Exhibit 99.4
EXECUTION COPY
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GSAA HOME EQUITY TRUST 2006-7
ASSET-BACKED CERTIFICATES
SERIES 2006-7
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
April 28, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
April 28, 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) those certain Mortgage Loans
listed on the schedule (the "Mortgage Loan Schedule") attached hereto as
Exhibit A (the "Mortgage Loans"), and (b) solely insofar as it relates to the
Mortgage Loans, that certain Flow Servicing Agreement, dated as of 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 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 the rate set forth on the Mortgage Loan Schedule.
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 2006-7 (the "Trust")
created pursuant to a Master Servicing and Trust Agreement, dated as of April
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, N.A.,
as master servicer (including its successors in interest and any successor
servicer under the Trust Agreement, the "Master Servicer"), and securities
administrator. 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 Trust Agreement, (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 the Mortgage Loans, under the applicable purchase agreement pursuant to
which the Owner purchased the related Mortgage Loans from the related Seller
and 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 Servicer shall service the Mortgage
Loans and any real property acquired upon default thereof (including, without
limitation, making or permitting any modification, waiver or amendment of any
term of any Mortgage Loan) prior to the applicable Transfer Date in accordance
with the Servicing Agreement but in no event in a manner that would (A) cause
the REMIC to fail to qualify as a REMIC or (B) result in the imposition of a
tax upon the REMIC (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code, the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code, and the tax
on "net income from foreclosure property" as set forth in Section 860G(c) of
the Code). Neither the Company nor the Assignor shall amend or agree to amend,
modify, 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 defined term "Business Day" in Article I,
Section 1.01 will be deleted in its entirety and replaced with the following:
"Business Day: Any day other than (i) a Saturday or
Sunday, (ii) a day on which banking and savings and loan institutions in (a)
the State of Maryland, Minnesota or New York, (b) the state in which the
Servicer's servicing operations are located or (iii) the State in which the
Custodian's operations are located, are authorized or obligated by law or
executive order to be closed."
(b) The definition of "Servicing Fee Rate" set
forth in Article I, Section 1.01 will be deleted in its entirety and replaced
with the following:
"Servicing Fee Rate: With respect to each Mortgage
Loan, 0.25% per annum."
(c) 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."
(d) 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
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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."
(e) 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."
(f) 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, 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."
(g) 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,
N.A., as master servicer and securities administrator under the Master
Servicing and Trust Agreement, dated as of April 1, 2006, among GS Mortgage
Securities Corp., Deutsche Bank National Trust Company, as trustee and 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:
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(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 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
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Company at the time the Company began servicing the Mortgage Loans),
there is no payment default existing under any Mortgage or any
Mortgage Note as of the Securitization Closing Date; and
(h) To the Company's knowledge, there is no non-payment
default existing under any Mortgage or Mortgage Note, or any event
which, with the passage of time or with notice and the termination of
any grace or cure period, would constitute a non-payment default,
breach, violation or event which would permit acceleration as of the
Securitization Closing Date.
Pursuant to Section 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
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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;
(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, no
Mortgage Loan originated on or after October 1, 2002 will impose a
prepayment premium for a term in excess of three years. Any loans
originated prior to such date, and any non-subprime loans, will not
impose prepayment penalties in excess of five years.
6. Remedies for Breach of Representations and Warranties of
the Assignor.
The Assignor hereby acknowledges and agrees that in the
event of any breach of the representations and warranties made by the Assignor
set forth in Section 5 hereof or in Section 2 of the Representations and
Warranties Agreement, dated as of April 28, 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.
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.
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(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.
[SIGNATURE PAGE FOLLOWS]
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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/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Managing Director
XXXXXXX XXXXX MORTGAGE COMPANY
By: XXXXXXX SACHS REAL ESTATE FUNDING
CORP., its General Partner
By: /s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
Title: Vice President
AVELO MORTGAGE, L.L.C. (Servicer)
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Vice President
Conduit/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
