EXECUTION COPY
------------------------------------------------------------------------------
GSAA HOME EQUITY TRUST 2006-1
ASSET-BACKED CERTIFICATES
SERIES 2006-1
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
U.S. BANK NATIONAL ASSOCIATION,
Trustee
DEUTSCHE BANK NATIONAL TRUST COMPANY
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Custodians
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
Dated January 1, 2006
------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...............................................................................11
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans..............................................................43
Section 2.02 Acceptance by the Custodians of the Mortgage Loans........................................45
Section 2.03 Execution and Delivery of Certificates....................................................46
Section 2.04 REMIC Matters.............................................................................47
Section 2.05 Representations and Warranties of the Depositor...........................................47
Section 2.06 Representations and Warranties of JPMorgan................................................48
Section 2.07 Representations and Warranties of Deutsche Bank...........................................49
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account.........................................50
Section 3.02 Investment of Funds in the Distribution Account...........................................51
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution................................................................53
Section 4.02 Monthly Statements to Certificateholders..................................................58
Section 4.03 Allocation of Applied Realized Loss Amounts...............................................61
Section 4.04 Certain Matters Relating to the Determination of LIBOR....................................61
Section 4.05 Supplemental Interest Trust...............................................................62
Section 4.06 Trust's Obligations under the Interest Rate Swap Agreement; Replacement
and Termination of the Interest Rate Swap Agreement ......................................63
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates..........................................................................64
i
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...............65
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................70
Section 5.04 Persons Deemed Owners.....................................................................71
Section 5.05 Access to List of Certificateholders' Names and Addresses.................................71
Section 5.06 Maintenance of Office or Agency...........................................................71
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor..............................................................71
Section 6.02 Merger or Consolidation of the Depositor..................................................71
Section 6.03 Limitation on Liability of the Depositor and Others.......................................72
Section 6.04 Servicing Compliance Review...............................................................72
Section 6.05 Option to Purchase Defaulted Mortgage Loans...............................................72
. ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default.........................................................................73
Section 7.02 Master Servicer to Act; Appointment of Successor..........................................73
Section 7.03 Master Servicer to Act as Servicer........................................................74
Section 7.04 Notification to Certificateholders........................................................75
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians..................................................75
Section 8.02 Custodial Responsibilities................................................................76
Section 8.03 Certain Matters Affecting the Trustee and the Custodians..................................76
Section 8.04 Trustee and Custodians Not Liable for Certificates or Mortgage Loans......................78
Section 8.05 Trustee May Own Certificates..............................................................78
Section 8.06 Trustee's Fees and Expenses...............................................................78
Section 8.07 Eligibility Requirements for the Trustee..................................................79
Section 8.08 Resignation and Removal of the Trustee....................................................80
Section 8.09 Successor Trustee.........................................................................81
Section 8.10 Merger or Consolidation of the Trustee or the Custodians..................................81
Section 8.11 Appointment of Co-Trustee or Separate Trustee.............................................81
Section 8.12 Tax Matters...............................................................................82
Section 8.13 [Reserved]................................................................................86
Section 8.14 Tax Classification of the Excess Reserve Fund Account and the Interest
Rate Swap Agreement.....................................................................86
Section 8.15 Custodial Responsibilities................................................................87
ii
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's Obligations......................88
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions Insurance...........................89
Section 9.03 Representations and Warranties of the Master Servicer.....................................89
Section 9.04 Master Servicer Events of Default.........................................................91
Section 9.05 Waiver of Default.........................................................................93
Section 9.06 Successor to the Master Servicer..........................................................93
Section 9.07 Compensation of the Master Servicer.......................................................94
Section 9.08 Merger or Consolidation...................................................................95
Section 9.09 Resignation of the Master Servicer........................................................95
Section 9.10 Assignment or Delegation of Duties by the Master Servicer.................................95
Section 9.11 Limitation on Liability of the Master Servicer............................................95
Section 9.12 Indemnification; Third Party Claims.......................................................96
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator.......................................................97
Section 10.02 Certain Matters Affecting the Securities Administrator...................................98
Section 10.03 Securities Administrator Not Liable for Certificates or Mortgage Loans..................100
Section 10.04 Securities Administrator May Own Certificates...........................................100
Section 10.05 Securities Administrator's Fees and Expenses............................................100
Section 10.06 Eligibility Requirements for Securities Administrator...................................101
Section 10.07 Resignation and Removal of Securities Administrator.....................................102
Section 10.08 Successor Securities Administrator......................................................103
Section 10.09 Merger or Consolidation of Securities Administrator.....................................103
Section 10.10 Assignment or Delegation of Duties by the Securities Administrator......................103
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage Loans..........................104
Section 11.02 Final Distribution on the Certificates..................................................105
Section 11.03 Additional Termination Requirements.....................................................106
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment...............................................................................107
iii
Section 12.02 Recordation of Agreement; Counterparts..................................................109
Section 12.03 Governing Law...........................................................................109
Section 12.04 Intention of Parties....................................................................109
Section 12.05 Notices.................................................................................110
Section 12.06 Severability of Provisions..............................................................111
Section 12.07 Limitation on Rights of Certificateholders..............................................111
Section 12.08 Certificates Nonassessable and Fully Paid...............................................112
Section 12.09 Waiver of Jury Trial....................................................................112
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations......................................................................112
Section 13.02 Form 10-D Filings.......................................................................113
Section 13.03 Form 8-K Filings........................................................................114
Section 13.04 Form 10-K Filings.......................................................................114
Section 13.05 Xxxxxxxx-Xxxxx Certification............................................................115
Section 13.06 Form 15 Filing..........................................................................115
Section 13.07 Report on Assessment of Compliance and Attestation......................................116
Section 13.08 Use of Subservicers and Subcontractors..................................................117
iv
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-1 and Class R-2 Certificates
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of
Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J [RESERVED]
Exhibit K [RESERVED]
Exhibit L Amended and Restated Mortgage Loan Flow Purchase, Sale &
Servicing Agreement, dated as of December 1, 2005, between
Xxxxxxx Xxxxx Mortgage Company and PHH Mortgage Corporation
(formerly known as Cendant Mortgage Corporation) and
Xxxxxx'x Gate Residential Mortgage Trust (formerly known as
Cendant Residential Mortgage Trust)
Exhibit M Amended and Restated Master Mortgage Loan Purchase
Agreement, dated as of November 1, 2005, between GreenPoint
Mortgage Funding, Inc. and Xxxxxxx Xxxxx Mortgage Company
Exhibit N Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and Xxxxxxx Xxxxx Mortgage
Company
Exhibit O Amended and Restated Flow Seller's Warranties and Servicing
Agreement, dated as of December 1, 2005, between Xxxxxxx
Sachs Mortgage Company and SunTrust Mortgage, Inc.
Exhibit P Amended and Restated Master Mortgage Loan Purchase
Agreement, dated on or about January 1, 2006 between
Countrywide Home Loans, Inc. and Xxxxxxx Xxxxx Mortgage
Company
v
Exhibit Q Servicing Agreement, dated on or about January 1, 2006
between Countrywide Home Loans Servicing LP and Xxxxxxx Xxxxx
Mortgage Company
Exhibit R Form of Master Loan Purchase Agreement, between various
sellers and Xxxxxxx Xxxxx Mortgage Company
Exhibit S Flow Servicing Agreement, dated as of May 1, 2005, between
Countrywide Home Loans Servicing LP and Xxxxxxx Xxxxx
Mortgage Company
Exhibit T-1 Form of Performance Certification (Master Servicer)
Exhibit T-2 Form of Performance Certification (Securities Administrator)
Exhibit U Form of Servicing Criteria to be addressed in assessment of
compliance statement
vi
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of
January 1, 2006 (this "Agreement"), is hereby executed by and among GS
MORTGAGE SECURITIES CORP., a Delaware corporation (the "Depositor"), U.S. BANK
NATIONAL ASSOCIATION, as trustee (in such capacity, the "Trustee"), DEUTSCHE
BANK NATIONAL TRUST COMPANY ("Deutsche Bank"), as a custodian, JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION ("JPMorgan"), as a custodian (Deutsche Bank and
JPMorgan, each a "Custodian" and together the "Custodians") and JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, 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 "Middle-Tier REMIC", and
the "Upper-Tier REMIC", respectively). The Class X Interest, Class UT Swap IO
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-1 Certificates represent
ownership of the sole class of residual interest in the Upper-Tier REMIC, and
the Class R-2 Certificates represent ownership of the sole class of residual
interest in each of the Lower-Tier REMIC and the Middle Tier 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 Upper-Tier
REMIC shall hold as assets the several classes of uncertificated Lower-Tier
Regular Interests, set out below. The Lower-Tier REMIC shall hold as assets
the assets described in the definition of "Trust Fund" herein (other than the
Prepayment Premiums, the Interest Rate Swap Agreement and the Excess Reserve
Fund Account). Each Lower-Tier Regular Interest is hereby designated as a
regular interest in the Lower-Tier REMIC. Each Middle-Tier Regular Interest is
hereby designated as a regular interest in the Lower-Tier REMIC. The Class
MT-A-1, Class MT-A-2, Class MT-A-3, Class MT-A-4, Class MT-M-1, Class MT-M-2,
Class MT-M-3, Class MT-M-4, Class MT-M-5, Class MT-B-1, Class MT-B-2 and Class
MT-B-3 Interests are hereby designated the MT-Accretion Directed Classes (the
"MT Accretion Directed Classes"). The Class P Certificates represent
beneficial ownership of the Prepayment Premiums, each Class of Regular
Certificates represents beneficial ownership of a regular interest in the
Upper-Tier REMIC and the right to receive Basis Risk Carry Forward Amounts and
the Class X Certificates represent beneficial ownership of two separate
regular interests in the Upper-Tier REMIC, the Interest Rate Swap Agreement,
the Supplemental Trust and the Excess Reserve Fund Account, which portions of
the Trust Fund shall be treated as a grantor trust.
The Lower-Tier REMIC
--------------------------------------------------------------------------------------------------------------------
Class LT-1 $24,479,137.95 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-2 $42,313,903.71 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-3 $40,254,071.14 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-4 $38,294,475.42 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-5 $36,430,256.88 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-6 $34,656,774.12 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-7 $32,969,611.50 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-8 $31,364,568.30 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-9 $29,837,648.15 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-10 $28,385,049.18 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-11 $27,003,154.45 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-12 $25,688,523.08 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-13 $24,437,881.59 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-14 $23,248,115.79 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-15 $22,116,263.00 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-16 $21,039,504.77 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-17 $20,015,159.70 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-18 $19,040,676.98 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-19 $18,113,629.82 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-20 $17,231,709.59 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-21 $16,392,719.98 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-22 $15,594,581.41 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-23 $14,835,288.12 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-24 $14,112,951.42 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-25 $13,425,781.46 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-26 $12,772,063.50 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-27 $12,150,169.35 (2)
--------------------------------------------------------------------------------------------------------------------
Class TL-28 $11,558,550.08 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-29 $10,995,812.99 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-30 $10,460,387.10 (2)
--------------------------------------------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------------------------------------------
Class LT-31 $9,951,027.54 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-32 $9,466,465.58 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-33 $38,376,475.00 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-34 $6,757,556.87 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-35 $6,428,513.82 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-36 $6,115,489.45 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-37 $5,817,704.01 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-38 $5,534,415.82 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-39 $5,264,919.24 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-40 $5,008,542.92 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-41 $4,764,648.24 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-42 $4,532,627.69 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-43 $4,311,903.24 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-44 $4,101,925.03 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-45 $3,902,169.99 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-46 $3,712,140.50 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-47 $3,531,363.08 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-48 $3,359,387.42 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-49 $3,195,785.03 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-50 $3,040,148.31 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-51 $2,892,089.48 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-52 $2,751,239.69 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-53 $2,617,247.96 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-54 $2,489,780.46 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-55 $2,368,519.55 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-56 $2,253,173.37 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-57 $2,143,636.51 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-58 $2,041,062.28 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-59 $39,811,822.61 (2)
--------------------------------------------------------------------------------------------------------------------
Class LT-60 $20,480,798.78 (2)
--------------------------------------------------------------------------------------------------------------------
3
(1) Scheduled principal, prepayments and Realized Losses
will be allocated among such Classes sequentially to the Class having the
lowest cardinal number following such designation, in each case until reduced
to zero.
(2) The WAC Cap calculated without regard to Net Swap
Receipt Amounts and Net Swap Payment Amounts.
The Lower-Tier REMIC shall hold as assets all of the assets
included in the Trust Fund, other than Prepayment Premiums, the Interest Rate
Swap Agreement, the Supplemental Interest Trust and the Excess Reserve Fund
Account.
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class LT-R Interest, which shall be
represented by the Class R-2 Certificates and represent the sole class of
residual interests in the Lower-Tier REMIC.
The Middle-Tier REMIC
Middle-Tier Middle-Tier Corresponding
Interest Interest Upper-Tier
Designation Rate Initial Middle-Tier Principal Amount REMIC Class
----------- ------------- ---------------------------------------- ---------------
Class MT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-A-2 (1) 1/2 initial Class Certificate Balance of A-2
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-A-3 (1) 1/2 initial Class Certificate Balance of A-3
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-A-4 (1) 1/2 initial Class Certificate Balance of A-4
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier REMIC Regular
Interest
4
Middle-Tier Middle-Tier Corresponding
Interest Interest Upper-Tier
Designation Rate Initial Middle-Tier Principal Amount REMIC Class
----------- ------------- ---------------------------------------- ---------------
Class MT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
Class MT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount, less aggregate
initial Lower Tier Principal Amounts
---------------------
MT-Swap IO (2) (2)
---------------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap,
calculated without regard to Net Swap Receipt Amounts.
(2) For each Distribution Date, the Middle-Tier Interest Rate will equal
the excess of 4.7905% over one month LIBOR on a notional balance
equal to the sum of the principal balances of each Lower Tier REMIC
Regular Interest whose cardinal number following such designation
(e.g. -1, -2, -3,..) is not exceeded by the ordinal number of the
Distribution Date following the Closing Date (e.g. first, second,
third,...) for such Distribution Date.
The Middle-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 Middle-Tier
Principal Amount of the MT-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 MT-Accrual Interest. On each Distribution Date,
the increase in the Middle-Tier Principal Amount of the Class MT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class MT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class
MT-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
MT-Accrual Interest payable as principal on the MT-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
MT-Accrual Interest and (ii) 50% to the MT-Accretion Directed Classes
(principal payments shall be allocated among such MT-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 MT-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 Middle-Tier
Principal Amount of each of the MT-Accretion Directed Classes is equal to 50%
of the Class Certificate Balance of its Corresponding Class, and (ii) the
Class MT-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 Middle-Tier Regular Interests,
the Middle-Tier REMIC shall issue the Class MT-R Interest which shall be the
sole class of residual interests in the Middle-Tier REMIC. The Class R-2
Certificates will represent ownership of the Class MT-R Interest and will be
issued as a single certificate in a principal amount of $100 and shall have no
interest rate. Amounts received by the Class MT-R Interest shall be deemed
paid from the Middle-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 Initial Upper-Tier
Rate and Principal Amount
Upper-Tier Corresponding and Corresponding Corresponding
Class Class Class Class of
Designation Pass-Through Rate Certificate Balance Certificates
----------- ----------------- ------------------- ------------
Class A-1 (1) $ 498,836,000 Class A-1(14)
Class A-2 (2) $ 165,814,000 Class A-2(14)
Class A-3 (3) $ 176,445,000 Class A-3(14)
Class A-4 (4) $ 19,606,000 Class A-4(14)
Class M-1 (5) $ 13,661,000 Class M-1(14)
Class M-2 (6) $ 4,553,000 Class M-2(14)
Class M-3 (7) $ 4,553,000 Class M-3(14)
Class M-4 (8) $ 4,553,000 Class M-4(14)
Class M-5 (9) $ 4,554,000 Class M-5(14)
Class B-1 (10) $ 4,555,000 Class B-1
Class B-2 (11) $ 4,556,000 Class B-2
Class B-3 (12) $ 4,555,000 Class B-3
Class X (13) (13) Class X(13)
UT-Swap IO (15) (15) N/A
6
(1) The Class A-1 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.090% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.180% and (iii) the WAC Cap.
(2) The Class A-2 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.220% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.440% and (iii) the WAC Cap.
(3) The Class A-3 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.330% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.660% and (iii) the WAC Cap.
(4) The Class A-4 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.380% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.760% and (iii) the WAC Cap.
(5) The Class M-1 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.400% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.600% and (iii) the WAC Cap.
(6) The Class M-2 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.420% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.630% and (iii) the WAC Cap.
(7) The Class M-3 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.450% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.675% and (iii) the WAC Cap.
(8) The Class M-4 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.610% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.915% and (iii) the WAC Cap.
7
(9) The Class M-5 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 0.640% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 0.960% and (iii) the WAC Cap.
(10) The Class B-1 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 1.400% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 2.100% and (iii) the WAC Cap.
(11) The Class B-2 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) LIBOR
plus 1.800% and (iii) the WAC Cap or (b) after the first distribution
date on which the optional clean-up call is exercisable, the lesser
of (i) LIBOR plus 2.700% and (iii) the WAC Cap.
(12) The Class B-3 Interest will bear interest during each Interest
Accrual Period at a per annum rate equal to (a) on or prior to the
first possible Optional Termination Date, the lesser of (i) 5.000%
and (ii) the weighted average of the interest rates for each mortgage
loan (in each case, less the applicable Expense Fee Rate) then in
effect at the beginning of the related Due Period on the mortgage
loans or (b) after the first distribution date on which the optional
clean-up call is exercisable, the lesser of (i) 0.500% and (ii) the
weighted average of the interest rates for each mortgage loan (in
each case, less the applicable Expense Fee Rate) then in effect at
the beginning of the related Due Period on the mortgage loans.
