expense (including reasonable
attorneys' fees) incurred in connection with any claim or legal action relating
to
(a) this Agreement,
(b) the Certificates,
(c) the performance of any of the Trustee's duties under this
Agreement, or
(d) incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders,
other than, in each case, any loss, liability, or expense (i) resulting from
any breach of any Servicer's obligations in connection with its Servicing
Agreement for which that Servicer has performed its obligation to indemnify the
Trustee pursuant to Servicing Agreement, (ii) resulting from any breach of the
Responsible Party's obligations in connection with any Sale Agreement for which
it has performed its obligation to indemnify the Trustee pursuant to the Sale
Agreement, (iii) resulting from any breach of the Master Servicer's obligations
hereunder for which the Master Servicer has performed its obligation to
indemnify the Trustee pursuant to this Agreement, or (iv) incurred because of
willful misfeasance, bad faith, or negligence in the performance of any of the
Trustee's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
under this Agreement. Without limiting the foregoing, except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misfeasance, the Trust Fund shall pay or reimburse the 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
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(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement, the Trustee shall
not be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee under
this Agreement or for any other expenses.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and the
appointment of which would not cause any of the Rating Agencies to reduce or
withdraw their respective then current ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation
or association publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.07 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.07, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.08. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or with
the Servicer and its affiliates; provided, however, that such entity cannot be
an affiliate of the Depositor or of any Servicer other than the Trustee in its
role as successor to the Master Servicer.
Section 8.08 Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice of resignation to the Depositor, the Master Servicer, the
Securities Administrator and each Rating Agency not less than sixty (60) days
before the date specified in such notice, when, subject to Section 8.09, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.09 meeting the qualifications set forth in Section
8.07. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within thirty (30) days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with Section 8.07 and shall fail to resign after written request
thereto by the Depositor, (ii) the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the 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
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such failure is not remedied within the lesser of ten (10) calendar days or
such period in which the applicable Exchange Act Report can be timely filed
(without taking into account any extensions), then, in the case of clauses (i)
through (iv), the Depositor may remove the Trustee and appoint a successor
trustee by written instrument, in duplicate, one copy of which shall be
delivered to the Trustee and one copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which shall be
delivered to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any removal
of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.09.
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor and the
predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.07 and its appointment does not adversely affect the
then current rating of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.09, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates and the Custodians. If the
Depositor fails to mail such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodians. Any corporation or association into which the Trustee or the
Custodians, as applicable, may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Custodians, as
applicable, shall be a party, or any corporation or association succeeding to
the business of the Trustee or the Custodians, as applicable, or any
corporation or association to which all or substantially all of the corporate
trust business of the Trustee or the Custodians, as
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applicable, may be sold or otherwise transferred, shall be the successor of the
Trustee or the Custodians, as applicable, hereunder; provided, that such
corporation or association shall be eligible under Section 8.07 without the
execution or filing of any paper or further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust
Fund or any part thereof, whichever is applicable, and, subject to the other
provisions of this Section 8.11, such powers, duties, obligations, rights and
trusts as the Trustee may consider appropriate. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.09 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.09.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor Master
Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the applicable Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(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
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each of them. Every instrument appointing any separate trustee or co-trustee
shall refer to this Agreement and the conditions of this Article VIII. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically
including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.
Section 8.12 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in, and in
accordance with, the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each REMIC described in the Preliminary Statement and that in such capacity it
shall:
(a) prepare and file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
Trust REMIC containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) within thirty (30) days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities and shall also furnish to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the
Code;
(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
79
required to be provided to them in accordance with the REMIC Provisions,
including the calculation of any original issue discount using the prepayment
assumption (as described in the Prospectus Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee (a "Non Permitted Transferee"), or an agent (including a
broker, nominee or other middleman) of a Non Permitted Transferee, or a pass
through entity in which a Non Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Securities Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Securities Administrator from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Securities Administrator or, if required by applicable tax
law, the Trustee or such other person as may be required to sign such returns
by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value
and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class RC,
Class R and Class RX Certificates shall act as Tax Matters Person for the
Lower-Tier REMIC, the Upper-Tier REMIC and the Class X REMIC, respectively,
within the meaning of Treasury Regulations Section 1.860F-4(d), and the
Securities Administrator is hereby designated as agent of such
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Certificateholder for such purpose (or if the Securities Administrator is not
so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall, as
and when necessary and appropriate, represent each Trust REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each Trust REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any Trust REMIC, and otherwise act on behalf of each Trust REMIC in
relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account
(subject to the obligation to pay Basis Risk Carry Forward Amounts) and the
rights of the Principal Certificateholders to receive Basis Risk Carry Forward
Amounts (as calculated in the Preliminary Statement) as the beneficial
ownership interests in a grantor trust and not as an obligations of any REMIC
created hereunder, for federal income tax purposes. The Securities
Administrator shall file or cause to be filed with the Internal Revenue Service
Form 1041 or such other form as may be applicable and shall furnish or cause to
be furnished, to the Class X Certificateholders, the Class P Certificateholders
and the Principal Certificateholders, the respective amounts described above
that are received, in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten (10) days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account. Thereafter, the Depositor shall
provide to the Securities Administrator promptly upon written request therefor
any additional information or data that the Securities Administrator may, from
time to time, reasonably request to enable the Securities Administrator to
perform its duties under this Agreement. The Depositor hereby indemnifies the
Securities Administrator for any losses, liabilities, damages, claims, or
expenses of the Securities Administrator arising from any errors or
miscalculations of the Securities Administrator that result from any failure of
the Depositor to provide, or to cause to be provided, accurate information or
data to the Securities Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is 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
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Servicer, the Trustee or the Securities Administrator, as applicable in the
performance of any of its obligations under this Agreement, (ii) a Servicer, in
the case of any such minimum tax, and otherwise if such tax arises out of or
results from a breach by the Servicer of any of its obligations under the
applicable Servicing Agreement, (iii) a Responsible Party if such tax arises
out of or results from the Responsible Party's obligation to repurchase a
Mortgage Loan pursuant to the applicable Sale Agreement or (iv) in all other
cases, or if the Trustee, the Master Servicer, the Securities Administrator,
the Servicer or the Responsible Party fails to honor its obligations under the
preceding clause (i), (ii), or (iii), any such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
4.01(a).
For as long as each Trust REMIC shall exist, the Securities
Administrator shall act as specifically required herein, and the Securities
Administrator shall comply with any directions of the Depositor or a Servicer
stating that such directions are being given to assure such continuing
treatment. In particular, the Securities Administrator shall not (a) sell or
authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement or (b)
accept any contribution to any Trust REMIC after the Startup Day without
receipt of an Opinion of Counsel that such action described in clause (a) or
(b) will not result in the imposition of a tax on any Trust REMIC or cause any
Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Section 8.13 [Reserved]
Section 8.14 Tax Classification of the Excess Reserve Fund Account.
For federal income tax purposes, the Securities Administrator shall treat the
Excess Reserve Fund Account as beneficially owned by the holder of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust
under subpart E, Part I of subchapter J of the Code. The Securities
Administrator shall treat the rights that each Class of Principal Certificates
has to receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account as rights to receive payments under an interest rate cap
contract written by the Class X Certificateholders in favor of each Class.
Accordingly, each Class of Principal Certificates will comprise two
components--a regular interest in the Upper-Tier REMIC and an interest in an
interest rate cap contract, and the Class X Certificates will be comprised of
two components--a regular interest in the Class X REMIC and an interest in the
Excess Reserve Fund Account subject to the obligation to pay Basis Risk ▇▇▇▇
Forward Amounts. The Securities Administrator shall allocate the issue price
for a Class of Certificates among these components for purposes of determining
the issue price of the Upper-Tier Regular Interest component based on
information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of each
Holder of a Principal Certificate to receive the related Basis Risk Carry
Forward Amount for purposes of allocating the purchase price of an initial
Principal Certificateholder between such right and the related Upper-Tier
Regular Interest.
Section 8.15 Custodial Responsibilities. Each of the Custodians
shall provide access to the Mortgage Loan documents in possession of such
Custodian regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access
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being afforded only upon two (2) Business Days prior written request and during
normal business hours at the office of such Custodian; provided, however, that,
unless otherwise required by law or any regulatory or administrative agency
(including the FDIC), such Custodian shall not be required to provide access to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. Each of the Custodians shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at the expense of
the Trust that covers such Custodians actual costs.
Upon receipt of a request for release by a Servicer substantially
in the form of Exhibit ▇-▇, ▇-▇ ▇▇ ▇-▇ hereto, the applicable Custodian shall
release within five (5) Business Days the related Mortgage File to such
Servicer and the Trustee shall execute and deliver to such Servicer, without
recourse, a request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
(furnished by such Servicer), together with the Mortgage Note.
Each of the Custodians may resign at any time or may be terminated
by the Trustee with cause, in each case, upon sixty (60) days written notice to
the applicable Servicer, the Depositor and the Securities Administrator, in
which event the Depositor will be obligated to appoint a successor. If no
successor has been appointed and has accepted appointment within sixty (60)
days after the resignation or termination of such Custodian, such Custodian may
petition any court of competent jurisdiction for appointment of a successor.
The Securities Administrator, pursuant to a separate agreement,
shall compensate from its own funds the Custodians for their respective
activities under this Agreement. The Custodians shall have no lien on the Trust
Fund for the payment of such fees. The Custodians shall be entitled to be
reimbursed, from funds on deposit in the Distribution Account, amounts
sufficient to indemnify and hold harmless each of the Custodians and any
director, officer, employee, or agent of a Custodian against any loss,
liability, or expense (including reasonable attorneys' fees) incurred in
connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Certificates; or
(c) the performance of any of such Custodian's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any
breach of a Servicer's obligations in connection with a Servicing Agreement for
which the Servicer has performed its obligation to indemnify such Custodian
pursuant to such Servicing Agreement, (ii) resulting from any breach of the
Responsible Party's obligations in connection with a Sale Agreement for which
the Responsible Party has performed its obligation to indemnify such Custodian
pursuant to such Sale Agreement, or (iii) incurred because of willful
misfeasance, bad faith, or negligence in the performance of any of such
Custodian's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of the
Custodians.
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations.
(a) The Master Servicer, on behalf of the Trustee, the Securities
Administrator, the Depositor and the Certificateholders, shall monitor the
performance of the Servicers under the related Servicing Agreements, and
(except as set forth below) shall use its reasonable good faith efforts to
cause the Servicers to duly and punctually perform their duties and obligations
thereunder as applicable. Upon the occurrence of an Event of Default of which a
Responsible Officer of the Master Servicer has actual knowledge, the Master
Servicer shall promptly notify the Securities Administrator and the Trustee and
shall specify in such notice the action, if any, the Master Servicer plans to
take in respect of such default. So long as an Event of Default shall occur and
be continuing, the Master Servicer shall take the actions specified in Article
VII.
If (i) a Servicer reports a delinquency on a monthly report and
(ii) such Servicer, by 11 a.m. (New York Time) on the Business Day preceding
the related Remittance Date, neither makes a Monthly Advance nor provides the
Securities Administrator and the Master Servicer with a report certifying that
such a Monthly Advance would be a Nonrecoverable Monthly Advance, then the
Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date a Monthly
Advance in an amount equal to the difference between (x) with respect to each
Monthly Payment due on a Mortgage Loan that is delinquent (other than Relief
Act Interest Shortfalls) and for which the related Servicer was required to
make a Monthly Advance pursuant to the related Servicing Agreement and (y)
amounts deposited in the Collection Account to be used for Monthly Advances
with respect to such Mortgage Loan, except to the extent the Master Servicer
determines any such Monthly Advance to be a Nonrecoverable Monthly Advance or
Nonrecoverable Servicing Advance. Subject to the foregoing, the Master Servicer
shall continue to make such Monthly Advances for so long as the related
Servicer is required to do so under the related Servicing Agreement. If
applicable, on the Business Day immediately preceding the Distribution Date,
the Master Servicer shall deliver an Officer's Certificate to the Trustee
stating that the Master Servicer elects not to make a Monthly Advance in a
stated amount and detailing the reason(s) it deems the Monthly Advance to be a
Nonrecoverable Monthly Advance. Any amounts deposited by the Master Servicer
pursuant to this Section 9.01 shall be net of the Servicing Fee for the related
Mortgage Loans. If the Master Servicer fails to make a required Monthly
Advance, the Securities Administrator shall provide prompt written notice to
the Trustee of such failure.
(b) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i)
termination of any Servicer, (ii) the appointment of a successor servicer or
(iii) the transfer to and assumption of, the servicing by the 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
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associated with the transition of servicing responsibilities to the Master
Servicer or to a successor servicer are not paid for by the predecessor or
successor Servicer (provided such successor Servicer is not the Master
Servicer), the Master Servicer may be reimbursed therefor by the Trust for
out-of-pocket costs incurred by the Master Servicer associated with any such
transfer of servicing duties from a Servicer to the Master Servicer or any
other successor servicer.
(c) If the Master Servicer assumes the servicing with respect to
any of the Mortgage Loans, it will not assume liability for the representations
and warranties of any Servicer it replaces or for any errors or omissions of
such Servicer.
If the Depositor or an affiliate of the Depositor, is the owner of
the servicing rights for any Servicer and the Depositor chooses to terminate
such Servicer with or without cause and sell those servicing rights to a
successor servicer, then the Depositor must provide thirty (30) days' notice to
the Master Servicer, such successor servicer must be reasonably acceptable to
the Master Servicer, the terminated servicer must be reimbursed for any
unreimbursed Monthly Advances, servicing fees and any related expenses, the
successor servicer must be qualified to service mortgage loans for ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac and the Depositor must obtain prior written consent from the
Rating Agencies that the transfer of the servicing of the mortgage loans will
not result in a downgrade, qualification or withdrawal of the then current
ratings of the Certificates. The costs of such transfer (including any costs of
the Master Servicer) are to be borne by the Depositor.
Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under the Agreement without the prior written consent of the Master
Servicer, which consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and
other Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in
such form and amount generally acceptable for entities serving as master
servicers or trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
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(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) Section 11.01(a) of this Agreement and of the applicable
Step 2 Assignment Agreements provide that the Depositor, at its option, may
request the Master
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Servicer to solicit bids in a commercially reasonable manner, on or after the
Optional Termination Date (such event, the "Auction Call"), for the purchase of
all of the Mortgage Loans (and REO Properties) at the Termination Price. The
Master Servicer shall accommodate such request to conduct an Auction Call at
its sole discretion. The Depositor hereby represents, covenants and agrees with
any applicable NIM Issuer that it will not exercise its right to request the
Master Servicer to solicit bids in a commercially reasonable manner, on or
after the Optional Termination Date, for the purchase of all of the Mortgage
Loans (and REO Properties) unless it has received (x) written notification from
the NIM Trustee that all of the outstanding notes issued under the applicable
indenture have been paid in full or (y) an Officer's Certificate of the NIM
Issuer pursuant to the applicable section of the relevant indenture to the
effect that all conditions precedent to the satisfaction and discharge of the
indenture have been complied with.
(c) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery
of this Agreement. The Master Servicer shall indemnify the Depositor,
Securities Administrator, and the Trustee and hold them harmless against any
loss, damages, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments, and other reasonable costs and expenses resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a material breach of the Master Servicer's representations and warranties
contained in Section 9.03(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer set forth in this Section
9.03 to indemnify the Depositor, Securities Administrator, and the Trustee
constitutes the sole remedy of the Depositor and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer, Securities Administrator or the Trustee or notice thereof by
any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from any Servicer or required
to be made by the Master Servicer under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement (including any obligation to
cause any subservicer or Reporting Subcontractor (except as specified below) to
take any action specified in Article XIII) which failure continues unremedied
for a period of thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the
holders of Certificates evidencing at least 25% of the Voting Rights; provided
that the thirty (30) day cure period shall not apply so long as the
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Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the failure to comply with the requirements set forth in Article XIII,
for which the grace period shall not exceed the lesser of ten (10) calendar
days or such period in which the applicable Exchange Act Report can be timely
filed (without taking into account any extensions);
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations for
three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement, in each case, where such
indictment materially and adversely affects the ability of the Master Servicer
to perform its obligations under this Agreement (subject to the condition that
such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the
Trustee may have at law or equity to damages, including injunctive relief and
specific performance, the Trustee, by notice in writing 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.
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Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which
accepts such appointments. Upon written request from the Trustee or the
Depositor, the Master Servicer shall prepare, execute and deliver to the
successor entity designated by the Trustee any and all documents and other
instruments related to the performance of its duties hereunder as the Master
Servicer and, place in such successor's possession all such documents with
respect to the master servicing of the Mortgage Loans and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, at the Master Servicer's sole expense. The
Master Servicer shall cooperate with the Trustee and such successor master
servicer in effecting the termination of the Master Servicer's responsibilities
and rights hereunder, including without limitation, the transfer to such
successor master servicer for administration by it of all cash amounts which
shall at the time be credited to the Distribution Account or are thereafter
received with respect to the Mortgage Loans.
Upon the occurrence of a Master Servicer Event of Default, the
Securities Administrator shall (i) provide prompt written notice to the Trustee
and the Depositor of such occurrence and (ii) provide the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a successor
master servicer in the event the Trustee should succeed to the duties of the
Master Servicer as set forth herein. In the event that the Master Servicer
becomes a terminated Master Servicer due to a Master Servicer Event of Default,
the terminated Master Servicer shall bear all costs of the transfer of master
servicing hereunder (including those incurred by the Trustee). If such costs
are not paid by the terminated Master Servicer, such costs shall be reimbursed
from the Trust Fund.
Section 9.05 Waiver of Default. By a written notice, the Trustee
may with the consent of a Holders of Certificates evidencing at least 51% of
the Voting Rights waive any default by the Master Servicer in the performance
of its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Master Servicer Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Master Servicer
under this Agreement prior to the termination of the Master Servicer. Any
successor shall be a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved servicer in good
standing and acceptable to the Depositor and the Rating Agencies. In connection
with such appointment and assumption, the Trustee may make such arrangements
for the compensation of such successor out of payments on Mortgage Loans as it
and such successor shall agree; provided, however, that in no event shall the
master servicer fee paid to such successor master servicer exceed that paid to
the Master Servicer hereunder. In the event that the Master Servicer's duties,
responsibilities and liabilities under this Agreement are terminated, the
Master Servicer shall continue to discharge its duties
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and responsibilities hereunder until the effective date of such termination
with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement and shall take no action whatsoever that might
impair or prejudice the rights of its successor. The termination of the Master
Servicer shall not become effective until a successor shall be appointed
pursuant hereto and shall in no event (i) relieve the Master Servicer of
responsibility for the representations and warranties made pursuant to Section
9.03(a) hereof and the remedies available to the Trustee under Section 9.03(b)
hereof, it being understood and agreed that the provisions of Section 9.03
hereof shall be applicable to the Master Servicer notwithstanding any such
sale, assignment, resignation or termination of the Master Servicer or the
termination of this Agreement; or (ii) affect the right of the Master Servicer
to receive payment and/or reimbursement of any amounts accruing to it hereunder
prior to the date of termination (or during any transition period in which the
Master Servicer continues to perform its duties hereunder prior to the date the
successor master servicer fully assumes its duties).
If no successor Master Servicer has accepted its appointment within
ninety (90) days of the time the Trustee receives the resignation of the Master
Servicer, the Trustee shall be the successor Master Servicer in all respects
under this Agreement and shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto, including
the obligation to make Monthly Advances; provided, however, that any failure to
perform any duties or responsibilities caused by the Master Servicer's failure
to provide information required by this Agreement shall not be considered a
default by the Trustee hereunder. In the Trustee's capacity as such successor,
the Trustee shall have the same limitations on liability herein granted to the
Master Servicer. As compensation therefor, the Trustee shall be entitled to
receive the compensation, reimbursement and indemnities otherwise payable to
the Master Servicer, including the fees and other amounts payable pursuant to
Section 9.07 hereof.
At least fifteen (15) calendar days prior to the effective date of
such appointment, the Trustee shall provide written notice to the Depositor of
such successor pursuant to this Section 9.06.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Master Servicer or termination of this
Agreement shall not affect any claims that the Trustee may have against the
Master Servicer arising out of the Master Servicer's actions or failure to act
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.
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Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master
Servicer shall (i) be a Person (or have an Affiliate) that is qualified and
approved to service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and FHLMC (provided, further
that a successor Master Servicer that satisfies subclause (i) through an
Affiliate agrees to service the Mortgage Loans in accordance with all
applicable ▇▇▇▇▇▇ Mae and FHLMC guidelines) and (ii) have a net worth of not
less than $25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as
otherwise provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall
not resign from the obligations and duties hereby imposed on it unless the
Master Servicer's duties hereunder are no longer permissible under applicable
law or are in material conflict by reason of applicable law with any other
activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be independent to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee shall
have assumed, or a successor master servicer satisfactory to the Trustee and
the Depositor shall have assumed, the Master Servicer's responsibilities and
obligations under this Agreement. Notice of such resignation shall be given
promptly by the Master Servicer and the Depositor to the Trustee.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Master Servicer shall provide written notice to the
Depositor of any successor pursuant to this Section.
If at any time, ▇▇▇▇▇ Fargo, as Master Servicer, resigns under this
Section 9.09, or is removed as Master Servicer pursuant to Section 9.04, then
at such time ▇▇▇▇▇ Fargo shall also resign (and shall be entitled to resign) as
Securities Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
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
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payable to such successor master servicer but in no event shall the fee payable
to the successor master servicer exceed that payable to the predecessor master
servicer.
Section 9.11 Limitation on Liability of the Master Servicer.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Trustee, the
Securities Administrator, the Servicers or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful malfeasance,
bad faith or negligence in the performance of its duties or by reason of
reckless disregard for its obligations and duties under this Agreement. The
Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Master Servicer shall be under no obligation to appear in, prosecute or defend
any legal action that is not incidental to its duties as Master Servicer with
respect to the Mortgage Loans under this Agreement and that in its opinion may
involve it in any expenses or liability; provided, however, that the Master
Servicer may in its sole discretion undertake any such action that it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom, shall be liabilities of the Trust, and the Master Servicer
shall be entitled to be reimbursed therefor out of the Master Servicer Account
in accordance with the provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions
of any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Depositor, the Securities Administrator and
the Trustee, and hold them harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, liability, fees and expenses that the Depositor, the Securities
Administrator or the Trustee may sustain as a result of the Master Servicer's
willful malfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of its reckless disregard for its obligations and duties
under this Agreement. The Depositor, the 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, the Servicers 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)
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that the Trustee may sustain as a result of such liability or obligations of
the Master Servicer and in connection with the Trustee's assumption (not
including the Trustee's performance, except to the extent that costs or
liability of the Trustee are created or increased as a result of negligent or
wrongful acts or omissions of the Master Servicer prior to its replacement as
Master Servicer) of the Master Servicer's obligations, duties or
responsibilities under such agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement, the Servicing Agreements, the Sale
Agreements, the Step 2 Assignment Agreements or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this
Agreement or (ii) the Master Servicer's willful malfeasance, bad faith or
negligence or by reason of its reckless disregard of its duties and obligations
under any such agreement; provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall
be entitled to reimbursement for any such indemnified amount from funds on
deposit in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator. The
Securities Administrator shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement.
(a) 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.
(b) The Securities Administrator, only as directed by an authorized
officer of ▇▇▇▇▇ Fargo, in its capacity as Servicer, shall remit from trust
amounts the mortgage insurance premiums in accordance with the requirements of
the Primary Mortgage Insurance Policy. The Securities Administrator shall also
remit any amounts due for premium taxes or assessments on insurance on
applicable covered Mortgage Loans secured by properties located in West
Virginia, Kentucky or Florida on a monthly basis as directed in writing by an
authorized officer of ▇▇▇▇▇ Fargo, in its capacity as Servicer. All other
responsibilities under the Primary Mortgage Insurance Policy, including making
claims and receiving payments, complying with unpaid principal reporting and
monthly default and delinquency reporting requirements, and in all other
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ways maintaining such Primary Mortgage Insurance Policy shall not be the
responsibility of the Securities Administrator, but will instead by the
responsibility of the party or parties set forth in such Primary Mortgage
Insurance Policy.
Premiums shall be calculated by the Securities Administrator on
individual covered loans as the product of the Loan-Level Premium-Rate (as
defined in the PMI Commitment Agreement and delivered by GSMC) assigned to the
applicable Mortgage Loan in the Certificate Schedule (as defined in the Primary
Mortgage Insurance Policy) and set forth on the Mortgage Loan Schedule,
multiplied by the current unpaid principal balance of the applicable Mortgage
Loan outstanding at the beginning of the month for which coverage is provided,
divided by twelve. The Securities Administrator shall remit from trust amounts
all such initial premiums and associated premium taxes required to be paid
under the Primary Mortgage Insurance Policy by the last Business Day of the
first full month following the Closing Date in accordance with the requirements
of the Primary Mortgage Insurance Policy. Any revised Loan-Level Premium-Rates
will be delivered to the Securities Administrator in writing by ▇▇▇▇▇ Fargo, in
its capacity as Servicer, at which time the Securities Administrator shall
revise premium amounts accordingly.
In no event will the Securities Administrator bear any
responsibility to investigate or resolve issues or claims in connection with
the Primary Mortgage Insurance Policy, or to advise or notify any party of
notices received by it with regard to such policy. The Securities Administrator
shall remit premiums on a covered Mortgage Loan until notified in writing by
▇▇▇▇▇ Fargo, in its capacity as Servicer, that such Mortgage Loan has been
liquidated and the unpaid principal balance brought to zero. The Securities
Administrator and its respective officers and directors shall be entitled to
conclusively rely on upon all such reports by ▇▇▇▇▇ Fargo, in its capacity as
Servicer. In the event additional premiums are required under the Primary
Mortgage Insurance Policy due to the reinstatement of a covered Mortgage Loan
or other shortfall due to error, the Securities Administrator will be notified
in writing by ▇▇▇▇▇ Fargo, in its capacity as Servicer (which writing will
confirm the reinstatement or error, as applicable, and direct the remittance of
premium amounts) and, if such notice is received on or before the fifteenth
(15th) day of the current month, shall remit all such premium amounts from
trust funds on the next Distribution Date. If such notice is received after the
fifteenth (15th) day of the month, the Securities Administrator shall remit
such premium amounts from trust funds on the Distribution Date occurring in the
immediately succeeding month.
(c) 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
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which it believed in good faith to be genuine and to have been duly
executed by the proper authorities respecting any matters arising
hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates
relating to the time, method and place of conducting any proceeding for
any remedy available to the Securities Administrator, or exercising or
omitting to exercise any trust or power conferred upon the Securities
Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(a) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature
of any such party or parties;
(b) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) the Securities Administrator shall not be liable for any action
or inaction taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(d) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of
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the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Securities
Administrator, not reasonably assured to the Securities Administrator by
the security afforded to it by the terms of this Agreement, the
Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to so proceeding. Nothing in this
clause (iv) shall derogate from the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Mortgagors, provided that the Master Servicer shall have no
liability for disclosure required by this Agreement;
(e) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(f) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(g) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities
Administrator reasonable security or indemnity satisfactory to the
Securities Administrator against the costs, expenses and liabilities
which may be incurred therein or thereby;
(h) the Securities Administrator shall have no obligation to appear
in, prosecute or defend any legal action that is not incidental to its
duties hereunder and which in its opinion may involve it in any expense
or liability; provided, however, that the Securities Administrator may in
its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Collection Account; and
(i) in no event shall the Securities Administrator be liable for
special, indirect or consequential damages.
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The Securities Administrator shall have no duty (A) to cause any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
cause the provision of any insurance or (C) to cause the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Transferor, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The
Securities Administrator shall not be accountable for the use or application by
the Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were
not the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Master Servicer Float Period.
The Securities Administrator and any director, officer, employee, agent or
"control person" within the meaning of the Securities Act of 1933, as amended,
and the Securities Exchange of 1934, as amended ("Control Person"), of the
Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Securities Administrator's duties
hereunder, (ii) incurred in 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
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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 any amounts in
connection with any investments on investment income earned on amounts in the
Distribution Account during the Master Servicer Float Period, (ii) amounts
necessary to reimburse it or the Master Servicer for any previously
unreimbursed Advances and any Advances the Master Servicer deems to be
non-recoverable from the related Mortgage Loan proceeds, (iii) an aggregate
annual amount to indemnify the Master Servicer and itself for amounts due in
accordance with this Agreement, (iv) amounts necessary for the Master Servicer
to pay primary mortgage insurance premiums under the Primary Mortgage Insurance
Policy and (v) 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
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Securities Administrator shall have been appointed and shall have accepted
appointment within sixty (60) days after the Securities Administrator ceases to
be the Securities Administrator pursuant to Section 10.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 10.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 10.07 Resignation and Removal of the Securities
Administrator. The Securities Administrator may at any time resign by giving
written notice of resignation to the Depositor and the Trustee and each Rating
Agency not less than sixty (60) days before the date specified in such notice
when, subject to Section 10.08, such resignation is to take effect, and
acceptance by a successor Securities Administrator in accordance with Section
10.08 meeting the qualifications set forth in Section 10.06. If no successor
Securities Administrator meeting such qualifications shall have been so
appointed by the Depositor and have accepted appointment within thirty (30)
days after the giving of such notice of resignation, the resigning Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Securities Administrator.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Securities Administrator shall provide written notice to
the Depositor or any successor pursuant to this Section 10.07.
If at any time (i) the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, (ii) the
Securities Administrator shall become incapable of acting, or shall be adjudged
as bankrupt or insolvent, or a receiver of the Securities Administrator or of
its property shall be appointed, or any public officer shall take charge or
control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, (iii)(A) a tax is
imposed with respect to the Trust Fund by any state in which the Securities
Administrator or the Trust Fund is located and (B) the imposition of such tax
would be avoided by the appointment of a different Securities Administrator, or
(iv) the Securities Administrator fails to comply with its obligations under
Article XIII and such failure is not remedied within the lesser of ten (10)
calendar days or such period in which the applicable Exchange Act Report can be
timely filed (without taking into account any extensions), then, in the case of
clauses (i) through (iv), the Depositor may remove the Securities Administrator
and appoint a successor Securities Administrator by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Securities
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
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Securities Administrator shall be given to each Rating Agency by the successor
Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Securities Administrator herein. The Depositor, the Trustee, the
Master Servicer and the predecessor Securities Administrator shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor Securities
Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency and has provided to the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a replacement Securities Administrator.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within ten (10) days
after acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
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.
