EXECUTION COPY
EXHIBIT 99.3
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GSAA HOME EQUITY TRUST 2006-10
ASSET-BACKED CERTIFICATES
SERIES 2006-10
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
XXXXXXX XXXXX MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
AVELO MORTGAGE, L.L.C.
as Servicer
Dated as of
June 29, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated June 29,
2006 (this "Agreement"), among Xxxxxxx Sachs Mortgage Company ("Assignor"), GS
Mortgage Securities Corp. ("Assignee") and Avelo Mortgage, L.L.C. ( the
"Company").
For and in consideration of the mutual promises contained herein
and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Assignment, Assumption and Conveyance.
The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) certain mortgage loans acquired
through the Xxxxxxx Xxxxx Residential Mortgage Conduit Program (the "Conduit
Mortgage Loans") and those certain mortgage loans originated or acquired by
each of Ameriquest Mortgage Company (the "Ameriquest Mortgage Loans"), Fremont
Investment & Loan (the "Fremont Mortgage Loans") and Novelle Financial
Services, Inc. (the "Novelle Mortgage Loans" and, together with the Ameriquest
Mortgage Loans, the Conduit Mortgage Loans and the Fremont Mortgage Loans, the
"Mortgage Loans") listed on the schedule (the "Mortgage Loan Schedule")
attached hereto as Exhibit A, and (b) solely insofar as it relates to the
Mortgage Loans, that certain Flow Servicing Agreement, dated as of January 1,
2006 (the "Servicing Agreement"), by and between the Assignor, as owner (the
"Owner") and the Company. The Assignor hereby agrees that it will (i) deliver
possession of notes evidencing the Mortgage Loans to, or at the direction of,
the Assignee or its designee and (ii) take in a timely manner all necessary
steps under all applicable laws to convey and to perfect the conveyance of the
Mortgage Loans as required under the Trust Agreement (as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Servicing Agreement that are not the Conduit Mortgage Loans set forth
on the Mortgage Loan Schedule and are not the subject of this Agreement, (ii)
any rights and obligations of the Assignor pursuant to the Servicing Agreement
arising prior to the date hereof or (iii) the rights and obligations of the
Owner under the following sections of the Servicing Agreement: Section 6.02
(relating to the Owner's right to terminate the Company) and Section 5.01
(relating to the Owner's right to receive information from the Servicer).
The Assignee hereby assumes all of the Assignor's obligations
under the Mortgage Loans and the Servicing Agreement solely insofar as such
obligations relate to the Mortgage Loans, other than the obligations set forth
in clauses (ii) and (iii) of the preceding paragraph.
The parties hereto agree that with respect to the Mortgage Loans
being serviced under the Servicing Agreement the Servicing Fee Rate for the
Mortgage Loans shall be an amount equal to 0.25% of the aggregate principal
balance of the Mortgage Loans.
2. Recognition of the Company.
From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Servicing
Agreement (solely to the extent set forth herein) and this Agreement to
Deutsche Bank National Trust Company ("Deutsche Bank"), as trustee (including
its successors in interest and any successor trustees under the Trust
Agreement, the "Trustee"), of the GSAA Home Equity Trust 2006-10 (the "Trust")
created pursuant to a Master Servicing and Trust Agreement, dated as of June
1, 2006 (the "Trust Agreement"), among the Assignee, the Trustee, Deutsche
Bank, as a custodian, U.S. Bank National Association, as a custodian, JPMorgan
Chase Bank, National Association, as a custodian and Xxxxx Fargo Bank,
National Association, as master servicer (including its successors in interest
and any successor servicer under the Trust Agreement, in such capacity, the
"Master Servicer"), securities administrator and as a custodian. The Company
hereby acknowledges and agrees that from and after the date hereof (i) the
Trust will be the owner of the Mortgage Loans and the Company will be the
servicer of the Mortgage Loans on or after the applicable Transfer Date
pursuant to the terms set forth in the Servicing Agreement as modified hereby,
(ii) the Company shall look solely to the Trust (including the Trustee and the
Master Servicer acting on the Trust's behalf) for performance of any
obligations of the Assignor under the Mortgage Loans and the Servicing
Agreement (solely insofar as it relates to the Mortgage Loans) (except for
such obligations of the Assignor retained by the Assignor hereunder), (iii)
the Trust (including the Trustee and the Master Servicer acting on the Trust's
behalf) shall have all the rights and remedies available to the Assignor,
insofar as they relate to (A) the Mortgage Loans, under the applicable
purchase agreement pursuant to which the Owner purchased the related Mortgage
Loans from the related Seller and (B) the Servicing Agreement, including,
without limitation, the enforcement of the document delivery requirements set
forth in Section 5(b) of the related purchase agreement, and shall be entitled
to enforce all of the obligations of the Company thereunder insofar as they
relate to the Mortgage Loans, including without limitation, the remedies for
breaches of representations and warranties set forth in Article IX of the
Servicing Agreement (except for the rights and remedies retained by the
Assignor hereunder), (iv) all references to the Owner under the Servicing
Agreement insofar as they relate to the Mortgage Loans shall be deemed to
refer to the Trust (except to the extent of the rights and obligations
retained by the Assignor hereunder) (including the Trustee and the Servicer
acting on the Trust's behalf) and (v) the Mortgage Loans will be part of a
REMIC, and the Company shall service the Mortgage Loans and any real property
acquired upon default thereof (including, without limitation, making or
permitting any modification, waiver or amendment of any term of any Mortgage
Loan) after the applicable Transfer Date in accordance with the Servicing
Agreement but in no event in a manner that would (A) cause the REMIC to fail
to qualify as a REMIC or (B) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code, the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, and the tax on "net income from foreclosure
property" as set forth in Section 860G(c) of the Code). Neither the Company
nor the Assignor shall amend or agree to amend, modify, waive, or otherwise
alter any of the terms or provisions of the Servicing Agreement which
amendment, modification, waiver or other alteration would in any way affect
the Mortgage Loans or the Company's performance under the Servicing Agreement
with respect to the Mortgage Loans without the prior written consent of the
Master Servicer.