(13) 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 Middle-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 Middle-Tier Interest Rate of
the Middle-Tier Regular Interests, where the Middle-Tier Interest
Rates on the Class MT-Accrual are subject to a cap equal to zero and
each MT-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 the Class
X Interest, the Interest Rate Swap Agreement, the Supplemental
Interest Trust and amounts in the Excess Reserve Fund Account,
subject to the obligation to make payments from the Excess Reserve
Fund Account and the Supplemental Interest Trust in respect of Basis
Risk Carry Forward Amounts. For federal income tax purposes, the
Securities Administrator will treat the Class X
8
Certificateholders' obligation to make payments from the Excess
Reserve Fund Account and the Supplemental Interest Trust as payments
made pursuant to an interest rate cap contract written by the Class 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.
(14) Each of these Certificates will represent not only the ownership of
the Corresponding Class of Upper-Tier Regular Interest but also the
right to receive payments from the Excess Reserve Fund Account and
the Supplemental Interest Trust in respect of any Basis Risk Carry
Forward Amounts. For federal income tax purposes, the Securities
Administrator will treat a Certificateholder's right to receive
payments from the Excess Reserve Fund Account and the Supplemental
Interest Trust as payments made pursuant to an interest rate cap
contract written by the Class X Certificateholders.
(15) For each Distribution Date, 100% of the cash flow in respect of the
Class MT-Swap IO Interest. The Class X Certificates will be entitled
to 100% of the cash flow in respect of the Class UT-Swap IO Interest.
(16) Each of these Certificates will also be subject to the obligation to
pay Class IO Shortfalls as described in Section 8.14. For federal
income tax purposes, any amount distributed on the Principal
Certificates on any such Distribution Date in excess of their Pass
Through Rate, calculated by subtracting any Net Swap Payment Amounts
or Net Swap Receipt Amounts from the WAC Cap (the "REMIC Cap") shall
be treated as having been paid from the Excess Reserve Fund Account
or the Supplemental Interest Trust, as applicable, and any excess of
the REMIC Cap over the amount distributable on such Class of
Principal Certificates on such Distribution Date shall be treated as
having been paid to the Supplemental Interest Trust, all pursuant to,
and as further provided in, Section 8.14. The Trustee will treat a
Principal Certificateholder's right to receive payments from the
Excess Reserve Fund Account and the Supplemental Interest Trust as
payments made pursuant to an interest rate cap contract written by
the Class X Certificateholders.
9
In addition to issuing the Upper-Tier Regular Interests, the
Upper-Tier REMIC shall issue the Class R-1 Certificates, which shall be the
sole class of residual interests in the Upper-Tier REMIC. The Class R-1
Certificates will be issued as a single certificate in book-entry form in a
principal amount of $100 and shall have no interest rate. Amounts received by
the Class R-1 Certificates shall be deemed paid from the Upper-Tier REMIC.
The foregoing REMIC structure is intended to cause all of
the cash from the Mortgage Loans to flow through to the Upper-Tier REMIC as
cash flow on a REMIC regular 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-1 or Class R-2 Certificates be
entitled to any cash flow pursuant to this Agreement except as provided in
Section 4.01(a)(iii)(N) 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-1 and Class R-2 Certificates will each be $100 and each will be a 100%
Percentage Interest in such Class and (b) the Class P and Class X Certificates
will be a 1% Percentage Interest in each such Class.
Set forth below are designations of Classes of Certificates
to the categories used herein:
Book-Entry Certificates.......... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates............. The Class A-1, Class A-2, Class A-3, and
Class A-4, Certificates, collectively.
Class B Certificates............. The Class B-1, Class B-2 and Class B-3
Certificates, collectively.
Class M Certificates............. The Class M-1, Class M-2, Class M-3, Class
M-4 and Class M-5 Certificates,
collectively.
Class R Certificates or
Residual Certificates............ The Class R-1 and Class R-2 Certificates.
10
ERISA Restricted The Private Certificates and any
Certificates..................... Certificate with a rating below the lowest
applicable permitted rating under the
Underwriters' Exemption.
Fixed Rate Certificates.......... The Class B-3 Certificates.
LIBOR Certificates............... The Offered Certificates (other than the
Class B-3 Certificates and the Class R
Certificates).
Offered Certificates............. All Classes of Certificates other than the
Private Certificates.
Physical Certificates............ The Class P and Class X Certificates.
Principal Certificates........... The Fixed Rate Certificates and LIBOR
Certificates.
Private Certificates............. The Class P and Class X Certificates.
Rating Agencies.................. Xxxxx'x and S&P.
Regular Certificates............. All Classes of Certificates other than the
Class R 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:
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 Account shall be an 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
11
share of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for the related Due Period allocated to such Class pursuant to Section 4.02.
Additional Designated Information: As defined in Section
13.02.
Adjusted Net Mortgage Interest Rate: As to each Mortgage
Loan and at any time, the per annum rate equal to the Mortgage Interest Rate
less the Expense Fee Rate.
Administrative Fee Rate: With respect to any Mortgage Loan,
the investment income earned on amounts in the Distribution Account during the
Master Servicer Float Period and paid to the Master Servicer as compensation
for its activities under this Agreement.
Administrative Fees: As to each Mortgage Loan, the fees
calculated by reference to the Administrative Fee Rate.
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" 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.
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 11.01.
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
12
connection with a liquidation or foreclosure and unreimbursed Advances, if
any); (iii) all partial or full prepayments (excluding Prepayment Premiums) on
the Mortgage Loans received during the related Principal Prepayment Period
together with all Compensating Interest paid in connection therewith; (iv) all
amounts received with respect to such Distribution Date in connection with a
purchase or repurchase of a Deleted Mortgage Loan; (v) all amounts received
with respect to such Distribution Date as a Substitution Adjustment Amount
received in connection with the substitution of a Mortgage Loan; (vi) all Net
Swap Receipt Amounts, if any, less Net Swap Payment Amounts, if any, for such
Distribution Date; 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.
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, (ii) the Class X Distributable Amount
(prior to any reduction for Basis Risk Payments) or (iii) the amount payable
from the Supplemental Interest Trust.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions, in (a) the
States of New York or California, (b) the State in which a Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order
to be closed.
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
13
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the
case of any Subordinated Certificates, reduced by any Applied Realized Loss
Amounts applicable to such Class of Subordinated Certificates; provided,
however, that immediately following the Distribution Date on which a
Subsequent Recovery is distributed, the Class Certificate Balances of any
Class or Classes of Certificates that have been previously reduced by Applied
Realized Loss Amounts will be increased, in order of seniority, by the amount
of the Subsequent Recovery distributed on such Distribution Date (up to the
amount of Applied Realized Loss Amounts allocated to such Class or Classes).
The Class X and Class P Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor
shall be deemed not to be Outstanding and the Percentage Interest evidenced
thereby shall not be taken into account in determining whether the requisite
amount of Percentage Interests necessary to effect such consent has been
obtained; provided, however, that if any such Person (including the Depositor)
owns 100% of the Percentage Interests evidenced by a Class of Certificates,
such Certificates shall be deemed to be Outstanding for purposes of any
provision hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Securities Administrator is entitled to rely conclusively on a certification
of the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 13.05.
Certifying Person: As defined in Section 13.05.
Class: All Certificates bearing the same class designation
as set forth in this Agreement.
Class 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) 89.00% 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 A-1 Certificates: All Certificates bearing the class
designation of "Class A-1."
14
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2."
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3."
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4."
Class B Certificates: As specified in the Preliminary
Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account
the distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date) and (G) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 97.00% 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 B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution
15
Amount on such Distribution Date), (F) the Class Certificate Balance of the
Class M-5 Certificates (after taking into account the distribution of the
Class M-5 Principal Distribution Amount on such Distribution Date), (G) the
Class Certificate Balance of the Class B-1 Certificates (after taking into
account the distribution of the Class B-1 Principal Distribution Amount on
such Distribution Date) and (H) the Class Certificate Balance of the Class B-2
Certificates immediately prior to that Distribution Date over (ii) the lesser
of (A) the product of (x) 98.00% 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 B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account
the distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date), (G) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date), (H) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account
the distribution of the Class B-2 Principal Distribution Amount on such
Distribution Date) and (I) the Class Certificate Balance of the Class B-3
Certificates immediately prior to that Distribution Date over (ii) the lesser
of (A) the product of 99.00% 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 Certificate Balance: With respect to any Class and as
to any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Shortfalls: As defined in Section 8.14. For the
avoidance of doubt, the Class IO Shortfall for any Distribution Date shall
equal the amount payable to the Class X Certificates in respect of amounts due
to the Swap Provider on such Distribution Date (other than Defaulted Swap
Termination Payments) in excess of the amount payable on the Class X Interest
on such Distribution Date, all as further provided in Section 8.14.
Class M Certificates: As specified in the Preliminary
Statement.
16
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 92.00% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) the product of (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 M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date) and (D) the
Class Certificate Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) the product of (x) 94.00%
and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A
17
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class
Certificate Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account
the distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 95.00% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over the Overcollateralization Floor.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5."
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 96.00% 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 P Certificates: All Certificates bearing the class
designation of "Class P."
Class R-1 Certificates: All Certificates bearing the class
designation of "Class R-1."
Class R-2 Certificates: All Certificates bearing the class
designation of "Class RC."
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, (i)
as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a
18
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
represented by the Class X Certificates as specified and described in the
Preliminary Statement and the related footnote thereto.
Closing Date: January 27, 2006.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Account: The "Custodial Account" as defined in
the applicable Servicing Agreement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and
Servicer (other than PHH and 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) in the case
of Countrywide and GreenPoint, one half of the Servicing Fee payable to such
Servicer for such Distribution Date. For any Distribution Date and PHH and
SunTrust, "Compensating Interest" shall mean the amount specified in clause
(a) above.
Condemnation Proceeds: All awards or settlements in respect
of a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: With respect to the Securities
Administrator, to the principal office of the Securities Administrator at 0
Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Worldwide
Securities Servicers Global Debt - GSAA Home Equity Trust 2006-1, 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 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx XX0000,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-1934, Attention: Structured Finance Trust
Services or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders.
Corresponding Class: The Class of interests in one Trust
REMIC created under this Agreement that corresponds to the Class of interests
in the other Trust REMIC or to a Class of Certificates in the manner set out
below:
Middle-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
---------------- ---------------- ---------------------
Class MT-A-1 Class A-2 Class A-1
Class MT-A-2 Class A-2 Class A-2
19
Class MT-A-3 Class A-3 Class A-3
Class MT-A-4 Class A-4 Class A-4
Class MT-M-1 Class M-1 Class M-1
Class MT-M-2 Class M-2 Class M-2
Class MT-M-3 Class M-3 Class M-3
Class MT-M-4 Class M-4 Class M-4
Class MT-M-5 Class M-5 Class M-5
Class MT-B-1 Class B-1 Class B-1
Class MT-B-2 Class B-2 Class B-2
Class MT-B-3 Class B-3 Class B-3
Countrywide: Countrywide Home Loans, Inc., a New York
corporation, and its successors in interest.
Countrywide Mortgage Loans: The mortgage loans acquired by
the Purchaser from Countrywide pursuant to the Countrywide Sale Agreement,
and, in the case of the mortgage loans being serviced by Countrywide, shall
include the Goldman Conduit Mortgage Loans.
Countrywide Sale Agreement: The Amended and Restated Master
Mortgage Loan Purchase Agreement, dated on or about January 1, 2006 between
Countrywide and Xxxxxxx Xxxxx Mortgage Company.
Countrywide Servicing: Countrywide Home Loans Servicing LP,
a Texas limited partnership, and its successors in interest.
Countrywide Servicing Agreements: The Flow Servicing
Agreement, dated May 1, 2005, between Countrywide Servicing and Xxxxxxx Xxxxx
Mortgage Company, and the Servicing Agreement, dated on oe about January 1,
2006 between Countrywide Servicing and Xxxxxxx Xxxxx Mortgage Company, each as
modified by the related Assignment Agreements.
Custodial File: With respect to each Mortgage Loan, any
Mortgage Loan Document which is delivered to the applicable Custodian or which
at any time comes into the possession of that Custodian.
Custodian: With respect to the Goldman Conduit Mortgage
Loans, JPMorgan, and with respect to all other Mortgage Loans, Deutsche Bank.
Cut-off Date: January 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balance of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date (after giving effect to payments of principal due on that date, whether
or not received).
Defaulted Swap Termination Payment: Any Swap Termination
Payment required to be paid by the Supplemental Interest Trust to the Swap
Provider pursuant to the Interest Rate
20
Swap Agreement as a result of an Event of Default (as defined in the Interest
Rate Swap Agreement) with respect to which the Swap Provider is the defaulting
party or a Termination Event (as defined in the Interest Rate Swap Agreement)
(other than Illegality or a Tax Event that is not a Tax Event Upon Merger (each
as defined in the Interest Rate Swap Agreement)) with respect to which the Swap
Provider is the sole Affected Party (as defined in the Interest Rate Swap
Agreement) or with respect to a termination resulting from a Substitution Event
(as defined in the Interest Rate Swap Agreement).
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by 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
pursuant to the GreenPoint Sale Agreement, Countrywide Sale Agreement, PHH
Sale and Servicing Agreement or any related Assignment Agreement, replaced or
to be replaced with a substitute mortgage loan.
Denomination: With respect to each Certificate, the amount
set forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee and the Securities Administrator, that (a) is
incorporated under the laws of the United States of America or any State
thereof, (b) is subject to supervision and examination by federal or state
banking authorities and (c) has outstanding unsecured commercial paper or
other short-term unsecured debt obligations that are rated "P-1" by Xxxxx'x
and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to each Distribution Date,
the Business Day immediately preceding the Remittance Date, or, with respect
to the Goldman Conduit Mortgage Loans, the 15th calendar day (or if such 15th
day is not a Business Day, the Business Day immediately following such 15th
day) of the month of the related Remittance Date, or, with respect to the PHH
Sale and Servicing Agreement, the 16th calendar day (or if such 16th day is
not a Business Day immediately preceding such 16th day) of the month of the
related Remittance Date.
21
Deutsche Bank: Deutsche Bank National Trust Company.
Distribution Account: The separate Eligible Account created
by the Securities Administrator pursuant to Section 3.01(b) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and
the Certificateholders and designated "JPMorgan Chase Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2006-1, Asset-Backed Certificates, Series 2006-1." 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 February 2006.
Document Certification and Exception Report: The report
attached to Exhibit F hereto.
Due Date: The day of the month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
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.
XXXXX: 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 Xxxxx'x (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.
XXXXX-Xxxxxxxxxx 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.
22
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 "JPMorgan Chase Bank,
National Association, as paying agent, in trust for registered holders of GSAA
Home Equity Trust 2006-1, Asset-Backed Certificates, Series 2006-1." 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.
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 Sections 9.08 and 9.09 with respect to notice and
information to be provided to the Depositor or Article XIII (except Section
13.07).
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and
Form 10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate, the Administrative Fee Rate and,
if set forth on the Mortgage Loan Schedule, the applicable Primary Mortgage
Insurance Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated
by reference to the Expense Fee Rate.
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.
Xxxxxx Xxx: 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 January 2036.
Fitch: Fitch, Inc.
Fixed Rate Certificates: As specified in the Preliminary
Statement.
23
Form 10-D Disclosure Item: With respect to any Person, any
pending material litigation or contemplated governmental proceedings against
such Person that would have a material adverse impact on the
Certificateholders.
Form 10-K Disclosure Item: With respect to any Person, (a)
any pending material litigation or contemplated governmental proceedings
against such Person that would have a material adverse impact on the
Certificateholders and (b) any affiliations or relationships between such
Person and any Item 1119 Party that would be material to a Certificateholder.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, and its
successors in interest.
Goldman Conduit: Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx Mortgage
Company, dated as of their respective dates.
Goldman Servicing Agreement: The Flow Servicing Agreement,
dated as of May 1, 2005, between Countrywide Servicing and Xxxxxxx Xxxxx
Mortgage Company relating to the servicing of the Goldman Conduit Mortgage
Loans.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York
corporation, and its successor in interest.
GreenPoint Mortgage Loans: The Mortgage Loans acquired by
the Purchaser from GreenPoint pursuant to the GreenPoint Sale Agreement.
GreenPoint Sale Agreement: The Amended and Restated Master
Mortgage Loan Purchase Agreement, dated as of November 1, 2005, between
GreenPoint and Xxxxxxx Xxxxx Mortgage Company.
GreenPoint Servicing Agreement: The Servicing Agreement,
dated as of November 1, 2005, between GreenPoint and Xxxxxxx Xxxxx Mortgage
Company.
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 which
such Distribution Date occurs. For purposes of computing interest accruals on
each Class of LIBOR Certificates, each
24
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 Rate Swap Agreement: The interest rate swap
agreement, dated as of January 27, 2006, between the GSAA Home Equity Trust
2006-1 and Xxxxxxx Xxxxx Mitsui Marine Derivative Products, L.P. and assigned
to the Supplemental Interest Trust or any other swap agreement (including any
related schedules) assigned to the Supplemental Interest Trust.
Interest Remittance Amount: With respect to any Distribution
Date, that portion of Available Funds attributable to interest relating to the
Mortgage Loans and any Net Swap Receipt Amount attributable for such
Distribution Date, net of any Net Swap Payment Amount made with respect to
such Distribution Date.
Investment Account: As defined in Section 3.02(a).