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Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities
Administrator shall not assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Securities Administrator;
provided, however, that the Securities Administrator shall have the right with
the prior written consent of the Depositor (which shall not be unreasonably
withheld or delayed), and upon delivery to the Trustee and the Depositor of a
letter from each Rating Agency to the effect that such action shall not result
in a downgrade of the ratings assigned to any of the Certificates, to delegate
or assign to or subcontract with or authorize or appoint any qualified Person
to perform and carry out any duties, covenants or obligations to be performed
and carried out by the Securities Administrator hereunder. Notice of such
permitted assignment shall be given promptly by the Securities Administrator to
the Depositor and the Trustee. If, pursuant to any provision hereof, the duties
of the Securities Administrator are transferred to a successor securities
administrator, the entire compensation payable to the Securities Administrator
pursuant hereto shall thereafter be payable to such successor securities
administrator but in no event shall the fee payable to the successor securities
administrator exceed that payable to the predecessor securities administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicers, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of: (a) the Depositor requesting the Master
Servicer to exercise its option to conduct an Auction Call for the purchase of
the Mortgage Loans and all other property of the Trust on a non-recourse basis
with no representations or warranties of any nature whatsoever and the sale of
all of the Property of the Trust Fund, on or after the Optional Termination
Date. (The Master Servicer shall accommodate such request to conduct an Auction
Call at its sole discretion. If the Master Services accommodates such request,
the Master Servicer shall be entitled to reimbursement for all fees and
expenses incurred. The Property of the Trust Fund shall be sold by the Trustee
as directed by the Depositor or the Master Servicer to the entity with the
highest bid received by the Master Servicer from closed bids solicited by the
Master Servicer or its designee; provided that to effectuate such sale, the
Master Servicer or its designee shall have made reasonable efforts to sell all
of the property of the Trust Fund for its fair market value in a commercially
reasonable manner and on commercially reasonable terms, which includes the good
faith solicitation of competitive bids to prospective purchasers that are
recognized broker/dealers for assets of this type and provided further that,
(i) such sale price shall not be less than the Par Value as certified by the
Depositor, (ii) the Master Servicer receives bids from no fewer than three
prospective purchasers (which may include the Majority Class X
Certificateholder) and (iii) such sale price shall be deposited with the 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
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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 "Termination Price" shall be equal to
the greater of: (1) the sum of (i) 100% of the unpaid principal balance of each
Mortgage Loan (other than in respect of REO Property) plus accrued and unpaid
interest thereon at the applicable Mortgage Interest Rate, (ii) the lesser of
(x) the appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Master
Servicer at its expense, plus accrued and unpaid interest on the related
mortgage loans at the applicable mortgage rate and (y) the unpaid principal
balance of each Mortgage Loan related to any REO Property, in each case plus
accrued and unpaid interest thereon at the applicable Mortgage Interest Rate;
and (2) the aggregate fair market value of each Mortgage Loan and any REO
Property, as determined by the highest bid received by the Master Servicer from
closed bids solicited by the Depositor or its designee from at least three
recognized broker/dealers (one of which may be an affiliate of the Depositor)
that deal in similar assets as of the close of business on the third Business
Day preceding the date upon which a Notice of Final Distribution is furnished
to Certificateholders pursuant to Section 11.02, plus accrued and unpaid
interest on the Mortgage Loans at the applicable Mortgage Interest Rate.
The proceeds of the purchase or sale of such assets of the Trust
pursuant to the Auction Call described in this Section 11.01 (other than, with
respect to any mortgage loan and the related property, an amount equal to the
excess, if any, of the amount in Section 11.01(2) over the sum of the amount
in Section 11.01(1) (such excess, the "Fair Market Value Excess")) will be
distributed to the holders of the Certificates in accordance with Section 4.01.
Any Fair Market Value Excess received in connection with the purchase of the
Mortgage Loans and REO Properties will be distributed to the holders of the
Class RC Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class RC Certificates, the
proceeds of such a purchase or sale will be treated as a prepayment of the
Mortgage Loans for purposes of distributions to Certificateholders.
Accordingly, the sale of the Mortgage Loans and the REO Properties as a result
of the exercise of the Auction Call will result in the final distribution on
the Certificates on that Distribution Date.
Section 11.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicers notify the Securities Administrator that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Collection Account, the Securities
Administrator shall promptly send a Notice of Final Distribution to the
applicable Certificateholders. If the Depositor exercises its option to
terminate the Trust Fund pursuant to clause (a) of Section 11.01, or if an
Auction Call is requested pursuant to clause (b) of such Section, the Master
Servicer, pursuant to the applicable Step 2 Assignment Agreements and by no
later than the tenth (10th) day of the month of final distribution, shall
notify the Trustee, each Servicer and the Securities Administrator of the final
Distribution Date and of the applicable sale price of the Mortgage Loans and
REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to
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Certificateholders mailed not later than the fifteenth (15th) day of the month
of such final distribution. Any such Notice of Final Distribution shall specify
(a) the Distribution Date upon which final distribution on the Certificates
will be made upon presentation and surrender of Certificates at the office
therein designated, (b) the amount of such final distribution, (c) the location
of the office or agency at which such presentation and surrender must be made,
and (d) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender
of the Certificates at the office therein specified. The Securities
Administrator will give such Notice of Final Distribution to each Rating Agency
at the time such Notice of Final Distribution is given to Certificateholders.
In the event the Mortgage Loans (and REO Properties) and all rights
and obligations under the Servicing Agreements are purchased or sold pursuant
to Section 11.01 and pursuant to the applicable Step 2 Assignment Agreement,
the Master Servicer on behalf of the Trustee is required thereunder to remit to
the Securities Administrator the applicable Termination Price on the applicable
Remittance Date immediately preceding the applicable final Distribution Date.
Upon such final deposit with respect to the Trust Fund and the receipt by the
Securities Administrator and the Custodians of a request for release therefor
in the form of Exhibit ▇-▇, ▇-▇ ▇▇ ▇-▇ as applicable, the Master Servicer shall
direct the Custodians to release and the relevant Custodians shall promptly
release to the Master Servicer or its designee the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due the Depositor, the Master
Servicer, the Securities Administrator, the Trustee and the Custodians
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.01, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount up to an amount
equal to (i) as to each Class of Regular Certificates (except the Class X
Certificates), the Certificate Balance thereof plus for each such Class and the
Class X Certificates accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.01, and (ii) as to the Residual Certificates,
the amount, if any, which remains on deposit in the Distribution Account after
application pursuant to clause (i) above (other than the amounts retained to
meet claims). The foregoing provisions are intended to distribute to each Class
of Regular Certificates any accrued and unpaid interest and principal to which
they are entitled based on the Pass-Through Rates and actual Class Certificate
Balances or notional principal balances set forth in the Preliminary Statement
upon liquidation of the Trust Fund.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second notice
all the applicable Certificates shall not have been surrendered for
cancellation, the Securities Administrator may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R
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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
Auction Call is exercised as provided in Section 11.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless the
Trustee and the Securities Administrator have been supplied with an Opinion of
Counsel, at the expense of the entity exercising the call right, to the effect
that the failure to comply with the requirements of this Section 11.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any Trust
REMIC as defined in Section 860F of the Code, or (ii) cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall
sell all of the assets of the Trust Fund to the entity with the highest bid
received pursuant to the Auction Call and, by the next Distribution Date after
such sale, shall distribute to the Certificateholders the proceeds of such sale
in complete liquidation of each of the Trust REMICs; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the ninety
(90) day liquidation period for each such Trust REMIC was the date on which the
Securities Administrator on behalf of the Trustee sold the assets of the Trust
Fund to the entity with the highest bid received pursuant to the Auction Call.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Securities Administrator, the
Custodians and the Trustee (and the Master Servicer may request an amendment or
consent to any amendment of a Servicing Agreement as directed by the Depositor)
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or in the applicable
Servicing Agreement, or to supplement any provision in this Agreement which may
be inconsistent with any other provision herein or in the applicable Servicing
Agreement, (iii) to add to the duties of the Depositor, or the Trustee (or with
respect to the applicable Servicing Agreement, of the applicable Servicer) the
Master Servicer, the Securities Administrator or the Custodians, (iv) to add
any other provisions with respect to matters or questions arising hereunder or
under the applicable Servicing Agreement, (v) to cause the provisions herein to
conform to or be consistent with or in furtherance of the statements made with
respect to the Certificates, the Trust Fund or this Agreement in the Prospectus
Supplement, or to correct or supplement any provision herein which may be
inconsistent with any other provisions herein or with the provisions of any
Sale Agreement or Servicing Agreement or (vi) to modify, alter, amend, add to
or rescind any of the terms or provisions contained in this Agreement or in the
applicable Servicing Agreement; provided that any action pursuant to clause
(iv) or (v) above shall not, as evidenced by an Opinion of Counsel (which
Opinion of Counsel shall be an expense of the requesting party, but in any case
shall not be an expense of the Trustee, the Master Servicer, the Securities
Administrator, the Custodians or the Trust Fund and
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shall be addressed to the foregoing entities), adversely affect in any material
respect the interests of any Certificateholder; provided, further, that the
amendment shall not be deemed to adversely affect in any material respect the
interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency stating that the amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates; it being understood and agreed that any such letter in and
of itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Custodians, the
Securities Administrator and the Master Servicer also may at any time and from
time to time amend this Agreement (and the Master Servicer shall request the
Servicers amend the applicable Servicing Agreements), without the consent of
the Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the risk
of the imposition of any tax on any Trust REMIC pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates or
(iii) comply with any other requirements of the Code; provided, that the
Trustee and the Master Servicer have been provided an Opinion of Counsel, which
opinion shall be an expense of the party requesting such opinion but in any
case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Custodians, the Securities Administrator
and the Trustee (and the Master Servicer shall consent to any amendment to the
applicable Servicing Agreement as directed by the Depositor) with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66?% of each Class of Certificates affected thereby for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required
to be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66?%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement or any Servicing Agreement unless (i) each shall have first received
an Opinion of Counsel, which opinion shall 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.
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Notwithstanding the foregoing provisions of this Section 12.01,
with respect to any amendment that significantly modifies the permitted
activities of the Trustee or a Servicer under the applicable Servicing
Agreement, any Certificate beneficially owned by the Depositor or any of its
Affiliates or by the Responsible Party or any of its Affiliates shall be deemed
not to be outstanding (and shall not be considered when determining the
percentage of Certificateholders consenting or when calculating the total
number of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 12.01 have been
obtained.
Promptly after the execution of any amendment to this Agreement or
any Servicing Agreement requiring the consent of Certificateholders, the
Trustee shall furnish written notification of the substance or a copy of such
amendment to each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the
Custodians, the Master Servicer or the Securities Administrator to enter into
an amendment which modifies its obligations or liabilities without its consent
and in all cases without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee, the Custodians, the Master Servicer, the
Securities Administrator or the Trust Fund), satisfactory to the Trustee, the
Master Servicer or the Securities Administrator, as applicable, that (i) such
amendment is permitted and is not prohibited by this Agreement or the
applicable Servicing Agreement and that all requirements for amending this
Agreement or such Servicing Agreement have been complied with; and (ii) either
(A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 12.01.
Notwithstanding the Trustee's consent to, or the Master Servicer's
request for, any amendment of any Servicing Agreement pursuant to the terms of
this Section 12.01, such Servicing Agreement cannot be amended without the
consent of the applicable Servicer. Neither the Master Servicer nor the Trustee
shall be responsible for any failure by such Servicer to consent to any
amendment to the applicable Servicing Agreement.
Section 12.02 Recordation of Agreement; Counterparts. This
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation shall
be caused to be effected by the Depositor at the expense of the Trust, but only
if an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders is delivered to
the Depositor.
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For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of
the parties that such conveyances be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, or if for any other reason this Agreement is
held or deemed to create a security interest in either of such assets, then (i)
this Agreement shall be deemed to be a security agreement within the meaning of
the Uniform Commercial Code of the State of New York and (ii) the conveyances
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of
a security interest in all of the assets transferred, whether now owned or
hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for
the benefit of the Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of a Servicer, Master
Servicer, Securities Administrator or the Trustee and the appointment of
any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
this Agreement or the Sale Agreements; and
(v) The final payment to Certificateholders.
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(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the
following: (i) Each report to Certificateholders described in Section 4.02.
(ii) The Servicer's annual statement of compliance and the
accountant's report described in the Servicing Agreements; and
(iii) Any notice of a purchase of a Mortgage Loan pursuant to this
Agreement and any Sale Agreement.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, the Purchaser or the Goldman Conduit, to ▇▇▇▇▇▇▇, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance
Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Asset Management Group/Senior Asset Manager,
or such other address as may be hereafter furnished to the Securities
Administrator by the Depositor in writing; (b) in the case of the Trustee or
the Securities Administrator to its Corporate Trust Office, or such other
address as the Trustee or the Securities Administrator may hereafter furnish to
the Depositor; (c) in the case of the Master Servicer and the Securities
Administrator, to ▇▇▇▇▇ Fargo Bank, National Association, ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: GSAA 2007-2, or such other address as may
be hereafter furnished to the Depositor and the Securities Administrator by the
Master Servicer in writing; (d) in the case of Deutsche Bank as a Custodian, to
Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Custody - GS0702; (e) in the case of BNY,
to The Bank of New York Trust Company, National Association, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; (f) in the case of U.S. Bank, to U.S.
Bank National Association, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: GSAA Home Equity Trust 2007-2; (g) in the case of Avelo,
Avelo Mortgage, L.L.C., ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: President and General Counsel or such other address as may be
hereafter furnished to the Depositor and the Securities Administrator by Avelo
in writing; (h) in the case of SunTrust, to SunTrust Mortgage, Inc. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter
furnished to the Depositor and the Securities Administrator by SunTrust in
writing; (i) in the Case of HSBC, to HSBC Mortgage Corporation (USA), ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (j) in the case of Ameriquest, to
Ameriquest Mortgage Company, ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by Ameriquest in writing; (k) in the
case of GreenPoint, to GreenPoint Mortgage Funding, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, or such other address
as may be hereafter furnished to the Depositor and the Securities Administrator
by GreenPoint in writing and (l) in the case of each of the Rating Agencies,
the address specified therefor in the definition corresponding to the name of
such Rating Agency. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid, to their respective addresses appearing in
the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the
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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.
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.
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Section 12.09 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations.
The Master Servicer, the Trustee, the Securities Administrator and
each Custodian shall reasonably cooperate with the Depositor and Securities
Administrator in connection with the satisfaction of the Depositor's reporting
requirements under the Exchange Act with respect to the Trust Fund. In addition
to the information specified below, if so requested by the Depositor in writing
for the purpose of satisfying its reporting obligation under the Exchange Act,
the Master Servicer, the Trustee, the Securities Administrator and each
Custodian shall (and the Master Servicer shall cause each Servicer and
subservicer to) provide the Depositor with (a) such information which is
available to such Person without unreasonable effort or expense and within such
timeframe as may be reasonably requested by the Depositor to comply with the
Depositor's reporting obligations under the Exchange Act and (b) to the extent
such Person is a party (and the Depositor is not a party) to any agreement or
amendment required to be filed, copies of such agreement or amendment in
▇▇▇▇▇-compatible form.
In the event that the Securities Administrator becomes aware that
it will be unable to timely file with the Commission all or any required
portion of any Form 8-K, 10-D or 10-K required to be filed by this Agreement
because required disclosure information was either not delivered to it or
delivered to it after the delivery deadlines set forth in this Agreement or for
any other reason, the Securities Administrator will promptly notify the
Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement
will cooperate and cause such other Servicers or Servicing Function
Participants, as applicable, to cooperate, to prepare and file a Form 12b-25
and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of all required Form 8-K Disclosure Information and upon the approval and
direction of the Depositor, include such disclosure information on the next
Form 10-D unless directed by the Depositor to file a Form 8-K with such Form
8-K Disclosure Information. In the event that any previously filed Form 8-K,
Form 10-D or Form 10-K needs to be amended, the Securities Administrator shall
notify the Depositor and prepare any necessary Form 8-KA, Form 10-DA or Form
10-KA. Any Form 15, Form 12b-25 or any amendment to Form 8-K or Form 10-D shall
be signed by a duly authorized representative of the Master Servicer. Any
amendment to Form 10-K shall be signed by the Depositor. The parties to this
Agreement acknowledge that the performance by the Securities Administrator of
its duties under this Section 13.01 related to the timely preparation and
filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, Form 10-D or
Form 10-K is contingent upon each such party performing its duties under this
Section. The Securities Administrator shall have no liability for any loss,
expense, damage or claim arising out of or with respect to any failure to
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properly prepare and/or timely file any such Form 15, Form 12b-25 or any
amendments to Form 8-K, Form 10-D or Form 10-K, where such failure results from
the Securities Administrator's inability or failure to receive on a timely
basis, any information from or on behalf of any other party hereto needed to
prepare, arrange for execution or file such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence,
bad faith or willful misconduct.
The Securities Administrator shall promptly file, and exercise its
reasonable best efforts to obtain a favorable response to, no-action requests,
or other appropriate exemptive relief with the Commission seeking the usual and
customary exemption from such reporting requirements granted to issuers of
securities similar to the Certificates if and to the extent the Depositor shall
deem any such relief to be necessary or appropriate. Unless otherwise advised
by the Depositor, the Securities Administrator shall assume that the Depositor
is in compliance with the preceding sentence. In no event shall the Securities
Administrator have any liability for the execution or content of any document
required to be filed by the 1934 Act. The Depositor agrees to promptly furnish
to the Securities Administrator, from time to time upon request, such further
information, reports, and financial statements within its control related to
the Trust Agreement and the Mortgage Loans as the Depositor reasonably deems
appropriate to prepare and file all necessary reports with the Commission.
Section 13.02 Form 8-K Filings.
The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter within four (4) Business Days after the
occurrence of an event requiring disclosure in a current report on Form 8-K
(each such event, a "Reportable Event"), and if requested by the Depositor, the
Master Servicer shall sign on behalf of the Depositor and the Securities
Administrator shall prepare and file with the Commission any Form 8-K, as
required by the Exchange Act. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K
("Form 8-K Disclosure Information") shall be determined and prepared by and at
the direction of the Depositor pursuant to this Section 13.02 and the
Securities Administrator shall have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in this Section 13.02.
As set forth on Exhibit M hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of a Reportable Event
each of the Securities Administrator, the Trustee, the Custodians, the Master
Servicer, the Sponsor and the Depositor shall be required to provide to the
Securities Administrator and Depositor, to the extent known, in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any Form 8-K
Disclosure Information, if applicable and (ii) the Depositor shall approve, as
to form and substance, or disapprove, as the case may be, the inclusion of the
Form 8-K Disclosure Information. The Depositor shall be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this paragraph.
111
After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor for
review. No later than 12:00 noon New York City time on the fourth (4th)
Business Day after the Reportable Event, a duly authorized representative of
the Master Servicer shall sign the Form 8-K and return such signed Form 8-K to
the Securities Administrator, and no later than 5:30 p.m. New York City time on
such Business Day the Securities Administrator shall file such Form 8-K with
the Commission. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 13.01. Promptly (but no later than one (1)
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a
final executed copy of each Form 8-K prepared by the Securities Administrator.
The signing party at the Master Servicer can be contacted at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust, GSAA 2007-2,
by e-mail at ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile (410)
715-2380. The parties to this Agreement acknowledge that the performance by the
Securities Administrator of its duties under this Section 13.02 related to the
timely preparation and filing of Form 8-K is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties
under this Section 13.02. The Securities Administrator shall have no liability
for any loss, expense, damage, claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 8-K, where such
failure results from the Securities Administrator's inability or failure to
receive on a timely basis, any information from any other party hereto (other
than an Affiliate) needed to prepare, arrange for execution or file such Form
8-K, not resulting from its own negligence, bad faith or willful misconduct.
Section 13.03 Form 10-D Filings.
Within fifteen days after each Distribution Date (subject to
permitted extensions under the Exchange Act and until a Form 15 is filed
pursuant to Section 13.05), the Securities Administrator shall prepare and file
with the Commission, and the Master Servicer shall sign on behalf of the
Depositor any distribution report on Form 10-D required by the Exchange Act, in
form and substance as required by the Exchange Act. The Securities
Administrator shall file each Form 10-D with a copy of the related Monthly
Statement attached thereto. Any disclosure in addition to the monthly statement
that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be determined and prepared by and at the direction of the
Depositor pursuant to the following paragraph and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or
prepare any Additional Form 10-D Disclosure, except as set forth in this
Section 13.03.
As set forth on Exhibit N hereto, within five (5) calendar days
after the related Distribution Date, (i) certain parties to the GSAA Home
Equity Trust 2007-2 Asset-Backed Certificates transaction shall be required to
provide to the Securities Administrator and the Depositor, to the extent known,
in ▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor
shall be responsible for any reasonable fees and
112
expenses assessed or incurred by the Securities Administrator in connection
with any Additional Form 10-D Disclosure on Form 10-D pursuant to this Section
13.03.
After preparing the Form 10-D, the Securities Administrator shall
forward electronically a draft copy of the Form 10-D to the Depositor for
review. No later than two (2) Business Days following the tenth (10th) calendar
day after the related Distribution Date, a duly authorized representative of
the Master Servicer shall sign the Form 10-D and return such signed Form 10-D
to the Securities Administrator and Depositor, and no later than 5:30 p.m. New
York City time on the fifteenth (15th) calendar day after such Distribution
Date the Securities Administrator shall file such Form 10-D with the
Commission. If a Form 10-D cannot be filed on time or if a previously filed
Form 10-D needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 13.01. Promptly (but no later than one (1)
Business Day) after filing with the Commission, the Securities Administrator
will make available on its internet website (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a
final executed copy of each Form 10-D prepared by the Securities Administrator.
The signing party at the Master Servicer can be contacted at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust, GSAA 2007-2,
by e-mail at ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ or by facsimile (410)
715-2380. Each party to this Agreement acknowledges that the performance by the
Securities Administrator of its duties under this Section 13.03 related to the
timely preparation and filing of Form 10-D is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties
under this Section 13.03. The Securities Administrator shall have no liability
for any loss, expense, damage or claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 10-D, where such
failure results from the Securities Administrator's inability or failure to
receive on a timely basis, any information from any other party hereto needed
to prepare, arrange for execution or file such Form 10-D, not resulting from
its own negligence, bad faith or willful misconduct.
Form 10-D requires the registrant to indicate (by checking "yes" or
"no") that it "(1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor shall
notify the Securities Administrator in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of
a report on Form 10-D if the answer to the questions should be "no". The
Securities Administrator shall be entitled to rely on such representations in
preparing, executing and/or filing any such report.
Section 13.04 Form 10-K Filings.
Within 90 days after the end of each fiscal year of the Trust or
such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline") (it being understood that the fiscal year for the Trust ends on
December 31 of each year), commencing in March 2008 and continuing until the
Trust has been deregistered with the Commission, the Securities Administrator
shall prepare and file on behalf of the Depositor an annual report on Form
10-K, in form and substance as required by the Exchange Act. Each such Form
10-K shall include the following items, in each case to the extent they have
been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement and the related Servicing Agreement: (i) an
annual compliance statement for each Servicer, each Additional
113
Servicer, the Master Servicer and the Securities Administrator (each such
party, a "Reporting Servicer") as described below, (ii)(A) the annual reports
on assessment of compliance with servicing criteria for each Reporting
Servicer, as described under this Section 13.04 and Section 13.07, and (B) if
each Reporting Servicer's report on assessment of compliance with servicing
criteria described under Section 13.04 and Section 13.07 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if each Reporting Servicer's report on assessment of
compliance with servicing criteria described under Section 13.04 and Section
13.07 is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for each
Reporting Servicer, as described under Section 13.07, and (B) if any registered
public accounting firm attestation report described under Section 13.07
identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any such registered public accounting firm
attestation report is not included as an exhibit to such Form 10-K, disclosure
that such report is not included and an explanation why such report is not
included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification as described in Section
13.06. Any disclosure or information in addition to the disclosure or
information specified in items (i) through (iv) above that is required to be
included on Form 10-K ("Additional Form 10-K Disclosure") shall be determined
and prepared by and at the direction of the Depositor pursuant to the following
paragraph and the Securities Administrator shall have no duty or liability for
any failure hereunder to determine or prepare any Additional Form 10-K
Disclosure, except as set forth in this Section 13.04.
The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and Securities Administrator shall cause any
Additional Servicer engaged by it to deliver) to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing in
March 2008, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of such party's activities during the preceding calendar year or
portion thereof and of such party's performance under this Agreement, or such
other applicable agreement in the case of an Additional Servicer, has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, such party has fulfilled all its obligations
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof. Promptly after receipt of each such Officer's
Certificate, the Depositor shall review such Officer's Certificate and consult
with each such party, as applicable, as to the nature of any failures by such
party, in the fulfillment of any of such party's obligations hereunder or, in
the case of an Additional Servicer, under such other applicable agreement.
The Master Servicer shall enforce any obligation of the Servicers,
to the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer an annual statement of compliance within the time frame set
forth in, and in such form and substance as may be required pursuant to, the
related Servicing Agreement The Master Servicer shall include such annual
statements of compliance with its own annual statement of compliance to be
submitted to the Securities Administrator pursuant to this Section.
As set forth on Exhibit O hereto, no later than March 15 of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2008 and continuing until
114
the Trust has been deregistered with the Commission, (i) certain parties to the
GSAA Home Equity Trust 2007-2 Asset-Backed Certificates transaction shall be
required to provide to the Securities Administrator and the Depositor, to the
extent known, in ▇▇▇▇▇-compatible form, or in such other form as otherwise
agreed upon by the Securities Administrator and such party, the form and
substance of any Additional Form 10-K Disclosure, if applicable, and (ii) the
Depositor shall approve, as to form and substance, or disapprove, as the case
may be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
Depositor shall be responsible for any reasonable fees and expenses assessed or
incurred by the Securities Administrator in connection with including any
Additional Form 10-K Disclosure on Form 10-K pursuant to this Section 13.04.
After preparing the Form 10-K, the Securities Administrator shall forward
electronically a draft copy of the Form 10-K to the Depositor for review. No
later than 12:00 noon New York City time on the fourth Business Day prior to
the 10-K Filing Deadline, a senior officer of the Depositor shall sign the Form
10-K and return such signed Form 10-K to the Securities Administrator. If a
Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to
be amended, the Securities Administrator will follow the procedures set forth
in 13.01. Promptly (but no later than one (1) Business Day) after filing with
the Commission, the Securities Administrator will make available on its
internet website located at (located at ▇▇▇.▇▇▇▇▇▇▇.▇▇▇) a final executed copy
of each Form 10-K prepared by the Securities Administrator. The parties to this
Agreement acknowledge that the performance by the Securities Administrator of
its duties under this Section 13.04 related to the timely preparation and
filing of Form 10-K is contingent upon such parties (and any Additional
Servicer or Servicing Function Participant) strictly observing all applicable
deadlines in the performance of their duties under this Section 13.04, Section
13.06, Section 13.01 and Section 13.07. The Securities Administrator shall have
no liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file such Form 10-K,
where such failure results from the Securities Administrator's inability or
failure to receive on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
Form 10-K requires the registrant to indicate (by checking "yes" or "no")
that it "(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days." The Depositor shall
notify the Securities Administrator in writing, no later than March 15th if the
answer to the questions should be "no". The Securities Administrator shall be
entitled to rely on such representations in preparing, executing and/or filing
any such report.
Section 13.05 Form 15 Filing.
Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare, sign and file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust Fund under the Exchange Act.
Section 13.06 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
115
Each Form 10-K shall include a certification, (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15(d)-14(d) under the Exchange
Act (pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations of the Commission promulgated thereunder). Each Servicer, the
Securities Administrator and the Master Servicer shall cause any Servicing
Function Participant engaged by it to provide to the Person who signs the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (the "Certifying Person"), by March 15 of each
year in which the Trust is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (each, a "Back-Up Certification"), in the form attached hereto as
Exhibit J-1 (in the case of the Master Servicer) and Exhibit J-2 (in the case
of the Securities Administrator), upon which the Certifying Person, the entity
for which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. An authorized officer of the
Depositor shall serve as the Certifying Person on behalf of the Trust. In the
event that prior to the filing date of the Form 10-K in March of each year, the
Securities Administrator or the Master Servicer has actual knowledge of
information material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, the Securities
Administrator or the Master Servicer, as the case may be, shall promptly notify
the Depositor. The respective parties hereto agree to cooperate with all
reasonable requests made by any Certifying Person or Certification Party in
connection with such Person's attempt to conduct any due diligence that such
Person reasonably believes to be appropriate in order to allow it to deliver
any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or portion thereof with respect to the Trust
Fund. In the event the Master Servicer or the Securities Administrator or any
Servicing Function Participant engaged by parties is terminated or resigns
pursuant to the terms of this Agreement, or any applicable sub-servicing
agreement, as the case may be, such party shall provide a Back-Up Certification
to the Certifying Person pursuant to this Section 13.06 with respect to the
period of time it was subject to this Agreement or any applicable sub-servicing
agreement, as the case may be.
The Master Servicer shall enforce any obligation of the Servicers, to the
extent set forth in the related Servicing Agreement, to deliver to the Master
Servicer a certification similar to the Back-Up Certification within the time
frame set forth in, and in such form and substance as may be required pursuant
to, the related Servicing Agreement.
Section 13.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15th of each calendar year, commencing in 2008:
(1) Each of the Master Servicer, the Securities Administrator and the
Custodians shall deliver to the Depositor and the Securities Administrator a
report regarding the Master Servicer's, the Securities Administrator's or
Custodians', as applicable, assessment of compliance with the Servicing
Criteria applicable to it during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB; provided, however, the Securities Administrator and Custodians
shall deliver such report until a Form 15 is filed pursuant to Section 13.06.
Such report shall be signed by an authorized officer of such Person and shall
address each of the Servicing Criteria applicable to it identified in Exhibit K
hereto delivered to the Depositor concurrently with the execution of this
Agreement. To the extent any of the Servicing Criteria so specified are not
applicable to such Person, with respect to asset-backed securities transactions
taken as a whole involving such
116
Person and that are backed by the same asset type backing the Certificates,
such report shall include such a statement to that effect. The Depositor and
its respective officers and directors shall be entitled to rely on upon each
such servicing criteria assessment.
(2) Each of the Master Servicer, the Securities Administrator and the
Custodians shall deliver to the Depositor, the Securities Administrator and the
Master Servicer a report of a registered public accounting firm that attests
to, and reports on, the assessment of compliance made by Master Servicer, the
Securities Administrator or the Custodians, as applicable, and delivered
pursuant to the preceding paragraphs. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and the Exchange Act, including, without limitation that in the event that an
overall opinion cannot be expressed, such registered public accounting firm
shall state in such report why it was unable to express such an opinion. Such
report must be available for general use and not contain restricted use
language. To the extent any of the Servicing Criteria are not applicable to
such Person, with respect to asset-backed securities transactions taken as a
whole involving such Person and that are backed by the same asset type backing
the Certificates, such report shall include such a statement to that effect.
(3) The Master Servicer shall cause each Servicer and Reporting
Subcontractor to deliver to the Depositor an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b) of this
Section 13.07.
(4) The Securities Administrator shall cause each Reporting Subcontractor
under its employ, if any, to deliver to the Depositor and the Master Servicer
an assessment of compliance and accountant's attestation as and when provided
in paragraphs (a) and (b) of this Section.
(b) Each assessment of compliance provided by the Securities
Administrator, the Master Servicer or the Custodians pursuant to Section
13.07(a)(2) shall address each of the Servicing Criteria applicable to it
specified on a Exhibit K hereto delivered to the Depositor concurrently with
the execution of this Agreement or, in the case of a securities administrator,
master servicer or custodian subsequently appointed as such, on or prior to the
date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 13.07(a)(3) or (4) need not address any
elements of the Servicing Criteria other than those specified pursuant to
Section 13.07(a)(1).
117
Section 13.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any subservicer used by the Master
Servicer and shall cause each Servicer to cause any subservicer used by such
servicer for the benefit of the Depositor to comply with the provisions of this
Article XIII to the same extent as if such Servicer or subservicer were the
Master Servicer (except with respect to the Master Servicer's duties with
respect to preparing and filing any Exchange Act Reports or as the Certifying
Person). The Master Servicer shall be responsible for obtaining from each
Servicer and subservicer and delivering to the Depositor any servicer
compliance statement required to be delivered by such Servicer or subservicer
pursuant to the second paragraph of Section 13.04, any assessment of compliance
and attestation required to be delivered by such Servicer or subservicer under
Section 13.07 and any certification required to be delivered to the Certifying
Person under Section 13.05 as and when required to be delivered.