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3. Modification of the Servicing Agreement. Only in so far as
it relates to the Mortgage Loans, the Servicer and the Assignor hereby amend
the Servicing Agreement as follows:
(a) The definition of "Servicing Fee Rate" set forth in
Article I shall be deleted in its entirety and replaced with the following:
"Servicing Fee Rate: With respect to each Mortgage Loan, 0.25% per
annum."
(b) Section 2.05 shall be amended as follows:
(i) "and" shall be deleted from the end of subsection
(vii);
(ii) subsection (viii) shall be amended by deleting
the "." at the end of subsection (viii) and replacing
it with "; and"
(iii) a new subsection (ix) shall be added to Section
2.05 immediately following subsection (viii) which
shall read as follows:
"(ix) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 3.04, the Servicer's right to reimburse itself
pursuant to this subclause (ix) being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, including amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest respecting which any such
advance was made, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the rights of
Purchaser."
(c) the third paragraph of Section 2.18 shall be deleted
and replaced as follows:
"The Servicer 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 one year after title has been taken to such REO Property, unless (i) a
REMIC election has not been made with respect to the arrangement under which
the Mortgage Loans and the REO Property are held, and (ii) the Servicer
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property; provided however, that the Servicer agrees not to sell or dispose of
any such Mortgage Loan to a person who acquires such Mortgage Loan using a
purchase money mortgage. If a period longer than one year is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Servicer
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property, and provided further, that if the Servicer is unable to
sell such REO Property within three years of acquisition, the Servicer shall
obtain an extension from the Internal Revenue Service."
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(d) the third paragraph of Section 3.01 shall be deleted
and replaced as follows:
"With respect to any remittance received by the Owner after the
Business Day on which such payment was due, the Servicer shall pay to the
Owner interest on any such late payment at an annual rate equal to the Prime
Rate, adjusted as of the date of each change, plus three percentage points,
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be deposited in the Custodial Account by the Servicer on
the date such late payment is made and shall cover the period commencing with
the day the payment was due and ending with the Business Day on which such
payment is made, both inclusive. Such interest shall be remitted along with
the distribution payable on the next succeeding Remittance Date. The payment
by the Servicer of any such interest shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Servicer."
(e) Section 3.04 will be amended by adding a new paragraph
as follows:
"In the event that the Servicer determines that any such advances
are Non-Recoverable Advances, the Servicer shall provide the Owner with a
certificate signed by an officer of the Servicer evidencing such
determination. Notwithstanding the foregoing, the Servicer shall not be
permitted to make any advances from amounts held for future distribution, and
instead shall be required to make all advances from its own funds, unless the
Servicer, its parent, or their respective successors hereunder shall have a
long term credit rating of at least "A" by Fitch, Inc., or the equivalent
rating of another Rating Agency."
(f) a new section, Section 11.17, will be added
immediately following Section 11.16 which shall read as follows:
"Section 11.17 Third-Party Beneficiary. Xxxxx Fargo Bank, National
Association, as master servicer, securities administrator and as a custodian
under the Master Servicing and Trust Agreement, dated as of June 1, 2006,
among GS Mortgage Securities Corp., as depositor, Deutsche Bank National Trust
Company, as trustee and a custodian, U.S. Bank National Association, as a
custodian and JPMorgan Chase Bank, National Association, as custodian, shall
be considered a third-party beneficiary to this Agreement entitled to all of
the rights and benefits accruing to it as if it were a direct party to this
Agreement."