Item 1119 Party: The Depositor, the Master Servicer, the
Trustee, any Servicer, any subservicer, any originator identified in the
Prospectus Supplement and any Swap Provider.
JPMorgan: JPMorgan Chase Bank, National Association, a
national banking corporation, and its successors in interest.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by the Securities Administrator on the
related LIBOR Determination Date on the basis of the offered rate for one
month U.S. dollar deposits as such rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such date; provided, that if such rate does not
appear on Telerate Page 3750, the rate for such date will be determined on the
basis of the rates at which one-month U.S. dollar deposits are offered by the
Reference Banks at approximately 11:00 a.m. (London time) on such date to
prime banks in the London interbank market. In such event, the Securities
Administrator shall request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two quotations are provided as requested, the rate for
that date will be the arithmetic mean of the rates quoted by major banks in
New York City, selected by the Securities Administrator (after consultation
with the Depositor), at approximately 11:00 a.m. (New York City time) on such
date for one-month U.S. dollar deposits of leading European banks. The
establishment of LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculations based thereon, in the absence of
manifest error, shall be final and binding. Except as otherwise set forth
herein, absent manifest error, the Securities Administrator may conclusively
rely on quotations of LIBOR as such quotations appear on Telerate Screen Page
3750.
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.
25
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: JPMorgan Chase Bank, National Association,
and if a successor master servicer is appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section
9.04.
Master Servicing Float Period: As to any Distribution Date
and each Mortgage Loan, the period commencing on the 18th Business Day
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.
Middle-Tier Principal Amount: As described in the
Preliminary Statement.
Middle-Tier Regular Interest: Each of the Class MT-A-1,
Class MT-A-2, Class MT-A-3, Class MT-A-4, Class MT-M-1, Class MT-M-2, Class
MT-M-3, Class MT-M-4, Class MT-M-5, Class MT-B-1, Class MT-B-2, Class MT-B-3
and Class MT-Accrual Interests as described in the Preliminary Statement.
26
Middle-Tier REMIC: As described in the Preliminary
Statement.
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: Xxxxx'x Investors Service, Inc. If Xxxxx'x 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 Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Pass-Through Group, or such other address as Moody's may
hereafter furnish to the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on
a Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the
subject of a Sale Agreement and a Servicing Agreement, each Mortgage Loan
originally sold and subject to any Sale Agreement being identified on the
Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage File, the Servicing File, the Monthly Payments, Principal
Prepayments, Prepayment Premiums, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage
Loan.
Mortgage Loan Documents: The mortgage loan documents
pertaining to each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting forth the following information
with respect to each Mortgage Loan: (1) Responsible Party's Mortgage Loan
number; (2) the address, city, state and zip code of the Mortgaged Property;
(3) a code indicating whether the Mortgagor is self-employed; (4) a code
indicating whether the Mortgaged Property is owner-occupied, investment
property or a second home; (5) a code indicating whether the Mortgaged
Property is a single family residence, two family residence, three-family
residence, four family residence, condominium, manufactured housing or planned
unit development; (6) the purpose of the Mortgage Loan; (7) the type of
Mortgage Loan; (8) the Mortgage Interest Rate at origination; (9) the current
Mortgage Interest Rate; (10) the name of the applicable Servicer; (11) the
applicable Servicing Fee Rate; (12) the current Monthly Payment; (13) the
original term to maturity; (14) the remaining term to maturity; (15) the
principal balance of the Mortgage Loan as of the Cut-off Date after deduction
27
of payments of principal due on or before the Cut-off Date whether or not
collected; (16) the LTV at origination and if the Mortgage Loan has a second
lien, combined LTV at origination; (17) the actual principal balance of the
Mortgage Loan as of the Cut-off Date; (18) social security number of the
Mortgagor; (19) a code indicating whether the Mortgage Loan had a second lien
at origination; (20) if the Mortgage Loan has a second lien, combined loan
balance as of the Cut-off Date; (21) a code indicating whether the Mortgaged
Property is a leasehold estate; (22) the due date of the Mortgage Loan; (23)
whether the Mortgage Loan is insured by a Primary Mortgage Insurance Policy
and the name of the insurer; (24) the certificate number of the Primary
Mortgage Insurance Policy; (25) the amount of coverage of the Primary Mortgage
Insurance Policy, and if it is a lender-paid Primary Mortgage Insurance
Policy, the premium rate; (26) the type of appraisal; (27) a code indicating
whether the Mortgage Loan is a MERS Loan; (28) documentation type (including
asset and income type); (29) first payment date; (30) the schedule of the
payment delinquencies in the prior 12 months; (31) FICO score; (32) the
Mortgagor's name; (33) the stated maturity date; (34) the original principal
amount of the Mortgage Loan and (35) the name of the applicable Custodian.
Mortgaged Property: The real property (or leasehold estate,
if applicable) identified on the Mortgage Loan Schedule as securing repayment
of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant to subsection 4.01(a)(iii) (before
giving effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution
Date, the amount by which the sum of the Prepayment Interest Shortfalls
exceeds the sum of the Compensating Interest payments made on such
Distribution Date.
Net Swap Payment Amount: With respect to any Distribution
Date, the Fixed Amount (as defined in the Interest Rate Swap Agreement)
payable by the Supplemental Interest Trust to the Swap Provider, pursuant to
the applicable clauses of the Priorities of Distribution, on the related Fixed
Rate Payer Payment Date (as defined in the Interest Rate Swap Agreement).
Net Swap Receipt Amount: With respect to any Distribution
Date, the Floating Amount (as defined in the Interest Rate Swap Agreement)
payable by the Swap Provider to the Supplemental Interest Trust on the related
Floating Rate Payer Payment Date (as defined in the Interest Rate Swap
Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise
backed by some or all of the Class P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non Permitted Transferee: As defined in Section 8.12(e).
28
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, 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, 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 applicable Servicer, reasonably acceptable to the Trustee
and/or the Securities Administrator, as applicable (and/or such other Persons
as may be set forth herein); provided, that any Opinion of Counsel relating to
(a) qualification of any Trust REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the applicable Servicer
or the Master Servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the applicable Servicer or the Master
Servicer of the Mortgage Loans or in an affiliate of either and (iii) is not
connected with the applicable Servicer or the Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which
the aggregate Stated Principal Balance of the Mortgage Loans, as of the last
day of the related Due Period, is equal to 10.00% or less of the Cut-off Date
Pool Principal Balance.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated
under this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
29
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage
Loan with a Stated Principal Balance greater than zero which was not the
subject of a Principal Prepayment in Full prior to such Due Date and which did
not become a Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class
Certificate Balances of the Principal Certificates as of such Distribution
Date (after giving effect to the payment of the Principal Remittance Amount on
such Certificates on such Distribution Date).
Overcollateralization Deficiency: With respect to any
Distribution Date, the excess, if any, of (a) the Specified Overcollateralized
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date.
Overcollateralization Floor: With respect to any
Distribution Date, 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial.
Par Value: means an amount equal to the greater of (a) the
sum of (1) 100% of the unpaid principal balance of the Mortgage Loans (other
than Mortgage Loans related to REO Properties), (2) interest accrued and
unpaid on the Mortgage Loans, (3) any unreimbursed P&I Advances, fees and
expenses of the Master Servicer, the Securities Administrator and the Trustee,
(4) any Swap Termination Payment other than a Defaulted Swap Termination
Payment owed to the Swap Provider and (5) with respect to any REO Property,
the lesser of (x) the appraised value of each REO Property, as determined by
the higher of two appraisals completed by two independent appraisers selected
by the Master Servicer or its designee, and (y) the unpaid principal balance
of each Mortgage Loan related to any REO Property, and (b) the sum of (1) the
aggregate unpaid Class Certificate Balance of each class of certificates then
outstanding, (2) interest accrued and unpaid on the certificates, (3) any
unreimbursed P&I Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee and (4) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
30
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal
to the percentage obtained by dividing the Denomination of such Certificate by
the aggregate of the Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 13.05.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued by the Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed
as to timely payment of principal and interest by, the United States
or any agency or instrumentality thereof, provided such obligations
are backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit
of, or bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars and issued by any Depository Institution and
rated F1+ by Fitch, P-1 by Xxxxx'x and A-1+ by S&P;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any state thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds, including money market
funds advised by the Depositor, the Securities Administrator or the
Trustee or an Affiliate thereof, that have been rated "Aaa" by
Xxxxx'x, "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;
31
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 Freddie Mac, a majority of its board of
directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHH: PHH Mortgage Corporation, a New Jersey corporation, and
its successors in interest.
PHH Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from PHH pursuant to the PHH Sale and Servicing Agreement.
PHH Sale and Servicing Agreement: Amended and Restated
Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of December
1, 2005, between Xxxxxxx Xxxxx Mortgage Company and PHH Mortgage Corporation
(formerly known as Cendant Mortgage Corporation) and Xxxxxx'x Gate Residential
Mortgage Trust (formerly known as Cendant Residential Mortgage Trust).
Physical Certificates: As specified in the Preliminary
Statement.
32
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.
Principal Certificates: As specified in the Preliminary
Statement.
Principal Distribution Amount: For any Distribution Date,
the sum of (i) the Basic Principal Distribution Amount for such Distribution
Date and (ii) the Extra Principal Distribution Amount for such Distribution
Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date,
including any Prepayment Premium, and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made
by a Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any
Distribution Date, the calendar month preceding the month in which that
Distribution Date occurs.
Principal Remittance Amount: With respect to any
Distribution Date and the Mortgage Loans, the amount equal to the sum of the
following amounts (without duplication): (i) all scheduled payments of
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received on or prior to the related Determination Date, together with any
Monthly Advances in respect thereof; (ii) all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds allocable to principal and received during
the related Principal Prepayment Period; (iii) all Principal Prepayments
allocable to principal and received during the related Principal Prepayment
Period; (iv) all amounts received with respect to such Distribution Date
representing the portion of the purchase price allocable to principal in
connection with a purchase or repurchase of a Deleted Mortgage Loan; (v)
principal portion of all amounts received with respect to such Distribution
Date as a Substitution Adjustment Amount and received in connection with the
substitution of a Mortgage Loan and (vi) the allocable portion of
33
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
January 26, 2006, relating to the Offered Certificates.
PTCE: Prohibited Transaction Class Exemption, issued by the
U.S. Department of Labor.
PUD: A planned unit development.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York
limited partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers. For purposes of Section 12.05(b), the addresses for
notices to each Rating Agency shall be the address specified therefor in the
definition corresponding to the name of such Rating Agency, or such other
address as either such Rating Agency may hereafter furnish to the Depositor
and the Servicer.
Realized Losses: With respect to any date of determination
and any Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of any amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the
close of business on the last Business Day of the related Interest Accrual
Period; provided, however, that for any Definitive Certificate issued pursuant
to Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7,
34
2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Relief Act Interest Shortfall: With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of
interest collectible on such Mortgage Loan for the most recently ended Due
Period as a result of the application of the Servicemembers' Civil Relief Act
of 1940 or any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Advice Date: The 5th, 5th, 10th and 10th day of
each calendar month, respectively, with respect to GreenPoint, PHH, SunTrust
and Countrywide Servicing or the immediately following Business Day if such
day is not a Business Day, and with respect to the Goldman Conduit Mortgage
Loans, not later than each Remittance Date.
Remittance Date: With respect to any Distribution Date, the
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such 18th day) of the month in which such Distribution
Date occurs.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Property: A Mortgaged Property acquired by the Trust
Fund through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: Any event required to be reported on Form
8-K, but at a minimum will include:
(a) entry into a definitive material agreement related to
the Trust Fund, the Certificates or the Mortgage Loans, or an amendment to a
Transaction Document, only if the Depositor is not a party to such agreement
(e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3)
of Regulation AB);
(b) termination of a Transaction Document (other than by
expiration of the agreement on its stated termination date or as a result of
all parties completing their obligations under such agreement), only if the
Depositor is not a party to such agreement (e.g., a servicing agreement with a
servicer contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to any material party related to the Trust
Fund, the commencement of any bankruptcy or receivership with respect to such
party;
35
(d) with respect to the Master Servicer and any Servicer
only, the occurrence of a Trigger Event, Sequential Trigger Event or an Event
of Default under this Agreement;
(e) the resignation, removal, replacement, substitution of
the Trustee, the Securities Administrator, the Master Servicer, any Servicer,
any subservicer or any Custodian;
(f) with respect to the Depositor only, if the Depositor
becomes aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added with respect
to one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(g) a required distribution to holders of the Certificates
is not made as of the required distribution date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer
or the Securities Administrator, any Subcontractor determined by such Person
pursuant to Section 13.08(b) to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB. References to a Reporting
Subcontractor shall refer only to the Subcontractor of such Person and shall
not refer to Subcontractors generally.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee,
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 Trustee, 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.
Responsible Party: Each of GreenPoint, Countrywide, SunTrust
or PHH, as the context may require, in its capacity as seller under the
related Sale Agreement. With respect to the Goldman Conduit Mortgage Loans,
the Purchaser.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the GreenPoint Sale Agreement, the
Countrywide Sale Agreement, the SunTrust Sale and Servicing Agreement, the PHH
Sale and Servicing Agreement and the Goldman Conduit Sale Agreement.
36
Xxxxxxxx-Xxxxx Certification: As defined in Section 13.05.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: JPMorgan Chase Bank, National
Association, and if a successor securities administrator is appointed
hereunder, such successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution Account, the
period commencing on the seventh Business Day immediately preceding such
Distribution Date and ending on such Distribution Date.
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, 11.00%.
Sequential Trigger Event: means, if (x) on any Distribution
Date before the 37th Distribution Date, 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 0.55%, or (y) on any
Distribution Date on or after the 37th Distribution Date, a Trigger Event is
in effect.
Servicer: Each of Countrywide Servicing, GreenPoint, PHH 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 Servicing Agreement.
Servicing Agreement: Each of the Countrywide Servicing
Agreements, the GreenPoint Servicing Agreement, the PHH 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.
Servicing Fee: As defined in the related Servicing
Agreement.
Servicing Fee Rate: As of the statistical calculation date
of December 1, 2005, a per annum rate equal to 0.25% with respect to
approximately 31.89% of the mortgage loans, 0.25% increasing to 0.375% after
the initial interest rate adjustment date with respect to approximately 27.65%
of the mortgage loans and 0.375% per annum with respect to approximately
40.46% of the mortgage loans.
37
Servicing File: As defined in the applicable Servicing
Agreement.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown
Date, an amount equal to 0.50% of the Cut-off Date Pool Principal Balance. On
and after the Stepdown Date, an amount equal to 1.00% 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 XxXxxx-Xxxx 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, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - GSAA Home Equity Trust 2006-1, or
such other address as Standard & Poor's may hereafter furnish to the Depositor
and the Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of
any Determination Date, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such date (whether or not received), minus (ii) all amounts previously
remitted to the Securities Administrator with respect to the related Mortgage
Loan representing payments or recoveries of principal including advances in
respect of scheduled payments of principal. For purposes of any Distribution
Date, the Stated Principal Balance of any Mortgage Loan will give effect to
any scheduled payments of principal received or advanced prior to the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Principal Prepayment Period,
and the Stated Principal Balance of any Mortgage Loan that has prepaid in full
or has become a Liquidated Mortgage Loan during the related Principal
Prepayment Period shall be zero.
Step 1 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of January 27, 2006, between
the Purchaser, GreenPoint and the Depositor, (ii) Assignment, Assumption and
Recognition Agreement, dated as of January 27, 2006, between the Purchaser,
Countrywide, Countrywide Servicing and the Depositor, (iii) Assignment,
Assumption and Recognition Agreement, dated as of January 27, 2006, between
the Purchaser, PHH, Xxxxxx'x Gate Residential Mortgage Trust and the
Depositor, (iv) Assignment, Assumption and Recognition Agreement, dated as of
January 27, 2006, between the Purchaser, Goldman Conduit, Countrywide
Servicing and the Depositor and (v) Assignment, Assumption
38
and Recognition Agreement, dated as of January 27, 2006, between the
Purchaser, SunTrust and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of January 27, 2006, among the
Depositor, the Master Servicer, the Trustee and GreenPoint, (ii) Assignment,
Assumption and Recognition Agreement, dated as of January 27, 2006, among the
Depositor, the Master Servicer, the Trustee and Countrywide Servicing, (iii)
Assignment, Assumption and Recognition Agreement, dated as of January 27,
2006, among the Depositor, the Master Servicer, the Trustee, PHH and Xxxxxx'x
Gate Residential Mortgage Trust, (iv) Assignment, Assumption and Recognition
Agreement, dated as of January 27, 2006, between the Purchaser, Goldman
Conduit, Countrywide Servicing, the Trustee and the Depositor and (v)
Assignment, Assumption and Recognition Agreement, dated as of January 27,
2006, between the Purchaser, SunTrust, the Trustee and the Depositor.
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
February 2009 and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subcontractor: Any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Master Servicer, any Servicer, any subservicer or the
Securities Administrator, as the case may be.
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
GreenPoint or Countrywide Sale Agreement or with respect to a Mortgage Loan
substituted by the Purchaser, an amount of cash received from the applicable
Responsible Party in connection with a substitution for a Deleted Mortgage
Loan.
SunTrust: SunTrust Mortgage, Inc., a Virginia corporation,
and its successor in interest.
SunTrust Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from SunTrust pursuant to the SunTrust Sale Agreement.
SunTrust Sale and Servicing Agreement: Amended and Restated
Flow Seller's Warranties and Servicing Agreement, dated as of December 1,
2005, between Xxxxxxx Xxxxx Mortgage Company and SunTrust Mortgage, Inc.
39
Supplemental Interest Trust: The corpus of a trust created
pursuant to Section 4.05 of this Agreement, consisting of the Interest Rate
Swap Agreement, subject to the obligation to pay amounts specified in Section
4.05.