(b) It shall not be necessary for the Master Servicer, any Servicer, any
subservicer or the Securities Administrator to seek the consent of the
Depositor or any other party hereto to the utilization of any Subcontractor.
The Master Servicer or the Securities Administrator, as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Master Servicer or administrator) a written description
(in form and substance satisfactory to the Depositor) of the role and function
of each Subcontractor utilized by such Person (or in the case of the Master
Servicer, any Servicer or any subservicer), specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be a
Reporting Subcontractor, the Master Servicer or the Securities Administrator,
as applicable, shall cause any such Subcontractor used by such Person (or in
the case of the Master Servicer, any Servicer or any subservicer) for the
benefit of the Depositor to comply with the provisions of Section 13.07 of this
Agreement to the same extent as if such Subcontractor were the Master Servicer
(except with respect to the Master Servicer's duties with respect to preparing
and filing any Exchange Act Reports or as the Certifying Person) or the
Securities Administrator, as applicable. The Master Servicer or the Securities
Administrator, as applicable, shall be responsible for obtaining from each
Subcontractor and delivering to the Depositor and the Master Servicer, any
assessment of compliance and attestation required to be delivered by such
Subcontractor under Section 13.07, in each case as and when required to be
delivered.
* * * * * * *
118
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY, solely in its
capacity as Trustee and a Custodian and not in its
individual capacity
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signer
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Autorized Signer
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Master
Servicer and Securities
Administrator
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURES CONTINUE]
Master Servicing and Trust Agreement
THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
ASSOCIATION, as a Custodian
By: /s/ Jn Ze
-------------------------------------
Name: Jn Ze
Title: Assistant Treasurer
U.S. BANK NATIONAL ASSOCIATION, as a Custodian
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Master Servicing and Trust Agreement
SCHEDULE I
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
S-I-1
EXHIBIT A
FORM OF CLASS AV1, CLASS AF2, CLASS AF3, CLASS AF4A, CLASS AF4B, CLASS AF5A,
CLASS AF5B, CLASS AF6A, CLASS AF6B, CLASS M1, CLASS M2, CLASS M3, CLASS M4,
CLASS M5, CLASS M6, CLASS B1, CLASS B2 AND CLASS B3 CERTIFICATES
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL
BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
IN THE EVENT THAT A TRANSFER OF A PRIVATE CERTIFICATE WHICH IS A BOOK-ENTRY
CERTIFICATE IS TO BE MADE IN RELIANCE UPON AN EXEMPTION FROM THE SECURITIES ACT
AND SUCH LAWS, IN ORDER TO ASSURE COMPLIANCE WITH THE SECURITIES ACT AND SUCH
LAWS, THE CERTIFICATEHOLDER DESIRING TO EFFECT SUCH TRANSFER WILL BE DEEMED TO
HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET FORTH IN THE
TRANSFEROR CERTIFICATE IN RESPECT OF SUCH CERTIFICATE AND THE TRANSFEREE WILL
BE DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET
FORTH IN THE RULE 144A LETTER IN RESPECT OF SUCH CERTIFICATE, IN EACH CASE AS
IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
A-1
Certificate No. :
Cut-off Date : February 1, 2007
First Distribution Date : March 26, 2007
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class :
-------------------- ------------
CUSIP
ISIN
A-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates, Series 2007-2
[Class AV1][Class AF2][Class AF3][Class AF4A][Class AF4B]
[Class AF5A] [Class AF5B][Class AF6A][Class AF6B]
[Class M1][Class M2] [Class M3][Class M4]
[Class M5][Class M6][Class B1][Class B2][Class B3]
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 as a custodian, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator"), The Bank of New York Trust Company, National Association, as a
custodian, and U.S. Bank National Association, as a custodian. To the extent
not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
A-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-----------------------
Authenticated:
By:
--------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
A-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2007-2 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the applicable Interest Accrual
Period for the related Distribution Date; provided, however, that for any
Definitive Certificates, the Record Date shall be the last Business Day of the
month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other
A-5
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Trustee, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
______________________________________________________________________________,
account number ______, or, if mailed by check, to ____________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
A-8
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL,
DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR, TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
B-1
Certificate No. : 1
Cut-off Date : February 1, 2007
First Distribution Date : March 26, 2007
$[______]
Notional Balance of this Certificate :
Percentage Interest of this
Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates, Series 2007-2
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 ▇▇▇▇▇▇▇ Sachs 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 as a custodian, ▇▇▇▇▇ Fargo Bank,
National Association, as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator"), The Bank of New York Trust Company, National Association, as a
custodian, and U.S. Bank National Association, as a custodian. To the extent
not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and such laws. In the event of
any such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter, (in substantially the
form attached to the Agreement), or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor. No transfer of a Certificate of this
Class shall be made unless the
B-3
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA or
Section 4975 of the Code or any materially similar provisions of applicable
federal, state or local law ("Similar Law") or a person acting on behalf of or
investing plan assets of any such plan, which representation letter shall not
be an expense of the Securities Administrator, or (ii) if the transferee is an
insurance company and the certificate has been the subject of an
ERISA-Qualifying Underwriting, a representation letter that it is purchasing
such Certificates with the assets of its general account and that the purchase
and holding of such Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets,
an Opinion of Counsel satisfactory to the Securities Administrator, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Depositor, the Trustee or the Trust Fund, addressed to the Securities
Administrator, the Trustee and the Depositor to the effect that the purchase
and holding of such Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Trustee to any obligation in addition
to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
B-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------
Authenticated:
By:
----------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2007-2 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Trustee and the other parties to the Agreement with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future
B-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: .
_______________________________________________________________________________
Dated:
-------------------------------------
Signature by or on behalf of assignor
B-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number __________, or, if mailed by check, to ________________________,
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ____,
the assignee named above, or ,
as its agent.
B-9
EXHIBIT C
FORM OF CLASS R, CLASS RC AND CLASS RX CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR AN
OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT. IN THE EVENT THAT SUCH
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT
WITHOUT AN OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [R][RC][RX]
Cut-off Date : February 1, 2007
First Distribution Date : March 26, 2007
Initial Certificate Balance of this
Certificate ("Denomination") : $100
Initial Certificate Balance of all
Certificates of this Class: : $100
CUSIP :
ISIN :
C-1
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates, Series 2007-2
Class [R][RC][RX]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. This Certificate does not evidence
an obligation of, or an interest in, and is not guaranteed by the Depositor,
the Master Servicer, the Securities Administrator or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class [R][RC][RX] Certificates pursuant to a Master Servicing and Trust
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), Deutsche Bank
National Trust Company, as trustee (in such capacity, the "Trustee") and as a
custodian, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in such
capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York Trust Company,
National Association, as a custodian, and U.S. Bank National Association, as a
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class [R][RC][RX]
Certificate at the office designated by the Securities Administrator for such
purposes.
No transfer of a Class [R][RC][RX] Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA, a plan or arrangement subject to Section 4975 of the Code or a
plan subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer, which representation letter shall not be an expense of the Securities
Administrator or the Trust Fund, or, alternatively, an opinion of counsel as
described in the Agreement. In the event that such representation is violated,
or any attempt is made to transfer to a plan or arrangement subject to Section
406 of ERISA or a plan subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement, without an opinion
C-2
of counsel as described in the Agreement, such attempted transfer or
acquisition shall be void and of no effect.
Each Holder of this Class [R][RC][RX] Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class [R][RC][RX]
Certificate to have agreed to be bound by the following provisions, and the
rights of each Person acquiring any Ownership Interest in this Class
[R][RC][RX] Certificate are expressly subject to the following provisions: (i)
each Person holding or acquiring any Ownership Interest in this Class
[R][RC][RX] Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in its
status as a Permitted Transferee, (ii) no Ownership Interest in this Class
[R][RC][RX] Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the Transfer
of this Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under Section 5.02(b) of the
Agreement, the Securities Administrator shall have been furnished with a
Transfer Affidavit of the initial owner or the proposed transferee in the form
attached as Exhibit G to the Agreement, (iii) each Person holding or acquiring
any Ownership Interest in this Class [R][RC][RX] Certificate shall agree (A) to
obtain a Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest this Class [R][RC][RX] Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class
[R][RC][RX] Certificate, (C) not to cause income with respect to the Class
[R][RC][RX] Certificate to be attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person and (D) not to Transfer the Ownership Interest
in this Class [R][RC][RX] Certificate or to cause the Transfer of the Ownership
Interest in this Class [R][RC][RX] Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee and (iv) any
attempted or purported Transfer of the Ownership Interest in this Class
[R][RC][RX] Certificate in violation of the provisions herein shall be
absolutely null and void and shall vest no rights in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
C-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-------------------------------
Authenticated:
By:
----------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
C-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2007-2 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name
this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other parties to the Agreement with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder
C-5
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate for
registration of transfer at the office designated by the Securities
Administrator for such purposes, accompanied by a written instrument of
transfer in form satisfactory to the Securities Administrator duly executed by
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor, the Securities Administrator and any agent of
the Trustee, the Depositor or the Securities Administrator may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Depositor, the Trustee or Securities Administrator,
nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans is less than or equal to 10% of the Cut-off Date Pool
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to effectuate the purchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined and in the manner as provided in the
Agreement. The obligations and responsibilities created by this Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
______________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ________, or, if mailed by check, to __________________________,
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________________,
the assignee named above, or _____________________________________________,
as its agent.
C-8
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR
RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR,
THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR, TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA,
D-1
SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR
OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS DESCRIBED
ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : February 1, 2007
First Distribution Date : March 26, 2007
Percentage Interest of this Certificate
("Denomination") : 100%
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates, Series 2007-2
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor the Master
Servicer, to Securities Administrator or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage Loans
are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), Deutsche
Bank National Trust Company, as trustee (in such capacity, the "Trustee") and
as a custodian, ▇▇▇▇▇ Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York Trust Company,
National Association, as a custodian, and U.S. Bank National Association, as a
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and such laws. In the event of
any such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Agreement) and deliver either (i) a Rule 144A Letter (in substantially the form
attached to the Agreement), or (ii) a written Opinion of Counsel to the
Securities Administrator that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an
D-3
expense of the transferor. No transfer of a Certificate of this Class shall be
made unless the Securities Administrator shall have received either (i) a
representation letter from the transferee of such Certificate, acceptable to
and in form and substance satisfactory to the Securities Administrator, to the
effect that such transferee is not an employee benefit plan subject to Section
406 of ERISA or Section 4975 of the Code or any materially similar provisions
of applicable federal, state or local law ("Similar Law") or a person acting on
behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Securities Administrator, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is purchasing
such Certificates with the assets of its general account and that the purchase
and holding of such Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets,
an Opinion of Counsel satisfactory to the Securities Administrator, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Depositor, the Trustee or the Trust Fund, addressed to the Securities
Administrator, the Trustee and the Depositor to the effect that the purchase
and holding of such Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Trustee to any obligation in addition
to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
D-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------
Authenticated:
By:
-------------------------------
Authorized Signatory of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
D-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2007-2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2007-2 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Trustee and the other parties to the Agreement with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by
D-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Trustee, the Depositor, the Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
-------------------------------------
Signature by or on behalf of assignor
D-8
DISTRIBUTION INSTRUCTIONS
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to ____________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
D-9
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as of February 1, 2007
(the "Agreement"), among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Deutsche Bank National Trust Company, as trustee
(in such capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo
Bank, National Association, as master servicer (in such capacity,
the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York
Trust Company, National Association, as a custodian, and U.S. Bank
National Association, as a custodian.
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, for each Mortgage Loan listed in the Mortgage Loan Schedule for
which the undersigned is specified as the Custodian (other than any Mortgage
Loan listed in the attached exception report), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to a MERS Loan, an executed Assignment of
Mortgage (which may be included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability, recordability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no
E-1
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.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION][U.S.
BANK NATIONAL ASSOCIATION], not in its
individual capacity, but solely as
Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Trustee]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as of February 1, 2007
(the "Agreement"), among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Deutsche Bank National Trust Company, as trustee
(in such capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo
Bank, National Association, as master servicer (in such capacity,
the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York
Trust Company, National Association, as a custodian, and U.S. Bank
National Association, as a custodian.
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Master
Servicing and Trust Agreement (the "Trust Agreement"), the undersigned, as
Custodian, hereby certifies, subject to any exceptions listed on the exception
report attached hereto, that as to each Mortgage Loan listed in the Mortgage
Loan Schedule for which the undersigned is specified as the Custodian (other
than any Mortgage Loan paid in full or listed on the attached exception report)
it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Loan;
(c) personal endorsement and/or guaranty agreements executed in
connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if provided);
(d) the related original Mortgage and evidence of its recording or
a certified copy of the mortgage with evidence of recording;
F-1
(e) except with respect to a MERS Loan, originals of any
intervening Mortgage assignment or certified copies in either case
evidencing recording; provided that the assignment may be in the form of
a blanket assignment or assignments, a copy of which with evidence of
recording shall be acceptable;
(f) if provided, originals of all assumption, modification,
agreements or certified copies thereof, in either case with evidence of
recording if required to maintain the lien of the mortgage or if
otherwise required, or, if recordation is not required, an original or
copy of the agreement;
(g) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(h) to the extent applicable, (1) an original power of attorney, or
a certified copy thereof, in either case with evidence of recordation if
the document to which such power of attorney relates is recorded, and (2)
if provided, an original or copy of any surety agreement or guaranty
agreement;
(i) for each Mortgage Loan with respect to which the Mortgagor's
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement or a certified copy thereof;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if provided.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items 2, 8, 33 and 34 of
the Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or the perfection or priority of any Mortgage. Notwithstanding anything
herein to the contrary, the Custodian has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.
F-2
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION][U.S.
BANK NATIONAL ASSOCIATION], not in its
individual capacity, but solely as
Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
F-3
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
GSAA Home Equity Trust 2007-2,
Asset-Backed Certificates, Series 2007-2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R][RC][RX] Certificate
(the "Certificate") issued pursuant to the Master Servicing and Trust
Agreement, dated as of February 1, 2007 (the "Agreement"), among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Deutsche Bank National Trust
Company, as trustee (in such capacity, the "Trustee") and as a custodian, ▇▇▇▇▇
Fargo Bank, National Association, as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), The Bank of New York Trust Company, National
Association, as a custodian, and U.S. Bank National Association, as a
custodian. Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor, the Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass through entity an
affidavit that such record holder is a Permitted Transferee and the pass
through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass through entity" includes a
G-1
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives and, except as
may be provided in Treasury Regulations, persons holding interests in pass
through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash flow
with respect thereto in some or all periods and intends to pay such taxes as
they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other U.S.
person.
12. Check one of the following:
|_| The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
G-2
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the
compounding period used by the Transferee.
|_| The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from the
Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of Sections
1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the U.S.
Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including, but
not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good faith.
|_| None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any federal, state or local law that is substantially similar
to Title I of ERISA or Section 4975 of the Code, and the Transferee is not
acting on behalf of or investing plan assets of such a plan.
G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _______, 20__.
-------------------------------
Print Name of Transferee
By:
------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20__.
---------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: GSAA Home Equity Trust 2007-2, Asset-Backed Certificates Series
2007-2, 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.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: GSAA Home Equity Trust 2007-2, Asset-Backed Certificates, Series
2007-2, 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 AV1, Class
AF2, Class AF3, Class AF4A, Class AF4B, Class AF5A, Class AF5B, Class AF6A,
Class AF6B, Class M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class
B1, Class B2 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 X Certificate or Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, the
purchaser is an insurance company that is purchasing this certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, (e)
we have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any
interest in the Certificates or any other similar 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-1
FORM OF BACK-UP CERTIFICATION
(Master Servicer)
Re: Master Servicing and Trust Agreement, dated as of February 1, 2007
(the "Agreement"), among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Deutsche Bank National Trust Company, as trustee
(in such capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo
Bank, National Association, as master servicer (in such capacity,
the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York
Trust Company, National Association, as a custodian, and U.S. Bank
National Association, as a custodian.
I, ________________________________, the _______________________ of [NAME
OF COMPANY] (the "Company"), certify to the Depositor, and its officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report"), all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Company during 200[ ] that
were delivered by the Company to the Depositor and the Securities
Administrator pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the Depositor;
(4) I am responsible for reviewing the activities performed by the
Company as a servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the
J-1-1
Compliance Statement, the Servicing Assessment or the Attestation Report,
the Company has fulfilled its obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment 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:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF BACK-UP CERTIFICATION
(Securities Administrator)
Re: Master Servicing and Trust Agreement, dated as of February 1, 2007
(the "Agreement"), among GS Mortgage Securities Corp., as depositor
(the "Depositor"), Deutsche Bank National Trust Company, as trustee
(in such capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo
Bank, National Association, as master servicer (in such capacity,
the "Master Servicer") and as securities administrator (in such
capacity, the "Securities Administrator"), The Bank of New York
Trust Company, National Association, as a custodian, and U.S. Bank
National Association, as a custodian.
I, ________________________________, the _______________________ of [NAME
OF COMPANY] (the "Company"), certify to the Depositor, and its officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report"), all
reports on Form 10-D containing statements to certificateholders filed in
respect of the period included in the year covered by the annual report
of the Trust Fund (collectively, the "Distribution Date Statements");
(2) Assuming the accuracy and completeness of the information
delivered to the Company by the Master Servicer as provided in the
Agreement and subject to paragraph (4) below, the distribution
information determined by the Company and set forth in the Distribution
Date Statements contained in all Form 10-D's included in the year covered
by the annual report of such Trust on Form 10-K for the calendar year
200[ ], is complete and does not contain any material misstatement of
fact as of the last day of the period covered by such annual report;
(3) Based solely on the information delivered to the Company by the
Master Servicer as provided in the Agreement, (i) the distribution
information required under the Agreement to be contained in the Trust
Fund's Distribution Date Statements and (ii) the servicing information
required to be provided by the Master Servicer to the Securities
Administrator for inclusion in the Trust Fund's Distribution Date
Statements, to the extent received by the Securities Administrator from
the Master Servicer in accordance with the Agreement, is included in such
Distribution Date Statements;
J-2-1
(4) The Company is not certifying as to the accuracy, completeness
or correctness of the information which it received from the Master
Servicer and did not independently verify or confirm the accuracy,
completeness or correctness of the information provided by the Master
Servicer;
(5) I am responsible for reviewing the activities performed by the
Company as a person "performing a servicing function" under the
Agreement, and based on my knowledge and the compliance review conducted
in preparing the Servicing Assessment and except as disclosed in the
Servicing Assessment or the Attestation Report, the Company has fulfilled
its obligations under the Agreement; and
(6) The Servicing Assessment and Attestation Report required to be
provided by the Company pursuant to the Agreement, have been provided to
the Depositor. Any material instances of noncompliance described in such
reports have been disclosed to the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: ____________________________
By: ____________________________
Name:
Title:
J-2-2
EXHIBIT K
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT
OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the [Master Servicer]
[Securities Administrator] [Custodian] shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
-----------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor
any performance or other triggers and events of
default in accordance with the transaction X X
1122(d)(1)(i) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(1)(ii) servicing activities.
-----------------------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
1122(d)(1)(iii) are maintained.
-----------------------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is
in effect on the party participating in the
servicing function throughout the reporting period
in the amount of coverage required by and
otherwise in accordance with the terms of the X
1122(d)(1)(iv) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related
bank clearing accounts no more than two business
days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements. X X
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of
an obligor or to an investor are made only by
1122(d)(2)(ii) authorized personnel. X
-----------------------------------------------------------------------------------------------------------------------------------
K-1
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances,
are made, reviewed and approved as specified in X
1122(d)(2)(iii) the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as
cash reserve accounts or accounts established as a
form of overcollateralization, are separately
maintained (e.g., with respect to commingling of
1122(d)(2)(iv) cash) as set forth in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------------------------
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 X
that meets the requirements of Rule 13k-1(b)(1) of
1122(d)(2)(v) the Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent X
1122(d)(2)(vi) unauthorized access.
-----------------------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis
for all asset-backed securities related bank
accounts, including custodial accounts and related
bank clearing accounts. These reconciliations are
(A) mathematically accurate; (B) prepared within
30 calendar days after the bank statement cutoff
date, or such other number of days specified in
the transaction agreements; (C) reviewed and
approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These X X
reconciling items are resolved within 90 calendar
days of their original identification, or such
other number of days specified in the transaction
1122(d)(2)(vii) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
K-2
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such
reports (A) are prepared in accordance with
timeframes and other terms set forth in the
transaction agreements; (B) provide information
calculated in accordance with 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 X X
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by
1122(d)(3)(i) the Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and
remitted in accordance with timeframes,
distribution priority and other terms set forth in X
1122(d)(3)(ii) the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted
within two business days to the Servicer's
investor records, or such other number of days
1122(d)(3)(iii) specified in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other form
1122(d)(3)(iv) of payment, or custodial bank statements. X X
-----------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is X
maintained as required by the transaction
agreements or related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are
safeguarded as required by the transaction
1122(d)(4)(ii) agreements. X
-----------------------------------------------------------------------------------------------------------------------------------
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.
-----------------------------------------------------------------------------------------------------------------------------------
K-3
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(iv) mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage
loans agree with the Servicer's records with
1122(d)(4)(v) respect to an obligor's unpaid principal balance.
-----------------------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications
or re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
1122(d)(4)(vi) documents.
-----------------------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu
of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded
in accordance with the timeframes or other
requirements established by the transaction
1122(d)(4)(vii) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent mortgage loans including, for example,
phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------------------------
K-4
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return
for mortgage loans with variable rates are
computed based on the related mortgage loan
1122(d)(4)(ix) documents.
-----------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual
basis, or such other period specified in the
transaction agreements; (B) interest on such funds
is paid, or credited, to obligors in accordance
with applicable mortgage loan documents and state
laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment
of the related mortgage loans, or such other
number of days specified in the transaction
1122(d)(4)(x) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax
or insurance payments) are made on or before the
related penalty or expiration dates, as indicated
on the appropriate bills or notices for such
payments, provided that such support has been
received by the servicer at least 30 calendar days
prior to these dates, or such other number of days
1122(d)(4)(xi) specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are
paid from the servicer's funds and not charged to
the obligor, unless the late payment was due to
1122(d)(4)(xii) the obligor's error or omission.
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are
posted within two business days to the obligor's
records maintained by the servicer, or such other
number of days specified in the transaction
1122(d)(4)(xiii) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
K-5
-----------------------------------------------------------------------------------------------------------------------------------
Securities
Servicing Criteria Master Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in accordance
1122(d)(4)(xiv) with the 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 X
in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
K-6
EXHIBIT L-1
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: U.S. Bank National Assoc. Attention: Document Custody Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇-▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Custodial Agreement between U.S. Bank National Association, a custodian,
and ___________________ as the company stated in the "agreement".
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
U.S. BANK#_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: _______________________________________________ Original
loan amount: ________
Property Address: ________________________________________________ Payment
amount: ____________
City/State/Zip: __________________________________________________ Interest
rate: ________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain)
_________________________________________________________
L-1-1
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY
NAME:____________________________________________PHONE#________________________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):_______________________________________________DATE:_______________
PHONE #:_____________________________________________________ DATE:____________
_______________________________________________________________________________
PLEASE MAIL DOCUMENTS BACK TO:
_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________
_______________________________________________________________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Master Servicing and Trust Agreement, dated as of February 1, 2007 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo Bank, National
Association, as master servicer (in such capacity, the "Master Servicer") and
as securities administrator (in such capacity, the "Securities
Administrator"), The Bank of New York Trust Company, National Association, as
a custodian, and U.S. Bank National Association, as a custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below. Further, any payments
received by the Servicer listed below in connection with this request for
release have been deposited into the Distribution Account for the benefit of
the Trust.
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
DEUTSCHE BANK #_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: _______________________________________________ Original
loan amount: ________
Property Address: ________________________________________________ Payment
amount: ____________
City/State/Zip: __________________________________________________ Interest
rate: ________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
L-2-1
________5. Other (please explain)
_________________________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:____________________________________________PHONE#________________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):_______________________________________________DATE:_______________
_____________
PHONE #:_____________________________________________________ DATE:____________
______________
_______________________________________________________________________________
PLEASE MAIL DOCUMENTS BACK TO:
_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________
_______________________________________________________________________________
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: The Bank of New York Trust Company, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
RE: Master Servicing and Trust Agreement, dated as of February 1, 2007 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee") and as a custodian, ▇▇▇▇▇ Fargo Bank, National
Association, as master servicer (in such capacity, the "Master Servicer") and
as securities administrator (in such capacity, the "Securities
Administrator"), The Bank of New York Trust Company, National Association, as
a custodian, and U.S. Bank National Association, as a custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
THE BANK OF NEW YORK TRUST COMPANY,
N.A.#_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: _______________________________________________ Original
loan amount: ________
Property Address: ________________________________________________ Payment
amount: ____________
City/State/Zip: __________________________________________________ Interest
rate: ________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
L-3-1
________5. Other (please explain)
_________________________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY
NAME:____________________________________________PHONE#________________________
__________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):_______________________________________________DATE:_______________
_____________
PHONE #:_____________________________________________________
DATE:__________________________
_______________________________________________________________________________
PLEASE MAIL DOCUMENTS BACK TO:
_____________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________
_______________________________________________________________________________
L-3-2
EXHIBIT M
Form 8-K Disclosure Information
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1.01- Entry into a Material Definitive Agreement The party to this Agreement entering into such
material definitive agreement (excluding the Trustee)
Disclosure is required regarding entry into or amendment
of any definitive agreement that is material to the
securitization, even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material Definitive Agreement The party to this Agreement entering into such
material definitive agreement (excluding the Trustee)
Disclosure is required regarding termination of any
definitive agreement that is material to the
securitization (other than expiration in accordance with
its terms), even if depositor is not a party.
Examples: servicing agreement, custodial agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or
receivership, with respect to any of the following:
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Affiliated Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
---------------------------------------------------------- --------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
o Derivative Counterparty Depositor
---------------------------------------------------------- --------------------------------------------------------
M-1
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase Master Servicer and Securities Administrator
a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
Includes an early amortization, performance trigger or
other event, including event of default, that would
materially alter the payment priority/distribution of
cash flows/amortization schedule.
Disclosure will be made of events other than waterfall
triggers which are disclosed in the monthly statements
to the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Securities Administrator
Holders
Disclosure is required of any material modification to
documents defining the rights of Certificateholders,
including the Master Servicing and Trust Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation or (i) Securities Administrator and (ii) Depositor with
Bylaws; Change of Fiscal Year respect to any information relating to the Depositor
Disclosure is required of any amendment "to the
governing documents of the issuing entity".
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Securities Administrator Master Servicer/Securities Administrator/
Servicer
Requires disclosure of any removal, replacement,
substitution or addition of any master servicer,
affiliated servicer, other servicer servicing 10% or
more of pool assets at time of report, other material
servicers or trustee.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new servicer or master Servicer/Master Servicer/Depositor
servicer is also required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also required. successor Trustee
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Depositor and Securities Administrator
Support
Covers termination of any enhancement in manner other
than by its terms, the addition of an
---------------------------------------------------------- --------------------------------------------------------
M-2
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
---------------------------------------------------------- --------------------------------------------------------
enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as
well as derivatives.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement provider is Depositor
also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or
more at the time of issuance of the securities from the
description in the final prospectus, provide updated Reg
AB disclosure about the actual asset pool.
---------------------------------------------------------- --------------------------------------------------------
If there are any new servicers or originators required Depositor
to be disclosed under Regulation AB as a result of the
foregoing, provide the information called for in Items
1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties (excluding the Trustee and any Custodian)
---------------------------------------------------------- --------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is not
otherwise called for in Form 8-K, that the registrant
deems of importance to certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
---------------------------------------------------------- --------------------------------------------------------
M-3
EXHIBIT N
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the [Monthly Statement] Servicer, Master Servicer and Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT included Depositor
on the [Monthly Statement]
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Master Servicing and Trust
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds (i) Depositor (with respect to the Closing Date) and
Information from Item 2(a) of Part II of Form 10-Q: (ii) Master Servicer
With respect to any sale of securities by the sponsor,
depositor or issuing entity, that are backed by the same
asset pool or are otherwise issued by the issuing
entity, whether or not registered, provide the sales and
use of proceeds information in Item 701 of Regulation
S-K. Pricing information can be omitted if securities
were not registered.
---------------------------------------------------------- --------------------------------------------------------
N-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after
expiration of any grace period and provision of any
required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Securities Administrator
Holders
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
N-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any party responsible for the applicable disclosure
items on Form 8-K
Disclose any information required to be reported on Form
8-K during the period covered by the Form 10-D but not
reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as Depositor
material agreements
---------------------------------------------------------- --------------------------------------------------------
N-3
EXHIBIT O
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any party responsible for disclosure items on Form 8-K
Disclose any information required to be reported on Form
8-K during the fourth quarter covered by the Form 10-K
but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules (i) As to agreements, Securities
Administrator/Depositor and (ii) as to financial
statements, Reporting Parties (as to themselves)
(excluding Custodian or Trustee)
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* Depositor
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider
Financial Information
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable exposure Depositor
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information (including Depositor
any required accountants' consent to the use thereof) or
effecting incorporation by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the Form 10-D
for the distribution period in which updated information
is required pursuant to the Items.
---------------------------------------------------------- --------------------------------------------------------
O-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following
entities or their respective property, that is material
to Certificateholders, including any proceedings known
to be contemplated by governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Master Servicing and Trust
Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer
Servicer or Securities Administrator)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Issuing Depositor as to (a)
Entity is an affiliate of the following parties, and (b) Sponsor/Seller as to (a)
to the extent known and material, any of the following
parties are affiliated with one another:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary course Depositor as to (a)
business arrangements" other than would be obtained in Sponsor/Seller as to (a)
an arm's length transaction between (a) the Sponsor
(Seller), Depositor or Issuing Entity on the one hand,
and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
---------------------------------------------------------- --------------------------------------------------------
O-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
---------------------------------------------------------- --------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Trustee Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships involving Depositor as to (a)
the transaction or the pool assets between (a) the Sponsor/Seller as to (a)
Sponsor (Seller), Depositor or Issuing Entity on the one
hand, and (b) any of the following parties (or their
affiliates) on the other hand, that exist currently or
within the past two years and that are material:
---------------------------------------------------------- --------------------------------------------------------
o Master Servicer Master Servicer
---------------------------------------------------------- --------------------------------------------------------
o Securities Administrator Securities Administrator
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
O-3
EXHIBIT P
Form of Master Loan Purchase Agreement, between various sellers and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.1 to Form 8-K/A filed with the Commission on February
14, 2006, Accession No. 0000905148-06-001326]
P-1
EXHIBIT Q
Flow Servicing Agreement, dated as of January 1, 2006,
between Avelo Mortgage, L.L.C. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.13 to Form 8-K filed with the Commission on March 14,
2006, Accession No. 0000905148-06-00297]
Q-1
EXHIBIT R
Amended and Restated Master Mortgage Loan Purchase Agreement,
dated as of November 1, 2005, between GreenPoint Mortgage Funding, Inc.