4. Representations and Warranties of the Company.
The Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to execute, deliver
and perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Servicing Agreement. The
execution by the Company of this
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Agreement is in the ordinary course of the Company's business and will
not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Company's charter or bylaws or any legal
restriction, or any material agreement or instrument to which the
Company is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Company or its property is subject. The execution, delivery
and performance by the Company of this Agreement have been duly
authorized by all necessary corporate action on part of the Company.
This Agreement has been duly executed and delivered by the Company, and,
upon the due authorization, execution and delivery by the Assignor and
the Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with its
terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Company in connection with the
execution, delivery or performance by the Company of this Agreement or
the consummation by it of the transaction contemplated hereby;
(d) The Company shall establish a Custodial Account and an Escrow
Account under the Servicing Agreement in favor of the Trust with respect
to the Mortgage Loans separate from the Custodial Account and Escrow
Account previously established under the Servicing Agreement in favor of
the Assignor;
(e) There is no action, suit, proceeding or investigation pending
or threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the validity of
this Agreement or the Servicing Agreement, or which, either in any one
instance or in the aggregate, is likely to result in any material
adverse change in the ability of the Company to perform its obligations
under this Agreement or the Servicing Agreement, and the Company is
solvent;
(f) The Company has serviced the Mortgage Loans in accordance with
the Servicing Agreement and has provided accurate "paid through" data
(assuming the correctness of all "paid through" data provided by the
Assignor to the Company at the time the Company began servicing the
Mortgage Loans) with respect to the Mortgage Loans to the Assignor;
(g) Except as reflected in the "paid through" data delivered to
the Assignor (assuming the correctness of all "paid through" data
provided by the Assignor to the Company at the time the Company began
servicing the Mortgage Loans), there is no payment default existing
under any Mortgage or any Mortgage Note as of the Securitization Closing
Date; and
(h) To the Company's knowledge, there is no non-payment default
existing under any Mortgage or Mortgage Note, or any event which, with
the passage of time or
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with notice and the termination of any grace or cure period, would
constitute a non-payment default, breach, violation or event which would
permit acceleration as of the Securitization Closing Date.
Pursuant to Section 9.01 of the Servicing Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Article IX
of the Servicing Agreement are true and correct as of the date hereof as if
such representations and warranties were made on the date hereof.
5. Representations and Warranties of the Assignor.
The Assignor warrants and represents to the Assignee and the Trust
as of date hereof that:
(a) Prior Assignments; Pledges. Except for the sale to the
Assignee, the Assignor has not assigned or pledged any Mortgage Note or
the related Mortgage or any interest or participation therein;
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the
Assignor has not released the related Mortgaged Property from the lien
of any Mortgage, in whole or in part, nor has the Assignor executed an
instrument that would effect any such release, cancellation,
subordination, or rescission. The Assignor has not released any
Mortgagor, in whole or in part, except in connection with an assumption
agreement or other agreement approved by the related federal insurer, to
the extent such approval was required;
(c) No Waiver. The Assignor has not waived the performance by any
Mortgagor of any action, if such Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the
Company waived any default resulting from any action or inaction by such
Mortgagor;
(d) Compliance with Applicable Laws. With respect to each Mortgage
Loan, any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, predatory and abusive lending or disclosure laws applicable
to such Mortgage Loan, including without limitation, any provisions
relating to prepayment charges, have been complied with;
(e) High Cost. With respect to the Mortgage Loans, no Mortgage
Loan is categorized as "High Cost" pursuant to the then-current Standard
& Poor's Glossary for File Format for LEVELS(R) Version 5.6(d), Appendix
E, as revised from time to time and in effect as of the Original
Purchase Date. Furthermore, none of the Mortgage Loans sold by the
Seller are classified as (a) a "high cost mortgage" loan under the Home
Ownership and Equity Protection Act of 1994 or (b) a "high cost home,"
"covered," "high-cost," "high-risk home," or "predatory" loan under any
other applicable state, federal or local law;
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(f) Georgia Fair Lending Act. No Mortgage Loan is secured by a
property in the state of Georgia and originated between October 1, 2002
and March 7, 2003;
(g) Qualified Mortgage Loan. Each Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Internal Revenue Code of 1986,
as amended; and
(h) Credit Reporting. The Assignor will cause to be fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on Mortgagor credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; and
(i) Prepayment Premiums. To the Assignor's knowledge, with respect
to any Mortgage Loan that contains a provision permitting imposition of
a Prepayment Premium prior to maturity: (a) prior to the Mortgage Loan's
origination, the borrower agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction;
(b) prior to the Mortgage Loan's origination, the borrower was offered
the option of obtaining a Mortgage Loan that did not require payment of
such a premium; (c) the prepayment premium is adequately disclosed to
the borrower pursuant to applicable state and federal law; (d) no
Mortgage Loan originated on or after October 1, 2002 will impose a
prepayment premium for a term in excess of three (3) years and any
Mortgage Loans originated prior to such date will not impose Prepayment
Premiums in excess of five years; in each case unless the Mortgage Loan
was modified to reduce the prepayment period to no more than three years
from the date of the note and the borrower was notified in writing of
such reduction in prepayment period; and (e) notwithstanding any state
or federal law to the contrary, the Servicer shall not impose such
Prepayment Premium in any instance when the Mortgage Loan is accelerated
or paid off in connection with the workout of a delinquent mortgage or
due to the borrower's default.