Swap Provider: Xxxxxxx Xxxxx Mitsui Marine Derivative
Products, L.P., a Delaware limited partnership, and its successors in
interest, and any successor swap provider under any replacement Interest Rate
Swap Agreement.
Swap Termination Payment: Any payment payable by the
Supplemental Interest Trust or the Swap Provider upon termination of the
Interest Rate Swap Agreement as a result of an Event of Default (as defined in
the Interest Rate Swap Agreement) or a Termination Event (as defined in the
Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the Class R-1 and Class
R-2 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
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees) plus the Net Swap Receipt Amount and
minus any Net Swap Payment Amount 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, each Interest Rate
Swap Agreement and any other document or agreement entered into in connection
with the Trust Fund, the Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c)(ii).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a
Trigger Event exists if (i) on such Distribution Date the quotient (expressed
as a percentage) of (x) the rolling three month average of the aggregate
unpaid principal balance of 60+ Day Delinquent Mortgage Loans, and (y) the
aggregate unpaid principal balance of the Mortgage Loans as of the last day of
the related Due Period equals or exceeds 40.00% of the Senior Enhancement
Percentage as of the last day of the prior Due Period or (ii) the quotient
(expressed as a percentage) of (x) the aggregate amount
40
of Realized Losses incurred since the Cut-off Date through the last day of the
related Principal Prepayment Period divided by (y) the Cut-off Date Pool
Principal Balance exceeds the applicable percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------ ---------------
February 2008 - January 2009 0.250% for the first month, plus an additional 1/12th
of 0.300% for each month thereafter (e.g.,
approximately 0.275% in March 2008)
February 2009 - January 2010 0.550% for the first month, plus an additional 1/12th
of 0.250% for each month thereafter (e.g.,
approximately 0.571% in March 2009)
February 2010 - January 2011 0.800% for the first month, plus an additional 1/12th
of 0.250% for each month thereafter (e.g.,
approximately 0.821% in March 2010)
February 2011 - January 2012 1.050% for the first month, plus an additional 1/12th
of 0.150% for each month thereafter (e.g.,
approximately 1.063% in March 2011)
February 2012 and thereafter 1.200%
Trust: The express trust created hereunder in Section
2.01(c).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received
on or with respect thereto after the related Cut-off Date, other than such
amounts which were due on the Mortgage Loans on or before the related Cut-off
Date; (ii) the Interest Rate Swap Agreement and all amounts received
thereunder; (iii) the Excess Reserve Fund Account, the Distribution Account,
and all amounts deposited therein pursuant to the applicable provisions of
this Agreement; (iv) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (v) the
rights of the Trust under the Step 2 Assignment Agreements; (vi) the
Supplemental Interest Trust; and (vii) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing. The Trust Fund created
hereunder is referred to as the GSAA Home Equity Trust 2006-1.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: U.S. Bank National Association, a national banking
association, and its successors in interest, and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg.
54487 (2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed.
Reg. 14979, or any successor exemption.
41
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. 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 (i) the sum of (A)
the weighted average of the Adjusted Net Mortgage Interest Rates then in
effect on the beginning of the related Due Period on the Mortgage Loans, and
(B) the Net Swap Receipt Amount, if any, less the Net Swap Payment Amount, if
any, divided by the Stated Principal Balance of the Mortgage Loans at the
beginning of the related Due Period multiplied by 12 and (ii) 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 Class B-3
Certificates.
42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The
Depositor, concurrently with the execution and delivery hereof, hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trustee for the
benefit of the Certificateholders, without recourse, all the right, title and
interest of the Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to each
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,
and in the case of the SunTrust Mortgage Loans, blanket assignments
for Mortgage Loans secured by Mortgaged Properties in jurisdictions
where permitted by Applicable Law;
(iii) personal endorsement, surety and/or guaranty
agreements executed in connection with all non individual Mortgage
Loans (corporations, partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its
recording or, in certain limited circumstances as set forth in the
applicable Servicing Agreement, a certified copy of the mortgage with
evidence of recording;
(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
43
Goldman Conduit Mortgage Loans, an original with evidence of
recording thereon is always required;
(vii) except with respect to the Countrywide Mortgage Loans,
an original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of
attorney; except in the case of the Goldman Conduit Mortgage Loans,
an original power of attorney or, in limited circumstances as set
forth in the applicable Servicing Agreement, a copy of the power of
attorney;
(ix) for each GreenPoint 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, in either case with evidence of recording thereon if
required to maintain the lien of the mortgage or if otherwise
required, or, if recordation is not so required, an original or copy
of such assumption agreement;
(x) except with respect to the Countrywide Mortgage Loans, a
security agreement, chattel mortgage or equivalent document executed
in connection with the Mortgage, if any; and
(xi) with respect to each Mortgage Loan, the complete
Mortgage File including all items as set forth in the applicable
Servicing Agreement to the extent in the possession of the Depositor
or the Depositor's Agents.
The Depositor shall deliver to each Custodian the applicable
recorded document promptly upon receipt from the respective recording office
but in no event later than 120 days from the Closing Date.
From time to time, pursuant to the applicable Sale
Agreement, the Responsible Party may forward to the applicable Custodian
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan, in accordance
with the terms of the applicable Sale Agreement. All such mortgage documents
held by the Custodians as to each Mortgage Loan shall constitute the
"Custodial File."
On or prior to the Closing Date, the Depositor shall deliver
to the Custodians Assignments of Mortgages (except in the case of MERS Loans),
in blank, for each applicable Mortgage Loan. On the Closing Date, the Trustee
shall provide a written request to each Responsible Party to submit the
Assignments of Mortgage for recordation, at the Responsible Party's expense,
pursuant to the applicable Sale Agreement. Each Custodian shall deliver the
Assignment of Mortgages to be submitted for recordation to the applicable
Responsible Party.
In the event that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so
delivered to the Custodian within the time period and in the manner specified
in the applicable Sale Agreement, the Trustee shall take or cause to be taken
such remedial actions under the Sale Agreement against the applicable
Responsible Party as may be permitted to be taken thereunder, including
without limitation, if applicable, the repurchase by the applicable
Responsible Party of such Mortgage Loan. The foregoing repurchase remedy shall
not apply in the event that the Responsible Party cannot
44
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 2006-1" and U.S. Bank National Association 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 and JPMorgan, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of Texas, unless otherwise permitted by the Rating Agencies.
Prior to and as a condition to the Closing, each Custodian
shall deliver via facsimile (with original to follow the next Business Day) to
the Depositor an Initial Certification prior to the Closing Date, or as the
Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage
Note and Assignment of Mortgage, subject to any exceptions listed on the
exception report attached thereto, for each Mortgage Loan. Neither Custodian
shall be responsible to verify 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 are in its possession, subject to any
exceptions listed on the exception report
45
attached thereto, and shall deliver to the Depositor an Initial Certification,
in the form annexed hereto as Exhibit E, and shall deliver to the Depositor a
Document Certification and Exception Report, in the form annexed hereto as
Exhibit F, within 90 days after the Closing Date to the effect that, as to
each applicable Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
such certification as an exception and not covered by such certification): (i)
all documents required to be delivered to it are in its possession; (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan; (iii) based on its examination and only as to the
foregoing documents, as to Deutsche Bank, the information set forth in items
2, 8, 33, and 34 of the Mortgage Loan Schedule respecting such Mortgage Loan
is correct; (iv) based on its examination and only as to the foregoing
documents, as to JPMorgan, the information set forth in items 2, 8, 33, and 34
of the Mortgage Loan Schedule respecting such Mortgage Loan is correct; and
(v) each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither Custodian shall be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
Each Custodian shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The Servicer shall promptly deliver to the
applicable Custodian, upon the execution or receipt thereof, the originals of
such other documents or instruments constituting the Custodial File as come
into the possession of the Servicer from time to time.
Each Custodian shall notify the Trustee of any Mortgage
Loans that do not conform to such requirements of Sections 2.01 and 2.02
hereof. 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 Custodian's review as required herein, or based upon
notification from JPMorgan, by notifying the applicable Responsible Party to
correct or cure such default. The Trustee shall also enforce the obligation of
the Responsible Parties under the Sale Agreements, and the Servicing
Agreements and of the Purchaser under the Step 1 Assignment Agreements to cure
or repurchase Mortgage Loans for which there is a defect or a breach of a
representation or warranty thereunder of which a Responsible Officer of the
Trustee has actual knowledge, by notifying the applicable party to correct or
cure such default. If any Servicer, any Responsible Party or the Purchaser, as
the case may be, fails or is unable to correct or cure the defect or breach
within the period set forth in the applicable agreement, the Trustee shall
notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by the applicable party to correct or cure, the
Trustee shall notify such party to repurchase the Mortgage Loan. If, within
ten (10) Business Days of receipt of such notice by such party, such party
fails to repurchase such Mortgage Loan, the Trustee shall notify the Depositor
of such failure. The Trustee shall pursue all legal remedies available to the
Trustee against the Servicers, the Responsible Parties and the Purchaser, as
applicable, under this Agreement, if the Trustee has received written notice
from the Depositor directing the Trustee to pursue such remedies.
Section 2.03 Execution and Delivery of Certificates. The
Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator
has executed and delivered to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing directly or indirectly the
46
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 January 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 or Swap Termination Payment) shall be deemed paid from the
Upper-Tier REMIC in respect of the Class X Interest 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 (prior to
any reduction for any Net Swap Receipt Amounts, Net Swap Payment Amounts or
Swap Termination Payment), 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, calculated by substituting the REMIC Cap for the WAC Cap
shall be treated as having been paid from the Excess Reserve Fund Account or
the Supplemental Interest Trust, as applicable, and any excess of the REMIC
Cap over the amount distributable on such Class of Principal Certificates on
such Distribution Date shall be treated as having been paid to the
Supplemental Interest Trust, all pursuant to, and as further provided in,
Section 8.14.
Section 2.05 Representations and Warranties of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Trustee that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey the Mortgage Loans and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by, this Agreement;
(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
47
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) of any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound;
(ii) results or will result in a violation of any law, rule, regulation,
order, judgment or decree applicable to the Depositor of any court or
governmental authority having jurisdiction over the Depositor or its
subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the knowledge of
the Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's
reasonable judgment, might materially and adversely affect the performance by
the Depositor of its obligations under this Agreement, or the validity or
enforceability of this Agreement;
(g) The Depositor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency that may materially and
adversely affect its performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any
other Person, and the Depositor has transferred all right, title and interest
in each Mortgage Loan to the Trustee. The transfer of each Mortgage Note and
each Mortgage as and in the manner contemplated by this Agreement is
sufficient either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 12.04
hereof.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the respective Custodial Files to the Custodians, and shall inure to the
benefit and to Certificateholders.
Section 2.06 Representations and Warranties of JPMorgan.
JPMorgan 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
48
or is otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any such
state, to the extent necessary to perform any of its obligations under this
Agreement in accordance with the terms thereof.
(b) Such Custodian has the full power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary action on the part of such Custodian the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
constitutes a legal, valid and binding obligation of such Custodian,
enforceable against such Custodian in accordance with its terms, except that
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such
Custodian, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not result
in a material breach of any term or provision of the articles of incorporation
or by laws of such Custodian.
Section 2.07 Representations and Warranties of Deutsche
Bank. Deutsche Bank 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
49
fulfillment of or compliance with the terms thereof are in the ordinary course
of business of such Custodian and will not result in a material breach of any
term or provision of the articles of incorporation or by laws of such
Custodian.
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 (prior to using any Net Swap Receipt
Amounts). On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment received by it for such date into
the Excess Reserve Fund Account. For the avoidance of doubt, any Basis Risk
Carry Forward Amounts shall be paid to the LIBOR Certificates first from the
Excess Reserve Fund Account and then from the Supplemental Interest Trust.
On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class or Classes of 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 and the Supplemental
Interest Account amounts necessary (including Net Swap Payment Amounts or Swap
Termination Payments (other than amounts received pursuant to an ISDA Credit
Support Annex negotiated between the Trust and the Swap Provider)) to pay to
such Class or Classes of Certificates the related Basis Risk Carry Forward
Amount. Such payments shall be allocated to those Classes based upon the
amount of Basis Risk Carry Forward Amount owed to each such Class and shall be
paid in the priority set forth in Section 4.01(a)(iii)(L).
The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve Fund
Account are the Class X Certificateholders. For all federal income tax
purposes, amounts transferred by the Upper-Tier REMIC to the Excess Reserve
Fund Account shall be treated as distributions by the Securities Administrator
to the Class X Certificateholders in respect of the Class X Interest 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 (in
respect of the Class X Interest) and then to the respective Class or Classes
of
50
Principal Certificates in accordance with the priority of payments in this
Section 4.05. 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).
(b) The Master Servicer shall establish and maintain a
custodial account for the benefit of the Trustee (the "Master Servicer
Account") which account shall be an Eligible Account. The amounts remitted by
the Servicers to the Master Servicer on each Remittance Date shall be credited
to the Master Servicer 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 Securities Administrator shall, promptly upon receipt
on the Business Day received, deposit in the Distribution Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicers to the
Master Servicer pursuant to the Servicing Agreements;
(ii) any Net Swap Receipt Amounts or Swap Termination
Payments (other than amounts received pursuant to an ISDA Credit
Support Annex negotiated between the Trust and the Swap Provider)
remitted by the Swap Provider; and
(iii) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not
required to be remitted pursuant to the applicable Servicing Agreement, and
such Servicer directs the Master Servicer in writing to withdraw such amount
from the Distribution Account, the Master Servicer shall return such funds to
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 (including, without limitation, any account necessary under the
Interest Rate Swap Agreement).
Section 3.02 Investment of Funds in the Distribution
Account. (a) The Securities Administrator may (but shall not be obligated to)
invest funds in the Distribution Account during the Securities Administrator
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. 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
51
Securities Administrator. The Securities Administrator shall be entitled to
sole possession over each such investment, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Securities Administrator or its agent, together with any document of transfer
necessary to transfer title to such investment to the Securities
Administrator. In the event amounts on deposit in an Investment Account are at
any time invested in a Permitted Investment payable on demand, the Securities
Administrator may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may
otherwise mature hereunder in an amount equal to
the lesser of (1) all 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 Securities Administrator Float Period shall be
subject to the Securities Administrator's withdrawal in the manner set forth
in Section 10.05.
(c) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due under any
Permitted Investment, or if a default occurs in any other performance required
under any Permitted Investment, the Securities Administrator shall take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Notwithstanding
the foregoing, the Securities Administrator shall be liable to the Trust for
any such loss on any funds it has invested under this Section 3.02 only during
the Securities Administrator Float Period, and the Securities Administrator
shall deposit funds in the amount of such loss in the Distribution Account
promptly after such loss is incurred.
(d) The Securities Administrator or its Affiliates are
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator's economic self-interest for (i) serving as
investment adviser, administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments. Such compensation is
not payable or reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA Patriot
Act of 2001, the Trustee and the Custodians shall obtain and verify certain
information and documentation from the other parties to this Agreement
including, but not limited to, each such party's name, address and other
identifying information.
(f) To help fight the funding of terrorism and money
laundering activities, Deutsche Bank National Trust Company as a Custodian
will obtain, verify, and record
52
information that identifies individuals or entities that establish a
relationship or open an account with the Custodian. The Custodian will ask for
the name, address, tax identification number and other information that will
allow the Custodian to identify the individual or entity who is establishing
the relationship or opening the account. The Custodian may also ask for
formation documents such as articles of incorporation, an offering memorandum,
or other identifying documents to be provided.