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on February 14, 2006,
Accession No. 0000905148-06-001326]
R-1
EXHIBIT S
Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on February 14, 2006,
Accession No. 0000905148-06-001326]
S-1
EXHIBIT T
Master Mortgage Loan and Servicing Agreement, dated as of December 1, 2006,
between HSBC Mortgage Corporation (USA) and ▇▇▇▇▇▇▇ Sachs Mortgage Company
MASTER MORTGAGE LOAN PURCHASE
AND SERVICING AGREEMENT
HSBC MORTGAGE CORPORATION, (USA)
Seller And Servicer
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
Initial Purchaser
Dated As Of December 1, 2006
Fixed and Adjustable Rate Mortgage Loans
First and Second Liens
TABLE OF CONTENTS
Page
SECTION 1. Definitions............................................................2
SECTION 2. Agreement to Purchase.................................................15
SECTION 3. Mortgage Loan Schedules...............................................15
SECTION 4. Purchase Price........................................................15
SECTION 5. Examination of Mortgage Files.........................................15
SECTION 6. Conveyance from Seller to Initial Purchaser...........................16
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach...................................................18
SECTION 8. Closing...............................................................37
SECTION 9. Closing Documents.....................................................38
SECTION 10. Costs.................................................................39
SECTION 11. Seller's Servicing Obligations........................................39
SECTION 12. Removal of Mortgage Loans from Inclusion under this Agreement
Upon a Whole Loan Transfer or a Securitization Transfer on One
or More Reconstitution Dates..........................................39
SECTION 13. The Seller............................................................42
SECTION 14. DEFAULT...............................................................44
SECTION 15. Termination...........................................................45
SECTION 16. Successor to the Seller...............................................46
SECTION 17. Financial Statements..................................................47
SECTION 18. Mandatory Delivery: Grant of Security Interest........................47
SECTION 19. Notices...............................................................48
SECTION 20. Severability Clause...................................................49
SECTION 21. Counterparts..........................................................49
SECTION 22. Governing Law.........................................................49
SECTION 23. Intention of the Parties..............................................49
SECTION 24. Successors and Assigns................................................50
SECTION 25. Waivers...............................................................50
SECTION 26. Exhibits..............................................................50
SECTION 27. Nonsolicitation.......................................................50
i
SECTION 28. General Interpretive Principles.......................................50
SECTION 29. Reproduction of Documents.............................................51
SECTION 30. Further Agreements....................................................51
EXHIBITS
EXHIBIT 1 FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 4 FORM OF ASSIGNMENT AND CONVEYANCE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 7 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 FORM OF COMMITMENT LETTER
EXHIBIT 10 MORTGAGE LOAN DOCUMENTS
EXHIBIT 11 FORM OF MONTHLY SERVICER'S REPORT
EXHIBIT 12 FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT 13 REGULATION AB[not referenced anywhere in the document]
SCHEDULE I MORTGAGE LOAN SCHEDULE
ii
MASTER MORTGAGE LOAN PURCHASE
AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of December 1, 2006, by and between, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company, having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (the "Initial Purchaser", and the Initial Purchaser or the Person, if
any, to which the Initial Purchaser has assigned its rights and obligations
hereunder as Purchaser with respect to a Mortgage Loan, and each of their
respective successors and assigns, the "Purchaser") and HSBC Mortgage
Corporation (USA), having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, in its capacity as the seller (the "Seller") and its capacity as the
servicer (the "Servicer").
W I T N E S S E T H :
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain fixed and adjustable rate residential first and second lien
mortgage loans, (the "Mortgage Loans") and certain fixed and adjustable rate
first and second lien Co-op Loans (the "Co-op Loans") as described herein on a
servicing retained basis, and which shall be delivered in groups of whole
loans or participation interests therein, as applicable, on various dates as
provided in the related Commitment Letter (each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule
for the related Mortgage Loan Package, which is to be annexed hereto on each
Closing Date as Schedule I;
WHEREAS, each of the Co-op Loans is secured by a pledge of shares of
stock issued by a Cooperative and the assignment of the appurtenant
proprietary lease, all relating to a specified dwelling unit in an apartment
building owned by the Cooperative and located in the states indicated on the
related Mortgage Loan Schedule; and
WHEREAS, the Purchaser, the Seller and the Servicer wish to
prescribe the manner of the conveyance, servicing and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to not
more than three purchasers as a whole loan transfer in a whole loan or
participation format or a public or private mortgage-backed securities
transaction; and
WHEREAS, certain Mortgage Loans have been, or will be, registered on
the MERS(R) System (defined below) such that the mortgagee of record under
each such Mortgage Loan shall be identified as MERS.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser,
the Seller and the Servicer agree as follows:
1
SECTION 1. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Loan, those
mortgage servicing practices (including collection procedures of prudent
mortgage lending institutions which service loans of the same type as such
Loan in the jurisdiction where the related Mortgage Property is located and in
accordance with applicable law.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the related Mortgage Note.
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
Agreement: This Master Mortgage Loan Purchase and Servicing
Agreement including all exhibits, schedules, amendments and supplements
hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the
value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of FNMA and FHLMC, and (ii) the purchase
price paid for the related Mortgaged Property by the Mortgagor with the
proceeds of the Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan, such value of the Mortgaged Property is based solely upon the
value determined by an appraisal made for the originator of such Refinanced
Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by
an appraiser who met the minimum requirements of FNMA and FHLMC. However in
the case of a mortgage made on property in New York State value will always be
determined by the appraisal for determining any requirement for primary
mortgage insurance only.
Assignment and Conveyance: An assignment and conveyance of the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as
Exhibit 4.
Assignment of Mortgage: An individual 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 give record notice of the sale of the Mortgage to the Purchaser.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan
Schedule as a balloon mortgage loan.
2
Borrower: The obligor on a Note, the owner of the Mortgaged Property
and the grantor or borrower named in the related Mortgage and such grantor's
or borrower's successors in title to the Mortgage Property.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of [SELLER'S
State of doing business] or the State of New York are authorized or obligated
by law or executive order to be closed.
Cash-Out Refinancing: A Refinanced Loan, the proceeds of which were
in excess of the principal balance, as defined per HSBC Underwriting
Guidelines.
Closing Date: The date or dates set forth on the related Commitment
Letter on which the Purchaser from time to time shall purchase and the Seller
from time to time shall sell to the Purchaser, the Mortgage Loans listed on
the related Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Closing Documents: With respect to any Closing Date, the documents
required pursuant to Section 9.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
sum of (a) the original principal balance of the Mortgage Loan, plus (b) the
unpaid principal balance of any related subordinate mortgage loan or loans
secured by the Mortgaged Property, and the denominator of which is the
Appraised Value of the related Mortgaged Property.
Commitment Letter: With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement between the
Purchaser and the Seller, in the form annexed hereto as Exhibit 9 (including
any exhibits, schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Mortgage Loans to be
purchased by the Purchaser on such Closing Date. A Commitment Letter may
relate to more than one Mortgage Loan Package to be purchased on one or more
Closing Dates hereunder.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property by exercise of the
power of condemnation or the right of eminent domain.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and
subject to certain conditions contained in the related Mortgage or Mortgage
Note allows the Mortgagor to convert the adjustable Mortgage Interest Rate on
such Mortgage Loan to a fixed Mortgage Interest Rate.
Co-op Lease: With respect to a Co-op Loan, the proprietary lease
with respect to a dwelling unit occupied by the Mortgagor and relating to the
stock allocated to the related dwelling unit.
3
Co-op Loan: A Mortgage Loan that is secured by a first or second
line on a perfected security interest in Cooperative Shares and the related
proprietary lease granting exclusive rights to occupy the related Cooperative
Apartment in the building owned by the related Cooperative.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
Cooperative: The private, non profit cooperative apartment
corporation which owns all of the real property that comprises the Project,
including the land, separate dwelling units and all common areas.
Cooperative Unit: With respect to any Co-op Loan, a specific unit in
a Project.
Cooperative Shares: With respect to any Co-op Loan, the shares of
stock issued by a Cooperative and allocated to a cooperative apartment and
represented by a stock certificate.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit Score: The credit score of the Mortgagor provided by Fair,
▇▇▇▇▇ & Company, Inc. or such other organization providing credit scores as
per HSBC underwriting/program guidelines in affect at the time of the
origination of a Mortgage Loan. .
Custodial Account: The separate account or accounts, each of which
shall be an Eligible Account, created and maintained pursuant to this
Agreement, which shall be entitled "[Seller], as servicer, in trust
PURCHASER", and established at a financial institution acceptable to the
Purchaser.
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 under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided.
Cut-off Date: The first day of the month in which the related
Closing Date occurs or as otherwise set forth in the related Commitment
Letter.
Deemed Material Breach Representation: Each representation and
warranty identified as such in Subsection 7.02.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
4
Determination Date: With respect to each Distribution Date, the
sixteenth (16th) day of the calendar month in which such Distribution Date
occurs or, if such sixteenth (16th) day is not a Business Day, the Business
Day immediately preceding such sixteenth (16th) day.
Distribution Date: The eighteenth (18th) day of each month, or if
such eighteenth (18th) day is not a Business Day, the first Business Day
immediately following such eighteenth (18th) day.
Due Date: With respect to each Distribution Date, the first day of
the calendar month in which such Distribution Date occurs, which is the day on
which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Due Period: With respect to each Distribution Date, the period
commencing on the second day of the month preceding the month of the
Distribution Date and ending on the first day of the month of the Distribution
Date.
Eligible Account: Either (i) an account or accounts 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 the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company of which) are rated A-2 or higher by S&P or Prime-2 or higher by
Moody's (or a comparable rating if another rating agency is specified by the
Initial Purchaser by written notice to the Seller of which) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits
in which are fully insured by the FDIC or (iii) a trust account or accounts
maintained with a federal or state chartered depository institution or trust
company acting in its fiduciary capacity. Eligible Accounts may bear interest.
Escrow Account: The separate trust accounts created and maintained
pursuant to this Agreement which shall be titled "[Seller], as servicer, in
trust for PURCHASER and various Mortgagors, Fixed and Adjustable Rate Mortgage
Loans", and established at a financial institution acceptable to the
Purchaser.
Escrow Payments: The amounts constituting taxes, Primary Insurance
Policy premiums, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the Mortgagee pursuant to the
terms of any Mortgage Note or Mortgage.
Event of Default: Any one of the events enumerated in Subsection
14.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to this Agreement), a determination made by the Seller
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Seller, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The
5
Seller shall maintain records, prepared by a servicing officer of the Seller,
of each Final Recovery Determination.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Flood Zone Service Contract: A life of loan service contract
transferable to a nationally recognized flood service provider, maintained for
the Mortgaged Property for the purpose of monitoring the Federal Emergency
Management Agency (FEMA) map status relating to such Mortgaged Property.
FNMA: ▇▇▇▇▇▇ Mae, F/K/A Federal National Mortgage Association, or
any successor thereto.
FNMA Guides: The ▇▇▇▇▇▇ ▇▇▇ Seller's Guide and the ▇▇▇▇▇▇ Mae
Services Guide and all amendments or additions thereto.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under
any other applicable state, federal or local law (or a similarly classified
loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees) or (c) categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary. For avoidance of doubt,
the parties agree that this definition shall apply to any law regardless of
whether such law is presently, or in the future becomes, the subject of
judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HSBC Underwriting Guidelines: The underwriting guidelines applicable
to the Mortgage Loans in a related Mortgage Loan Package.
HUD: The United States Department of Housing and Urban Development
or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest rate thereon.
Initial Closing Date: The Closing Date on which the Initial
Purchaser purchases and the Seller sells the first Mortgage Loan Package
hereunder, as set forth in the related Commitment Letter.
6
Initial Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, or any successor.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan
and the initial Adjustment Date therefore, a number of percentage points per
annum that is set forth in the related Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Adjustable Rate Mortgage Loan may increase or decrease on such
Adjustment Date from the Mortgage Interest Rate in effect immediately prior to
such Adjustment Date.
Interest Only Mortgage Loan: A Mortgage Loan that requires payment
of interest only for a period of time specified on the related Mortgage Note.
The interest-only period followed by full amortization of the remaining
balance over the remaining duration of the loan.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A policy of
mortgage guaranty insurance issued by a Qualified Insurer in which the owner
or servicer of the Mortgage Loan is responsible for the premiums associated
with such mortgage insurance policy.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise,
other than amounts received following the acquisition of REO Property.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of
any date of determination, the ratio on such date of the outstanding principal
amount of the Mortgage Loan, to the lower of the Appraised Value or the sale's
price of the Mortgaged Property. However, in the case of a mortgage made on
property in New York State, value will always be determined by the appraisal
for determining any requirement for primary mortgage insurance only.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any
Adjustment Date.
MERS: Mortgage Electronic Registration System, Inc., a subsidiary of
MERSCORP, Inc.
MERS(R) System: The electronic mortgage registration system
maintained by MERS.
7
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any
Adjustment Date.
MOM Mortgage: A Mortgage Loan naming MERS as the original mortgagee
on the mortgage security instrument.
Monthly Advance: The aggregate of the advances made by the Seller on
any Distribution Date pursuant to Subsection 11.30 of the Servicing Addendum.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal (if applicable) and interest payable by a
Mortgagor under the related Mortgage Note on each Due Date.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in
interest.
Mortgage: (a) With respect to any Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument creating a first or
second lien on the Mortgaged Property securing the Mortgage Note And (b) with
respect to a Co-op Loan, the related Security Agreement.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related
Commitment Letter.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage
Loan, the fixed annual rate of interest provided for in the related Mortgage
Note and, with respect to each Adjustable Rate Mortgage Loan, the annual rate
that interest accrues on such Adjustable Rate Mortgage Loan from time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each residential mortgage loan or Co-op Loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Commitment Letter and identified on the Mortgage Loan Schedule annexed
to this Agreement on the related Closing Date, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, 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 documents listed in Exhibit 10 hereto
pertaining to any Mortgage Loan or Co-op Loan.
Mortgage Loan Package: The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Custodian and the Purchaser at least three (3)
Business Days prior to
8
the related Closing Date and attached to this Agreement as Schedule I on the
related Closing Date.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package,
the schedule of Mortgage Loans to be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date for the Mortgage Loan Package
delivered on such Closing Date in both hard copy and electronic form, such
schedule setting forth the following information with respect to each Mortgage
Loan in the Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2) the Mortgagor's first and last name; (3) the street address of the
Mortgaged Property including the state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied; (5) the type of Residential
Dwelling constituting the Mortgaged Property; (6) the original months to
maturity; (7) the original date of the Mortgage Loan and the remaining months
to maturity from the Cut-off Date, based on the original amortization
schedule; (8) the Loan-to-Value Ratio at origination; (9) the Mortgage
Interest Rate in effect immediately following the Cut-off Date; (10) the date
on which the first Monthly Payment was due on the Mortgage Loan; (11) the
stated maturity date; (12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date; (14) the last
Due Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance; (15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date; (17) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date; (18) with respect to each Adjustable
Rate Mortgage Loan, the Gross Margin; (19) a code indicating the purpose of
the loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing); (20) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage Note; (21) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Interest
Rate under the terms of the Mortgage Note; (22) the Mortgage Interest Rate at
origination; (23) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap; (24) with respect to each Adjustable Rate Mortgage Loan,
the first Adjustment Date immediately following the related Cut-off Date; (25)
with respect to each Adjustable Rate Mortgage Loan, the Index; (26) the date
on which the first 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;
(27) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan; (28) a code indicating the
documentation style (i.e., full, alternative or reduced); (29) a code
indicating if the Mortgage Loan is subject to a Primary Insurance Policy or
LPMI Policy; (30) the Appraised Value of the Mortgaged Property; (31) the sale
price of the Mortgaged Property, if applicable; (32) a code indicating whether
the Mortgage Loan is subject to a Prepayment Charge, the term of such
Prepayment Charge and the amount of such Prepayment Charge; (33) the product
type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon, etc.); (34) the
Mortgagor's debt to income ratio; (35) a code indicating whether the Mortgaged
Property is subject to a First Lien or a Second Lien. With respect to the
Mortgage Loan Package in the aggregate, the Mortgage Loan Schedule shall set
forth the following information, as of the related Cut-off Date: (36) a code
indicating whether the Mortgage Loan is an Interest Only Mortgage Loan; and
(37) and with respect to each Interest Only Mortgage Loan, the duration of the
related interest only period expressed in months. (1) the number of Mortgage
Loans; (2) the current 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.
9
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Mortgage Loan Schedule with respect to the related Mortgage
Loan Package.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property: (a) With respect to each Mortgage Loan which is
not a Co-op Loan, the Mortgagor's real property securing repayment of a
related Mortgage Note, consisting of a fee simple interest or leasehold in a
single parcel of real property improved by a Residential Dwelling and (b) with
respect to each Co-op Loan, the related cooperative apartment.
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successors in title to the Mortgaged
Property.
Net Mortgage Interest Rate: With respect to any Mortgage Loan (or
the related REO Property), as of any date of determination, a per annum rate
of interest equal to the then applicable Mortgage Interest Rate for such
Mortgage Loan minus the Servicing Fee Rate.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Seller, will not, or, in the case of a
proposed Monthly Advance, would not be, ultimately recoverable from related
late payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Person on behalf of whom such certificate is
being delivered.
Opinion of Counsel: A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is being given,
reasonably acceptable to each Person to whom such opinion is addressed.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan and any Adjustment Date therefor, a number of percentage points per annum
that is set forth in the related Mortgage Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Adjustable Rate Mortgage Loan may increase (without regard to the
Maximum Mortgage Interest Rate) or decrease (without regard to the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Interest
Rate in effect immediately prior to such Adjustment Date.
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
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Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Preliminary Servicing Period: With respect to any Mortgage Loans,
the period commencing on the related Closing Date and ending on the date the
Seller enters into Reconstitution Agreements which amend or restate the
servicing provisions of this Agreement.
Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a principal prepayment
on such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
excluding any Prepayment Charge, 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.
Project: All real property owned by the Cooperative including the
land, separate dwelling units and all common areas.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Commitment Letter in exchange
for the Mortgage Loans purchased on such Closing Date as provided in Section
4.
Purchaser: The Person listed as such in the initial paragraph of
this Agreement, together with its successors and assigns as permitted under
the terms of this Agreement.
Qualified Appraiser: An appraiser, not unacceptable to the Seller,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated
Qualified Insurer: Any insurer which meets the requirements of FNMA
and FHLMC.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due
during or prior to the month of substitution, not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage
Interest Rate not less than (and not more than one percentage point in excess
of) the Mortgage Interest Rate of the Deleted
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Mortgage Loan, (iii) have a Net Mortgage Interest Rate not less than (and not
more than one percentage point in excess of) the Net Mortgage Interest Rate of
the Deleted Mortgage Loan, (iv) have a remaining term to maturity not greater
than (and not more than 1 year less than) that of the Deleted Mortgage Loan,
(v) have the same Due Date as the Due Date on the Deleted Mortgage Loan, (vi)
have a Loan-to-Value Ratio as of the date of substitution equal to or lower
than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date,
(vii) be covered under a Primary Insurance Policy if such Qualified Substitute
Mortgage Loan has a Loan-to-Value Ratio in excess of 80% and the Deleted
Mortgage Loan was covered under a Primary Insurance Policy, (viii) conform to
each representation and warranty set forth in Subsection 7.02 of this
Agreement and (ix) be the same type of mortgage loan (i.e. fixed or adjustable
rate with the same Gross Margin and Index as the Deleted Mortgage Loan). In
the event that one or more mortgage loans are substituted for one or more
Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates and shall be satisfied as to each
such mortgage loan, the terms described in clause (iv) shall be determined on
the basis of weighted average remaining terms to maturity, the Loan-to-Value
Ratios described in clause (vi) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence,
the representations and warranties described in clause (viii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
as the case may be. In addition, the substitution of more than one Mortgage
Loan pursuant to the previous sentence shall be subject to the Purchaser's
approval in its sole discretion.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which are not in excess of the existing first mortgage, as outlined in the
HSBC Underwriting Guidelines in effect at the time of origination.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
serviced hereunder, in connection with a Whole Loan Transfer or a
Securitization Transfer as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Securitization
Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
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 REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed,
12
temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
REO Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled "[Seller], in
trust for the Purchaser, as of [date of acquisition of title], Fixed and
Adjustable Rate Mortgage Loans".
REO Disposition: The final sale by the Seller of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the outstanding principal balance of the Mortgage Loan to be
repurchased as of the date of repurchase, plus accrued interest thereon at the
Net Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding
advances owed to any servicer, plus all costs and expenses incurred by the
Purchaser or any servicer arising out of or based upon such breach, including
without limitation costs and expenses incurred in the enforcement of the
Seller's repurchase obligation hereunder plus any costs and damages incurred
by the related trust with respect to any securitization of the Mortgage Loan
in connection with any violation by such Mortgage Loan of any predatory- or
abusive-lending law.
Residential Dwelling: Any one of the following: (i) a one-family
dwelling in an eligible cooperative project, (ii) a two- to four family
dwelling, or (iii) a one-family dwelling unit in an eligible condominium
project, as defined in the HSBC guidelines in effect at the time of
origination.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly
issued or privately placed mortgage backed securities transaction.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by the Seller
during the Preliminary Servicing Period.
Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Seller in the performance
of its servicing obligations, including, but not limited to, the cost of (i)
preservation, restoration and repair of a Mortgaged Property, (ii) any
enforcement or judicial proceedings with respect to a Mortgage Loan, including
foreclosure actions and (iii) the management and liquidation of REO Property.
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Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual servicing fee the Purchaser shall pay to the Seller, which shall, for
each month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the Stated Principal Balance of the Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respectively which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and payable solely from, the interest portion (including recoveries with
respect to interest from Liquidation Proceeds and other proceeds, to the
extent permitted by Section 11.05) of related Monthly Payments collected by
the Seller, or as otherwise provided under Section 11.05.
Servicing Fee Rate: The per annum rate set forth in the related
Commitment Letter at which the Servicing Fee accrues.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller on an image platform consisting of copies or printable
images of all documents in the Mortgage File which are not delivered to the
Purchaser or the Custodian and the Mortgage Loan Documents set forth in
Section 2 of the Custodial Agreement.
S&P: Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., or its successor in interest.
S&P Glossary: The Standard & Poor's LEVELS(R) Glossary, as may be in
effect from time to time.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of the
Cut-off Date after giving effect to payments of principal due on or before
such date, whether or not collected from the Mortgagor on or before such date,
minus (ii) all amounts previously distributed to the Purchaser with respect to
the related Mortgage Loan representing payments or recoveries of principal.
Tax Service Contract: A life of loan service contract, transferable
to a nationally recognized tax service provider, maintained for the Mortgaged
Property for the purpose of obtaining current information from local taxing
authorities relating to such Mortgaged Property.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is
not a Securitization Transfer.
14
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, from time-to-time, Mortgage Loans having an
aggregate principal balance on the related Cut-off Date in an amount as set
forth in the related Commitment Letter, or in such other amount as agreed to
by the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on the related Closing
Date.
SECTION 3. Mortgage Loan Schedules. The Seller shall deliver the
Mortgage Loan Schedule for a Mortgage Loan Package to be purchased on a
particular Closing Date to the Purchaser at least two (2) Business Days prior
to the related Closing Date or as otherwise set forth in the related
Commitment Letter.
SECTION 4. Purchase Price. The Seller agrees to sell from time to
time, and the Purchaser agrees to purchase from time to time, Mortgage Loans
having an aggregate principal balance on the related Cut-off Date in an amount
as set forth in the related Commitment Letter, or in such other amount as
agreed by the Purchaser and the Seller as evidenced by the actual aggregate
principal balance of the Mortgage Loans accepted by the Purchaser on each
Closing Date, together with the related Mortgage Files and all rights and
obligations arising under the documents contained therein. The Seller,
simultaneously with the delivery of the Mortgage Loan Schedule with respect to
the related Mortgage Loan Package to be purchased on each Closing Date, shall
execute and deliver an Assignment and Conveyance Agreement in the form
attached hereto as Exhibit 4 (the "Assignment and Conveyance Agreement")
With respect to each Mortgage Loan purchased, the Purchaser shall
own and be entitled to receive: (a) all scheduled principal due after the
related Cut-off Date, (b) all other payments and/or recoveries of principal
collected after the related Cut-off Date (provided, however, that all
scheduled payments of principal due on or before the related Cut-off Date and
collected by the Servicer after the related Cut-off Date shall belong to the
Seller), and (c) all payments of interest on the Mortgage Loans, net of the
Servicing Fee (minus that portion of any such interest payment that is
allocable to the period prior to the related Cut-off Date).
For the purposes of this Agreement, payments of scheduled principal
and interest prepaid for a Due Date beyond the related Cut-off Date shall not
be applied to reduce the Stated Principal Balance as of the related Cut-off
Date. Such prepaid amounts (minus the applicable Servicing Fee) shall be the
property of the Purchaser. The Seller shall remit to the Servicer for deposit
any such prepaid amounts into the Custodial Account, which account is
established for the benefit of the Purchaser, for remittance by the Servicer
to the Purchaser on the appropriate Remittance Date. All payments of principal
and interest, less the applicable Servicing Fee, due on a Due Date following
the related Cut-off Date shall belong to the Purchaser.
SECTION 5. Examination of Mortgage Files. In addition to the rights
granted to the Initial Purchaser under the related Commitment Letter to
underwrite the Mortgage Loans and review the Mortgage Files prior to the
related Closing Date, the Seller shall make the related Mortgage File
available to the Initial Purchaser for examination at the Seller's offices or
15
such other location as shall otherwise be agreed upon by the Initial Purchaser
and the Seller. Such examination may be made by the Initial Purchaser or its
designee at any reasonable time before or after the related Closing Date. Such
examination shall be during regular business hours and Purchaser shall give
Seller ten days prior written notice. If the Initial Purchaser makes such
examination prior to the related Closing Date and identifies any Mortgage
Loans that do not conform to the terms of the related Commitment Letter or the
Seller's underwriting standards, such Mortgage Loans may, at the Initial
Purchaser's option, be rejected for purchase by the Initial Purchaser. If not
purchased by the Initial Purchaser, such Mortgage Loans shall be deleted from
the related Mortgage Loan Schedule and any files should be returned within 10
days. The Initial Purchaser may, at its option and without notice to the
Seller, purchase all or part of any Mortgage Loan Package without conducting
any partial or complete examination. The fact that the Initial Purchaser has
conducted or has determined not to conduct any partial or complete examination
of the Mortgage Files shall not affect the Initial Purchaser's (or any of its
successors') rights to demand repurchase or other relief or remedy provided
for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the payment of the Purchase Price,
shall execute and deliver to the Initial Purchaser an Assignment and
Conveyance with respect to the related Mortgage Loan Package in the form
attached hereto as Exhibit 4. No assignment is required if the Mortgage Loan
is a MOM Mortgage, or has been previously assigned to MERS, and will remain
registered on the MERS(R) System. The Servicing File retained by the Seller
with respect to each Mortgage Loan pursuant to this Agreement shall be
appropriately identified in the Seller's computer system to reflect clearly
the sale of such related Mortgage Loan to the Purchaser. The Seller shall
release from its custody the contents of any Servicing File retained by it
only in accordance with this Agreement, except when such release is required
in connection with a repurchase of any such Mortgage Loan pursuant to
Subsection 7.03 or 7.04.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage Note as of
the related Closing Date shall be in the name of the Seller, MERS, the
Purchaser, the Custodian or one or more designees of the Purchaser, as the
Purchaser shall designate. Notwithstanding the foregoing, beneficial ownership
of each Mortgage and the related Mortgage Note shall be vested solely in the
Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to,
all funds received by the Seller after the related Cut-off Date on or in
connection with a Mortgage Loan as provided in Section 4 shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however,
that all such funds received on or in connection with a Mortgage Loan as
provided in Section 4 shall be received and held by the Seller in trust for
the benefit of the Purchaser or the assignee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
16
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the Seller to
the Purchaser to secure a debt or other obligation of the Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as a sale on
the Seller's business records, tax returns and financial statements. In the
event, for any reason, any transaction contemplated herein is construed by any
court or regulatory authority as a borrowing rather than as a sale, the Seller
and the Purchaser intend that the Purchaser or its assignee, as the case may
be, shall have a perfected first priority security interest in the Mortgage
Loans which may be held by MERS as the nominee for the Purchaser, the
Custodial Account and the proceeds of any and all of the foregoing
(collectively, the "Collateral"), free and clear of adverse claims. In such
case, the Seller shall be deemed to have hereby granted to the Purchaser or
its assignee, as the case may be, a first priority security interest in and
lien upon the Collateral, free and clear of adverse claims. In such event, the
related Commitment Letter and this Agreement shall constitute a security
agreement, the Custodian shall be deemed to be an independent custodian for
purposes of perfection of the security interest granted to the Purchaser or
its assignee, as the case may be, and the Purchaser or its assignee, as the
case may be, shall have all of the rights of a secured party under applicable
law.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement between the Custodian and the
Initial Purchaser, the Seller shall from time to time in connection with each
Closing Date, at least five (5) Business Days prior to such Closing Date,
deliver and release to the Custodian those Mortgage Loan Documents as required
by the Custodial Agreement with respect to each Mortgage Loan to be purchased
and sold on the related Closing Date and set forth on the related Mortgage
Loan Schedule delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Trust Receipt and Initial
Certification of the Custodian in the form annexed to the Custodial Agreement.
The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks
of their execution, provided, however, that the Seller shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original
of any document submitted for recordation or a copy of such document certified
by the Seller to be a true and complete copy of the original within three
hundred sixty days of its submission for recordation.
17
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach.
Subsection 7.01. Representations and Warranties Respecting the
Seller.
The Seller represents, warrants and covenants to the Purchaser as of
the Initial Closing Date and each subsequent Closing Date or as of such date
specifically provided herein or in the applicable Assignment and Conveyance:
18
(i) The Seller is duly organized, validly existing and in good
standing under the laws of the state of Delaware and is and will remain in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the terms of
this Agreement. No licenses or approvals obtained by the Seller have been
suspended or revoked by any court, administrative agency, arbitrator or
governmental body and no proceedings are pending which might result in such
suspension or revocation;
(ii) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by
this Agreement. The Seller has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(iii) The execution and delivery of this Agreement by the Seller and
the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(iv) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;
(v) The Seller is an approved seller/servicer for FNMA and FHLMC in
good standing and is a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act. No event has occurred, including but not limited to a
change in insurance coverage, which would make the Seller unable to comply
with FNMA, FHLMC or HUD eligibility requirements or which would require
notification to FNMA, FHLMC or HUD;
(vi) The Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vii) The Mortgage Loan Documents and any other documents required
to be delivered with respect to each Mortgage Loan pursuant to this Agreement
have been delivered to the Custodian all in compliance with the specific
requirements of this Agreement;
(viii) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of record or had appointed MERS
as the Seller's nominee of the
19
related Mortgage and the indebtedness evidenced by the related Mortgage Note
and upon the payment of the Purchase Price by the Purchaser, in the event that
the Seller or MERS as nominee for the Seller retains record title, the Seller
or MERS as nominee for the Seller shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with
respect thereto in trust for the Purchaser as the owner thereof and only for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
(ix) There are no actions or proceedings against, or investigations
of, the Seller before any court, administrative agency or other tribunal (A)
that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
the validity or enforceability of, this Agreement;
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained prior to the related Closing Date;
(xi) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions;
(xii) Neither this Agreement nor any written statement, report or
other document prepared and furnished or to be prepared and furnished by the
Seller 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 herein or
therein not misleading;
(xiii) The consideration received by the Seller upon the sale of the
Mortgage Loans constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans; and
(xiv) The Seller is solvent and will not be rendered insolvent by
the consummation of the transactions contemplated hereby. The Seller is not
transferring any Mortgage Loan with any intent to hinder, delay or defraud any
of its creditors.