6. Remedies for Breach of Representations and Warranties of the
Assignor.
With respect to the Conduit Mortgage Loans, the Assignor hereby
acknowledges and agrees that in the event of any breach of the representations
and warranties made by the Assignor set forth in Section 5 hereof or in
Section 2 of the Representations and Warranties Agreement, dated as of June
29, 2006, between the Assignor and Assignee (the "Representations and
Warranties Agreement") that materially and adversely affects the value of the
Mortgage Loans or the interest of the Assignee or the Trust therein, within
sixty (60) days of the earlier of either discovery by or notice to the
Assignor of such breach of a representation or warranty, it shall cure,
purchase, cause the purchase of, or substitute for the applicable Mortgage
Loan in the same manner and subject to the conditions set forth in Section 3
of the Representations and Warranties Agreement.
With respect to the Ameriquest Mortgage Loans, the Assignor hereby
acknowledges and agrees that in the event of any breach of representations and
warranties made by the Assignor set forth in Section 5 hereof or in Sections 5
and 6 of the Assignment, Assumption and Recognition Agreement, dated as of
June 29, 2006, between the Assignor, the Assignee and Ameriquest Mortgage
Company (the "Ameriquest Assignment Agreement"), the
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Assignor shall repurchase such affected Ameriquest Mortgage Loans as set forth
in the Ameriquest Assignment Agreement and in the related Sale Agreement (as
such term is defined in the Ameriquest Assignment Agreement).
With respect to the Novelle Mortgage Loans, the Assignor hereby
acknowledges and agrees that in the event of any breach of representations and
warranties made by the Assignor set forth in Section 5 hereof or in Sections 6
and 7 of the Assignment, Assumption and Recognition Agreement, dated as of
June 29, 2006, between the Assignor, the Assignee and Novelle Financial
Services, Inc. (the "Novelle Assignment Agreement"), the Assignor shall
repurchase such affected Novelle Mortgage Loans as set forth in the Novelle
Assignment Agreement and in the related Sale Agreement (as such term is
defined in the Novelle Assignment Agreement).
7. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws
of the State of New York, without regard to conflicts of law principles,
and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.
(b) No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by
the party against whom such waiver or modification is sought to be
enforced, with the prior written consent of the Trustee.
(c) This Agreement shall inure to the benefit of (i) the
successors and assigns of the parties hereto and (ii) the Trust
(including the Trustee and the Master Servicer acting on the Trust's
behalf). Any entity into which the Assignor, Assignee or the Company may
be merged or consolidated shall, without the requirement for any further
writing, be deemed Assignor, Assignee or the Company, respectively,
hereunder.
(d) Each of this Agreement and the Servicing Agreement shall
survive the conveyance of the Mortgage Loans to the Trust and the
assignment of the purchase agreements and the Servicing Agreement (to
the extent assigned hereunder) by the Assignor to the Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or
amend the terms of the purchase agreements and the Servicing Agreement.
(e) This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all
such counterparts shall constitute one and the same instrument.
(f) In the event that any provision of this Agreement conflicts
with any provision of the purchase agreements or the Servicing Agreement
with respect to the Mortgage Loans, the terms of this Agreement shall
control.
(g) Capitalized terms used in this Agreement (including the
exhibits hereto) but not defined in this Agreement shall have the
meanings given to such terms in the purchase agreements or the Servicing
Agreement, as applicable.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
XXXXXXX XXXXX MORTGAGE COMPANY
By: XXXXXXX SACHS REAL ESTATE FUNDING
CORP., its General Partner
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
AVELO MORTGAGE, L.L.C., as Servicer
By: /s/ J. Xxxxxx Xxxxxxx
-----------------------------------
Name: J. Xxxxxx Xxxxxxx
Title: Vice President
Avelo Step 1 AAR
EXHIBIT A
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Mortgage Loan Schedule
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[On File with the Securities Administrator as provided by the Depositor]
A-1