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) to the holders of each Class of Principal Certificates
and to the Supplemental Interest Trust in the following order of
priority:
(A) to the Supplemental Interest Trust, the sum of
(x) all Net Swap Payment Amounts and (y) any Swap
Termination Payment owed to the Swap Provider other than a
Defaulted Swap Termination Payment owed to the Swap
Provider, if any;
(B) from the Interest Remittance Amount,
concurrently, to the Class A Certificates, their respective
Accrued Certificate Interest Distribution Amounts and Unpaid
Interest Amounts (allocated pro rata based on their
respective Accrued Certificate Interest Distribution Amounts
and Unpaid Interest Amounts, respectively);
(C) from any remaining Interest Remittance Amounts
to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
(D) from any remaining Interest Remittance Amounts
to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
(E) from any remaining Interest Remittance Amounts
to the Class M-3 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
(F) from any remaining Interest Remittance Amounts
to the Class M-4 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
(G) from any remaining Interest Remittance Amounts
to the Class M-5 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
(H) from any remaining Interest Remittance Amounts
to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class;
53
(I) from any remaining Interest Remittance Amounts
to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for that Class; and
(J) from any remaining Interest Remittance Amounts
to the Class B-3 Certificates, the Accrued Certificate
Interest Distribution Amount for that 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-1 and
Class R-2 Certificates, pro rata, until their
respective Class Certificate Balances have been
reduced to zero;
(2) to the Class A Certificates, in the
following order of priority:
(x) sequentially, to the Class
A-1 and Class A-2 Certificates, in that
order, until their respective Class
Certificate Balances have been reduced to
zero; and
(y) concurrently, to the Class
A-3 and Class A-4 Certificates, pro rata,
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 A-3 and Class
A-4 Certificates will be allocated first
to the Class A-3 Certificates, until its
Class Certificate Balance has been reduced
to zero, and then to the Class A-4
Certificates, until its Class Certificate
Balance has been reduced to zero
(3) sequentially, to the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class B-1,
Class B-2 and Class B-3 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:
54
(1) to the Class A Certificates, the
lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount
allocated among those classes in the following
order of priority:
(x) sequentially, to the Class A-1
and Class A-2 Certificates, in that order,
until their Class Certificate Balances
have been reduced to zero; and
(y) concurrently, to the Class
A-3 and Class A-4 Certificates, pro rata,
until their respective Class Certificate
Balances have been reduced to zero;
(2) to the Class M-1 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above and (y) the Class M-1 Principal
Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(3) to the Class M-2 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above and to the Class M-1 Certificates
in clause (ii)(B)(2) above and (y) the Class M-2
Principal Distribution Amount, until their Class
Certificate Balance has been reduced to zero;
(4) to the Class M-3 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above and to the Class M-2
Certificates in clause (ii)(B)(3) above and (y) the
Class M-3 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to
zero;
(5) to the Class M-4 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above and to the
Class M-3 Certificates in clause (ii)(B)(4) above
and (y) the Class M-4 Principal Distribution
Amount, until their Class Certificate Balance has
been reduced to zero;
(6) to the Class M-5 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above, to the
Class M-3 Certificates in clause (ii)(B)(4) above
and to the Class M-4 Certificates in clause
(ii)(B)(5) above and (y)
55
the Class M-5 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to
zero;
(7) to the Class B-1 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above, to the
Class M-3 Certificates in clause (ii)(B)(4) above,
to the Class M-4 Certificates in clause (ii)(B)(5)
above, to the Class M-5 Certificates in clause
(ii)(B)(6) above and (y) the Class B-1 Principal
Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(8) to the Class B-2 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above, to the
Class M-3 Certificates in clause (ii)(B)(4) above,
to the Class M-4 Certificates in clause (ii)(B)(5)
above, to the Class M-5 Certificates in clause
(ii)(B)(6) above, to the Class B-1 Certificates in
clause (ii)(B)(7) above and (y) the Class B-2
Principal Distribution Amount, until their Class
Certificate Balance has been reduced to zero; and
(9) to the Class B-3 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount
distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above, to the
Class M-3 Certificates in clause (ii)(B)(4) above,
to the Class M-4 Certificates in clause (ii)(B)(5)
above, to the Class M-5 Certificates in clause
(ii)(B)(6) above, to the Class B-1 Certificates in
clause (ii)(B)(7) above and to the Class B-2
Certificates in clause (ii)(B)(8) above and (y) the
Class B-3 Principal Distribution Amount, until
their Class Certificate Balance has been reduced to
zero;
(iii) from the Available Funds remaining after the
distributions in clauses (a)(i) and (a)(ii) above, the following
amounts shall be distributed in the following order of priority:
(A) if and to the extent that the Interest
Remittance Amounts distributed pursuant to clauses (a)(i)
and (a)(ii) above were insufficient to make full
distributions in respect of interest set forth in such
clauses, (x) to the holders of each Class of Class A
Certificates, any unpaid Accrued Certificate Interest and
any Unpaid Interest Amounts, pro rata among such Classes
based on their respective entitlement to those amounts, and
then (y) to the holders of each Class of the Class M and
Class B Certificates, any unpaid Accrued Certificate
Interest, in the order of priority for such classes set
forth in clause (i) above;
56
(B) to the holders of the Class M-1 Certificates,
any Unpaid Interest Amount for such Class;
(C) to the holders of the Class M-2 Certificates,
any Unpaid Interest Amount for such Class;
(D) to the holders of the Class M-3 Certificates,
any Unpaid Interest Amount for such Class;
(E) to the holders of the Class M-4 Certificates,
any Unpaid Interest Amount for such Class;
(F) to the holders of the Class M-5 Certificates,
any Unpaid Interest Amount for such Class;
(G) to the holders of the Class B-1 Certificates,
any Unpaid Interest Amount for such Class;
(H) to the holders of the Class B-2 Certificates,
any Unpaid Interest Amount for such Class;
(I) to the holders of the Class B-3 Certificates,
any Unpaid Interest Amount for such Class;
(J) to the Excess Reserve Fund Account, the amount
of any Basis Risk Payment (without regard to Net Swap
Receipt Amounts) for such Distribution Date;
(K) 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;
(L) to the Supplemental Interest Trust, the amount
of any Defaulted Swap Termination Payment owed to the Swap
Provider;
(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); and
57
(N) to the holders of the Class R-1 and Class R-2
Certificates, pro rata, any remaining amount.
(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
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class B-2
and Class B-3 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, until their respective Class Principal
Balances have been returned to zero, with the exception that if a Sequential
Trigger Event is in effect, principal distributions to the Class A-3 and Class
A-4 Certificates will be allocated (x) first to the Class A-3 Certificates,
until its Class Certificate Balance has been reduced to zero and (y) then to
the Class A-4 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 pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and Class B
Certificates, based on the Accrued Certificate Interest Distribution Amount to
which such Classes would otherwise be entitled on such Distribution Date.
(e) Upon any exercise of the purchase option set forth in
Section 11.01(a), the Securities Administrator shall distribute to the holders
of the Class R-2 Certificates any amounts required to be distributed on the
Class R-2 Certificates pursuant to Section 11.02.
Section 4.02 Monthly Statements to Certificateholders. (a)
Not later than each Distribution Date, the Securities Administrator shall make
available to each Certificateholder, the Depositor, the Trustee and each
Rating Agency a statement based 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 and the Supplemental Interest
Trust 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
58
principal and interest, including any Basis Risk Carry Forward Amount
not covered by amounts in the Excess Reserve Fund Account and the
Supplemental Interest Trust;
(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, in each case, identifying the general
purpose of such fees;
(vii) the amount of the expenses and fees paid to the Master
Servicer or Securities Administrator with respect to such
Distribution Date;;
(viii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on
such Distribution Date and the aggregate amount of Advances reported
by the Servicers (and the Master Servicer, the Trustee as successor
master servicer and any other successor master servicer, if
applicable) as outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(x) the number and aggregate outstanding principal balances
of Mortgage Loans (1) as to which the scheduled payment is delinquent
31 to 60 days, 61 to 90 days and 91 or more days, (2) that have
become REO property, (3) that are in foreclosure and (4) that are in
bankruptcy, in each case as of the close of business on the last
business day of the immediately preceding month;
(xi) for each of the preceding 12 calendar months, or all
calendar months since the related Cut-off date, whichever is less,
the aggregate dollar amount of the scheduled payments (A) due on all
Outstanding Mortgage Loans on each of the Due Dates in each such
month and (B) delinquent 60 days or more on each of the Due Dates in
each such month;
(xii) with respect to all Mortgage Loans that became REO
properties during the preceding calendar month, the aggregate number
of such mortgage loans and the aggregate Stated Principal Balance of
such Mortgage Loans as of the close of business on the Determination
Date preceding such Distribution Date and the date of acquisition of
the REO properties;
(xiii) 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;
59
(xiv) 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);
(xv) the amount on deposit in the Excess Reserve Fund
Account (after giving effect to distributions on such Distribution
Date);
(xvi) 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;
(xvii) 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;
(xviii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xix) the Prepayment Premiums collected by or paid by the
Servicers;
(xx) 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;
(xxi) the amount distributed on the Class X and Class P
Certificates;
(xxii) the amount of any Subsequent Recoveries for such
Distribution Date;
(xxiii) the Record Date for such Distribution Date;
(xxiv) updated Mortgage Loan information, such as weighted
average interest rate, and weighted average remaining term;
(xxv) material breaches of Mortgage Loan representations of
warranties of which the Trustee, Master Servicer or any Servicer has
knowledge or received written notice; and
(xxvi) material breaches of any covenants under this
Agreement of which the Trustee, Master Servicer or any Servicer has
received written notice.
(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 0-000-000-0000. The Securities
Administrator will also make a paper copy of the above statement available
upon request.
60
(c) Upon request, within a reasonable period of time after
the end of each calendar year, the Securities Administrator shall cause to be
furnished to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in clauses
(a)(i), (a)(ii), (a)(iii) and (a)(vii) of this Section 4.02 aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
Section 4.03 Allocation of Applied Realized Loss Amounts.
Any Applied Realized Loss Amounts will be allocated to the most junior Class
of Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event, Applied Realized Loss Amounts are
allocated to any Class of Certificates, their Class Certificate Balance shall
be reduced by the amount so allocated and no funds shall be distributed with
respect to the written down amounts or with respect to interest or Basis Risk
Carry Forward Amounts on the written down amounts on that Distribution Date or
any future Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance
of each Class of Subordinated Certificates that has been previously reduced by
Applied Realized Loss Amounts will be increased, in the order of seniority, by
the amount of the Subsequent Recoveries (but not in excess of the Applied
Realized Loss Amount allocated to the applicable Class of Subordinated
Certificates).
Section 4.04 Certain Matters Relating to the Determination
of LIBOR. LIBOR shall be calculated by the Securities Administrator in
accordance with the definition of "LIBOR." Until all of the LIBOR Certificates
are paid in full, the Securities Administrator will at all times retain at
least four Reference Banks for the purpose of determining LIBOR with respect
to each LIBOR Determination Date. The Securities Administrator initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Securities Administrator
and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the
Securities Administrator should terminate its appointment as Reference Bank,
the Securities Administrator shall promptly appoint or cause to be appointed
another Reference Bank (after consultation with the Depositor). The Securities
Administrator shall have no liability or responsibility to any Person for (i)
the selection of any Reference Bank for purposes of determining LIBOR or (ii)
any inability to 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
61
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Securities Administrator shall (in the absence
of manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
Section 4.05 Supplemental Interest Trust. On the Closing
Date, the Securities Administrator on behalf of the Trustee shall establish
and maintain a separate non-interest bearing trust (the "Supplemental Interest
Trust") to which the Trustee will transfer and assign the Interest Rate Swap
Agreement. The Supplemental Interest Trust shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not
be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net
Swap Payment Amounts owed to the Swap Provider and Net Swap Receipt Amounts
for that Distribution Date will be deposited into the Supplemental Interest
Trust. Funds in the Supplemental Interest Trust will be distributed in the
following order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap
Payment Amounts and (y) any Swap Termination Payment, other than a
Defaulted Swap Termination Payment, to the Swap Provider, if any,
owed for that Distribution Date;
(ii) to the Certificateholders, to pay Accrued Certificate
Interest and, if applicable, any Unpaid Interest Amounts as described
in clause (i) of "--Priorities of Distributions" above, to the extent
unpaid from other Available Funds;
(iii) to the Certificateholders, to pay principal as
described in clause (ii)(A) and clause (ii)(B) of "--Priorities of
Distributions" above, but only to the extent necessary to maintain
the Overcollateralized Amount at the Specified Overcollateralized
Amount, after giving effect to payments and distributions from other
Available Funds;
(iv) to the Certificateholders, to pay Unpaid Interest
Amounts and Basis Risk Carry Forward Amounts as described in clause
(iii) of "--Priorities of Distributions" above, to the extent unpaid
from other Available Funds (including funds on deposit in the Excess
Reserve Fund Account);
(v) to the Swap Provider, any Defaulted Swap Termination
Payment owed to the Swap Provider for that Distribution Date; and
(vi) to the holders of the Class X Certificates, any
remaining amounts.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities
set forth in this Section 4.05.
62
The Securities Administrator shall account for the
Supplemental Interest Trust as an asset of a grantor trust under subpart E,
Part I of subchapter J of the Code and not as an asset of any Trust REMIC
created pursuant to this Agreement. The beneficial owners of the Supplemental
Interest Trust are the Class X Certificateholders. For federal income tax
purposes, Net Swap Payment Amounts and Swap Termination Payments payable to
the Swap Provider shall be deemed to be paid to the Supplemental Interest
Trust first, from the Upper-Tier REMIC, by the Holder of the Class X
Certificates and second, other than any Defaulted Swap Termination Payment,
from the Upper-Tier REMIC by the Holders of the applicable Class or Classes of
Principal Certificates as and to the extent provided in Section 8.14.
Any Basis Risk Carry Forward Amounts (defined solely for
this purpose as any excess of monies received for such Distribution Date over
the REMIC Cap) distributed by the Securities Administrator to the 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 in respect of the Class X Interest and (to the extent remaining
after payments to the Swap Provider) then to the respective Class or Classes
of Principal Certificates. In addition, the Securities Administrator shall
account for the rights of Holders of each Class of Principal Certificates to
receive payments of Basis Risk Carry Forward Amounts (defined solely for this
purpose as any excess of monies received for such Distribution Date over the
REMIC Cap) from the Supplemental Interest Trust (along with Basis Risk Carry
Forward Amounts (defined solely for this purpose as any excess of monies
received for such Distribution Date over the REMIC Cap) payable from the
Excess Reserve Fund Account) as rights in a separate limited recourse interest
rate cap contract written by the Class X Certificateholders in favor of
Holders of each such Class.
The Supplemental Interest Trust shall be an "outside reserve
fund" for federal income tax purposes and will not be an asset of any Trust
REMIC. Furthermore, the Holders of the Class X Certificates shall be the
beneficial owners of the Supplemental Interest Trust for all federal income
tax purposes, and shall be taxable on all income earned thereon.
Section 4.06 Trust's Obligations under the Interest Rate
Swap Agreement; Replacement and Termination of the Interest Rate Swap
Agreement.
(a) Upon the Trustee obtaining actual knowledge of the
rating of the Swap Provider falling below the Required Hedge Counterparty
Rating (as defined in the Interest Rate Swap Agreement), the Trustee, acting
at the written direction of the Depositor, shall attempt to negotiate an ISDA
Credit Support Annex (as defined in the Interest Rate Swap Agreement with the
Swap Provider that meets the terms of the Interest Rate Swap Agreement. If an
ISDA Credit Support Annex is negotiated, the Trustee, acting at the written
direction of the Depositor, shall set up an account in accordance with Section
3.01(c) to hold cash or other eligible investments pledged under such ISDA
Credit Support Annex. Any cash or other eligible investments pledged under an
ISDA Credit Support Annex shall not be part of the Distribution Account, the
Excess Reserve Fund Account or the Supplemental Interest Trust unless they are
applied in accordance with such ISDA Credit Support Annex to make a payment
due to the Trust pursuant to the Interest Rate Swap Agreement.
63
(b) Upon the Trustee obtaining actual knowledge of an Event
of Default (as defined in the Interest Rate Swap Agreement) or Termination
Event (as defined in the Interest Rate Swap Agreement) for which the Trust has
the right to designate an Early Termination Date (as defined in the Interest
Rate Swap Agreement), the Trustee will act at the written direction of the
Depositor as to whether it will designate an Early Termination Date; provided,
however, that the Trust shall provide written notice to each Rating Agency
following the Event of Default or Termination Event. Upon the termination of
the Interest Rate Swap Agreement under the circumstances contemplated by this
Section 4.06(b), the Trust shall use its reasonable best efforts to enforce
the rights of the Trust and the Trustee thereunder as may be permitted by the
terms of the Interest Rate Swap Agreement and consistent with the terms
hereof, and shall apply the proceeds of any such efforts to enter into a
replacement interest rate swap agreement with another swap provider. To the
extent such replacement interest rate swap agreement can be entered into, any
termination payments received by the Trust in respect of the terminated
interest rate swap agreement shall be used, to the extent necessary, by the
Trust for the purpose of entering into such replacement interest rate swap
agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Depositor hereby directs the Securities Administrator to
transfer the Class X and Class P Certificates in the name of the NIM Trustee
or such other name or names as the Depositor shall request, and to deliver the
Class X and Class P Certificates to the NIM Trustee, or to such other person
or persons as the Depositor shall request.
Subject to Section 11.02 respecting the final distribution
on the Certificates, on each Distribution Date the Securities Administrator
shall make distributions to each Certificateholder of record on the preceding
Record Date either (x) by wire transfer in immediately available funds to the
account of such holder at a bank or other entity having appropriate facilities
therefor as directed by that Certificateholder by written wire instructions
provided to the Securities Administrator or (y), in the event that no wire
instructions are provided to the Securities Administrator, by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Securities Administrator by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time such signatures were affixed, authorized to sign on behalf
of the Securities Administrator shall bind the Securities Administrator,
notwithstanding that such individuals or any of them have ceased to be so
64
authorized prior to the authentication and delivery of any such Certificates
or did not hold such office at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless authenticated by the Securities Administrator by manual
signature, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer
and Exchange of Certificates. (a) The Securities Administrator shall maintain,
or cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein
provided. Upon surrender for registration of transfer of any Certificate, the
Securities Administrator shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
holder thereof or his attorney duly authorized in writing. 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 Trustee and 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
65
Depositor or any Affiliate of the Depositor, in the event that a transfer of a
Private Certificate which is a Physical Certificate is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "Transferor Certificate") and either (i) there shall
be delivered to the Securities Administrator a letter in substantially the
form of Exhibit I (the "Rule 144A Letter") or (ii) there shall be delivered to
the Securities Administrator at the expense of the transferor an Opinion of
Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is
a Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer will be deemed to have made as of the transfer date each of the
certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Letter in respect
of such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor and each Servicer against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
Except with respect to (i) the initial transfer of the Class
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
66
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 Trustee, the Securities
Administrator and the Depositor, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor, the Securities Administrator or the
Trust Fund, addressed to the Securities Administrator and the Depositor, to
the effect that the purchase and holding of such ERISA-Restricted Certificate
will not constitute or result in a non-exempt prohibited transaction within
the meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee, the Depositor, the Master Servicer, any other servicer or
the Securities Administrator to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is
not a Private Certificate or a Residual Certificate, in the event the
representation letter referred to in the preceding sentence is not furnished,
such representation shall be deemed to have been made to the Securities
Administrator by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. In the event that such representation is
violated, or any attempt is made to transfer to a plan or arrangement subject
to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a plan
subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, without such
Opinion of Counsel, such attempted transfer or acquisition shall be void and
of no effect.