(xv) The Seller's decision to originate any mortgage loan or to deny
any mortgage loan application is an independent decision based upon the
Underwriting Guidelines, and is in no way made as a result of Purchaser's
decision to purchase, or not to purchase, or the price Purchaser may offer to
pay for, any such mortgage loan, if originated;
(xvi) The Seller has complied with all applicable anti-money
laundering laws, executive orders and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money
Laundering Laws"); the Seller has established an anti-money
20
laundering compliance program as required by the Anti-Money Laundering Laws,
has conducted the requisite due diligence in connection with the origination
of each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws
(xvii) Seller has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans. The Seller is duly qualified, licensed, registered and
otherwise authorized under all applicable federal, state and local laws, and
regulations, if applicable, meets the minimum capital requirements set forth
by HUD, the OTS, the OCC or the FDIC, if applicable, and is in good standing
to enforce, originate, sell mortgage loans to, and service mortgage loans in
the jurisdiction wherein the Mortgaged Properties are located;
(xviii) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(xix) The Mortgage Loans were selected from among the outstanding
one-to four-family mortgage loans in the Seller's portfolio at the related
Closing Date as to which the representations and warranties set forth in
Subsection 7.02 could be made and such selection was not made in a manner so
as to affect adversely the interests of the Purchaser.
(xx) All such financial statements of the Seller fairly present the
pertinent results of operations and changes in financial position for each of
such periods and the financial position at the end of each such period of the
Seller and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as set forth in the notes thereto. There has been no
change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser
in a timely manner and in accordance with the provided instructions.
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
21
(i) The information set forth in the related Mortgage Loan Schedule
and the Mortgage Loan data delivered to the Purchaser and the Custodian is
complete, true and correct;
(ii) The Mortgage Loan is in compliance with all requirements set
forth in the related Commitment Letter, and the characteristics of the related
Mortgage Loan Package as set forth in the related Commitment Letter are true
and correct;
(iii) All payments required to be made up to the close of business
on the related Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made. No payment under the Mortgage Loan has been
delinquent for more than twenty-nine days (29) during the last twelve months;
(iv) There are no defaults in complying with the terms of the
Mortgage, and all taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which remains
unpaid and which has been assessed but is not yet due and payable. The Seller
has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement
of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes
by one month the related Due Date of the first installment of principal and
interest;
(v) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary
to maintain the lien priority of the Mortgage, the substance of any such
waiver, alteration or modification has been approved by the insurer under the
Primary Insurance Policy or LPMI Policy, if any, and the title insurer, to the
extent required by the related policy, and is reflected on the related
Mortgage Loan Schedule. No instrument of waiver, alteration or modification
has been executed, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the insurer
under the Primary Insurance Policy or LPMI Policy, if any, the title insurer,
to the extent required by the policy, and the terms of which are reflected in
the related Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vii) All buildings upon the Mortgaged Property are insured by an
insurer acceptable to FNMA and FHLMC against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, pursuant to insurance policies conforming to
the requirements of the Servicing Addendum. All such insurance policies
contain a standard mortgagee clause naming the Seller, its successors and
22
assigns as mortgagee and all premiums the Servicer is aware of have been paid.
If the Mortgaged Property is in an area identified on a Flood Hazard Map or
Flood Insurance Rate Map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect which policy
conforms to the requirements of FNMA and FHLMC. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost
and expense, and on the Mortgagor's failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor;
(viii) 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, predatory and abusive lending, equal
credit opportunity, fair housing and disclosure laws or unfair and deceptive
practice laws applicable to the Mortgage Loan, including, without limitation,
any provisions relating to a Prepayment Charge, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulation, and the Seller shall deliver to the
Purchaser upon demand, copies of any documents in the Seller's possession that
would evidence compliance with the above. This representation and warranty is
a Deemed Material Breach Representation;
(ix) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release. The Mortgaged Property is
located in the state identified in the related Mortgage Loan Schedule and
consists of real property with a detached/attached single family residence
erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a condominium project, or an individual unit in a planned
unit development or a de minimis planned unit development which is in each
case four stories or less, provided, however, that any mobile home (double
wide only) or manufactured dwelling shall conform with the applicable ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements regarding such dwellings and that no Mortgage
Loan is secured by a single parcel of real property with a mobile home erected
thereon . As of the date of origination, no portion of the Mortgaged Property
was used for commercial purposes, provided, that Mortgaged Properties which
contain a home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other than those
commonly used for homeowner repair, maintenance and/or household purposes.
With respect to any Mortgage Loan secured by a Mortgaged Property improved by
manufactured housing, (i) the related manufactured housing unit is permanently
affixed to the land, (ii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming the Seller as mortgagee, (iii) the related
Mortgaged Property is not located in the state of New Jersey and (iv) as of
the origination date of the related Mortgage Loan, the related Mortgagor
occupied the related manufactured home as its primary residence. This
representation and warranty is a Deemed Material Breach Representation;
(x) Except with respect to each Co-op Loan, the related Mortgage is
properly recorded and is a valid, existing and enforceable (A) first lien and
first priority security interest
23
with respect to each Mortgage Loan which is indicated by the Seller as
reflected on the Mortgage Loan Schedule, on the Mortgaged Property, including
all improvements on the Mortgaged Property subject only to (a) the lien of
current real property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of the Mortgage
Loan and which do not adversely affect the Appraised Value of the Mortgaged
Property, (c) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended
to be provided by the Mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property, (d) with respect to each Second Lien
Mortgage Loan a prior mortgage lien on the Mortgaged Property. Except with
respect to each Co-op Loan, any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, existing and enforceable (A) first lien
and first priority security interest with respect to each first lien Mortgage
Loan, or (B) second lien and second priority security interest with respect to
each Second Lien Mortgage Loan, in either case, on the property described
therein and the Seller has full right to sell and assign the same to the
Purchaser. The Mortgaged Property was not, as of the date of origination of
the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt
or other security instrument creating a lien subordinate to the lien of the
Mortgage. With respect to each Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first or second security interest on the related
Cooperative Shares securing the related cooperative note, subject only to (a)
liens of the Cooperative for unpaid assessments representing the Mortgagor's
pro rata share of the Cooperative's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such Cooperative Shares;
(xi) The Mortgagor is one or more natural persons and or trustees
for an Illinois land trust or a trustee under a "living trust" and such
"living trust" is in compliance with HSBC guidelines for such trusts;
(xii) The Mortgage Note and the Mortgage and any other agreement
executed and delivered by a Mortgagor in connection with a Mortgage Loan are
genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms (including, without
limitation, any provisions therein relating to Prepayment Charges). All
parties to the Mortgage Note and the Mortgage had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by such related parties. No
fraud, error omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of any Person,
including without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination, servicing, or in
the application of any insurance in relation to such
24
Mortgage Loan. The Seller has reviewed all of the documents constituting the
Servicing File and has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein;
(xiii) The proceeds of the Mortgage Loan have been fully disbursed
except where there is an established completion escrow or for the account of
the Mortgagor then there is no obligation for the Mortgagee to advance
additional funds thereunder and any and all requirements as to completion of
any on-site or off-site improvement and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses incurred
in making or closing the Mortgage Loan and the recording of the Mortgage have
been paid, and the Mortgagor is not entitled to any refund of any amounts paid
or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and equitable owner
of the Mortgage Note and the Mortgage, and has full right and authority
subject to no interest or participation of, or agreement with, any other
party, to sell and assign each Mortgage Loan pursuant to this Agreement and
following the sale of each Mortgage Loan, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Seller intends to relinquish
all rights to possess, control and monitor the Mortgage Loan. After the
related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation
or right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(xv) All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) in compliance
with any and all applicable "doing business" and licensing requirements of the
laws of the state wherein the Mortgaged Property is located;
(xvi) Except with respect to each Co-op Loan, the Mortgage Loan,
that is a first lien, is covered by an American Land Title Association
("ALTA") ALTA lender's title insurance policy (which, in the case of an
Adjustable Rate Mortgage Loan has an adjustable rate mortgage endorsement in
the form of ALTA 6.0 or 6.1) acceptable to FNMA and FHLMC, issued by a title
insurer acceptable to FNMA and FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained above in (x)(a) (b) and (c) and with respect to each
Second Lien Mortgage Loan, is covered by an ALTA lender's title insurance
policy per Seller's guidelines, clause (x) (d) above) the Seller and/or MERS
as nominee for the Seller, its successors and assigns as to the first or
second priority lien of the Mortgage in the original principal amount of the
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan, against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment in the Mortgage
Interest Rate and Monthly Payment. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Seller and/or MERS as nominee for the Seller, its
successors and assigns, is the sole insured of such lender's title insurance
policy, and such lender's title insurance policy is in full force and effect
and will be in full force and effect upon the consummation of the transactions
contemplated by this
25
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration.
(xviii) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
(xix) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(xx) The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal
or state authority, or by a mortgagee approved by the Secretary of HUD
pursuant to Section 203 and 211 of the National Housing Act or the Mortgage
Loan (A) was underwritten in accordance with standards established by Seller,
using application forms and related credit documents approved by Seller, (B)
Seller (or a Seller -approved correspondent that is a SMMEA (Secondary
Mortgage Market Enhancement Act of 1984) eligible institution in the case of a
brokered loan) underwrote and approved the application and the related credit
documents, including the property appraisal, (C) after a commitment to fund
the Mortgage Loan was issued by Seller (or such correspondent), Seller (or
such correspondent) prepared or cause to be prepared closing documents for
such Mortgage Loan, (D) was funded by Seller (or such correspondent) or by the
loan broker subject to a pre-closing commitment by Seller (or such
correspondent) to purchase the Mortgage Loan at closing or soon thereafter,
and (E) if purchased by such correspondent, Seller purchased the Mortgage Loan
only after the Mortgage Loan was submitted for review and approval by Seller
either pre- or post-closing, and Seller confirmed that the Mortgage Loan met
Seller's underwriting standards and purchase program requirements and that the
loan package and closing documents were in proper order. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. No Mortgage Loan contains terms or
provisions which would result in negative amortization;
(xxi) Principal payments on the Mortgage Loan, other than the
Interest Only Mortgage Loan, shall commence (with respect to any newly
originated Mortgage Loans) or commenced no more than sixty days after the
proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears interest
at the Mortgage Interest Rate. With respect to each Mortgage Loan, the
Mortgage Note is payable on the first day of each month in Monthly Payments,
which,
26
(A) in the case of a Fixed Rate Mortgage Loan, are sufficient to fully
amortize the original principal balance over the original term thereof and to
pay interest at the related Mortgage Interest Rate, (B) in the case of an
Adjustable Rate Mortgage Loan, other than the Interest Only Mortgage Loan, are
changed on each Adjustment Date, and in any case, are sufficient to fully
amortize the original principal balance over the original term thereof and to
pay interest at the related Mortgage Interest Rate and (C) in the case of a
Balloon Loan, are based on a fifteen (15) or thirty (30) year amortization
schedule, as set forth in the related Mortgage Note, and a final monthly
payment substantially greater than the preceding monthly payment which is
sufficient to amortize the remaining principal balance of the Balloon Loan and
to pay interest at the related Mortgage Interest Rate. The Index for each
Adjustable Rate Mortgage Loan is as defined in the related Commitment Letter
and the Mortgage Loan Schedule. The Mortgage Note does not permit negative
amortization, unless otherwise noted on the Mortgage Loan Schedule. No
Mortgage Loan is a Convertible Mortgage Loan; (D) in the case of an Interest
Only Mortgage Loan, the monthly payments on each Interest Only Mortgage Loan
during the related interest only period is equal to the product of the related
Mortgage Interest Rate and the principal balance of such Mortgage Loan on the
first day of each month and after such interest only period, except with
respect to Interest Only Mortgage Loan that are Adjustable Rate Mortgage
Loans, such Mortgage Loan is payable in equal monthly installments of
principal and interest.
(xxii) The origination and collection practices used by the Seller
with respect to each Mortgage Note and Mortgage have been in all respects
legal, proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Seller and any
predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow), if any, all such payments are in the
possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note. All Mortgage Interest Rate adjustments
have been made in strict compliance with state or federal law and the terms of
the related Mortgage and Mortgage Note on the related Interest Rate Adjustment
Date. The Seller executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and Monthly Payment adjustments. Any
interest required to be paid pursuant to applicable state, federal or local
law has been properly paid and credited;
(xxiii) There is no proceeding pending or threatened for the total
or partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake, or earth movement, windstorm, flood,
hurricane, tornado, or other casualty so as to affect adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair;
(xxiv) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise
by judicial foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection
27
under applicable bankruptcy laws. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
The Mortgagor has not notified the Seller and the Seller has no knowledge of
any relief requested or allowed to the Mortgagor under the Servicemembers
Civil Relief Act or other similar statutes;
(xxv) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on forms acceptable to
FNMA and FHLMC;
(xxvi) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (x) above;
(xxvii) With respect to each First Lien Mortgage, the Mortgage File
contains an appraisal of the related Mortgaged Property which satisfied the
standards of FNMA and FHLMC and was made and signed, prior to the closing of
the Mortgage Loan , by a qualified appraiser, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of FNMA and FHLMC.
Each appraisal of the Mortgage Loan was made in accordance with the relevant
provisions of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder all or in effect on the
date the Mortgage Loan was originated. For Second Lien Mortgage Loans, the
Mortgage File contains an assessment of the collateral that meets HSBC
Underwriting Guidelines;
(xxviii) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxix) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(xxx) No Mortgage Loan was made in connection with (a)
rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;
(xxxi) There are no circumstances or condition with respect to the
Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage File or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan or Mortgaged Property;
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(xxxii) With respect to any First Lien Mortgage Loan with an
original Loan-to-Value Ratio greater than 80%, the Mortgage Loan will be
insured by a Primary Insurance Policy, issued by a Qualified Insurer, which
insures that portion of the Mortgage Loan in excess of the portion of the
Appraised Value of the Mortgaged Property required by the Seller. All
provisions of such Primary Insurance Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage subject to any such Primary Insurance Policy
obligates the Mortgagor thereunder to maintain such insurance and to pay all
premiums and charges in connection therewith. The Mortgage Interest Rate for
the Mortgage Loan does not include any such insurance premium. For loans in
New York State, the appraisal will be used to determine the original
Loan-to-Value Ratio as it relates to Primary Mortgage Insurance.
(xxxiii) The Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to certificates of occupancy, have been made or obtained from the appropriate
authorities;
(xxxiv) The Seller has caused or will cause to be performed any and
all acts required to preserve the rights and remedies of the Purchaser in any
insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies
or interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser. No action has been taken or failed
to be taken, no event has occurred and no state of facts exist or has existed
on or prior to the related Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which
would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising
out of actions, representations, errors, omissions, negligence, or fraud of
the Seller, the related Mortgagor or any party involved in the application for
such coverage, but not including the failure of such insurer to pay by reason
of such insurer's breach of such insurance policy or such insurer's financial
inability to pay;
(xxxv) The Assignment of Mortgage, (except with respect to any
Mortgage that has been recorded in the name of MERS or its designee), with
respect to each Mortgage Loan, is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property
is located;
(xxxvi) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly insured as
having first lien priority with respect to each Mortgage Loan which is
indicated by the Seller to be a First Lien (as reflected on the Mortgage Loan
Schedule), by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
FNMA or FHLMC or the Seller;
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(xxxvii) If the Residential Dwelling on the Mortgaged Property is a
condominium unit, a unit in a planned unit development (other than a de
minimis planned unit development), or a unit in a cooperative, such
condominium, planned unit development, or cooperative project meets the
eligibility requirements of HSBC;
(xxxviii) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months;
(xxxix) The Mortgaged Property is free from any and all toxic or
hazardous substances and there exists no violation of any local, state, or
federal environmental law, rule or regulation, There is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or regulation constituting a prerequisite to use and enjoyment of said
property;
(xl) Each Mortgage Loan is covered by a "life of loan" Tax Service
Contract which is transferable to a nationally recognized tax service provider
and is assignable to the Purchaser or its designee at no cost to the Purchaser
or its designee;
(xli) Each Mortgage Loan is covered by a "life of loan" Flood Zone
Service Contract which is transferable to a nationally recognized flood
service provider and is assignable to the Purchaser or its designee at no cost
to the Purchaser or its designee;
(xlii) None of the Adjustable Rate Mortgage Loans include an option
to convert to a Fixed Rate Mortgage Loan;
(xliii) No selection procedures were used by the Seller that
identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Seller's portfolio;
(xliv) The Loan-to-Value Ratio of any Mortgage Loan at origination
was not more than 95% and the CLTV of any Mortgage Loan at origination was not
more than 100%;
(xlv) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G (a) (3) (A) of the Code and Treasury Regulation Section
1.860G-2(a) (1). This representation and warranty is a Deemed Material Breach
Representation;
(xlvi) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994 and no
Mortgage Loan is in violation of any applicable comparable state or local law.
The Mortgaged Property is not located in a jurisdiction where a breach of this
representation with respect to the related Mortgage Loan may result in
additional assignee liability to the Purchaser, as determined by Purchaser in
its reasonable discretion. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay were employed in the origination of the
Mortgage Loan. This representation and warranty is a Deemed Material Breach
Representation;
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(xlvii) No Mortgage Loan had an original term to maturity of more
than thirty (30) years;
(xlviii) In connection with the origination of any Mortgage Loan, no
proceeds from any Mortgage Loan were used to finance or acquire a
single-premium credit life insurance policy. No Mortgagor was required to
purchase any single premium credit insurance policy (e.g., life, disability,
accident, unemployment or property insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. This
representation and warranty is a Deemed Material Breach Representation;
(xlix) With respect to each Fixed Rate Mortgage Loan, the Mortgage
contains an enforceable provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent of the
mortgagee thereunder, and such provision is enforceable;
(l) None of the Mortgage Loans are, by their terms, assumable;
(li) The Mortgagor has not notified the Seller, and the Seller has
no knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act of 2003 or any similar applicable state or
local law;
(lii) With respect to each Mortgage, the Seller has within the last
twelve (12) months (unless such Mortgage was originated within such
twelve-month period) analyzed the required Escrow Payments for each Mortgage
and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(liii) Each Mortgage Loan has been serviced in strict compliance
with Accepted Servicing Practices;
(liv) As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by the
Seller to the Purchaser, that Seller has full right and authority and is not
precluded by law or contract from furnishing such information to the Purchaser
and the Purchaser is not precluded by the terms of the Mortgage Loan Documents
from furnishing the same to any subsequent or prospective purchaser of such
Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's secondary
marketing operations and the purchase and sale of mortgages. The Seller has in
its capacity as servicer, for each Mortgage Loan, fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis. The Servicer will transmit full-file credit reporting data for each
Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19 and that for
each Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination,
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current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
This representation and warranty is a Deemed Material Breach Representation;
(lv) If the Mortgage Loan is secured by a long-term residential
lease, (1) the lessor under the lease holds a fee simple interest in the land;
(2) the terms of such lease expressly permit the mortgaging of the leasehold
estate, the assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease
do not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in
the event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies relating
to the Mortgaged Property or (d) permit any increase in rent other than
pre-established increases set forth in the lease; (4) the original term of
such lease is not less than fifteen (15) years; (5) the term of such lease
does not terminate earlier than five (5) years after the maturity date of the
Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in
which the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;
(lvi) The Mortgage Loan is not subject to any outstanding litigation
for fraud, origination, predatory lending, servicing or closing practices;
(lvii) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs, in part, objective mathematical principles
which relate the Mortgagor's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of the
Mortgagor's equity in the collateral as the principal determining factor in
approving such credit extension. Such underwriting methodology confirmed that
at the time of origination (application/approval) the Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material Breach Representation;
(lviii) The Mortgage Note, the Mortgage, the Assignment of Mortgage
and any other documents constituting the Mortgage File for each Mortgage Loan
have been delivered to the Custodian. The Seller is in possession of a
complete, true and accurate Mortgage File in compliance with Exhibit 5 hereto,
except for such documents the originals of which will be delivered to the
Custodian upon receipt after the Closing Date;
(lix) The origination, servicing and collection practices used by
the Seller, and any prior servicer with respect to the Mortgage Loan have been
in all respects in compliance with Accepted Servicing Practices, applicable
laws and regulations, and have been in all respects legal and proper and
prudent in the mortgage origination and servicing business. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession
of, or under the control of the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have not been made. All Escrow Payments have been collected in full compliance
with state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
32
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal
law and the terms of the related Mortgage and Mortgage Note on the related
Interest Rate Adjustment Date. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to applicable state,
federal and local law has been properly paid and credited. Seller is in
compliance with all federal, state and local laws, except where only federal
law applies because of Seller's national bank charter; provided, however, that
this exception shall not apply to any state or local laws described in clause
(xlvi) of this Section 7.02.
(lx) With respect to any Mortgage Loan originated on or after August
1, 2004, neither the related Mortgage nor the related Mortgage Note requires
the Mortgagor to submit to arbitration to resolve any dispute arising out of
or relating in any way to the Mortgage Loan transaction. This representation
and warranty is a Deemed Material Breach Representation.
Subsection 7.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or Assignment of Mortgage or the examination or lack of examination of any
Mortgage File. Upon discovery by the Seller or the Purchaser of a breach of
any of the foregoing representations and warranties which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the Seller
of any breach of a representation or warranty which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser
therein (or which materially and adversely affects the value of the applicable
Mortgage Loan or the interest of the Purchaser therein in the case of a
representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. In
the event that a breach shall involve any representation or warranty set forth
in Subsection 7.01 and such breach cannot be cured within 60 days of the
earlier of either discovery by or notice to the Seller of such breach, all of
the Mortgage Loans shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 7.02 (other than any Deemed
Material Breach Representation) and the Seller discovers or receives notice of
any such breach within one hundred twenty (120) days of the related Closing
Date, the Seller shall, at the Purchaser's option and provided that the Seller
has a Qualified Substitute Mortgage Loan, rather
33
than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan
(a "Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans; provided that such substitution shall be effected not
later than 120 days after notice to the Seller of such breach. Notwithstanding
the above, any breach of a Deemed Material Breach Representation shall
automatically be deemed to materially and adversely affect the value of the
Mortgage Loan and the interest of the Purchaser therein. Therefore, within
sixty (60) days of the earlier of either discovery by, or notice to the Seller
of any Deemed Material Breach Representation, the Seller shall repurchase such
Mortgage Loan at the Repurchase Price. If the Seller has no Qualified
Substitute Mortgage Loan, the Seller shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Subsection 7.03 shall occur on a date designated by the
Purchaser and shall be accomplished (i) by wire transfer of immediately
available funds on the repurchase date to an account designated by the Initial
Purchaser or (ii) as otherwise set forth in the related Commitment Letter.
At the time of repurchase of any deficient Mortgage Loan, the
Purchaser and the Seller shall arrange for the reassignment of the repurchased
Mortgage Loan to the Seller and the delivery to the Seller of any documents
held by the Custodian relating to the repurchased Mortgage Loan. In the event
the Repurchase Price is deposited in the Custodial Account, the Seller shall,
simultaneously with such deposit, give written notice to the Purchaser that
such deposit has taken place. Upon such repurchase the related Mortgage Loan
Schedule shall be amended to reflect the withdrawal of the repurchased
Mortgage Loan from this Agreement.
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In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed
made as of the date of such substitution. The Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of
Mortgage, unless such Mortgage Loan is a MOM Mortgage or has previously been
assigned to MERS, and such other documents and agreements as are required by
the Custodial Agreement, with the Mortgage Note endorsed as required therein.
No such substitution will be made in any calendar month after the
Determination Date for such month. The Seller shall deposit in the Custodial
Account the Monthly Payment less the Servicing Fee due on such Qualified
Substitute Mortgage Loan or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution will be retained by the Seller.
For the month of substitution, distributions to the Purchaser will include the
Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. The Seller shall give written notice to the Purchaser that such
substitution has taken place and shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon
such substitution, such Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement in all respects, and the Seller shall
be deemed to have made with respect to such Qualified Substitute Mortgage Loan
or Loans, as of the date of substitution, the covenants, representations and
warranties set forth in Subsections 7.01 and 7.02.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). An amount equal to the product of the amount of such shortfall
multiplied by the Repurchase Price shall be distributed by the Seller in the
month of substitution pursuant to the Servicing Addendum. Accordingly, on the
date of such substitution, the Seller, as applicable, will deposit from its
own funds into the Custodial Account an amount equal to such amount.
In addition to such cure, repurchase and substitution obligation,
the Seller shall indemnify the Purchaser and hold it harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and other costs and expenses resulting from
any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller's representations and warranties
contained in this Section 7. It is understood and agreed that the obligations
of the Seller set forth in this Subsection 7.03 to cure, substitute for or
repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Subsection 7.03 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties. For
purposes of this paragraph, "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement. Any cause of action against the Seller
relating to or arising out of the breach of any representations and warranties
made in Subsections 7.01 or 7.02 shall accrue as to any Mortgage Loan upon (i)
discovery of such breach by the
35
Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
the relevant provisions of this Agreement.
Subsection 7.04. (Reserved)
Subsection 7.05. Representations of the Purchaser.
The Initial Purchaser hereby represents and warrants to the Seller,
as of the date hereof and as of each Closing Date, that:
(i) The Initial Purchaser is a New York limited partnership with
full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. This Agreement has been duly authorized, executed and
delivered by the Initial Purchaser. The Initial Purchaser had the full
corporate power and authority to own the Mortgage loans and has the full
corporate power authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of the
Agreement.
(ii) The Initial Purchaser has duly authorized the execution,
delivery and performance of the Agreement, has duly executed and delivered
this Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Seller, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity;
(iii) The execution, delivery and performance of this Agreement by
the Initial Purchaser (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provision on the
organizational documents of the Initial Purchaser, (B) any term or provision
of any material agreement, contract, instrument or indenture, to which the
Initial Purchaser is a party or by which the Initial Purchaser or any of its
property is bound, or (C) any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having
jurisdiction over the Initial Purchaser or any of its property and (y) does
not create or impose and will not result 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 Loan;
(iv) No consent, approval, authorization or order of, registration
or filing with, or notice on behalf of the Initial Purchaser to any
governmental authority or court is required, under federal or the laws of the
State of New York, for the execution, delivery and performance by the Initial
Purchaser of, or compliance by the Initial Purchaser with, this Agreement or
the consummation by the Initial Purchaser of any other transaction
contemplated hereby;
(v) The Initial Purchaser is not in violation of, and the execution
and delivery of this Agreement by the Initial Purchaser and its performance
and compliance with the terms of
36
this Agreement will not constitute a violation with respect to, any order or
decree of New York court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Initial
Purchaser or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Initial Purchaser or its assets or might have consequences
that would materially and adversely affect the performance of its obligation
and duties hereunder;
(vi) There are not actions or proceedings against, or investigations
known to it of, the Initial Purchaser before any court, administrative or
other tribunal (A) that might prohibit its entering into the Agreement, or (B)
that might prohibit or materially and adversely affect the performance by the
Initial Purchaser of its obligations under, or validity or enforceability of,
this Agreement; and
(vii) There is no litigation currently pending or, to the best of
the Initial Purchaser's knowledge without independent investigation,
threatened against the Initial Purchaser that would reasonably be expected to
adversely affect the execution, delivery, performance or enforceability of
this Agreement, or that would result in a material adverse change in the
financial condition of the Initial Purchaser.
SECTION 8. Closing. The closing for each Mortgage Loan Package shall
take place on the related Closing Date. At the Purchaser's option, the closing
shall be either by telephone, confirmed by letter or wire as the parties shall
agree, or conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(a) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related Closing Date and no
event shall have occurred which, with reasonable notice to the Seller or the
passage of time, would constitute a default under this Agreement;
(b) the Initial Purchaser shall have received, or the Initial
Purchaser's attorneys shall have received in escrow, all Closing Documents as
specified in Section 9, in such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the terms hereof;
(c) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(d) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Initial Purchaser shall pay
to the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 4, by wire transfer of immediately available
funds to the account designated by the Seller.
37
SECTION 9. Closing Documents.
(a) On or before the Initial Closing Date, the Seller shall submit
to the Initial Purchaser fully executed originals of the following documents:
1. this Agreement, in four counterparts;
2. a Custodial Account Letter Agreement in the form attached as
Exhibit 6 hereto;
3. as Escrow Account Letter Agreement in the form attached as
Exhibit 7 hereto;
4. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
5. an Opinion of Counsel to the Seller, in the form of Exhibit 2
hereto;
6. the Seller's underwriting guidelines for each of the Seller's
origination programs; and
(b) The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of fully executed originals of the following
documents:
1. the related Commitment Letter;
2. the related Mortgage Loan Schedule, one copy to be attached
hereto and one copy to be attached to the Custodian's
counterpart of the Custodial Agreement, as the Mortgage Loan
Schedule thereto;
3. a Custodian's trust receipt and initial certification, as
required under the Custodial Agreement, in a form acceptable to
the Initial Purchaser;
4. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
5. if requested by the Initial Purchaser, an Opinion of Counsel to
the Seller, in the form of Exhibit 2 hereto;
6. a Security Release Certification, in the form of Exhibit 3
hereto executed by any Person, as requested by the Initial
Purchaser, if any of the Mortgage Loans has at any time been
subject to any security interest, pledge or hypothecation for
the benefit of such Person;
7. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by merger
or acquired or originated by
38
the Seller while conducting business under a name other than
its present name, if applicable; and
8. an Assignment and Conveyance in the form of Exhibit 4 hereto
unless such Mortgage Loan is a MOM Mortgage or has previously
been assigned to MERS.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including without limitation recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 11. Seller's Servicing Obligations. The Seller, as
independent contract servicer, shall service and administer the Mortgage Loans
the Seller sold to the Purchaser on the related Closing Date during the
Preliminary Servicing Period in accordance with the terms and provisions set
forth in the Servicing Addendum attached as Exhibit 8, which Servicing
Addendum is incorporated herein by reference.
The Prepayment Penalty Mortgage Loans. The penalty will be enforced
as per the Seller and as per the Mortgage Note and will be payable to the
Seller.
SECTION 12. Removal of Mortgage Loans from Inclusion under this
Agreement Upon a Whole Loan Transfer or a Securitization Transfer on One or
More Reconstitution Dates. The Seller and the Initial Purchaser agree that
with respect to some or all of the Mortgage Loans, the Initial Purchaser may
effect either:
1. one or not more than three Whole Loan Transfers; and/or
2. one or not more than three Securitization Transfers.
A fee will be paid by the Initial Purchaser to the Seller each time
loans are included in a reconstitution transaction. The fee will represent 3
Basis Points of the outstanding Unpaid Principle Balance of the loans in the
transaction. The fee is due and payable in the month of the settlement. The
Purchaser shall not effect in excess of three (3) Whole Loan Transfers or
Securitization Transfers, as the case may be with respect to any Loan Package.
All notices of intent to exercise either option in Section 12 must be received
by the Seller no less than 7 business days prior to each Whole Loan Transfer
or Securitization Transfer.