During the period the Supplemental Interest Trust is in
effect, no transfer of a Certificate shall be made unless the Securities
Administrator shall have received either a representation from the transferee
of such Certificate acceptable to and in form and substance satisfactory to
the Securities Administrator to the effect that such transferee is not a Plan,
or (ii) a representation that the purchase and holding of the Certificate
satisfy the requirements for exemptive relief under PTCE 84-14, PTCE 90-1,
PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or in the case of a
Plan subject to Similar Law, will not constitute a non-exempt violation of
such Similar Law. In the event such a representation letter is not delivered,
one of the foregoing representations, as appropriate, shall be deemed to have
been made by the transferee's (including an initial acquirer's) acceptance of
the Certificate. In the event that such representation is violated, such
transfer or acquisition shall be void and of no effect.
Neither the Class R nor the Class RC Certificates may be
sold to any employee benefit plan subject to Title I of ERISA, any plan
subject to Section 4975 of the Code, or any plan subject to any Similar Law or
any person investing on behalf of or with plan assets of such plan.
Neither the Securities Administrator nor the Trustee shall
have any duty to monitor transfers of beneficial interests in any Book-Entry
Certificate, and neither the Securities Administrator nor the Trustee shall 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)
67
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
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
68
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Securities
Administrator, all information necessary to compute any tax imposed
under Section 860E(e) of the Code as a result of a Transfer of an
Ownership Interest in a Residual Certificate to any Holder who is not
a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable
portions of the legend on a Residual Certificate may be deleted) with respect
to Transfers occurring after delivery to the Securities Administrator of an
Opinion of Counsel, which Opinion of Counsel shall not be an expense of the
Trust Fund, the Trustee, or the Securities Administrator, to the effect that
the elimination of such restrictions will not cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Securities Administrator except to another Depository; (ii)
the Depository shall maintain book entry records with respect to the
Certificate Owners and with respect to ownership and transfers of such
Book-Entry Certificates; (iii) ownership and transfers of registration of the
Book-Entry Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iv) the Depository may
collect its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee and the Securities Administrator shall deal with
the Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and
requests and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different
Certificate Owners; and (vi) the Securities Administrator may rely and shall
be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and persons shown on
the books of such indirect participating firms as direct or indirect
Certificate Owners.
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
69
Certificates of Certificate Owners it represents or of brokerage firms for
which it acts as agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the
Securities Administrator in writing that the Depository is no longer willing
or able to properly discharge its responsibilities as Depository, and (ii) the
Securities Administrator or the Depositor is unable to locate a qualified
successor, or (y) the Depositor notifies the Depository of its intent to
terminate the book entry system through the Depository, the Depository
Participants holding beneficial interests in the Book-Entry Certificates agree
to initiate such termination, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. Neither the Depositor nor the Securities
Administrator shall be liable for any delay in delivery of such instruction
and each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder; provided, that
the Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Securities Administrator in accordance with its customary
practice. No service charge shall be made for any registration of transfer or
exchange of Private Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the
Securities Administrator, or the Securities Administrator receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to the Depositor, the Trustee and the Securities
Administrator such security or indemnity as may be required by them to hold
each of them harmless, then, in the absence of notice to the Securities
Administrator that such Certificate has been acquired by a protected
purchaser, the Securities Administrator shall execute, authenticate 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
70
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 Business Days after the receipt of such
request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Securities Administrator, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree
that the Securities Administrator shall not be held accountable by reason of
the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where Certificates may be surrendered for registration
of transfer or exchange. The Securities Administrator initially designates its
office for such purposes, located at 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx,
Xxxxx 00000; Attention: Worldwide Securities Services, GSAA 2006-1. 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
71
the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor may be merged or
consolidated, or any Person resulting from any merger or consolidation to
which the Depositor shall be a party, or any person succeeding to the business
of the Depositor, shall be the successor of the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and
Others. Neither the Depositor nor any of its directors, officers, employees or
agents shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor or any such Person against any
breach of representations or warranties made by it herein or protect the
Depositor or any such Person from any liability which would otherwise be
imposed by reasons of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor and any director, officer, employee or
agent of the Depositor may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor and any director, officer, employee
or agent of the Depositor shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with
any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion
undertake any such action (or direct the Trustee to undertake such actions for
the benefit of the Certificateholders) that it may deem necessary or desirable
in respect of this Agreement and the rights and duties of the parties hereto
and interests of the Trustee and the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, the
Depositor shall be entitled to be reimbursed therefor out of the Distribution
Account.
Section 6.04 Servicing Compliance Review. Promptly upon
receipt from 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
72
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 receipt by such Servicer of such written
notice of termination, all authority and power of such Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Master Servicer. The Master Servicer is hereby authorized and
empowered to execute and deliver, on behalf of such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise.
Section 7.02 Master Servicer to Act; Appointment of
Successor. Within 120 days after the Master Servicer gives, and the applicable
Servicer receives a notice of termination pursuant to Section 7.01, the Master
Servicer shall, subject to and to the extent provided in Section 7.03, and
subject to the rights of the Master Servicer to appoint a successor Servicer
pursuant to this Section 7.02, be the successor to the 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
73
Mortgage Loans, respectively) such Servicing Fee and the income on investments
or gain related to the Collection Account.
Notwithstanding the foregoing, the Master Servicer may, if
it shall be unwilling to so act, or shall, if it is prohibited by applicable
law from making Monthly Advances and Servicing Advances pursuant to the
applicable Servicing Agreement, or if it is otherwise unable to so act, or, at
the written request of Certificateholders entitled to a majority of the Voting
Rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each
Rating Agency, as the successor to such Servicer under the 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 Xxxxxx Xxx and Freddie Mac approved seller/servicer in
good standing, which has a net worth of at least $25,000,000, which is willing
to service the Mortgage Loans and which executes and delivers to the Depositor
and the Master Servicer an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such terminated Servicer,
(other than liabilities of such terminated Servicer incurred prior to
termination of such Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided, that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced, as a
result of such assignment and delegation. Pending appointment of a successor
to a Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to this Section 7.02, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it, the
Depositor and such successor shall agree; provided, however, that no such
compensation shall be in excess of the 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
74
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 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
75
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 Custodial Responsibilities. Each Custodian
shall provide access to the Mortgage Loan documents in possession of the
Custodian regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request (but in no event less than 48 hours) and
during normal business hours at the office of the Custodian. Each Custodian
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 person requesting such access.
Upon receipt of a written request by a Servicer in a form
acceptable to the applicable Custodian, the Custodian shall release within
five Business Days the related Mortgage File to the Servicer and the Trustee
shall execute and deliver to the 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.
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon
and shall be protected in acting or refraining from acting upon any
resolution, Officer's Certificate, Opinion of Counsel, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by the proper party
or parties and the Trustee and the Custodians shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) 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;
76
(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 adequate indemnity 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; and
(i) the Trustee shall be under no obligation to exercise any
of the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders, pursuant to
this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or thereby.
(j) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
77
(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 is authorized and directed to execute the
Interest Rate Swap Agreement.
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.
The Securities Administrator executes the Certificates not
in its individual capacity but solely as Trustee 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 Trustee on behalf of the Trust Fund in the Certificates is
made and intended not as a personal undertaking or agreement by the Trustee
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
78
harmless the Trustee and any director, officer, employee, or agent of the
Trustee against any loss, liability, or expense (including reasonable
attorneys' fees) incurred in connection with any claim or legal action
relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under
this Agreement,
other than any loss, liability, or expense (i) resulting from any breach of
any Servicer's obligations in connection with a 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 as otherwise agreed upon in writing by the Depositor and the
Trustee, and except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misfeasance, the Trust Fund shall
pay or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement
with respect to:
(A) the reasonable compensation, expenses, and
disbursements of its counsel not associated with the closing
of the issuance of the Certificates, and
(B) the reasonable compensation, expenses, and
disbursements of any accountant, engineer, or appraiser that
is not regularly employed by the Trustee, to the extent that
the Trustee must engage them to perform services under this
Agreement.
Except as otherwise provided in this Agreement, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee under this Agreement or for any other expenses.
Section 8.07 Eligibility Requirements for the Trustee. The
Trustee hereunder shall at all times be a corporation, banking association or
other association organized and doing business under the laws of a state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating which would not cause any of the Rating Agencies to reduce 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
79
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 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 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.
At least 15 calendar days prior to the effective date of
such resignation, the Trustee shall provide written notice to the Depositor of
any successor pursuant to this Section 8.08.
If at any time the (i) 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 Article XIII and such failure is not remedied within the
lesser of 10 calendar days or such period in which the applicable Exchange Act
Report can be filed timely (without taking into account any extensions), then,
in the case of clauses (i) through (iii), the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in duplicate, one copy
of which shall be delivered to the Trustee and one copy to the successor
trustee.
The Holders of Certificates entitled to a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in duplicate, signed by such
Holders or their attorneys in fact duly authorized, one complete set of which
shall be delivered to the Trustee so removed and one complete set to the
successor so appointed. The successor trustee shall notify each Rating Agency
of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.09.
80
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 10 days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodians. Any corporation into which the Trustee or the Custodians, as
applicable, may be merged or converted or with which it may be consolidated or
any corporation resulting from any merger, conversion or consolidation to
which the Trustee or the Custodians, as applicable, shall be a party, or any
corporation succeeding to the business of the Trustee or the Custodians, as
applicable, shall be the successor of the Trustee or the Custodians, as
applicable, hereunder; provided, that such corporation shall be eligible under
Section 8.07 without the execution or filing of any paper or further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations,
rights and trusts as the Trustee may consider appropriate. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.09 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.09.
81
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 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
82
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 days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities and shall also furnish to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that
the holders of the Certificates may contact for tax information relating
thereto, together with such additional information as may be required by such
Form, and update such information at the time or times in the manner required
by the Code;
(c) make an election that each Trust REMIC be treated as a
REMIC on the federal tax return for its first taxable year (and, if necessary,
under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any
original issue discount using the prepayment assumption (as described in the
Prospectus Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee (a "Non Permitted Transferee"), or an agent (including a
broker, nominee or other middleman) of a Non Permitted Transferee, or a pass
through entity in which a Non Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status of each Trust REMIC as a REMIC under
the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of any
Trust REMIC created hereunder;
83
(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
R-1 and Class R-2 Certificates shall act as Tax Matters Person for the
Lower-Tier REMIC, the Middle-Tier REMIC and the Upper-Tier REMIC,
respectively, within the meaning of Treasury Regulations Section 1.860F-4(d),
and the Securities Administrator is hereby designated as agent of such
Certificateholder for such purpose (or if the Securities Administrator is not
so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall,
as and when necessary and appropriate, represent each Trust REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of each Trust REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of any Trust REMIC, and otherwise act on behalf of each Trust
REMIC in relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and
Supplemental Interest Trust (subject to the obligation to pay Basis Risk Carry
Forward Amounts) and the rights of the 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
84
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 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 and the
Supplemental Interest Trust. Thereafter, the Depositor shall provide to the
Securities Administrator promptly upon written request therefor any additional
information or data that the Securities Administrator may, from time to time,
reasonably request to enable the Securities Administrator to perform its
duties under this Agreement. The Depositor hereby indemnifies the Securities
Administrator for any losses, liabilities, damages, claims, or expenses of the
Securities Administrator arising from any errors or miscalculations of the
Securities Administrator that result from any failure of the Depositor to
provide, or to cause to be provided, accurate information or data to the
Securities Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any
Trust REMIC as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Lower-Tier REMIC as defined in Section
860G(c) of the Code, on any contribution to any Trust REMIC after the Startup
Day pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Master
Servicer, the Trustee or the Securities Administrator, as applicable if such
tax arises out of or results from negligence of the Master Servicer, the
Trustee or the Securities Administrator, as applicable in the performance of
any of its obligations under this Agreement, (ii) a Servicer, in the case of
any such minimum tax, and otherwise if such tax arises out of or results from
a breach by the Servicer of any of its obligations under the 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
85
Day without receipt of an Opinion of Counsel that such action described in
clause (a) or (b) will not result in the imposition of a tax on any Trust
REMIC or cause any Trust REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
Section 8.13 [Reserved]
Section 8.14 Tax Classification of the Excess Reserve Fund
Account and the Interest Rate Swap Agreement. For federal income tax purposes,
the Securities Administrator shall treat the Excess Reserve Fund Account and
the Interest Rate Swap Agreement as beneficially owned by the holder of the
Class X Certificates and shall treat such portion of the Trust Fund as a
grantor trust under subpart E, Part I of subchapter J of the Code. The
Securities Administrator shall treat the rights that each Class of Principal
Certificates has to receive payments of Basis Risk Carry Forward Amounts from
the Excess Reserve Fund Account and the Supplemental Interest Trust 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 four components--a regular interest
in the Upper-Tier REMIC, an interest in the Interest Rate Swap Agreement, the
Supplemental Interest Trust and the Excess Reserve Fund Account subject to the
obligation to pay Basis Risk Xxxx Forward Amounts, Net Swap Payment Amounts
and Swap Termination Payments. The Securities Administrator shall allocate the
issue price for a Class of Certificates among these components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of
each Holder of a 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.
Holders of Principal Certificates shall also be treated as
having agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payment Amounts and Swap Termination Payments (other that Defaulted Swap
Termination Payments) over (ii) the sum of amounts payable on the Class X
Interest as provided in the Preliminary Statement hereof (such excess, a
"Class IO Shortfall"), first from interest and then from principal
distributable on the Principal Certificates. A Class IO Shortfall payable from
interest collections shall be allocated pro rata among such Principal
Certificates based on the amount of interest otherwise payable to such Class
of Principal Certificates, and a Class IO Shortfall payable from principal
collections shall be allocated in reverse sequential order beginning with the
most subordinate Class of Principal Certificates then outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Principal
Certificates in respect of the corresponding Upper-Tier Regular Interest and
as having been paid by such Holders to the Holders of the Class X Certificates
through the Supplemental Interest Trust.
86
Section 8.15 Custodial Responsibilities. Each of the
Custodians shall provide access to the Mortgage Loan documents in possession
of such Custodian regarding the related Mortgage Loans and REO Property and
the servicing thereof to the Trustee, the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon two (2) Business Days prior written request and during normal
business hours at the office of such Custodian; provided, however, that,
unless otherwise required by law or any regulatory or administrative agency
(including the FDIC), such Custodian shall not be required to provide access
to such records and documentation if the provision thereof would violate the
legal right to privacy of any Mortgagor. Each of the Custodians shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at the expense of
the Trust that covers such Custodians actual costs.
Upon receipt of a Request for Release by a Servicer, the
applicable Custodian shall release within five 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 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 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 Xxxxxxxxx'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 Servicing
Agreement for which the Responsible Party has performed its obligation to
indemnify such Custodian pursuant to such Servicing Agreement, or (iii)
incurred because of willful
87
misfeasance, bad faith, or negligence in the performance of any of such
Custodian's duties under this Agreement.
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. In no event, however, will the
Master Servicer be responsible for supervising, monitoring, or overseeing the
administration and the servicing by any Servicer of any defaulted Mortgage
Loans and any related REO Properties.
If (i) a Servicer reports a delinquency on a monthly report
and (ii) such Servicer, by 11 a.m. (New York Time) on the Business Day
preceding the related Remittance Date, neither makes a Monthly Advance nor
provides the Securities Administrator and the Master Servicer with a report
certifying that such a Monthly Advance would be a Nonrecoverable Monthly
Advance, then the Master Servicer shall deposit in the Distribution Account
not later than the Business Day immediately preceding the related Distribution
Date a Monthly Advance in an amount equal to the difference between (x) with
respect to each Monthly Payment due on a Mortgage Loan that is delinquent
(other than Relief Act Interest Shortfalls) and for which the related Servicer
was required to make a Monthly Advance pursuant to the related Servicing
Agreement and (y) amounts deposited in the Collection Account to be used for
Monthly Advances with respect to such Mortgage Loan, except to the extent the
Master Servicer determines any such Monthly Advance to be a Nonrecoverable
Monthly Advance or Nonrecoverable Servicing Advance. Subject to the foregoing,
the Master Servicer shall continue to make such Monthly Advances for so long
as the related Servicer is required to do so under the related Servicing
Agreement. If applicable, on the Business Day immediately preceding the
Distribution Date, the Master Servicer shall deliver an Officer's Certificate
to the Trustee stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount and detailing the reason(s) it deems the Monthly
Advance to be a Nonrecoverable Monthly Advance. Any amounts deposited by the
Master Servicer pursuant to this Section 9.01 shall be net of the Servicing
Fee for the related Mortgage Loans.
(a) The Master Servicer shall pay the costs of monitoring
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
88
reimbursement therefor initially from the terminated Servicer. In the event
the full costs associated with the transition of servicing responsibilities to
the Master Servicer or to a successor servicer are not paid for by the
predecessor or successor Servicer (provided such successor Servicer is not the
Master Servicer), the Master Servicer may be reimbursed therefor by the Trust
for out-of-pocket costs incurred by the Master Servicer associated with any
such transfer of servicing duties from a Servicer to the Master Servicer or
any other successor servicer.
(b) If the Master Servicer assumes the servicing with
respect to any of the Mortgage Loans, it will not assume liability for the
representations and warranties of any Servicer it replaces or for any errors
or omissions of such Servicer.
If the Depositor or an affiliate of the Depositor, is the
owner of the servicing rights for a servicer and the Depositor chooses to
terminate such servicer with or without cause and sell those servicing rights
to a successor servicer, then the Depositor must provide 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 Xxxxxx Xxx
or Freddie Mac and the Depositor must obtain prior written consent from the
Rating Agencies that the transfer of the servicing of the mortgage loans will
not result in a downgrade, qualification or withdrawal of the then current
ratings of the Certificates. The costs of such transfer (including any costs
of the Master Servicer) are to be borne by the Depositor.
Neither the Depositor nor the Securities Administrator shall
consent to the assignment by 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.
(a) The Master Servicer, at its expense, shall maintain in
effect a blanket fidelity bond and an errors and omissions insurance policy,
affording coverage with respect to all directors, officers, directors,
employees and other Persons acting on such Master Xxxxxxxx'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
89
execution, delivery and performance of which have been duly
authorized by all necessary corporate action on the part of the
Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative
decree or order to which it is subject or (C) constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer
is a party or by which it is bound or to which any of its assets are
subject, which violation, default or breach would materially and
adversely affect the Master Servicer's ability to perform its
obligations under this Agreement;
(iii) this Agreement constitutes, assuming due
authorization, execution and delivery hereof by the other respective
parties hereto, a legal, valid and binding 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 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.
90
(b) Section 11.01(a) of this Agreement and Section 7 of the
applicable Step 2 Assignment Agreements provide that the Depositor, at its
option, may request the Master Servicer 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) at the Termination Price
(the Master Servicer shall accommodate such request at its sole discretion).
The Depositor hereby represents, covenants and agrees with any applicable NIM
Issuer that it will not exercise its right to request the Master Servicer to
solicit bids in a commercially reasonable manner, on or after the Optional
Termination Date, for the purchase of all of the Mortgage Loans (and REO
Properties) unless it has received (x) written notification from the NIM
Trustee that all of the outstanding notes issued under the applicable
indenture have been paid in full or (y) an Officer's Certificate of the NIM
Issuer pursuant to the applicable section of the relevant indenture to the
effect that all conditions precedent to the satisfaction and discharge of the
indenture have been complied with.
(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
91
to the Master Servicer and the Trustee by the holders of Certificates
evidencing at least 25% of the Voting Rights; provided that the thirty (30)
day cure period shall not apply so long as the Depositor is required to file
Exchange Act Reports with respect to the Trust Fund, the failure to comply
with the requirements set forth in Article XIII, for which the grace period
shall not exceed the lesser of 10 calendar days or such period in which the
applicable Exchange Act Report can be filed timely (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 Trustee, 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
92
Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
Upon receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer under this Agreement, shall
pass to and be vested in any successor master servicer appointed hereunder
which accepts such appointments. Upon written request from the Trustee or the
Depositor, the Master Servicer shall prepare, execute and deliver to the
successor entity designated by the Trustee any and all documents and other
instruments related to the performance of its duties hereunder as the Master
Servicer and, place in such successor's possession all such documents with
respect to the master servicing of the Mortgage Loans and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, at the Master Servicer's sole expense. The
Master Servicer shall cooperate with the Trustee and such successor master
servicer in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor master servicer for administration by it of all
cash amounts which shall at the time be credited to the Distribution Account
or are thereafter received with respect to the Mortgage Loans.
Upon the occurrence of a Master Servicer Event of Default,
the Securities Administrator shall provide the Depositor in writing and in
form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a successor master
servicer in the event the Trustee should succeed to the duties of the Master
Servicer as set forth herein.
Section 9.05 Waiver of Default. By a written notice, the
Trustee may with the consent of a Holders of Certificates evidencing at least
51% of the Voting Rights waive any default by the Master Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Master Servicer
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon
termination of the Master Servicer's responsibilities and duties under this
Agreement, the Trustee shall appoint or may petition any court of competent
jurisdiction for the appointment of a successor, which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Master Servicer under this Agreement prior to the termination of the Master
Servicer. Any successor shall be a Xxxxxx Xxx and Freddie Mac approved
servicer in good standing and acceptable to the Depositor and the Rating
Agencies. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree; provided, however,
that in no event shall the master servicer fee paid to such successor master
servicer exceed that paid to the Master Servicer hereunder. In the event that
the Master Servicer's duties, responsibilities and liabilities under this
Agreement are terminated, the Master Servicer shall continue to discharge its
duties and responsibilities hereunder until the effective date of such
termination with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement and shall take
93
no action whatsoever that might impair or prejudice the rights of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.03(a) hereof and the remedies available
to the Trustee under Section 9.03(b) hereof, it being understood and agreed
that the provisions of Section 9.03 hereof shall be applicable to the Master
Servicer notwithstanding any such sale, assignment, resignation or termination
of the Master Servicer or the termination of this Agreement; or (ii) affect
the right of the Master Servicer to receive payment and/or reimbursement of
any amounts accruing to it hereunder prior to the date of termination (or
during any transition period in which the Master Servicer continues to perform
its duties hereunder prior to the date the successor master servicer fully
assumes its duties).
If no successor Master Servicer has accepted its appointment
within 90 days of the time the Trustee receives the resignation of the Master
Servicer, the Trustee shall be the successor Master Servicer in all respects
under this Agreement and shall have all the rights and 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 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 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 entitled to the investment income earned on amounts in the Master
Servicer Account during the Master Servicer Float Period.
94
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 Xxxxxx Xxx 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 Xxxxxx Xxx 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 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.
Section 9.10 Assignment or Delegation of Duties by the
Master Servicer. Except as expressly provided herein, the Master Servicer
shall not assign or transfer any of its rights, benefits or privileges
hereunder to any other Person, or delegate to or subcontract with, or
authorize or appoint any other Person to perform any of the duties, covenants
or obligations to be performed by the Master Servicer; provided, however, that
the Master Servicer shall have the right with the prior written consent of the
Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency
to the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the Master
Servicer hereunder. Notice of such permitted assignment shall be given
promptly by the Master Servicer to the Depositor and the Trustee. If, pursuant
to any provision hereof, the duties of the Master Servicer are transferred to
a successor master servicer, the entire compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer but in no event shall the fee payable to the successor master
servicer exceed that payable to the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be
95
under any liability to the Trustee, 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 the Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Xxxxxxxx agrees to indemnify the Depositor, 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, Securities Administrator, the
Servicer, and the Trustee shall immediately notify the Master Servicer if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans which would entitle the Depositor, the Servicer or the Trustee to
indemnification under this Section 9.12, whereupon the Master Servicer shall
assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.
The Master Servicer agrees to indemnify and hold harmless
the Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer)
of the Master Servicer's obligations, duties or responsibilities under such
agreement.
96
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 Securities Administrator. The
Securities Administrator shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Securities Administrator that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that the Securities
Administrator shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument. If any such instrument is found not to conform in any material
respect to the requirements of this Agreement, the Securities Administrator
shall notify the Certificateholders of such non conforming instrument in the
event the Securities Administrator, after so requesting, does not receive a
satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve
the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
(i) the duties and obligations of the Securities
Administrator shall be determined solely by the express provisions of
this Agreement, the Securities Administrator shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Securities
Administrator and the Securities Administrator may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Securities Administrator and conforming to the requirements of this
Agreement which it believed in good faith to be genuine and to have
been duly executed by the proper authorities respecting any matters
arising hereunder;
97
(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:
(i) the Securities Administrator may request and
conclusively rely upon and shall be fully protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties and the Securities Administrator shall have no responsibility
to ascertain or confirm the genuineness of any signature of any such
party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for
any action or inaction taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing
not less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a
reasonable time to the Securities Administrator of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Securities
Administrator, not reasonably assured to
98
the Securities Administrator by the security afforded to it by the
terms of this Agreement, the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition
to so proceeding. Nothing in this clause (iv) shall derogate from the
obligation of the Master Servicer to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors,
provided that the Master Servicer shall have no liability for
disclosure required by this Agreement;
(v) the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a custodian and the
Securities Administrator shall not be responsible for any misconduct
or negligence on the part of any such agent, attorney or custodian
appointed by the Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to
risk or expend its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise
of any of its rights or powers hereunder if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it, and
none of the provisions contained in this Agreement shall in any event
require the Securities Administrator to perform, or be responsible
for the manner of performance of, any of the obligations of the
Master Servicer under this Agreement;
(vii) the Securities Administrator shall be under no
obligation to exercise any of the trusts, rights or powers vested in
it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall
have offered to the Securities Administrator reasonable security or
indemnity satisfactory to the Securities Administrator against the
costs, expenses and liabilities which may be incurred therein or
thereby;
(viii) the Securities Administrator shall have no obligation
to appear in, prosecute or defend any legal action that is not
incidental to its duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that the
Securities Administrator may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and the
interests of the Trustee, the Securities Administrator and the
Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Securities
Administrator shall be entitled to be reimbursed therefor out of the
Collection Account; and
(ix) in no event shall the Securities Administrator be
liable for special, indirect or consequential damages.
The Securities Administrator shall have no duty (A) to see
to any recording, filing, or depositing of this Agreement or any agreement
referred to herein or any financing statement or continuation statement
evidencing a security interest, or to see to the maintenance of
99
any such recording or filing or depositing or to any rerecording, refiling or
redepositing thereof, (B) to see to the provision of any insurance or (C) to
see to the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to, assessed
or levied against, any part of the Trust Fund other than from funds available
in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates shall be taken as the statements of the Depositor or the
Transferor, as the case may be, and the Securities Administrator assumes no
responsibility for their correctness. The Securities Administrator makes no
representations as to 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 Securities Administrator
Float Period. The Securities Administrator and any director, officer,
employee, agent or "control person" within the meaning of the Securities Act
of 1933, as amended, and the Securities Exchange of 1934, as amended ("Control
Person"), of the Securities Administrator shall be indemnified by the Trust
and held harmless against any loss, liability or expense (including reasonable
attorney's fees) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder, (ii) incurred in connection with
the performance of any of the Securities Administrator's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder or (iii) incurred by reason of any
action of the Securities Administrator taken at the direction of the
Certificateholders, provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the
meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such indemnity
shall survive the termination of this Agreement or the resignation or removal
of the Securities Administrator hereunder. Without limiting the foregoing, and
except for any such expense, disbursement or advance as may arise from the
Securities Administrator's negligence, bad faith or willful misconduct, or
which would not be an "unanticipated expense" within the meaning of the second
preceding sentence, the Securities Administrator shall be reimbursed by the
Trust for all reasonable expenses, disbursements and advances incurred or made
by the Securities Administrator in accordance with any of the provisions of
this Agreement with respect to: (A) the reasonable compensation and the
expenses and disbursements of its counsel not associated
100
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 investment income earned on amounts in the
Distribution Account during the Master Servicer Float Period, (ii) amounts
necessary to reimburse it or the Master Servicer for any previously
unreimbursed Advances and any Advances the Master Servicer deems to be
non-recoverable from the related Mortgage Loan proceeds, (iii) an aggregate
annual amount to indemnify the Master Servicer and itself for amounts due in
accordance with this Agreement, and (iv) any other amounts which it or the
Master Servicer is entitled to receive hereunder for reimbursement,
indemnification or otherwise, including the amount to which the Securities
Administrator is entitled pursuant to Section 3.02 hereof. The Securities
Administrator shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for 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, or the equivalent rating by S&P or
Xxxxx'x. If no successor Securities Administrator shall have been appointed
and shall have accepted appointment within 60 days after the Securities
Administrator ceases to be the Securities Administrator pursuant to Section
10.07, then the Trustee may (but shall not be obligated to) become the
successor Securities Administrator. The Depositor shall appoint a successor to
the Securities Administrator in
101
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 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 60 days before the date specified
in such notice when, subject to Section 10.08, such resignation is to take
effect, and acceptance by a successor Securities Administrator in accordance
with Section 10.08 meeting the qualifications set forth in Section 10.06. If
no successor Securities Administrator meeting such qualifications shall have
been so appointed by the Depositor and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Securities Administrator.
At least 15 calendar days prior to the effective date of
such resignation, the Securities Administrator shall provide written notice to
the Depositor of 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 10 calendar days or such period in which the
applicable Exchange Act Report can be filed timely (without taking into
account any extensions), then, in the case of clauses (i) through (iii), the
Depositor may remove the Securities Administrator and appoint a successor
Securities Administrator by written instrument, in triplicate, one copy of
which instrument shall be delivered to the Securities Administrator so
removed, one copy of which shall be delivered to the Master Servicer and one
copy to the successor Securities Administrator.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Securities Administrator and appoint
a successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator
and appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall
102
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 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 Securities
Administrator. Any corporation or other entity into which the Securities
Administrator may be merged or converted or with which it may be consolidated
or any corporation or other entity resulting from any merger, conversion or
consolidation to which the Securities Administrator shall be a party, or any
corporation or other entity succeeding to the business of the Securities
Administrator, shall be the successor of the Securities Administrator
hereunder, provided that such corporation or other entity shall be eligible
under the provisions of Section 10.06 hereof, without the execution or filing
of any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the
Securities Administrator. Except as expressly provided herein, the Securities
Administrator shall not assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Securities Administrator;
provided, however,
103
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 (and the Master Servicer agreeing to accommodate such
request) to exercise its option to solicit bids in a commercially reasonable
manner for the purchase of the Mortgage Loans and all other property of the
Trust on a non-recourse basis with no representations or warranties of any
nature whatsoever (such event, the "Auction Call") and the sale of all of the
Property of the Trust Fund, on or after the Optional Termination Date, by the
Trustee to the entity with the highest bid received by the Trustee 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 Trustee prior to the Distribution Date following
the month in which such value is determined and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement. In no event
shall the trusts created hereby continue beyond the expiration of 21 years
from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
The proceeds of the sale of such assets of the Trust
pursuant to the Auction Call described in Section 11.01 (other than, with
respect to any mortgage loan and the related property, an amount equal to the
excess, if any, of the amount in Section 11.01(a)(2) over the sum of the
amount in Section 11.01(a)(1) (such excess, the "Fair Market Value Excess"))
will be
104
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 R-2 Certificates.
Except to the extent provided above with regard to
allocating any Fair Market Value Excess to the holders of the Class R-2
Certificates, the proceeds of such a purchase will be treated as a prepayment
of the Mortgage Loans for purposes of distributions to Certificateholders.
Accordingly, the sale of the Mortgage Loans and the REO Properties as a result
of the Depositor requesting the Master Servicer to exercise its option to
solicit bids therefor 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 requests the Master Servicer
to exercise its option to terminate the Trust Fund pursuant to clause (a) of
Section 11.01, by no later than the 10th day of the month of the final
distribution, the Master Servicer, pursuant to the applicable Step 2
Assignment Agreements, shall notify the Trustee and the Securities
Administrator of the final Distribution Date and of the applicable sale price
of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed not later than
the 15th day of the month of such final distribution. Any such Notice of Final
Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender
of Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Securities Administrator
will give such Notice of Final Distribution to each Rating Agency at the time
such Notice of Final Distribution is given to Certificateholders.
In the event the Mortgage Loans (and REO Properties) are
sold pursuant to Section 11.01 and pursuant to the applicable Step 2
Assignment Agreement, the Trustee is required thereunder to remit to the
Securities Administrator the applicable Termination Price on the Remittance
Date immediately preceding the applicable final Distribution Date. Upon such
final deposit with respect to the Trust Fund and the receipt by the Securities
Administrator and the Custodians of a Request for Release therefor, 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 and the Trustee hereunder), in each case on the final Distribution
Date and in the order set forth in Section 4.01, in proportion to their
respective Percentage
105
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 Certificateholder shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second
notice all the applicable Certificates shall not have been surrendered for
cancellation, the Securities Administrator may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the
event the Depositor requests the Master Servicer to exercise its option to
solicit bids in a commercially reasonable manner for the purchase of the
Mortgage Loans as provided in Section 11.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, unless
the Trustee and the Securities Administrator have been supplied with an
Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure to comply with the requirements of this Section 11.03 will not (i)
result in the imposition of taxes on "prohibited transactions" on any Trust
REMIC as defined in Section 860F of the Code, or (ii) cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee
shall sell all of the assets of the Trust Fund to the entity with the highest
bid received pursuant to the Auction Call and, by the next Distribution Date
after such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each of the Trust REMICs; and
(b) The Securities Administrator shall attach a statement to
the final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the 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 to the entity with the highest bid received pursuant to the
Auction Call.
106
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, or (v) to modify, alter, amend, add
to or rescind any of the terms or provisions contained in this Agreement or in
the applicable Servicing Agreement; provided that any action pursuant to
clause (iv) or (v) above shall not, as evidenced by an Opinion of Counsel
(which Opinion of Counsel shall be an expense of the requesting party, but in
any case shall not be an expense of the Trustee, the Master Servicer, the
Securities Administrator, the Custodians or the Trust Fund), 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 66-2/3% 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
107
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 66-2/3%, 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.
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
108
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 effected by the Trustee 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 Trustee.
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
109
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.