All notices of this nature should be sent via e-mail to:
▇▇▇▇ ▇▇▇▇▇▇/HSBC - Investor Accounting
E-mail address: ▇▇▇▇.▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
Phone number: ▇▇▇-▇▇▇-▇▇▇▇
39
With respect to each Whole Loan Transfer or Securitization Transfer,
as the case may be, entered into by the Initial Purchaser, the Seller agrees:
(1) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due
diligence procedures and with respect to the preparation
(including, but not limited to, the endorsement, delivery,
assignment, and execution) of the Mortgage Loan Documents and
other related documents, and with respect to servicing
requirements reasonably requested by the rating agencies and
credit enhancers;
(2) to execute all Reconstitution Agreements provided that each of
the Seller and the Purchaser is given an opportunity to review
and reasonably negotiate in good faith the content of such
documents not specifically referenced or provided for herein;
(3) with respect to any Whole Loan Transfer or Securitization
Transfer, the Seller shall make the representations and
warranties regarding the Seller and, if such Whole Loan
Transfer or Securitization Transfer occurs within 12 months of
the related Closing Date or such later period as specified in
the related Commitment Letter, the Mortgage Loans as of the
date of the Whole Loan Transfer or Securitization Transfer,
modified to the extent necessary to accurately reflect the pool
statistics of the Mortgage Loans as of the date of such Whole
Loan Transfer or Securitization Transfer and any events or
circumstances existing subsequent to the related Closing
Date(s);
(4) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information
regarding the Seller, its financial condition and its mortgage
loan delinquency, foreclosure and loss experience and any
additional information requested by the Purchaser, and to
deliver to the Purchaser any similar non-public, unaudited
financial information, in which case the Purchaser shall bear
the cost of having such information audited by certified public
accountants if the Purchaser desires such an audit, or as is
otherwise reasonably requested by the Purchaser and which the
Seller is capable of providing without unreasonable effort or
expense, and to indemnify the Purchaser and its affiliates for
material misstatements or omissions contained (i) in such
information and (ii) on the Mortgage Loan Schedule;
(5) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and
audit letters of reputable, certified public accountants
pertaining to information provided by the Seller pursuant to
clause 4 above as shall be reasonably requested by the
Purchaser;
(6) to deliver to the Purchaser, and to any Person designated by
the Purchaser, such legal documents and in-house Opinions of
Counsel as are
40
customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers or
Securitization Transfers, as the case may be, such in-house
Opinions of Counsel for a Securitization Transfer to be in the
form reasonably acceptable to the Purchaser, it being
understood that the cost of any opinions of outside special
counsel that may be required for a Whole Loan Transfer or
Securitization Transfer, as the case may be, shall be the
responsibility of the Purchaser;
(7) to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by the Purchaser in its sole
discretion after consultation with the Seller and/or one or
more custodial and servicing agreements among the Purchaser,
the Seller and a third party custodian/trustee which is
generally considered to be a prudent custodian/trustee in the
secondary mortgage market designated by the Purchaser in its
sole discretion after consultation with the Seller, in either
case for the purpose of pooling the Mortgage Loans with other
Mortgage Loans for resale or securitization;
(8) in connection with any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement, which pooling and
servicing agreement may, at the Purchaser's direction, contain
contractual provisions including, but not limited to, a 24-day
certificate payment delay (54-day total payment delay),
servicer advances of delinquent scheduled payments of principal
and interest through liquidation (unless deemed
non-recoverable) and prepayment interest shortfalls (to the
extent of the monthly servicing fee payable thereto), servicing
and mortgage loan representations and warranties which in form
and substance conform to the representations and warranties in
this Agreement and to secondary market standards for securities
backed by mortgage loans similar to the Mortgage Loans and such
provisions with regard to servicing responsibilities, investor
reporting, segregation and deposit of principal and interest
payments, custody of the Mortgage Loans, and other covenants as
are required by the Purchaser and one or more nationally
recognized rating agencies for "AAA" rated mortgage
pass-through transactions which are "mortgage related
securities" for the purposes of the Secondary Mortgage Market
Enhancement Act of 1984, unless otherwise mutually agreed. At
the option of the Purchaser, the facilities of the Depository
Trust Company ("DTC") may be used in connection with any class
of security issued pursuant to any pooling agreement, subject
only to the consent of the DTC. In addition, at the sole option
of the Purchaser, any REMIC residual class issued pursuant to
any pooling agreement may be transferred to the Seller. If the
Purchaser deems it advisable at any time to pool the Mortgage
Loans with other mortgage loans for the purpose of resale or
securitization, the Seller agrees to execute one or more
subservicing agreements between itself (as servicer) and a
master servicer designated
41
by the Purchaser at its sole discretion, and/or one or more
servicing agreements among the Seller (as servicer), the
Purchaser and a trustee designated by the Purchaser at its sole
discretion, such agreements in each case incorporating terms
and provisions substantially identical to those described in
the immediately preceding paragraph; and
(9) to transfer the servicing rights to the Purchaser or its
designee as described in Section 15 upon the direction of the
Purchaser.
(10) to execute, deliver and satisfy all conditions set forth in an
indemnity agreement set forth on Exhibit 12, in the event of a
Securitization Transaction. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser, each
Person who controls the Purchaser or such Affiliate and the
Successor Servicer and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of
them may sustain in any way related to any information provided
by the Seller regarding the Seller (or if the Seller is not the
originator, the originator of the Mortgage Loans), the Seller's
servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For purposes of
the previous sentence, "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Securitization Transfer shall be subject to this Agreement and
shall continue to be serviced for the remainder of the Preliminary Servicing
Period in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
In addition to the indemnification provided in Subsection 7.03, the Seller
shall indemnify the Purchaser and hold the Purchaser harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, legal fees
(including all legal fees incurred with connection with the enforcement of the
Seller's indemnification obligation under this Subsection 13.01) and related
costs, judgments, and any other costs, fees and expenses that the Purchaser or
Successor Servicer may sustain in any way related to (a) the failure of the
Seller to perform its obligations under this Agreement, (b) any breach of any
of Seller's representations, warranties or covenants set forth in this
Agreement, (c) the failure of the Seller to service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 12. The Seller
immediately shall notify the Purchaser if a claim is made by a third party
with respect to this Agreement or any Reconstitution Agreement or the Mortgage
Loans, assume (with the prior written consent of the Purchaser) the defense of
any such claim
42
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or the Purchaser in respect of such claim. The Purchaser
promptly shall reimburse the Seller for all amounts advanced by it pursuant to
the preceding sentence, except when the claim is in any way related to the
Seller's indemnification pursuant to Section 7 or the first sentence of this
Subsection 13.01, or is in any way related to the failure of the Seller to
service and administer the Mortgage Loans in strict compliance with the terms
of this Agreement or any Reconstitution Agreement.
Subsection 13.02. Merger or Consolidation of the Seller.
The Seller shall keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the state of its
incorporation except as permitted herein, and shall obtain and preserve its
qualification to do business as a foreign entity 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 enable
the Seller to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller, shall be the successor of the Seller hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall be an institution whose
deposits are insured by FDIC or a company whose business is the origination
and servicing of mortgage loans, shall be a FNMA or FHLMC approved
seller/servicer and shall satisfy any requirements of Section 16 with respect
to the qualifications of a successor to the Seller.
Subsection 13.03. Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of
the Seller shall be under any liability to the Purchaser for any action taken
or for refraining from the taking of any action in good faith in connection
with the servicing of the Mortgage Loans pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Seller or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in strict
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 Seller and any officer, employee
or agent of the Seller 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 Seller shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
obligation to sell or duty to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may result in its incurring any
expenses or liability; provided, however, that the Seller may, with the
consent of the Purchaser, undertake any such action which they may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto. In such event, the legal expenses and costs of such
action and any liability resulting
43
therefrom shall be expenses, costs and liabilities for which the Purchaser
shall be liable, and the Seller shall be entitled to reimbursement therefor
from the Purchaser upon written demand except when such expenses, costs and
liabilities are subject to the Seller's indemnification under Subsections 7.03
or 13.01.
Subsection 13.04. Seller Not to Resign.
The Seller shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Seller in which event the Seller may resign as
servicer. Any such determination permitting the resignation of the Seller as
servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Purchaser which Opinion of Counsel shall be in form and substance
acceptable to the Purchaser and which shall be provided at the cost of the
Seller. No such resignation shall become effective until a successor shall
have assumed the Seller's responsibilities and obligations hereunder in the
manner provided in Section 16.
Subsection 13.05. No Transfer of Servicing.
The Seller acknowledges that the Purchaser has acted in reliance
upon the Seller's independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Without in any way
limiting the generality of this Section, the Seller shall not either assign
this Agreement or the servicing hereunder or delegate its rights or duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written
approval of the Purchaser, which consent will not be unreasonably withheld.
This provision shall not prevent Seller from delegating certain servicing
functions to affiliates of Seller.
SECTION 14. DEFAULT.
Subsection 14.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of ten Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Seller by the Purchaser; or (
(ii) failure on the part of the Seller duly to observe or perform in
any material respect any other of the covenants or agreements on the part of
the Seller set forth in this Agreement which continues unremedied for a period
of thirty days (except that such number of days shall be fifteen in the case
of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Seller by the Purchaser; or
44
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Seller and
such decree or order shall have remained in force undischarged or unstayed for
a period of sixty days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Seller or of or relating to all or substantially all of its property; or
(v) the Seller 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
(vi) failure by the Seller to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged Property is
located; or
(vii) the Seller ceases to meet the qualifications of either a FNMA
or FHLMC seller/servicer; or
(viii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent of the
Purchaser, 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;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Seller,
may, in addition to whatever rights the Purchaser may have at law or in equity
to damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Seller as servicer under this Agreement.
On or after the receipt by the Seller of such written notice, all authority
and power of the Seller to service the Mortgage Loans under this Agreement
shall on the date set forth in such notice pass to and be vested in the
successor appointed pursuant to Section 16.
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Seller 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.
SECTION 15. Termination. The respective obligations and
responsibilities of the Seller, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Seller) or the
45
disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure with respect to the last Mortgage Loan and the remittance of all
funds due hereunder unless terminated with respect to all or a portion of the
Mortgage Loans on an earlier date at the option of the Purchaser pursuant to
this Section 15 or pursuant to Section 14. In the event that the Seller is
terminated pursuant to this Section 15 without cause, the Purchaser shall pay
to the Seller a termination fee in an amount equal to 2% of the Stated
Principal Balance, as of the date of such termination, of the Mortgage Loans
with respect to which the Seller is being terminated as servicer. Upon written
request from the Purchaser in connection with any such termination, the Seller
shall prepare, execute and deliver any and all documents and other
instruments, place in the Purchaser's possession all Mortgage Files, 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 Seller's sole expense. The Seller agrees to cooperate with
the Purchaser and such successor in effecting the termination of the Seller's
responsibilities and rights hereunder as servicer, 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 Seller to the related
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
SECTION 16. Successor to the Seller. Prior to termination of the
Seller's responsibilities and duties under this Agreement pursuant to Section
12, 14 or 15, the Purchaser shall (i) succeed to and assume all of the
Seller's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Seller as
servicer under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the reasonable
compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree. In the event that the Seller's duties,
responsibilities and liabilities as servicer under this Agreement should be
terminated pursuant to the aforementioned Sections, the Seller shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof 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 the Purchaser or such successor. The
termination of the Seller as servicer pursuant to the aforementioned Sections
shall not become effective until a successor shall be appointed pursuant to
this Section 16 and shall in no event relieve the Seller of the
representations and warranties made pursuant to Subsections 7.01 and 7.02 and
the remedies available to the Purchaser under Subsection 7.03 or 7.04, it
being understood and agreed that the provisions of such Subsections 7.01,
7.02, 7.03 and 7.04 shall be applicable to the Seller notwithstanding any such
resignation or termination of the Seller, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Seller, with like effect as if originally named as a party
to this Agreement provided, however, that such successor shall not assume, and
the Seller shall indemnify such successor for, any and all liabilities arising
out of the Seller's acts as servicer. Any termination of the Seller as
servicer pursuant to Section 12, 14 or 15 shall not affect any
46
claims that the Purchaser may have against the Seller arising prior to any
such termination or resignation or remedies with respect to such claims.
The Seller shall timely deliver to the successor the funds in the
related Custodial Account, REO Account and the related Escrow Account and the
Mortgage Files and related documents and statements held by it hereunder and
the Seller shall account for all funds. The Seller shall execute and deliver
such instruments and do such other things all as may reasonably be required to
more fully and definitely vest and confirm in the successor all such rights,
powers, duties, responsibilities, obligations and liabilities of the Seller as
servicer. The successor shall make arrangements as it may deem appropriate to
reimburse the Seller for amounts the Seller actually expended as servicer
pursuant to this Agreement which the successor is entitled to retain hereunder
and which would otherwise have been recovered by the Seller pursuant to this
Agreement but for the appointment of the successor servicer.
SECTION 17. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
shall make available to prospective purchasers the Seller's financial
statements for the most recently completed three fiscal years respecting which
such statements are available. The Seller also shall make available any
comparable interim statements to the extent any such statements have been
prepared by the Seller (and are available upon request to members or
stockholders of the Seller or the public at large). The Seller, if it has not
already done so, agrees to furnish promptly to the Purchaser copies of the
statements specified above. The Seller also shall make available information
on its servicing performance with respect to mortgage loans serviced for
others, including delinquency ratios.
The Seller also agrees to allow access to knowledgeable financial,
accounting, origination and servicing officers of the Seller for the purpose
of answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller, its loan origination or servicing practices
or the financial statements of the Seller.
SECTION 18. Mandatory Delivery: Grant of Security Interest. The sale
and delivery of each Mortgage Loan on or before the related Closing Date is
mandatory from and after the date of the execution of the related Commitment
Letter, it being specifically understood and agreed that each Mortgage Loan is
unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Initial Purchaser for the losses and
damages incurred by the Initial Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver each of the related Mortgage Loans or one or more Mortgage Loans
otherwise acceptable to the Initial Purchaser on or before the related Closing
Date. The Seller hereby grants to the Initial Purchaser a lien on and a
continuing security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligation hereunder, and the Seller agrees that it holds such
Mortgage Loans in custody for the Initial Purchaser subject to the Initial
Purchaser's (i) right to reject any Mortgage Loan under the terms of this
Agreement and the related Commitment Letter, and (ii) obligation to pay the
related Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any
other rights or remedies under this
47
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 19. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address as follows:
(i) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(ii) if to the Seller:
HSBC Mortgage Corporation (USA)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
if to MERS:
Attn: Secretary
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
48
SECTION 20. Severability Clause. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void
or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
SECTION 21. 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 22. Governing Law. The Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of law provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with the laws of the State
of New York, except to the extent preempted by Federal law.
SECTION 23. Intention of the Parties. It is the intention of the
parties that the Initial Purchaser is purchasing, and the Seller is selling,
the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the transaction
for Federal income tax purposes as a sale by the Seller, and a purchase by the
Purchaser, of the Mortgage Loans. The Initial Purchaser shall have the right
to review the Mortgage Loans and the related Mortgage Loan Files to determine
the characteristics of the Mortgage Loans which shall affect the Federal
income tax consequences of owning the Mortgage Loans and the Seller shall
cooperate with all reasonable requests made by the Initial Purchaser in the
course of such review. In the event, for any reason, any transaction
contemplated herein is construed by any court or regulatory authority as a
borrowing rather than as a sale, the Seller and the Purchaser intend that the
Purchaser or its assignee, as the case may be, shall have a perfected first
priority security interest in the Mortgage Loans which may be held by MERS as
the nominee for the Purchaser, the Custodial Account and the proceeds of any
and all of the foregoing (collectively, the "Collateral"), free and clear of
adverse claims. In such case, the Seller shall be deemed to have hereby
granted to the Purchaser or its assignee, as the case may be, a first priority
security interest in and lien upon the Collateral, free and clear of adverse
claims. In such event, the related Commitment Letter and this Agreement shall
constitute a security agreement, the Custodian shall be deemed to be an
independent custodian for purposes of perfection of the security interest
granted to the Purchaser or its assignee, as the case may be, and the
Purchaser or its assignee, as the case may be, shall have all of the rights of
a secured party under applicable law.
49
SECTION 24. Successors and Assigns. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller and the Purchaser and
the respective successors and assigns of the Seller and the Purchaser. The
Purchaser may assign this Agreement to any Person to whom any Mortgage Loan is
transferred whether pursuant to a sale or financing and to any Person to whom
the servicing or master servicing of any Mortgage Loan is sold or transferred.
Upon any such assignment, the Person to whom such assignment is made shall
succeed to all rights and obligations of the Purchaser under this Agreement to
the extent of the related Mortgage Loan or Mortgage Loans and this Agreement,
to the extent of the related Mortgage Loan or Loans, shall be deemed to be a
separate and distinct Agreement between the Seller and such Purchaser, and a
separate and distinct Agreement between the Seller and each other Purchaser to
the extent of the other related Mortgage Loan or Loans. In the event that this
Agreement is assigned to any Person to whom the servicing or master servicing
of any Mortgage Loan is sold or transferred, the rights and benefits under
this agreement which inure to the Purchaser shall inure to the benefit of both
the Person to whom such Mortgage Loan is transferred and the Person to whom
the servicing or master servicing of the Mortgage Loan has been transferred;
provided that, the right to require a Mortgage Loan to be repurchased by the
Seller pursuant to Subsection 7.03 or 7.04 shall be retained solely by the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller to a third party without the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld.
SECTION 25. Waivers. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be
enforced.
SECTION 26. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
SECTION 27. Nonsolicitation. From and after the related Closing
Date, the Seller agrees that it will not take any action or permit or cause
any action to be taken by any of its agents or affiliates, or by any
independent contractors on the Seller's behalf, to personally, by telephone or
mail, solicit the Mortgagor under any Mortgage Loan to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Seller or any Affiliate of the Seller which are directed to
the general public at large, including, without limitation, mass mailing,
internet and e-mail solicitations, based in all instances, on commercially
acquired mailing lists (which may not be targeted at the Mortgagors) and
newspaper, radio, television or other media advertisements nor any Mortgagor
who, without solicitation, contacts the Seller to request the refinancing of
the related Mortgage Loan, nor any promotion or solicitation of the Mortgagors
by the Seller, any of its agents or Affiliates or any independent contractor
on the Seller's behalf for products or services not related to mortgage loans,
home equity lines of credit, or other consumer loans secured by real property
shall not constitute solicitations under this Section 27.
SECTION 28. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
50
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 29. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 30. Further Agreements. The Seller and the Purchaser each
agree to execute and deliver to the other such reasonable and appropriate
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
51
[Signature Page Follows]
52
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
HSBC Mortgage Corporation (USA)
(Seller)
By:_____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ SACHS MORTGAGE COMPANY, a New York
limited partnership (Initial Purchaser)
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL ESTATE
FUNDING CORP., a New York
corporation, its General Partner
By:________________________________
Name:
Title:
EXHIBIT 1
FORM OF SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly
elected ______________ of HSBC Mortgage Corporation (USA)], a ______________
(the "Seller"), and further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of
the Certificate of Incorporation and by-laws of the Seller as are in full
force and effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Master Mortgage Loan Purchase and Servicing Agreement (the
"Purchase Agreement"), dated as of _______ __, 200_ by and between the Seller
and "Purchaser; (b) the Commitment Letter, dated _______ __, 200_, between the
Seller and the Purchaser (the "Commitment Letter"); and (c) any other document
delivered prior hereto or on the date hereof in connection with the sale and
servicing of the Mortgage Loans in accordance with the Purchase Agreement and
the Commitment Letter was, at the respective times of such signing and
delivery, and is as of the date hereof, duly elected or appointed, qualified
and acting as such officer or attorney-in-fact, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy of
the resolutions duly adopted by the board of directors of the Seller on
____________, 200_ (the "Resolutions") with respect to the authorization and
approval of the sale and servicing of the Mortgage Loans; said Resolutions
have not been amended, modified, annulled or revoked and are in full force and
effect on the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good
Standing of the Seller dated ____________, 200_. No event has occurred since
____________, 200_ which has affected the good standing of the Seller under
the laws of the State of ___________.
6. Attached hereto as Attachment IV is a copy of each license of the
Seller to originate and sell the Mortgage Loans. No such licenses have been
suspended or revoked by any court, administrative agency, arbitrator or
governmental body and no proceedings are pending which might result in such
suspension or revocation.
7. All of the representations and warranties of the Seller contained
in Subsections 7.01 and 7.02 of the Purchase Agreement were true and correct
in all material respects as of the date of the Purchase Agreement and are true
and correct in all material respects as of the date hereof.
8. The Seller has performed all of its duties and has satisfied all
the materialconditions on its part to be performed or satisfied prior to the
related Closing Date pursuant to the Purchase Agreement and the related
Commitment Letter.
All capitalized terms used herein and not otherwise defined shall
have the meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Seller.
Dated:
--------------------------------------
[Seal]
HSBC Mortgage Corporation (USA)
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title: Vice President
I, _______________________, Secretary of the Seller, hereby certify
that _________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
--------------------------------------
[Seal]
HSBC Mortgage Corporation (USA)
(Seller)
By:
---------------------------------------
Name:
-------------------------------------
Title: [Assistant] Secretary
EXHIBIT 2
FORM OF OPINION OF COUNSEL TO THE SELLER
------------------------------
(DATE)
Re: Master Mortgage Loan Purchase and Servicing
Agreement, dated as of ________ __, 200_
Gentlemen:
I have acted as counsel to HSBC Mortgage Corporation (USA), a
__Delaware_________ corporation (the "Seller"), in connection with the sale of
certain mortgage loans by the Seller to (the "Purchaser") pursuant to (i) a
Master Mortgage Loan Purchase and Servicing Agreement, dated as of ________
__, 200_, by and between the Seller and the Purchaser (the "Purchase
Agreement"), [and the Commitment Letter, dated __________ __, 200_, between
the Seller and the Purchaser (the "Commitment Letter")]. Capitalized terms not
otherwise defined herein have the meanings set forth in the Purchase
Agreement.
In connection with rendering this opinion letter, I, or attorneys
working under my direction, have examined, among other things, originals,
certified copies or copies otherwise identified to my satisfaction as being
true copies of the following:
A. The Purchase Agreement;
B. [The Commitment Letter;]
C. The Seller's Certificate of Incorporation and By-Laws, as
amended to date; and
D. Resolutions adopted by the board of directors of the Seller
with specific reference to actions relating to the transactions
covered by this opinion (the "Resolutions").
For the purpose of rendering this opinion, I have made such
documentary, factual and legal examinations as I deemed necessary under the
circumstances. As to factual matters, I have relied upon statements,
certificates and other assurances of public officials and of officers and
other representatives of the Seller, and upon such other certificates as I
deemed appropriate, which factual matters have not been independently
established or verified by me. I have also assumed, among other things, the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to me as originals, and the conformity
to original documents of all documents submitted to me as copies and the
authenticity of the originals of such copied documents.
On the basis of and subject to the foregoing examination, and in
reliance thereon, and subject to the assumptions, qualifications, exceptions
and limitations expressed herein, I am of the opinion that:
1. The Seller has been duly incorporated and is validly existing and
in good standing under the laws of the State of __________ with corporate
power and authority to own its properties and conduct its business as
presently conducted by it. The Seller has the corporate power and authority to
service the Mortgage Loans, and to execute, deliver, and perform its
obligations under the Purchase Agreement [and the Commitment Letter]
(sometimes collectively, the "Agreements").
2. The Purchase Agreement [and the Commitment Letter] have been duly
and validly authorized, executed and delivered by the Seller.
3. The Purchase Agreement [and the Commitment Letter] constitute
valid, legal and binding obligations of the Seller, enforceable against the
Seller in accordance with their respective terms.
4. No consent, approval, authorization or order of any state or
federal court or government agency or body is required for the execution,
delivery and performance by the Seller of the Purchase Agreement [and the
Commitment Letter], or the consummation of the transactions contemplated by
the Purchase Agreement [and the Commitment Letter], except for those consents,
approvals, authorizations or orders which previously have been obtained.
5. Neither the servicing of the Mortgage Loans by the Seller as
provided in the Purchase Agreement [and the Commitment Letter,] nor the
fulfillment of the terms of or the consummation of any other transactions
contemplated in the Purchase Agreement [and the Commitment Letter] will result
in a breach of any term or provision of the certificate of incorporation or
by-laws of the Seller, or, to the best of my knowledge, will conflict with,
result in a breach or violation of, or constitute a default under, (i) the
terms of any indenture or other agreement or instrument known to me to which
the Seller is a party or by which it is bound, (ii) any State of ____________
or federal statute or regulation applicable to the Seller, or (iii) any order
of any State of ____________ or federal court, regulatory body, administrative
agency or governmental body having jurisdiction over the Seller, except in any
such case where the default, breach or violation would not have a material
adverse effect on the Seller or its ability to perform its obligations under
the Purchase Agreement.
6. There is no action, suit, proceeding or investigation pending or,
to the best of my knowledge, threatened against the Seller which, in my
judgment, either in any one instance or in the aggregate, would draw into
question the validity of the Purchase Agreement or which would be likely to
impair materially the ability of the Seller to perform under the terms of the
Purchase Agreement.
7. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement is sufficient fully to transfer to the
Purchaser all right, title and interest of the Seller thereto as noteholder
and mortgagee.
8. The Assignments of Mortgage, if applicable, are in recordable
form and upon completion will be acceptable for recording under the laws of
the State of ___________. When endorsed, as provided in the [related custodial
agreement], the Mortgage Notes will be duly endorsed under ______________ law.
The opinions above are subject to the following additional
assumptions, exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the
Seller have all requisite power and authority to execute, deliver and perform
their respective obligations under each of the Agreements, and that the
Agreements have been duly authorized by all necessary corporate action on the
part of such parties, have been executed and delivered by such parties and
constitute the legal, valid and binding obligations of such parties.
B. My opinion expressed in paragraphs 3 and 7 above is subject to
the qualifications that (i) the enforceability of the Agreements may be
limited by the effect of laws relating to (1) bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances or
preferential transfers, and (2) general principles of equity upon the specific
enforceability of any of the remedies, covenants or other provisions of the
Agreements and upon the availability of injunctive relief or other equitable
remedies and the application of principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) as such
principles relate to, limit or affect the enforcement of creditors' rights
generally and the discretion of the court before which any proceeding for such
enforcement may be brought; and (ii) I express no opinion herein with respect
to the validity, legality, binding effect or enforceability of (a) provisions
for indemnification in the Agreements to the extent such provisions may be
held to be unenforceable as contrary to public policy or (b) Section 18 of the
Purchase Agreement.
C. I have assumed, without independent check or certification, that
there are no agreements or understandings among the Seller, the Purchaser and
any other party which would expand, modify or otherwise affect the terms of
the documents described herein or the respective rights or obligations of the
parties thereunder.
I am admitted to practice in the State of ___________, and I render
no opinion herein as to matters involving the laws of any jurisdiction other
than the State of _________ and the Federal laws of the United States of
America.
Very truly yours,
EXHIBIT 3
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
___________________________, hereby relinquishes any and all right,
title and interest it may have in and to the Mortgage Loans described in
Exhibit A attached hereto upon purchase thereof by (PURCHASER)from the Seller
named below pursuant to that certain Master Mortgage Loan Purchase and
Servicing Agreement, dated as of _________ __, 200_, as of the date and time
of receipt by ______________________________ of $__________ for such Mortgage
Loans (the "Date and Time of Sale"), and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Seller named below or its
designees as of the Date and Time of Sale.
Name and Address of Financial Institution
---------------------------------
(Name)
---------------------------------
(Address)
By:
-----------------------------
II. Certification of Release
The Seller named below hereby certifies to PURCHASER that, as of the
Date and Time of Sale of the above mentioned Mortgage Loans to , the
security interests in the Mortgage Loans released by the above named
corporation comprise all security interests relating to or affecting any and
all such Mortgage Loans. The Seller warrants that, as of such time, there are
and will be no other security interests affecting any or all of such Mortgage
Loans.
HSBC Mortgage Corporation
Seller
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT 4
ASSIGNMENT AND CONVEYANCE
On this _______ day of ________, 200_, [SELLER] (the "Seller"), as
Seller under that certain Master Mortgage Loan Purchase and Servicing
Agreement, dated as of _________ __, 200_ (the "Agreement"), does hereby sell,
transfer, assign, set over and convey to as Purchaser under the Agreement,
without recourse, but subject to the terms of the Agreement, all rights, title
and interest of the Seller in and to the Mortgage Loans listed on the Mortgage
Loan Schedule attached hereto as Schedule One, together with the related
Mortgage Files and all rights and obligations arising under the documents
contained therein. Pursuant to Subsection 6.03 of the Agreement, the Seller
has delivered or shall deliver to the Custodian the Mortgage Loan Documents
for each Mortgage Loan to be purchased and such other documents as set forth
in the Custodial Agreement. The contents of each related Servicing File
required to be retained by the Seller to service the Mortgage Loans pursuant
to the Agreement and thus not delivered to the Purchaser are and shall be held
in trust by the Seller for the benefit of the Purchaser as the owner thereof.
The Seller's possession of any portion of each such Servicing File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Agreement, and such retention and
possession by the Seller shall be in a custodial capacity only. The ownership
of each Mortgage Note, Mortgage, and the contents of the Mortgage File and
Servicing File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or which come
into the possession of the Seller shall immediately vest in the Purchaser and
shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representations and
warranties set forth in Subsections 7.01 and 7.02 of the Agreement are true
and correct as of the date hereof, and that all statements made in the
Seller's Officer's Certificate and all attachments thereto remain complete,
true and correct in all respects as of the date hereof, and that the Mortgage
Loan information set forth on Schedule Two attached hereto is true and correct
as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
HSBC Mortgage Corporation
(Seller)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Seller in an electronic format:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income, if required pursuant to
the related Mortgage Loan's origination program.
5. Verification of acceptable evidence of source and amount of
downpayment, if required pursuant to the related Mortgage
Loan's origination program.
6. Credit report on Mortgagor.
7. Residential appraisal reporter applicable collateral assessment
form as accepted by ▇▇▇▇▇▇ Mae and/or ▇▇▇▇▇▇▇ Mac.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
11. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. 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.
16. Amortization schedule, if available.
17. Payment history for Mortgage Loans that have been closed for
more than 90 days.
EXHIBIT 6
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________ __, 200__
To:
--------------------------------------------
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of _______ __, 200_, we hereby authorize and request you
to establish an account, as a Custodial Account, to be designated as HSBC
Mortgage Corporation (USA) in trust for __________."All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Seller. 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.
HSBC Mortgage Corporation (USA)
(Seller)
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
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 full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
Depository
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Date:
----------------------------------------
EXHIBIT 7
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
___________ __, 200__
To:
-----------------------------------
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of _______ __, 200_, we hereby authorize and request you
to establish an account, as an Escrow Account, to be designated as HSBC
Mortgage Corporation (USA) in trust for ________________________ and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Seller. 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.
HSBC Mortgage Corporation (USA)
(Seller)
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Date:
---------------------------------
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 full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
Depository
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
EXHIBIT 8
SERVICING ADDENDUM
Subsection 11.01 Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans that the Seller sells to the Purchaser hereunder
in accordance with this Agreement during the Preliminary Servicing Period and
shall have full power and authority, acting alone, to do or cause to be done
any and all things in connection with such servicing and administration which
the Seller may deem necessary or desirable and consistent with the terms of
this Agreement.
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, defer or forgive the payment thereof or of any principal or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal), make additional advances of additional principal or
extend the final maturity date on such Mortgage Loan without prior consent of
the Purchaser or its designee. Without limiting the generality of the
foregoing, the Seller shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself, and the Purchaser, 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 Property. If reasonably required by the Seller, the
Purchaser shall furnish the Seller with any powers of attorney and other
documents necessary or appropriate to enable the Seller to carry out its
servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller 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 giving due consideration to accepted
mortgage servicing practices of prudent lending institutions and the
Purchaser's reliance on the Seller.
Subsection 11.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans are paid in full, the Seller shall proceed diligently to
collect all payments due under each Mortgage Loan when the same shall become
due and payable and shall, to the extent such procedures shall be consistent
with this Agreement and the terms and provisions of any related Primary
Insurance Policy or LPMI Policy, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Further, the Seller shall take special care in
ascertaining and estimating annual taxes, fire and
8-1
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable 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.
Subsection 11.03 Realization Upon Defaulted Mortgage Loans.
(a) The Seller shall use its best efforts, consistent with the
procedures that the Seller would use in servicing loans for its own account,
to foreclose upon or otherwise comparably convert the ownership of such
Mortgaged Properties as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Subsection 11.01. The Seller shall use its best efforts to realize
upon defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Seller shall not be required to expend its own funds toward the
restoration of such property in excess of $2,000 unless it shall determine in
its discretion (i) that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan to Purchaser after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by
the Seller through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Subsection 11.05. In the event that any
payment due under any Mortgage Loan 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 Seller shall take such action as it shall deem to
be in the best interest of the Purchaser. In the event that any payment due
under any Mortgage Loan remains delinquent for a period of 90 days or more,
the Seller shall use Accepted Servicing Practices and refer to foreclosure by
the 120th day of delinquency. The Seller will notify the Purchaser of
foreclosure referrals on a monthly basis, after the initiation of foreclosure
proceedings. When foreclosure sale is imminent, Seller shall obtain a property
valuation and issue bidding instructions in accordance with Accepted Servicing
Practices and consistent with methods used for the mortgage loans held for its
own portfolio. In such connection, the Seller shall be responsible for all
costs and expenses incurred by it in any such proceedings; provided, however,
that it shall be entitled to reimbursement thereof from the related Mortgaged
Property, as contemplated in Subsection 11.05.
(b) Notwithstanding the foregoing provisions of this Subsection
11.03, with respect to any Mortgage Loan as to which the Seller has received
actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property the Seller shall not
either (i) obtain title to such Mortgaged Property as a result of or in lieu
of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take
any other action, with respect to, such Mortgaged Property if, as a result of
any such action, the Purchaser would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law,
8-2
unless the Seller has also previously determined, based on its reasonable
judgment and a prudent report prepared by a Person who regularly conducts
environmental audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any
hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required
under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required,
that it would be in the best economic interest of the Purchaser to
take such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Subsection 11.03 shall be advanced by the Seller, subject to the Seller's
right to be reimbursed therefor from the Custodial Account as provided in
Subsection 11.05(v).
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials affecting any such Mortgaged
Property, then the Seller shall take such action as it deems to be in the best
economic interest of the Purchaser. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Seller, subject
to the Seller's right to be reimbursed therefor from the Custodial Account as
provided in Subsection 11.05(v).
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Seller for any related unreimbursed Servicing Advances, pursuant to Subsection
11.05(iii); second, to accrued and unpaid interest on the Mortgage Loan, to
the date of the Final Recovery Determination, or to the Due Date prior to the
Distribution Date on which such amounts are to be distributed if not in
connection with a Final Recovery Determination; and third, as a recovery of
principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than the full amount of accrued and unpaid interest due on
such Mortgage Loan, the amount of such recovery will be allocated by the
Seller as follows: first, to unpaid Servicing Fees; and second, to the balance
of the interest then due and owing. The portion of the recovery
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so allocated to unpaid Servicing Fees shall be reimbursed to the Seller
pursuant to Subsection 11.05(iii).
Subsection 11.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts. The creation of any
Custodial Account shall be evidenced by a Custodial Account Letter Agreement
in the form of Exhibit 6.
The Seller shall deposit in the related Custodial Account on a daily
basis, and retain therein the following payments and collections received by
it subsequent to the Cut-off Date, or received by it prior to the Cut-off Date
but allocable to a period subsequent thereto, other than in respect of
principal and interest on the Mortgage Loans due on or before the Cut-off
Date:
(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans,
including all Prepayment Charges;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Subsections 11.10 and 11.11, 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 the
Seller's normal servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Seller's normal
servicing procedures, the loan documents or applicable law;
(vi) all proceeds of any Mortgage Loan repurchased in accordance
with Subsections 7.03 and 7.04 and all amounts required to be deposited by the
Seller in connection with shortfalls in principal amount of Qualified
Substitute Mortgage Loans pursuant to Subsection 7.03;
(vii) any amounts required to be deposited by the Seller pursuant to
Subsection 11.11 in connection with the deductible clause in any blanket
hazard insurance policy. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Subsection 11.13;
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(ix) any amounts required to be deposited in the Custodial Account
pursuant to Subsections 11.19 or 11.20;
(x) all Monthly Advances; and
(xi) with respect to each Principal Prepayment in full, an amount
(to be paid by the Seller out of its own funds without reimbursement therefor)
which, when added to all amounts allocable to interest received in connection
with such Principal Prepayment, equals one month's interest on the amount of
principal so prepaid at the Mortgage Interest Rate, provided, however, that in
no event shall the aggregate of deposits made by the Seller pursuant to this
clause (xi) exceed the aggregate amount of the Seller's servicing compensation
in the calendar month in which such deposits are required.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Subsection 11.21, need not be
deposited by the Seller in the Custodial Account. Such Custodial Account shall
be an Eligible Account. Any interest or earnings on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Seller and the Seller shall be entitled to retain and withdraw such
interest from the related Custodial Account pursuant to Subsection 11.05(iii).
The Seller shall give notice to the Purchaser of the location of the Custodial
Account when established and prior to any change thereof.
Subsection 11.05 Permitted Withdrawals From the Custodial Account.
The Seller may, from time to time, withdraw from the related
Custodial Account for the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Subsection 11.14;
(ii) to reimburse itself for unreimbursed Servicing Advances, the
Seller's right to reimburse itself pursuant to this subclause (ii) 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 Seller from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of such reimbursement,
the Seller's right thereto shall be prior to the rights of the Purchaser,
except that, where the Seller is required to repurchase a Mortgage Loan,
pursuant to Subsection 7.03, the Seller's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price pursuant to
Subsection 7.03 and all other amounts required to be paid to the Purchaser
with respect to such Mortgage Loans;
(iii) to pay to itself pursuant to Subsection 11.21 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all
such interest to be withdrawn monthly
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not later than each Distribution Date), and (b) the Servicing Fee from that
portion of any payment or recovery as to interest on a particular Mortgage
Loan;
(iv) to pay to itself with respect to each Mortgage Loan that has
been repurchased pursuant to Subsection 7.03 all amounts received thereon and
not distributed as of the date on which the related Repurchase Price is
determined;
(v) to pay, or to reimburse the Seller for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Subsection
11.03(b), but only to the extent of amounts received in respect of the
Mortgage Loans to which such expense is attributable;
(vi) to clear and terminate the Custodial Account on the termination
of this Agreement;
(vii) to reimburse itself for Monthly Advances, the Seller's right
to reimburse itself pursuant to this subclause (vii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fees) respecting which any such advance was made it
being understood that, in the case of such reimbursement, the Seller's right
thereto shall be prior to the rights of Purchaser, except that, where the
Seller is required to repurchase a Mortgage Loan, pursuant to Subsection 7.03,
the Seller's right to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price pursuant to Subsection 7.03, and all
other amounts required to be paid to the Purchaser with respect to such
Mortgage Loans; and
(viii) to reimburse the Seller for any Monthly Advance previously
made which the Seller has determined to be a Nonrecoverable Monthly Advance.
(ix) to reimburse the Seller for funds deposited in a custodial
account in error.
The Seller shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) - ( ix)
above. The Seller shall provide written notification in the form of an
Officers' Certificate to the Purchaser, on or prior to the next succeeding
Distribution Date, upon making any withdrawals from the Custodial Account
pursuant to subclause (viii) above.
Subsection 11.06 Establishment of Escrow Accounts; Deposits in
Escrow Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute 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. The creation of any Escrow Account shall be evidenced by an Escrow
Account Letter Agreement in the form of Exhibit 7.
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The Seller shall deposit in the Escrow Account or Accounts on a
daily basis, 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 Insurance
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. The Seller shall make withdrawals therefrom only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth or in accordance with Subsection 11.08. The Seller shall
be entitled to retain any interest paid on funds deposited in the related
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required
by law, the Seller shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Subsection 11.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the related Escrow Account may be made by the
Seller (i) to effect timely payments of ground rents, taxes, assessments,
water rates, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, and comparable items, (ii) to reimburse the Seller for any
Servicing Advance made by the Seller with respect to a related Mortgage Loan
but only from amounts received on the related Mortgage Loan which represent
late payments or collections of Escrow Payments thereunder, (iii) to refund to
the Mortgagor any funds as may be determined to be overages, (iv) for transfer
to the related Custodial Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account, or (vii) to clear and terminate the Escrow Account on the termination
of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies and LPMI
Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain
accurate records reflecting the status of taxes, and other charges which are a
lien upon the Mortgaged Property and the status of Primary Insurance Policy
and LPMI Policy premiums and fire and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges,
including insurance renewal premiums and shall effect payment thereof prior to
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, employing for such purpose deposits of
the Mortgagor in the related Escrow Account which shall have been estimated
and accumulated by the Seller in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage and applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Seller shall upon
notice of default ensure that any such payments are made by the Mortgagor or
by the Seller. The Seller assumes full responsibility for the timely payment
of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds
to effect such payments.
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The Seller shall maintain in full force and effect, a Primary
Insurance Policy, issued by a Qualified Insurer, with respect to each Mortgage
Loan for which such coverage is required. Such coverage shall be maintained
until the Loan-to-Value Ratio of the related Mortgage Loan is reduced to that
amount for which the Home Owners Protection Act no longer requires such
insurance to be maintained. The Seller will not cancel or refuse to renew any
Primary Insurance Policy in effect on the related Closing Date that is
required to be kept in force under this Agreement unless a replacement Primary
Insurance Policy or LPMI Policy for such cancelled or non- renewed policy is
obtained from and maintained with a Qualified Insurer. The Seller shall not
take any action which would result in non-coverage under any applicable
Primary Insurance Policy or LPMI Policy of any loss which, but for the actions
of the Seller, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Subsection 11.19, the Seller shall promptly notify the insurer
under the related Primary Insurance Policy or LPMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under the Primary Insurance Policy
or LPMI Policy. If such Primary Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Seller shall obtain a
replacement Primary Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself, and the Purchaser, claims to the
insurer under any Primary Insurance Policy or LPMI Policy in a timely fashion
in accordance with the terms of such policies and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary
Insurance Policy or LPMI Policy respecting a defaulted Mortgage Loan. Pursuant
to Subsection 11.04, any amounts collected by the Seller under any Primary
Insurance Policy or LPMI Policy shall be deposited in the related Custodial
Account, subject to withdrawal pursuant to Subsection 11.05.
Subsection 11.09 Transfer of Accounts.
The Seller may transfer the related Custodial Account or the related
Escrow Account to a different depository institution from time to time. Such
transfer shall be made only upon obtaining the consent of the Purchaser, which
consent shall not be unreasonably withheld. In any case, the Custodial Account
and Escrow Account shall be Eligible Accounts.
Subsection 11.10 Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss
to the improvements which are a part of such property on a replacement cost
basis or (ii) the outstanding principal balance of the Mortgage Loan, in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Flood Emergency Management
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Agency as having special flood hazards and such flood insurance has been made
available, the Seller will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the lesser of (i) the outstanding
principal balance of the Mortgage Loan or (ii) the maximum amount of insurance
which is available under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended. The Seller also shall maintain on
any REO Property, fire and hazard insurance with extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property plus accrued interest at the Mortgage Interest Rate and
related Servicing Advances, liability insurance and, to the extent required
and available under the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Pursuant to Subsection 11.04, any amounts collected by the
Seller under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Seller's normal servicing procedures, shall be deposited in the related
Custodial Account, subject to withdrawal pursuant to Subsection 11.05. Any
cost incurred by the Seller in maintaining any such insurance shall not, for
the purpose of calculating distributions to the Purchaser, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance need be required by the Seller or the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable
to the Seller, or upon request to the Purchaser, and shall provide for at
least thirty days prior written notice of any cancellation, reduction in the
amount of, or material change in, coverage to the Seller. The Seller shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Seller shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a General Policy Rating of A:VI or better in
Best's Key Rating Guide and are licensed to do business in the state wherein
the property subject to the policy is located.
Subsection 11.11 Maintenance of Mortgage Impairment Insurance
Policy.
In the event that the Seller shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer that has a Best rating of
A:VI insuring against hazard losses on all Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Subsection 11.10 and otherwise
complies with all other requirements of Subsection 11.10, the Seller shall
conclusively be deemed to have satisfied its obligations as set forth in
Subsection 11.10, it being understood and agreed that such policy may contain
a deductible clause, in which case the Seller shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO
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Property a policy complying with Subsection 11.10, and there shall have been
one or more losses which would have been covered by such policy, deposit in
the related Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as servicer of the Mortgage Loans, the Seller agrees to prepare and
present, on behalf of the Purchaser, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Upon request of
the Purchaser, the Seller shall cause to be delivered to the Purchaser 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 thirty days prior written notice to the Purchaser.
Subsection 11.12 Fidelity Bond, Errors and Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA or FHLMC on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The fidelity bond and errors and omissions insurance shall be
in the form of the Mortgage Banker's Blanket Bond and shall protect and insure
the Seller against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons. Such fidelity bond
shall also protect and insure the Seller against losses in connection with the
failure to maintain any insurance policies required pursuant to this Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Subsection 11.12 requiring the fidelity bond and errors and omissions
insurance shall diminish or relieve the Seller from its duties and obligations
as set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Seller's and
Servicers' Guide. The Seller shall deliver to the Purchaser a certified true
copy of the fidelity bond and insurance policy and a statement from the surety
and the insurer that such fidelity bond or insurance policy shall in no event
be terminated or materially modified without thirty days' prior written notice
to the Purchaser.
Subsection 11.13 Title, Management and Disposition of REO Property.
In the event that title to the 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 person designated by the Purchaser, or in
the event such person is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person or Persons as shall be consistent with an opinion of counsel obtained
by the Seller from an attorney duly licensed to practice law in the state
where the REO Property is located. Any Person or Persons holding such title
other than the Purchaser shall acknowledge in writing that such title is being
held as nominee for the benefit of the Purchaser.
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The Seller shall either itself or through an agent selected by the
Seller, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) 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. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO Property are held, the
Seller shall manage, conserve, protect and operate each REO Property in a
manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by such REMIC of any "income from non permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income
from foreclosure property" within the meaning of Section 860G(c)(2) of the
Code. The Seller shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Seller shall make or cause to be
made a written report of each such inspection. Such reports shall be retained
in the Mortgage File and copies thereof shall be forwarded by the Seller to
the Purchaser upon request. The Seller shall use its best efforts to dispose
of the REO Property as soon as possible and shall sell such REO Property in
any event within two years after title has been taken to such REO Property,
unless the Seller determines, and gives appropriate notice to the Purchaser,
that a longer period is necessary for the orderly liquidation of such REO
Property. Notwithstanding the foregoing, if a REMIC election is made with
respect to the arrangement under which the Mortgage Loans and the REO Property
are held, such REO Property shall be disposed of within three years or such
other period as may be permitted under Section 860G(a)(8) of the Code.
With respect to each REO Property, the Seller shall segregate and
hold all funds collected and received in connection with the operation of the
REO Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each REO Property in the
form of a non interest bearing demand account, unless an Opinion of Counsel is
obtained by the Seller to the effect that the classification as a grantor
trust or REMIC for federal income tax purposes of the arrangement under which
the Mortgage Loans and the REO Property is held will not be adversely affected
by holding such funds in another manner. Each REO Account shall be established
with the Seller or, with the prior consent of the Purchaser, with a commercial
bank, a mutual savings bank or a savings association. The creation of any REO
Account shall be evidenced by a letter agreement substantially in the form of
the Custodial Account Letter Agreement attached as Exhibit 6 hereto. An
original of such letter agreement shall be furnished to any Purchaser upon
request.
The Seller shall deposit or cause to be deposited, on a daily basis
in each REO Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Subsection 11.10 hereof and
the fees of any managing agent acting on behalf of the Seller. The Seller
shall not be entitled to retain interest paid or other earnings, if any, on
funds deposited in such REO Account. On or before each Determination Date, the
Seller shall withdraw from each REO Account and deposit
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into the Custodial Account the net income from the REO Property on deposit in
the REO Account.
Each REO Disposition shall be carried out by the Seller at such
price and upon such terms and conditions as the Seller deems to be in the best
interest of the Purchaser r. If as of the date title to any REO Property was
acquired by the Seller there were outstanding unreimbursed Servicing Advances
with respect to the REO Property, the Seller, upon an REO Disposition of such
REO Property, shall be entitled to reimbursement for any related unreimbursed
Servicing Advances from proceeds received in connection with such REO
Disposition. The proceeds from the REO Disposition, net of any payment to the
Seller as provided above, shall be deposited in the REO Account and shall be
transferred to the Custodial Account on the Determination Date in the month
following receipt thereof for distribution on the succeeding Distribution Date
in accordance with Subsection 11.14.
Subsection 11.14 Distributions.
On each Distribution Date, the Seller shall distribute to the
Purchaser (A) (i) all amounts credited to the related Custodial Account as of
the close of business on the preceding Determination Date, net of charges
against or withdrawals from the related Custodial Account pursuant to
Subsection 11.05., plus (ii) all Monthly Advances, if any, which the Seller is
obligated to distribute pursuant to Subsection 11.21[should be 11.29]; minus
(B) (x) any amounts attributable to Principal Prepayments received after the
last day of the Calendar month immediately preceding the related Distribution
Date and (y) any amounts attributable to Monthly Prepayments collected but due
on a Due Date or Dates subsequent to the preceding Determination Date.
All distributions made to the Purchaser on each Distribution Date
will be made to the Purchaser of record , and shall be based on the Mortgage
Loans owned and held by the Purchaser as of the preceding Record Date. All
remittances will be made by wire transfer of immediately available funds to
the account of the Purchaser at a bank or other entity having appropriate
facilities therefor. .
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment
at an annual rate equal to the rate of interest as is publicly announced from
time to time at its principal office by JPMorgan Chase Bank, New York, New
York, as its prime lending rate, adjusted as of the date of each change, plus
three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be paid by the Seller to the
Purchaser on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest
shall be remitted along with such late payment. The payment by the Seller of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Seller.
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Subsection 11.15 Remittance Reports.
No later than the fifth Business Day of each month, the Seller shall
furnish to the Purchaser or its designee the monthly data in an acceptable
electronic format in which the electronic data will be sent to a secured
website approved by HSBC for retrieval by the Purchaser or paper, together
with such other information with respect to the Loans as the Purchaser may
reasonably require to allocate distributions made pursuant to this Agreement
and provide appropriate statements with respect to such distribution.
Subsection 11.16 Statements to the Purchaser.
Upon Purchaser's request, the Seller shall forward to the Purchaser
or its designee a statement prepared by the Seller setting forth the status of
the Custodial Account as of the close of business on such Distribution Date
and showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Custodial Account of each category of
deposit specified in Subsection 11.04 and each category of withdrawal
specified in Subsection 11.05.
The Seller 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 any Purchaser pursuant to any applicable
law with respect to the Mortgage Loans and the transactions contemplated
hereby. In addition, the Seller shall provide the Purchaser with such
information concerning the Mortgage Loans as is necessary for the Purchaser to
prepare its federal income tax return as any Purchaser may reasonably request
from time to time.
Subsection 11.17 Real Estate Owned Reports.
The Seller shall furnish to the Purchaser a statement covering the
Seller'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, together with the operating statement, as the Purchaser shall
reasonably request.
Subsection 11.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Seller shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property.
Subsection 11.19 Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance
or prospective conveyance by any Mortgagor of the Mortgaged Property (whether
by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such
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Mortgage Loan under any "due-on-sale" clause applicable thereto; provided,
however, that the Seller shall not exercise any such rights if prohibited by
law from doing so or if the exercise of such rights would impair or threaten
to impair any recovery under the related Primary Insurance Policy or LPMI
Policy, if any. If the Seller reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Seller shall enter
into an assumption agreement with the person to whom the Mortgaged Property
has been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Where an
assumption is allowed pursuant to this Subsection 11.19, the Seller, with the
prior written consent of the insurer under the Primary Insurance Policy or
LPMI Policy, if any, is authorized to enter into a substitution of liability
agreement with the person to whom the Mortgaged Property has been conveyed or
is proposed to be conveyed pursuant to which the original Mortgagor is
released from liability and such Person is substituted as Mortgagor and
becomes liable under the related Mortgage Note. Any such substitution of
liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Seller shall
notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser the original of
any such substitution of liability or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. Any fee collected by
the Seller for entering into an assumption or substitution of liability
agreement in excess of 1% of the outstanding principal balance of the Mortgage
Loan shall be deposited in the Custodial Account pursuant to Subsection 11.04.
Notwithstanding the foregoing paragraphs of this Subsection or any
other provision of this Agreement, the Seller shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan by operation of law or any assumption
which the Seller may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Subsection 11.19, the term "assumption" is
deemed to also include a sale of the Mortgaged Property subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Subsection 11.20 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser
by a certification of a servicing officer of the Seller (a "Servicing
Officer"), which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which
are required to be
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deposited in the Custodial Account pursuant to Subsection 11.04 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it of the portion of the Mortgage
File held by the Purchaser or the Purchaser's designee. Upon receipt of such
certification and request, the Purchaser, shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand, shall remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan
by deposit thereof in the Custodial Account. The Seller shall maintain the
fidelity bond insuring the Seller against any loss they may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures
set forth herein.
From time to time and as appropriate for the servicing of the
Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy or LPMI Policy, the Purchaser shall, upon request of the
Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the requested portion of the Mortgage File held by
the Purchaser to the Seller. Such servicing receipt shall obligate the Seller
to return the related Mortgage documents to the Purchaser when the need
therefor by the Seller no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Custodial Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Seller has delivered to the
Purchaser a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Purchaser to the
Seller.
Subsection 11.21 Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amounts provided for as the Seller's
Servicing Fee. Additional servicing compensation in the form of assumption
fees, as provided in Subsection 11.19, and late payment charges or otherwise
shall be retained by the Seller to the extent not required to be deposited in
the Custodial Account. The Seller shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for.
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Subsection 11.22 Notification of Adjustments.
On each Adjustment Date, the Seller shall make interest rate
adjustments for each Adjustable Rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note. The Seller shall
execute and deliver the notices required by each Mortgage and Mortgage Note
regarding interest rate adjustments. The Seller also shall provide timely
notification to the Purchaser of all applicable data and information regarding
such interest rate adjustments and the Seller's methods of implementing such
interest rate adjustments. Upon the discovery by the Seller or the Purchaser
that the Seller has failed to adjust a Mortgage Interest Rate or a Monthly
Payment pursuant to the terms of the related Mortgage Note and Mortgage, the
Seller shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss caused thereby without reimbursement therefor.
Subsection 11.23 Statement as to Compliance.
The Seller will deliver to the Purchaser not later than 90 days
following the end of each fiscal year of the Seller, which as of each Closing
Date ends on the last day in December in each calendar year, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Seller during the preceding year and of performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Seller has
fulfilled all of its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of such statement shall be provided by the Purchaser to any
Person identified as a prospective purchaser of the Mortgage Loans.
Subsection 11.24 Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year of the
Seller, the Seller at its expense shall cause a firm of independent public
accountants (which may also render other services to the Seller) which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser or its designee to the effect that such firm has
examined certain documents and records relating to the servicing of the
Mortgage Loans under this Agreement or of mortgage loans under pooling and
servicing agreements (including the Mortgage Loans and this Agreement)
substantially similar one to another (such statement to have attached thereto
a schedule setting forth the pooling and servicing agreements covered thereby)
and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm confirms that such servicing has been conducted in compliance with
such pooling and servicing agreements except for such significant exceptions
or errors in records that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers requires it to report. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
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Subsection 11.25 Access to Certain Documentation.
The Seller shall provide to the Office of Thrift Supervision, the
FDIC and any other federal or state banking or insurance regulatory authority
that may exercise authority over the Purchaser access to the documentation
regarding the Mortgage Loans serviced by the Seller required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller For any mortgage loan where the documentation has not been
previously provided to the Purchaser.
Subsection 11.26 Reports and Returns to be Filed by the Seller.
The Seller shall file information reports with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and information
returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Subsection 11.27 Servicing Transfer.
At the end of the Preliminary Servicing Period, the Initial
Purchaser, or its designee, shall assume all servicing responsibilities
related to the Mortgage Loans and the Seller shall cease all servicing
responsibilities related to the Mortgage Loans. During the Preliminary
Servicing Period, the Seller shall, at its 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 Initial Purchaser, or its
designee. The Seller agrees to execute and deliver such instruments and take
such actions as the Initial Purchaser, or its designee may, from time to time,
reasonably request to carry out the servicing transfer.
Subsection 11.28 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Seller shall not
take any action, cause the REMIC to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of the REMIC as a
REMIC or (ii) 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 and the tax on "contributions" to a REMIC set forth in
Section 860G(d) of the Code) unless the Seller has received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such REMIC status or
result in the imposition of any.
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Subsection 11.29 Monthly Advances by the Seller.
(a) Not later than the close of business on the Business Day
preceding each Distribution Date, the Seller shall deposit in the Custodial
Account an amount equal to all payments not previously advanced by the Seller,
whether or not deferred pursuant to Section 11.01, of principal (due after the
Cut-off Date) and interest not allocable to the period prior to the Cut-off
Date, at the Mortgage Interest Rate net of the Servicing Fee, which were due
on a Mortgage Loan and delinquent at the close of business on the related
Determination Date.
(b) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be
made hereunder by the Seller if such Monthly Advance would, if made,
constitute a Nonrecoverable Monthly Advance. The determination by the Seller
that it has made a Nonrecoverable Monthly Advance or that any proposed Monthly
Advance, if made, would constitute a Nonrecoverable Monthly Advance, shall be
evidenced by an Officers' Certificate delivered to the Purchaser.
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EXHIBIT 9
FORM OF COMMITMENT LETTER
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EXHIBIT 10
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan set forth on a related Mortgage
Loan Schedule, the Seller shall deliver and release to the Custodian the
following documents:
1. the original Mortgage Note bearing all intervening endorsements
necessary to show a complete chain of endorsements from the original payee to
the Seller, endorsed in blank, "Pay to the order of _____________, without
recourse", and, if previously endorsed, signed in the name of the last
endorsee by a duly qualified officer of the last endorsee. If the Mortgage
Loan was acquired by the last endorsee in a merger, the endorsement must be by
"[name of 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 "[name of last
endorsee], formerly known as [previous name]";
If the Seller uses facsimile signatures to endorse Mortgage Notes,
the Seller must provide in an Officer's Certificate that the
endorsement is valid and enforceable in the jurisdiction(s) in which
the Mortgaged Properties are located and must retain in its
corporate records the following specific documentation authorizing
the use of facsimile signatures: (i) a resolution from its board of
directors authorizing specific officers to use facsimile signatures;
stating that facsimile signatures will be a valid and binding act on
the Seller's part; and authorizing the Seller's corporate secretary
to certify the validity of the resolution, the names of the officers
authorized to execute documents by using facsimile signatures, and
the authenticity of specimen forms of facsimile signatures; (ii) the
corporate secretary's certification of the authenticity and validity
of the board of directors' resolution; and (iii) a notarized
"certification of facsimile signature," which includes both the
facsimile and the original signatures of the signing officer(s) and
each officer's certification that the facsimile is a true and
correct copy of his or her original signature.
2. the certified true copy of the Assignment of Mortgage for each
Mortgage Loan, in form and substance acceptable for recording unless the
Mortgage Loan is a MOM Mortgage or has been previously assigned to MERS. The
Mortgage shall be assigned, with assignee's name left blank. If the Mortgage
Loan was acquired by the last assignee in a merger, the Assignment of Mortgage
must be made by "[name of last assignee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the last
assignee while doing business under another name, the Assignment of Mortgage
must be by "[name of last assignee], formerly known as [previous name]";
3. the certified true copy of any guarantee executed in connection
with the Mortgage Note, if any;
4. the certified true copy of the Mortgage with evidence of
recording thereon or, if the original Mortgage with evidence of recording
thereon has not been returned by the public recording office where such
Mortgage has been delivered for recordation or such Mortgage has
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been lost or such public recording office retains the original recorded
Mortgage, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, a Certificate insuring the
Mortgage stating that such Mortgage has been delivered 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 and (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 with the recording information
thereon certified by such public recording office to be a true and complete
copy of the original recorded Mortgage;
5. the certified true copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording thereon, if
any;
6. the certified true copies of all intervening assignments of
mortgage with evidence of recording thereon evidencing a complete chain of
ownership from the originator of the Mortgage Loan to the last assignee, or if
any such intervening assignment of mortgage has not been returned from the
applicable public recording office or has been lost or if such public
recording office retains the original recorded intervening assignments of
mortgage, a photocopy of such intervening assignment of mortgage, together
with (i) in the case of a delay caused by the public recording office, a
Certificate insuring the Mortgage stating that such intervening assignment of
mortgage has been delivered 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 party delivering the
Officer's Certificate or by the Seller; or (ii) in the case of an intervening
assignment of mortgage where a public recording office retains the original
recorded intervening assignment of mortgage or in the case where an
intervening assignment of mortgage is lost after recordation in a public
recording office, a copy of such intervening assignment of mortgage with
recording information thereon certified by such public recording office to be
a true and complete copy of the original recorded intervening assignment of
mortgage;
7. if the Mortgage Note, the Mortgage, any Assignment of Mortgage,
or any other related document has been signed by a Person on behalf of the
Mortgagor, a photocopy of the power of attorney or other instrument that
authorized and empowered such Person to sign;
8. the certified true copy of the lender's title insurance policy in
the form of an ALTA mortgage title insurance policy, which includes titles
with digitized signatures, containing each of the endorsements required by
FNMA and insuring the Purchaser and its successors and assigns as to the first
or second priority lien of the Mortgage in the original principal amount of
the Mortgage Loan or, if the original lender's title insurance policy has not
been issued, the irrevocable commitment to issue the same; and
9. the certified true copy of any security agreement, chattel
mortgage or equivalent document executed in connection with the Mortgage, if
any.
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10. with respect to any Co-op Loan: (i) a copy of the Co-op Lease
and the assignment of such Co-op Lease, with all intervening assignments
showing a complete chain of title and an assignment thereof by Seller; (ii)
the stock certificate together with an undated stock power relating to such
stock certificate executed in blank; (iii) the recognition agreement of the
interests of the mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan; and (iv) copies of the
financial statement filed by the originator as secured party and, if
applicable, a filed UCC-3 assignment of the subject security interest showing
a complete chain of title, together with an executed UCC-3 assignment of such
security interest by the Seller in a form sufficient for filing.
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EXHIBIT 11
FORM OF MONTHLY SERVICER'S REPORT
8-23
EXHIBIT 12
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated [_______],
200___ ("Agreement") between GS Mortgage Securities Corp., a Delaware
corporation (the "Depositor"), and [___________________], a [_________]
corporation (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party or its Affiliate originated or
acquired the Mortgage Loans and subsequently sold the Mortgage Loans to an
Affiliate of the Depositor in anticipation of the securitization transaction;
and
WHEREAS, as an inducement to the Depositor to enter into the
Assignment and Recognition Agreement, to the Underwriter[s] to enter into the
Underwriting Agreement (as defined herein), and to the Initial Purchaser[s] to
enter into the Certificate Purchase Agreement (as defined herein), the
Indemnifying Party wishes to provide for indemnification and contribution on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
Subsection 1.01 Certain Defined Terms. The following terms shall
have the meanings set forth below, unless the context clearly indicates
otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
ABS Informational and Computational Material: Any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act
and the 1934 Act, as amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Certificate Purchase Agreement: The Purchase Agreement, dated as of
[______], 200___, [among] the Depositor and the Initial Purchaser[s], relating
to the Privately Offered Certificates.
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Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the 1933 Act.
GSMC: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited
partnership, and its successors and assigns.
Indemnified Parties: As defined in Section 3.01.
Indemnifying Party Information: (A) All information in the
Prospectus Supplement, the Offering Circular, ABS Informational and
Computational Material or any Free Writing Prospectus or any amendment or
supplement thereto, (i) contained under the headings ["Transaction
Overview--Parties--The Responsible Party"] and ["The Mortgage Loan
Pool--Underwriting Guidelines"] and (ii) regarding the Mortgage Loans, the
related Mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission or
alleged untrue statement or omission arises from or is based upon errors or
omissions in the information concerning the Mortgage Loans, the related
Mortgagors and/or the related Mortgaged Properties, as applicable, provided to
the Depositor or any Affiliate thereof by or on behalf of the Indemnifying
Party or any Affiliate thereof), and (B) [and static pool information
regarding mortgage loans originated or acquired by the Seller [and included in
the Prospectus Supplement, the Offering Circular, ABS Informational and
Computational Material or the Free Writing Prospectus] [incorporated by
reference from the website located at ______________].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of [_______], 200___, among the Depositor, the
Indemnifying Party, [Servicer], as servicer, and [Trustee], as trustee.
Privately Offered Certificates: [__________________], issued
pursuant to the Pooling and Servicing Agreement.
Prospectus Supplement: The prospectus supplement, dated [______],
200___, relating to the public offering of the Publicly Offered Certificates.
Publicly Offered Certificates: [______________________________],
issued pursuant to the Pooling and Servicing Agreement.
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,
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2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Underwriters: ▇▇▇▇▇▇▇, Sachs & Co., a New York limited partnership,
and [____________], a [___________] corporation], and their successors and
assigns.
Underwriting Agreement: The Underwriting Agreement, dated as of
[________], 200__, [among] the Depositor and the Underwriter[s], relating to
the Publicly Offered Certificates.
Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) Each party hereto represents and warrants that it has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement;
(b) Each party hereto represents and warrants that this Agreement
has been duly authorized, executed and delivered by such party;
(c) Each party hereto represents and warrants that assuming the due
authorization, execution and delivery by each other party hereto, this
Agreement constitutes the legal, valid and binding obligation of such party;
and
(d) The Indemnifying Party hereto represents that the Indemnifying
Party Information satisfies the requirements of the applicable provisions of
Regulation AB.
SECTION 3. INDEMNIFICATION
Subsection 3.01 Indemnification by the Indemnifying Party of the
Depositor and the Underwriters.
(a) The Indemnifying Party shall indemnify and hold harmless the
Depositor, GSMC, [each of] the Underwriter[s], the Initial Purchaser[s], and
their respective Affiliates and their respective present and former directors,
officers, partners and each Person, if any, that controls the Depositor, GSMC,
such Underwriter, such Initial Purchaser, or such Affiliate, within the
meaning of either the 1933 Act or the 1934 Act (collectively, the "Indemnified
Parties") against any and all losses, claims, damages, penalties, fines,
forfeitures, or liabilities, joint or several, to which each such Indemnified
Party may become subject, under the 1933 Act, the 1934 Act or otherwise, to
the extent that such losses, claims, damages, penalties, fines, forfeitures,
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any breach of the representation and warranty set forth in Section 2(d)
above or (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Prospectus Supplement, the Offering Circular, the ABS
Informational and Computational Material, any Free Writing Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or
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necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission relates to
information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability, penalties, fines, forfeitures, or action. The Indemnifying Party's
liability under this Section 3.01 shall be in addition to any other liability
that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.01 shall
for any reason be unavailable to an Indemnified Party under this Section 3.01,
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated herein
and incurred by the parties hereto in such proportions that are appropriate to
reflect the relative fault of the Depositor, GSMC, the Underwriter[s], and the
Initial Purchaser[s], on one hand, and the Indemnifying Party, on the other
hand, in connection with the applicable misstatements or omissions as well as
any other relevant equitable considerations. Notwithstanding the foregoing, no
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any Person that
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 3.01, each director, officer, partner and controlling Person, of the
Depositor, GSMC, the Underwriter[s] and the Initial Purchaser[s] and their
respective Affiliates shall have the same rights to contribution as such
Person.
Subsection 3.02 Notification; Procedural Matters. Promptly after
receipt by an Indemnified Party under Section 3.01 of notice of any claim or
the commencement of any action, such Indemnified Party shall, if a claim in
respect thereof is to be made against the Indemnifying Party under Section
3.01, notify the Indemnifying Party (or other contributing party) in writing
of the claim or the commencement of such action; provided, however, that the
failure to notify the Indemnifying Party (or other contributing party) shall
not relieve it from any liability which it may have under Section 3.01 except
to the extent it has been materially prejudiced by such failure; and provided
further, however, that the failure to notify the Indemnifying Party shall not
relieve it from any liability which it may have to any Indemnified Party
otherwise than under Section 3.01. In case any such action is brought against
any Indemnified Party and it notifies the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
therein and, to the extent that, by written notice delivered to the
Indemnified Party promptly after receiving the aforesaid notice from such
Indemnified Party, the Indemnifying Party elects to assume the defense
thereof, it may participate with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that if the defendants in any such
action include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party or parties shall reasonably have concluded that there may be
legal defenses available to it or them and/or other Indemnified Parties that
are different from or additional to those available to the Indemnifying Party,
the Indemnified Party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such Indemnified Party or parties. Upon
receipt of notice from the Indemnifying Party to such Indemnified Party of its
election so to assume the defense of such action and approval by the
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Indemnified Party of such counsel, the Indemnifying Party shall not be liable
to such Indemnified Party under this paragraph for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel
(plus any local counsel) in connection with the assertion of legal defenses in
accordance with the proviso to the immediately preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party within a reasonable
time after notice of commencement of the action or (iii) the Indemnifying
Party shall have authorized the employment of counsel for the Indemnified
Party at the expense of the Indemnifying Party. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one
counsel representing the Indemnified Parties (in addition to any local
counsel) separate from its own counsel for all Indemnified Parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 4. GENERAL.
Subsection 4.01 Survival. This Agreement and the obligations of the
parties hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and the Privately Offered Certificates.
Subsection 4.02 Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, each Indemnified Party and
their respective successors and assigns, and no other Person shall have any
right or obligation hereunder.
Subsection 4.03 Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to principles of conflict of laws.
Subsection 4.04 Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken
together shall constitute one and the same instrument.
Subsection 4.05 Notices. All communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in
the case of the Depositor, GSMC, the Underwriter[s], or the Initial
Purchaser[s], GS Mortgage Securities Corp., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company or
▇▇▇▇▇▇▇, Sachs & Co. c/o Goldman, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Principal Finance Group/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and (b)
in the case of the Indemnifying Party: [______________], [Address], Attention:
[____________].
Subsection 4.06 Submission To Jurisdiction; Waivers. The
Indemnifying Party hereby irrevocably and unconditionally:
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(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE DEPOSITOR SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By: _____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By: _____________________________________
Name:
Title:
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EXHIBIT 13
REGULATION AB
1. Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in Section 1.The following definitions are added
in their proper alphabetical order:
Commission: The United States Securities and Exchange
Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: With respect to any Securitization Transaction, the
Person identified in writing to the Company by the Purchaser as
depositor for such Securitization Transaction.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company
purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans were
originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Company, in
accordance with underwriting guidelines designated by the
Company ("Designated Guidelines") or guidelines that do not
vary materially from such Designated Guidelines: (ii) such
Mortgage Loans were in fact underwritten as described in clause
(i) above and were acquired by the Company within 1800 (except
that 1% of the Mortgage Loans in any pool may be within 240
days) days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were
originated, used by the Company in the origination of mortgage
loans of the same type as the Mortgage Loans for the Company's
own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating
mortgage loans to be purchased by the Company; and (iv) the
Company employed, at the time such Mortgage Loans were acquired
by the Company pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time
period or through particular channels) designed to ensure that
Persons from which it purchased mortgage loans properly applied
the underwriting criteria designated by the Company.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement: An agreement or agreements entered
into by the Company and the Purchaser and/or certain third
parties in connection with a Reconstitution with respect to any
or all of the Mortgage Loans.
8-31
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.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either
(1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity (as defined
in Regulation AB) in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed
securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are
determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Servicer: As defined in Section 2(f)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to
time.
Static Pool Information: Information set forth in Item 1105(a)
and 1105 (c) of Regulation AB.
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 pursuant to a
Reconstitution Agreement but performs one or more discrete
functions identified in Item 1122(d) of Regulation AB with
respect to Mortgage Loans (serviced by the Company under a
Reconstitution Agreement) under the direction or authority of
the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf
of the Company (as servicer under a Reconstitution Agreement)
or any Subservicer and is responsible for the performance
(whether directly or through Subservicers or Subcontractors) of
a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or
any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Third Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Company.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
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2. The Purchaser and the Company agree that the Existing Agreement is hereby
amended by adding the following provisions as an addendum:
(a) (i) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is
first provided to the Purchaser or any Depositor under Section
2(f) that, except as disclosed in writing to the Purchaser or
such Depositor prior to such date: (i) the Company is not aware
and has not received notice that any default, early
amortization or other performance triggering event has occurred
as to any other securitization due to any act or failure to act
of the Company; (ii) the Company has not been terminated as
servicer in a residential mortgage loan securitization, either
due to a servicing default or to application of a servicing
performance test or trigger; (iii) no material noncompliance
with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the
Company as servicer has been disclosed or reported by the
Company; (iv) no material changes to the Company's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the
related Securitization Transaction; (v) there are no aspects of
the Company's financial condition that could have a material
adverse effect on the performance by the Company of its
servicing obligations under this Agreement or any
Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated)
against the Company, any Subservicer or any Third-Party
Originator of a type identified in Item 1117 of Regulation AB;
and (vii) there are no affiliations, relationships or
transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(ii) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided
to the Purchaser or any Depositor under Section 2(f), the
Company shall use its reasonable best efforts within five
Business Days, but in no event later than ten calendar days,
following such request, to confirm in writing the accuracy of
the representations and warranties set forth in paragraph (i)
of this Section or, if any such representation and warranty is
not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the
requesting party.
(b) The Company shall use its reasonable best efforts on or before
March 1, but in no event later than March 15, of each calendar
year, commencing in 2007, to deliver to the Purchaser and any
Depositor a statement of compliance addressed to the Purchaser
and such Depositor and signed by an authorized officer of the
Company, to the effect that (i) a review of the Company's
activities during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement
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during such period has been made under such officer's
supervision, and (ii) to the best of such officers' knowledge,
based on such review, the Company has fulfilled all of its
obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout
such calendar year (or applicable portion thereof) or, if there
has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure
known to such officer and the nature and the status thereof.
(c) (i) The Company shall use its reasonable best efforts on or
before March 1, but in no event later than March 15, of each
calendar year, commencing in 2007 to:
(A) deliver to the Purchaser and any Depositor a
report (in form and substance reasonably satisfactory to
the Purchaser and such Depositor) regarding the Company's
assessment of compliance with the Servicing Criteria
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. Such report shall be
addressed to the Purchaser and such Depositor and signed
by an authorized officer of the Company, and shall address
each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit B
hereto delivered to the Purchaser concurrently with the
execution of this Agreement;
(B) deliver to the Purchaser and any Depositor a
report of a registered public accounting firm reasonably
acceptable to the Purchaser and such Depositor that
attests to, and reports on, the assessment of compliance
made by the Company and delivered pursuant to the
preceding paragraph. 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;
(C) cause each Subservicer and each Subcontractor
determined by the Company pursuant to Section 2(e)(ii) to
be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB (each, a
"Participating Entity"), to deliver to the Purchaser and
any Depositor an assessment of compliance and accountants'
attestation as and when provided in paragraphs (i) and
(ii) of this Section 2(c); and
(D) if requested by the Purchaser or any Depositor
not later than February 1 of the calendar year in which
such certification is to be delivered, deliver to the
Purchaser, any Depositor and any other Person that will be
responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a
certification in the form attached hereto as Exhibit A.
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The Company acknowledges that the parties identified in
clause (i)(D) above may rely on the certification provided by
the Company pursuant to such clause in signing a Sarbanes
Certification and filing such with the Commission.
(ii) Each assessment of compliance provided by a
Subservicer pursuant to Section 2(c)(i)(A) shall address each
of the Servicing Criteria specified on a certification
substantially in the form of Exhibit B hereto delivered to the
Purchaser concurrently with the execution of this Agreement or,
in the case of a Subservicer subsequently appointed as such, on
or prior to the date of such appointment. An assessment of
compliance provided by a Subcontractor pursuant to Section
2(c)(i)(C) need not address any elements of the Servicing
Criteria other than those specified by the Company pursuant to
Section 2(e).
(d) [Reserved]
(e) The Company shall not hire or otherwise utilize the services of
any Subservicer to fulfill any of the obligations of the
Company as servicer under this Agreement or any Reconstitution
Agreement unless the Company complies with the provisions of
clause (i) of this Section. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall
not permit any Subservicer to hire or otherwise utilize the
services of any Subcontractor, to fulfill any of the
obligations of the Company as servicer under this Agreement or
any Reconstitution Agreement unless the Company complies with
the provisions of paragraph (ii) of this Section.
(i) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of
any Subservicer. The Company shall cause any Subservicer used
by the Company (or by any Subservicer) for the benefit of the
Purchaser and any Depositor to comply with the provisions of
this Section and with Sections 2(a), 2(b), 2(c), 2(f)(iii),
2(f)(v) and 2(g) of this Agreement to the same extent as if
such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under
Section 2(f)(iv) of this Agreement. The Company shall be
responsible for obtaining from each Subservicer and delivering
to the Purchaser and any Depositor any servicer compliance
statement required to be delivered by such Subservicer under
Section 2(b), any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 2(c)
and any certification required to be delivered to the Person
that will be responsible for signing the Sarbanes Certification
under Section 2(c) as and when required to be delivered. For
the purposes of clarification, the covenants of this clause (i)
are applicable only with respect to those Mortgage Loans being
securitized in a Securitization Transaction pursuant to which
the Company has entered into a Reconstitution Agreement.
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(ii) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of
any Subcontractor. The Company shall promptly upon request
provide to the Purchaser and any Depositor (or any designee of
the Depositor, such as a master servicer or administrator) a
written description (in form and substance satisfactory to the
Purchaser and such Depositor) of the role and function of each
Subcontractor utilized by the Company or any Subservicer,
specifying (A) the identity of each such Subcontractor, (B)
which (if any) of such Subcontractors are Participating
Entities, and (C) which elements of the Servicing Criteria will
be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (B) of this
paragraph.
As a condition to the utilization of any Subcontractor
determined to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, the Company
shall cause any such Subcontractor used by the Company (or by
any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 2(c) and
2(g) of this Agreement to the same extent as if such
Subcontractor were the Company. The Company shall be
responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of
compliance and attestation required to be delivered by such
Subcontractor under Section 2(c), in each case as and when
required to be delivered.
For the purposes of clarification, the covenants of this clause
(ii) are applicable only with respect to those Mortgage Loans
being securitized in a Securitization Transaction pursuant to
which the Company has entered into a Reconstitution Agreement.
(f) In connection with any Securitization Transaction the Company
shall (1) use its best reasonable efforts within five Business
Days, but in no event later than ten calendar days, following
request by the Purchaser or any Depositor, to provide to the
Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in
writing and in form and substance reasonably satisfactory to
the Purchaser and such Depositor, the information and materials
specified in paragraphs (i), (ii), (iii) and (vi) of this
Section 2(f), and (2) as promptly as practicable following
notice to or discovery by the Company, provide to the Purchaser
and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor)
the information specified in paragraph (iv) of this Section.
For the purposes of clarification, the covenants of this
Section 2(f) are applicable only with respect to those Mortgage
Loans being securitized in a Securitization Transaction
pursuant to which the Company has entered into a Reconstitution
Agreement.
(i) If so requested by the Purchaser or any Depositor in
connection with a Securitization Transaction, the Company shall
provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an
8-36
acquirer of Mortgage Loans from a Qualified Correspondent), or
(y) each Third-Party Originator, and (z) as applicable, each
Subservicer, as is requested for the purpose of compliance with
Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB.
Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination
program and how long the originator has been engaged in
originating residential mortgage loans, which description
shall include a discussion of the originator's experience
in originating mortgage loans of a similar type as the
Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and
information that may be material, in the good faith
judgment of the Purchaser or any Depositor, to an analysis
of the performance of the Mortgage Loans, including the
originators' credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans
and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or
governmental proceedings pending (or known to be
contemplated) of a type described in Item 1117 of
Regulation AB against the Company, each Third-Party
Originator and each Subservicer; and
(D) a description of any affiliation or relationship
of a type described in Item 1119 of Regulation AB between
the Company, each Third-Party Originator, each Subservicer
and any of the following parties to a Securitization
Transaction, as such parties are identified to the Company
by the Purchaser or any Depositor in writing in advance of
such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor,
the Company shall provide (or, as applicable, cause each
Third-Party Originator to provide) Static Pool Information with
respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as
provided below)
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originated by (a) the Company, if the Company is an originator
of Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), and/or (b) each Third-Party
Originator. Such Static Pool Information shall be prepared by
the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of
Item 1105(a)(1)-(3) of Regulation AB. To the extent that there
is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be
entitled to specify whether some or all of such information
shall be provided pursuant to this paragraph. The content of
such Static Pool Information may be in the form customarily
provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for
each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently
than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The
most recent periodic increment must be as of a date no later
than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that
provides a permanent record of the information provided, such
as a portable document format (pdf) file, or other such
electronic format reasonably required by the Purchaser or the
Depositor, as applicable.
Promptly following notice or discovery of a material error in
Static Pool Information provided pursuant to the immediately
preceding paragraph (including an omission to include therein
information required to be provided pursuant to such
paragraph), the Company shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable,
in the same format in which Static Pool Information was
previously provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party
Originator to provide), at the expense of the requesting party
(to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable,
pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with
respect to the Company's or Third-Party Originator's
originations or purchases, to calendar months commencing
January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be
for the benefit of such parties as the Purchaser or such
Depositor shall designate, which may include, by way of
example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser
with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally
applicable document
8-38
accompanied by a reliance letter authorizing reliance by the
addressees designated by the Purchaser or such Depositor.
(iii) If so requested by the Purchaser or any Depositor,
the Company shall provide such information regarding the
Company, as servicer of the Mortgage Loans, and each
Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a "Servicer"), as is requested for
the purpose of compliance with Item 1108 of Regulation AB. Such
information shall include, at a minimum:
(A) the Servicer's form of organization;
1. (B) 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 this Agreement
and any Reconstitution Agreements; information regarding
the size, composition and growth of the Servicer's
portfolio of residential mortgage loans of a type similar
to the Mortgage Loans and information on factors related
to the Servicer that may be material, in the good faith
judgment of the Purchaser or any Depositor, to any
analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable, including,
without limitation:
2. (1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of servicing
during the three-year period immediately preceding
the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous disclosure
of material noncompliance with the applicable
servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan
securitization, either due to a servicing default or
to application of a servicing performance test or
trigger; and
8-39
(5) such other information as the Purchaser or
any Depositor may reasonably request for the purpose
of compliance with Item 1108(b)(2) of Regulation AB;
3. (C) a description of any material changes during
the three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution
Agreements for mortgage loans of a type similar to the
Mortgage Loans;
4. (D) information regarding the Servicer's financial
condition, to the extent that there is a material risk
that an adverse financial event or circumstance involving
the Servicer could have a material adverse effect on the
performance by the Company of its servicing obligations
under this Agreement or any Reconstitution Agreement;
5. (E) information regarding advances made by the
Servicer on the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans for the
three-year period immediately preceding the related
Securitization Transaction, which may be limited to a
statement by an authorized officer of the Servicer to the
effect that the Servicer has made all advances required to
be made on residential mortgage loans serviced by it
during such period, or, if such statement would not be
accurate, information regarding the percentage and type of
advances not made as required, and the reasons for such
failure to advance;
6. (F) a description of the Servicer's processes and
procedures designed to address any special or unique
factors involved in servicing loans of a similar type as
the Mortgage Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts;
and
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the
effect of any grace period, re-aging, restructuring,
partial payments considered current or other practices
with respect to delinquency and loss experience.
(iv) If so requested by the Purchaser or any Depositor for
the purpose of satisfying its reporting obligation under the
Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each
8-40
Subservicer and Third-Party Originator to) (a) notify the
Purchaser and any Depositor in writing of (1) any material
litigation or governmental proceedings of a type described in
Item 1117 of Regulation AB pending against the Company, any
Subservicer or any Third-Party Originator and (2) any
affiliations or relationships of a type described in Item 1119
of Regulation AB that develop following the closing date of a
Securitization Transaction between the Company, any Subservicer
or any Third-Party Originator and any of the parties specified
in clause (D) of paragraph (i) of this Section 2(f) (and any
other parties identified in writing by the requesting party)
with respect to such Securitization Transaction, and (b)
provide to the Purchaser and any Depositor a description of
such proceedings, affiliations or relationships.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement or
any Reconstitution Agreement by any Person (i) into which the
Company or such Subservicer may be merged or consolidated, or
(ii) which may be appointed as a successor to the Company or
any Subservicer, the Company shall provide to the Purchaser and
any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to
the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor,
all information reasonably requested by the Purchaser or any
Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.
(vi) In addition to such information as the Company, as
servicer, is obligated to provide pursuant to other provisions
of this Agreement, if so requested in writing by the Purchaser
or any Depositor, the Company shall provide such information
regarding the performance or servicing of the Mortgage Loans as
is reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation
AB. Such information shall be provided concurrently with the
monthly reports otherwise required to be delivered by the
servicer under this Agreement, commencing with the first such
report due not less than ten Business Days following such
request.
(g) (i) The Company shall indemnify the Purchaser, each affiliate
of the Purchaser, and each of the following parties
participating in a Securitization Transaction: each sponsor and
issuing entity; each Person responsible for the preparation,
execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person
who controls any of such parties or the Depositor (within the
meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the
foregoing and
8-41
of the Depositor (the "Indemnified Parties"), and shall hold
each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based
upon:
(A)(1) any untrue statement of a material fact contained
or alleged to be contained in any information, report,
certification, accountants' letter or other material provided
under this Amendment Reg AB by or on behalf of the Company, or
provided under this Amendment Reg AB by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator
(collectively, the "Company Information"), or (2) the omission
or alleged omission to state in the Company Information a
material fact required to be stated in the Company Information
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (2)
of this paragraph shall be construed solely by reference to the
Company Information and not to any other information
communicated in connection with a sale or purchase of
securities, without regard to whether the Company Information
or any portion thereof is presented together with or separately
from such other information provided, further that
notwithstanding anything to the contrary herein, the Company
shall have no obligation to indemnify and hold harmless any
Person based on any untrue statement of material fact or
omission or alleged omission that is the result of any error in
the manipulation of, or any calculations based upon, or any
aggregation of the Company Information provided to the
Indemnified Parties by the Company.
(B) any failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or
other material when and as required under this Amendment Reg
AB, including any failure by the Company to identify pursuant
to Section 2(e)(ii) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of
Regulation AB; or
(C) any breach by the Company of a representation or
warranty set forth in Section 2(a)(i) or in a writing furnished
pursuant to Section 2(a)(ii) and made as of a date prior to the
closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or
any breach by the Company of a representation or warranty in a
writing furnished pursuant to Section 2(a)(ii) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in
clause (i)(B) of this Section 2(g), the Company shall promptly
reimburse the Purchaser, any Depositor, as applicable, and each
Person responsible for the preparation, execution or filing of
any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with
8-42
respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or
other material not delivered as required by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator.
(ii) (A) Any failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or
other material when and as required under this Amendment Reg
AB, or any breach by the Company of a representation or
warranty set forth in Section 2(a)(i) or in a writing furnished
pursuant to Section 2(a)(ii) and made as of a date prior to the
closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or
any breach by the Company of a representation or warranty in a
writing furnished pursuant to Section 2(a)(ii) to the extent
made as of a date subsequent to such closing date, shall,
except as provided in clause (B) of this paragraph, immediately
and automatically, without notice or grace period, constitute
an Event of Default with respect to the Company under this
Agreement and any applicable Reconstitution Agreement, and
shall entitle the Purchaser or Depositor, as applicable, in its
sole discretion to terminate the rights and obligations of the
Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Company;
provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or
obligations following termination of the Company as servicer,
such provision shall be given effect.
(B) Any failure by the Company, any Subservicer or any
Subcontractor to deliver any information, report, certification
or accountants' letter when and as required under Section 2(b)
or 2(c), including (except as provided below) any failure by
the Company to identify pursuant to Section 2(e)(ii) any
Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB, which continues
unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was
required to be delivered shall constitute an Event of Default
with respect to the Company under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the
Purchaser or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Company as
servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation
to the Company; provided that to the extent that any provision
of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as
servicer, such provision shall be given effect.
8-43
Neither the Purchaser nor any Depositor shall be entitled
to terminate the rights and obligations of the Company pursuant
to this subparagraph (ii)(B) if a failure of the Company 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.
(C) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any
Depositor, as applicable, for all reasonable expenses incurred
by the Purchaser (or such designee) or such Depositor as such
are incurred, in connection with the termination of the Company
as servicer and the transfer of servicing of the Mortgage Loans
to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may
have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific
performance or injunctive relief.
3. The Company acknowledges that a Subservicer or Subcontractor that
performs services with respect to mortgage loans involved in a
Securitization Transaction in addition to the Mortgage Loans may be
determined by a Depositor to be a Participating Entity on the basis
of the aggregate balance of such mortgage loans, without regard to
whether such Subservicer or Subcontractor would be a Participating
Entity with respect to the Mortgage Loans viewed in isolation. The
Company shall (A) respond as promptly as practicable to any good
faith request by the Purchaser or any Depositor for information
regarding each Subservicer and each Subcontractor and (B) cause each
Subservicer and each Subcontractor with respect to which the
Purchaser or any Depositor requests delivery of an assessment of
compliance and accountants' attestation to deliver such within the
time required under Section 2(c).
4. Notwithstanding any other provision of this Amendment Reg AB, (i) the
Company shall seek the written consent of the Purchaser for the
utilization of all third party service providers, including
Subservicers and Subcontractors, when required by and in accordance
with the terms of the Existing Agreement and (ii) references to the
Purchaser shall be deemed to include any assignees or designees of
the Purchaser, such as any Depositor, a master servicer or a
trustee.
5. The Existing Agreement is hereby amended by adding the Exhibit attached
hereto as Exhibit A to the end thereto.
6. References in this Amendment Reg AB to "this Agreement" or words of
similar import (including indirect references to the Agreement)
shall be deemed to be references to the Existing Agreement as
amended by this Amendment Reg AB. Except as expressly amended and
modified by this Amendment Reg AB, the Agreement shall continue to
be, and shall remain, in full force and effect in accordance with
its terms. In the event of a conflict between this Amendment Reg AB
and any other document or agreement,
8-44
including without limitation the Existing Agreement, this Amendment
Reg AB shall control.
7. This Amendment Reg AB shall be governed by and construed in accordance
with the laws of the State of New York, or federal law as
applicable, without reference to its conflict of law provisions
(other than Section 5-1401 of the General Obligations Law), and the
obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
8. This Amendment Reg AB may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which,
when so executed, shall constitute one and the same agreement.
9. This Amendment Reg AB shall bind and inure to the benefit of and be
enforceable by the Company and the Purchaser and the respective
permitted successors and assigns of the Company and the successors
and assigns of the Purchaser.
10. This Amendment Reg AB will become effective as of the date first
mentioned above. This Amendment Reg AB shall not be assigned,
pledged or hypothecated by the Company to a third party without the
prior written consent of the Purchaser, which consent may be
withheld by the Purchaser in its sole discretion. The Existing
Agreement as amended by this Amendment Reg AB may be assigned,
pledged or hypothecated by the Purchaser in whole or in part, and
with respect to one or more of the Mortgage Loans, without the
consent of the Company. There shall be no limitation on the number
of assignments or transfers allowable by the Purchaser with respect
to the Mortgage Loans and this Amendment Reg AB and the Existing
Agreement.
11. Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose
of this Amendment Reg AB is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB include provision of comparable disclosure in
private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Company
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by
8-45
the Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Company shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
8-46
8-47
A-2
EXHIBIT A
FORM OF ANNUAL CERTIFICATION
I. The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY - PARTIES]
I, ________________________________, the _______________________ of
[NAME OF COMPANY], certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their 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"), and 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] [Master Servicer] [Securities
Administrator] [Trustee] 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] [Master Servicer]
[Securities Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed
by the Company as 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 in all
material respects; and
(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 [Depositor] [Master Servicer]. Any material instances
of noncompliance described in such reports have been disclosed to the
A-1
[Depositor] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
1.
Date: _________________________
By: ________________________________
Name:
Title:
A-2
EXHIBIT B
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name
of Subservicer] shall address, at a minimum, the criteria identified as below
as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
General Servicing Considerations
-------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or X
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, X
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 X
servicer for the mortgage loans are maintained.
-------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
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.
-------------------- ----------------------
Cash Collection and Administration
-------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
-------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an X
investor are made only by authorized personnel.
-------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-------------------- ----------------------
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) X
1122(d)(2)(iv) as set forth in the transaction agreements.
-------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
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.
-------------------- ----------------------
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 X
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.
-------------------- ----------------------
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the X
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.
-------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance X
with timeframes, distribution priority and 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 X
specified in the transaction agreements.
-------------------- ----------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
statements.
-------------------- ----------------------
Pool Asset Administration
-------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required X
by the transaction agreements or related mortgage loan documents.
-------------------- ----------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by X
the transaction agreements
-------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance X
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 X
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 X
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, X
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 X
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).
-------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
-------------------- ----------------------
-----------------------------------------------------------------------------------------------------------------
Applicable Servicing
Servicing Criteria Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
-------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
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 X
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 X
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 X
such other number of days specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized X
and recorded in accordance with the 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 X
as set forth in the transaction agreements.
-------------------- ----------------------
-----------------------------------------------------------------------------------------------------------------
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
By: ________________________________
Name:
Title:
SCHEDULE 1
MORTGAGE LOAN SCHEDULE
EXHIBIT U
Amended and Restated Flow Seller's Warranties and Servicing Agreement,
dated as of December 1, 2005, between
SunTrust Mortgage, Inc. and ▇▇▇▇▇▇▇ Sachs Mortgage Company
[See Exhibit 99.7 to Form 8-K/A filed with the Commission on February 14,
2006, Accession No. 0000905148-06-001326]
U-1
EXHIBIT V
Amendment No. 1, dated as of July 1, 2006, between SunTrust Mortgage, Inc. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
[See Exhibit 99.7 to Form 8-K/A filed with the Commission on December 15,
2006, Accession No. 0000905148-06-007220]
V-1
EXHIBIT W
Amended and Restated Flow Mortgage Loan Purchase and Warranties Agreement,
dated as of June 1, 2005 between ▇▇▇▇▇▇▇ Sachs Mortgage Company and Ameriquest
Mortgage Company
[See Exhibit 99.3 to Form 8-K filed with the Commission on February 21, 2006,
Accession No. 0000905148-06-001399]
W-1