(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 or GS Mortgage Securities Corp. or Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Principal Finance
Group/Xxxxxxxxxxx X. Xxxxxxx 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 PHH, PHH
Mortgage Corporation, 0000 Xxxxxxxxxx Xxxx, Xx. Laurel, New Jersey 08054, or
such other address as may be hereafter furnished to the Depositor and the
Securities Administrator by PHH in writing; (c) in the case of Countrywide or
Countrywide Servicing, to Countrywide Home Loans Servicing LP, 4500 Park
Granada, Calabasas, California 91302, Attention: Investor Accounting, or such
other address as may be hereafter furnished to the Depositor and the
Securities Administrator by Countrywide in writing; (d) in the case of
GreenPoint, GreenPoint Mortgage Funding, Inc., 000 Xxxx Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, or such other address as may be
hereafter furnished to the Depositor and the Securities Administrator by
GreenPoint in writing; (e) in the case of SunTrust, 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Xxx Xxxxxxx, or such other address as
may be hereafter furnished to the Depositor and the Securities Administrator
by SunTrust in writing; (f) in the case of the Goldman Conduit,
110
Xxxxxxx Xxxxx Mortgage Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (g)
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; (h) in the case of the
Master Servicer, JPMorgan Chase Bank, National Association, 0000 Xxxx Xxxxxx
Xxxx, Xxxxx 000, Xxx Xxxxxx Xxxx 00000-00000, Attention: GSAA 2006-1, or such
other address as may be hereafter furnished to the Depositor and the
Securities Administrator by the Master Servicer in writing; (i) in the case of
Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attention: Mortgage Custody - GS05SC; (j) in the case of
JPMorgan Chase Bank, National Association, 0000 Xxxxxxxxxx Xxxx., Xxxxx 000,
Xxxxxx, Xxxxx 00000; (k) in the case of the Swap Provider, to the related Swap
Provider addressed to it at the address specified in the Interest Rate Swap
Agreement or at any other address previously furnished in writing to the Trust
by the related Swap Provider; and (m) in the case of each of the Rating
Agencies, the address specified therefor in the definition corresponding to
the name of such Rating Agency. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the Holders thereof.
Section 12.07 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
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,
111
and liabilities to be incurred therein or thereby, and the Trustee, for 60
days after its receipt of such notice, request and offer of indemnity shall
have neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 12.07, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 12.08 Certificates Nonassessable and Fully Paid. It
is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 12.09 Waiver of Jury Trial. EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations.
The Master Servicer, the Trustee, the Securities
Administrator and any 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 any 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 XXXXX-compatible form.
The Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon written request, such further
information, reports and financial statements within its control related to
the Trust Agreement and the Mortgage Loans as the Depositor
112
reasonably deems appropriate to prepare and file all necessary reports with
the Commission. Upon filing with the Commission, the Securities Administrator
shall promptly deliver to the Depositor a copy of any such reports.
Section 13.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Securities
Administrator shall prepare for filing and file within 15 days after each
Distribution Date commencing February 2006 (subject to permitted extensions
under the Exchange Act and until a Form 15 is filed pursuant to Section 13.06)
with the Commission with respect to the Trust Fund, a Form 10-D with copies of
the Monthly Statement and, to the extent delivered to the Securities
Administrator, no later than 10 days following the Distribution Date, such
other information identified by the Depositor, to be filed with the Commission
(such other information, the "Additional Designated Information"). If the
Depositor directs that any Additional Designated Information is to be filed
with any Form 10-D, the Depositor shall specify the Item on Form 10-D to which
such information is responsive and, with respect to any Exhibit to be filed on
Form 10-D, the Exhibit number. Any information to be filed on Form 10-D shall
be delivered to the Securities Administrator in XXXXX-compatible form or as
otherwise agreed upon by the Securities Administrator and the Depositor at the
Depositor's expense, and any necessary conversion to XXXXX-compatible format
will be at the Depositor's expense. Upon completion of each 10-D filing by the
Securities Administrator, such 10-D filing shall be submitted to the Depositor
for approval. Upon receipt of written notice via electronic mail to
xxxxx@xxxxxxxx.xxx, from the Depositor that the 10-D has been approved, the
Securities Administrator shall attach to such 10-D the signature page of the
Depositor which has been previously delivered by the Depositor to the
Securities Administrator and submit such 10-D for filing with the Commission.
At the reasonable request of, and in accordance with the reasonable directions
of, the Depositor, the Securities Administrator shall prepare for filing and
file an amendment to any Form 10-D previously filed with the Commission with
respect to the Trust Fund. The Depositor shall sign the Form 10-D filed on
behalf of the Trust Fund.
(b) No later than each Distribution Date, each of the Master
Servicer, the Securities Administrator and the Trustee shall, to the extent
they have knowledge, notify (and the Master Servicer shall cause any Servicer,
to the extent such Servicer is required to make such disclosure under its
Servicing Agreement, to notify) the Depositor of any Form 10-D Disclosure
Item, together with a description of any such Form 10-D Disclosure Item in
form and substance reasonably acceptable to the Depositor. In addition to such
information as the Master Servicer, the Securities Administrator and the
Trustee are obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Depositor in writing, each of the Master
Servicer, the Securities Administrator and the Trustee shall provide such
information which is available to the Master Servicer, the Securities
Administrator and the Trustee, as applicable, without unreasonable effort or
expense 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.
(c) The Securities Administrator shall not have any responsibility to
file any items (other than those generated by it) that have not been received
in a format suitable (or readily convertible into a format suitable) for
electronic filing via the XXXXX system and shall not have
113
any responsibility to convert any such items to such format (other than those
items generated by it or that are readily convertible to such format). The
Securities Administrator shall have no liability to the Certificateholders,
the Trust Fund, the Master Servicer or the Depositor with respect to any
failure to properly prepare or file any of Form 10-D to the extent that such
failure is not the result of any negligence, bad faith or willful misconduct
on its part.
Section 13.03 Form 8-K Filings.
The Depositor shall prepare, sign and file (via XXXXX) any Form 8-K
required by the Exchange Act and the Rules and Regulations of the Commission
thereunder. Each of the Master Servicer (and the Master Servicer shall cause
any Servicer to promptly notify), the Securities Administrator and the Trustee
shall promptly notify the Depositor, but in no event later than one (1)
Business Day after its occurrence, of any Reportable Event, applicable to it,
of which a Responsible Officer of such entity has actual knowledge.
Section 13.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2007 (or such earlier
date as may be required by the Exchange Act and the Rules and Regulations of
the Commission and until a Form 15 is filed pursuant to Section 13.06), the
Securities Administrator shall prepare and file on behalf of the Trust Fund a
Form 10-K, in form and substance as required by applicable law or the Exchange
Act. The Depositor shall sign each Form 10-K filed on behalf of the Trust
Fund. Such Form 10-K shall include as exhibits each (i) annual statement of
compliance described in the paragraph below, (ii) annual report on assessments
of compliance with servicing criteria described under Section 13.07 and (iii)
accountant's report described under Section 13.07. Each Form 10-K shall also
include any Xxxxxxxx-Xxxxx Certification required to be included therewith, as
described in Section 13.05. The Securities Administrator shall have no
liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith.
The Master Servicer shall, and shall cause each Servicer to cause any
subservicer used by such Servicer to, deliver to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing with
its 2007 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of such Person during the
preceding calendar year (or applicable portion thereof) and of the performance
of the Master Servicer under this Agreement, or in the case of a Servicer or
subservicer, the applicable servicing agreement, has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, such Person has fulfilled all its obligations under this
Agreement, or in the case of a Servicer or subservicer, the applicable
servicing agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof. The Securities Administrator
shall forward a copy of each such statement to each Rating Agency. Copies of
such statement shall be provided by the Securities Administrator to any
Certificateholder upon written request, provided such statement is delivered
by the Master Servicer to the Securities Administrator.
114
No later than March 10 of each year, commencing in 2007, and until a
Form 15 is filed pursuant to Section 13.06, the Master Servicer, the
Securities Administrator and the Trustee shall notify (and the Master Servicer
shall cause any Servicer to notify) the Depositor of any Form 10-K Disclosure
Item, together with a description of any such Form 10-K Disclosure Item in
form and substance reasonably acceptable to the Depositor. Additionally, each
of the Master Servicer, the Securities Administrator and the Trustee shall
provide, and shall cause each Reporting Subcontractor retained by the Master
Servicer, the Securities Administrator or the Trustee, as applicable, and in
the case of the Master Servicer shall cause each Servicer, to provide, the
following information no later than March 10 of each year in which a Form 10-K
is required to be filed on behalf of the Trust Fund: (i) if such Person's
report on assessment of compliance with servicing criteria described under
Section 13.07 or related registered public accounting firm attestation report
described under Section 13.07 identifies any material instance of
noncompliance, notification of such instance of noncompliance and (ii) if any
such Person's report on assessment of compliance with servicing criteria or
related registered public accounting firm attestation report is not provided
to be filed as an exhibit to such Form 10-K, information detailing the
explanation why such report is not included.
Section 13.05 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Master Servicer and the Securities
Administrator shall (unless such person is the Certifying Person), and the
Master Servicer shall cause each Servicer to, provide to the Person who signs
the Xxxxxxxx-Xxxxx Certification (the "Certifying Person") a certification
(each, a "Performance Certification"), in the form attached hereto as Exhibit
T-1 (in the case of the Master Servicer) and Exhibit T-2 (in the case of the
Securities Administrator), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The Depositor will not request
delivery of a certification under this clause unless the Depositor is required
under the Exchange Act to file an annual report on Form 10-K with respect to
the Trust Fund. In the event that prior to the filing date of the Form 10-K in
March of each year, the Securities Administrator or the Master Servicer has
actual knowledge of information material to the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx Certification or portion thereof
with respect to the Trust Fund.
Section 13.06 Form 15 Filing.
Prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15 relating to the automatic suspension of
reporting in respect of the Trust Fund under the Exchange Act.
115
Section 13.07 Report on Assessment of Compliance and
Attestation.
(a) On or before March 15th of each calendar year, commencing in
2007:
(1) Each of the Master Servicer, the Securities Administrator and the
Custodians shall deliver to the Depositor and the Securities Administrator a
report (in form and substance reasonably satisfactory to the Depositor)
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 specified on a
certification substantially in the form of Exhibit U hereto delivered to the
Depositor concurrently with the execution of this Agreement. 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. 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 and the Securities Administrator
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 or the
Securities Administrator, 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 and the Securities Administrator 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, the
Securities Administrator 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)(3) shall address each of the Servicing Criteria applicable to it
specified on a certification substantially in the form of Exhibit U 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,
116
on or prior to the date of such appointment. An assessment of compliance
provided by a Subcontractor pursuant to Section 13.07(a)(3) or (4) need not
address any elements of the Servicing Criteria other than those specified
pursuant to Section 13.07(a)(1).
Section 13.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any subservicer used by the
Master Servicer and shall cause each Servicer to cause any subservicer used by
such servicer for the benefit of the Depositor to comply with the provisions
of this Article XIII to the same extent as if such Servicer or subservicer
were the Master Servicer (except with respect to the Master Servicer's duties
with respect to preparing and filing any Exchange Act Reports or as the
Certifying Person). The Master Servicer shall be responsible for obtaining
from each Servicer and subservicer and delivering to the Depositor any
servicer compliance statement required to be delivered by such Servicer or
subservicer pursuant to the second paragraph of Section 13.04, any assessment
of compliance and attestation required to be delivered by such Servicer or
subservicer under Section 13.07 and any certification required to be delivered
to the Certifying Person under Section 13.05 as and when required to be
delivered.
(b) It shall not be necessary for the Master Servicer, any Servicer,
any subservicer or the Securities Administrator to seek the consent of the
Depositor or any other party hereto to the utilization of any Subcontractor.
The Master Servicer or the Securities Administrator, as applicable, shall
promptly upon request provide to the Depositor (or any designee of the
Depositor, such as the Master Servicer or administrator) a written description
(in form and substance satisfactory to the Depositor) of the role and function
of each Subcontractor utilized by such Person (or in the case of the Master
Servicer, any Servicer or any subservicer), specifying (i) the identity of
each such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be a Reporting Subcontractor, the Master Servicer or the Securities
Administrator, as applicable, shall cause any such Subcontractor used by such
Person (or in the case of the Master Servicer, any Servicer or any
subservicer) for the benefit of the Depositor to comply with the provisions of
Sections 13.07 and 13.09 of this Agreement to the same extent as if such
Subcontractor were the Master Servicer (except with respect to the Master
Servicer's duties with respect to preparing and filing any Exchange Act
Reports or as the Certifying Person) or the Securities Administrator, as
applicable. The Master Servicer or the Securities Administrator, as
applicable, shall be responsible for obtaining from each Subcontractor and
delivering to the Depositor and the Master Servicer, any assessment of
compliance and attestation required to be delivered by such Subcontractor
under Section 13.07, in each case as and when required to be delivered.
* * * * * * *
117
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
GS MORTGAGE SECURITIES CORP.
By:
------------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, solely
as Trustee and not in its individual capacity
By:
------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Master Servicer
and Securities Administrator
By:
------------------------------------------
Name:
Title:
Master Servicing and Trust Agreement
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as a Custodian
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as a Custodian
By:
------------------------------------------
Name:
Title:
Master Servicing and Trust Agreement
SCHEDULE I
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
S-1-1
EXHIBIT A
FORM OF CLASS A-1, CLASS A-2, CLASS A-3, CLASS A-4
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5,
CLASS B-1, CLASS B-2 AND CLASS B-3 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 : January 1, 2006
First Distribution Date : February 27, 2006
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 2006-1
Asset-Backed Certificates, Series 2006-1
[Class A-1][Class A-2][Class A-3][Class A-4]
[Class M-1][Class M-2][Class M-3][Class M-4][Class M-5]
[Class B-1][Class B-2][Class B-3]
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"), U.S. Bank National
Association, as trustee (the "Trustee"), JPMorgan Chase Bank, National
Association, as Master Servicer (in such capacity, the "Master Servicer") and
Securities Administrator (in such capacity, the "Securities Administrator"),
Deutsche Bank National Trust Company, as a custodian and JPMorgan Chase 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:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
-----------------------------------------
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
A-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as GSAA Home Equity Trust 2006-1 Asset-Backed
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest
in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Distribution Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee and the other parties to the
Agreement.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month or, if such day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing
on the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the applicable Interest
Accrual Period for the related Distribution Date; provided, however, that for
any Definitive Certificates, the Record Date shall be the last Business Day of
the month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of payment
set forth in the Agreement, or, if not, by check mailed by first class mail to
the address of such Certificateholder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but
only upon presentment and surrender of such Certificate at the office
designated by the Securities Administrator for such purposes, or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Trustee and the other
A-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 registrable
in the Certificate Register of the Securities Administrator upon surrender of
this Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator
and any agent of the Trustee, the Depositor or the Securities Administrator
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Trustee, the
Securities Administrator, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Cut-off Date Pool Principal Balance, the Person specified in Section 11.01 of
the Agreement will have the option to 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 the Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-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 Trustee 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 TRUSTEE 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 : January 1, 2006
First Distribution Date : February 27, 2006
Percentage Interest of this
Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates, Series 2006-1
Class P
evidencing a percentage interest in the distributions
allocable to the Certificates of the above referenced Class.
Distributions in respect of this Certificate are
distributable monthly as set forth herein. This Certificate does not evidence
an obligation of, or an interest in, and is not guaranteed by the Depositor,
the Master Servicer, the Securities Administrator or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [_______________________] is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"), Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase 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:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------------
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as GSAA Home Equity Trust 2006-1 Asset-Backed
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest
in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Distribution Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee and the other parties to the
Agreement.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date for each Distribution Date is the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Securities Administrator in
writing at least five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of payment
set forth in the Agreement, or, if not, by check mailed by first class mail to
the address of such Certificateholder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but
only upon presentment and surrender of such Certificate at the office
designated by the Securities Administrator for such purposes or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Trustee and the other parties to the Agreement
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future
B-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Securities Administrator upon surrender of
this Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator
and any agent of the Trustee, the Depositor or the Securities Administrator
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Trustee, the Depositor, the
Securities Administrator, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Cut-off Date Principal Balance, the Person specified in Section 11.01 of the
Agreement will have the option to repurchase, 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 the Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned 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 Trustee 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-1 AND CLASS R-2 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-1][R-2]
Cut-off Date : January 1, 2006
First Distribution Date : February 27, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
------------
Initial Certificate Balance of all
Certificates of this Class: : $100
C-1
CUSIP :
ISIN :
C-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates, Series 2006-1
Class [R-1] [R-2]
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-1][R-2] 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"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"), Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase 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-1][R-2]
Certificate at the office designated by the Securities Administrator for such
purposes.
No transfer of a Class [R-1][R-2] 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-3
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-1] [R-2] Certificate shall be deemed by
the acceptance or acquisition an Ownership Interest in this Class [R-1] [R-2]
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-1]
[R-2] Certificate are expressly subject to the following provisions: (i) each
Person holding or acquiring any Ownership Interest in this Class [R-1] [R-2]
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-1] [R-2]
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-1] [R-2] 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-1] [R-2] 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-1]
[R-2] Certificate, (C) not to cause income with respect to the Class [R-1]
[R-2] 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-1] [R-2] Certificate or to cause the Transfer of the
Ownership Interest in this Class [R-1] [R-2] 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-1] [R-2] 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-4
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Securities
Administrator
By:
---------------------------------------
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
C-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-1 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other parties to the Agreement with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder
C-6
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor, the Securities Administrator and any
agent of the Trustee, the Depositor or the Securities Administrator may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Depositor, the Trustee or Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to repurchase, 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 the Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned 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 Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
C-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number __________, or, if mailed by check, to ________________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
______________________________________________________________________________
______________________________________________________________________________
This information is provided by ________________________________________,
the assignee named above, or ________________________________________________,
as its agent.
C-9
EXHIBIT D
FORM OF CLASS 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 : January 1, 2006
First Distribution Date : February 27, 2006
Percentage Interest of this Certificate
("Denomination") : 100%
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates, Series 2006-1
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"), U.S. Bank
National Association, as trustee (the "Trustee"), JPMorgan Chase Bank, as
Master Servicer (in such capacity, the "Master Servicer") and Securities
Administrator (in such capacity, the "Securities Administrator"), Deutsche
Bank National Trust Company, as a custodian and JPMorgan Chase 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
D-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.
* * *
D-4
IN WITNESS WHEREOF, the Securities Administrator has caused
this Certificate to be duly executed.
Dated:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, not in its individual capacity,
but solely as Securities Administrator
By:
----------------------------------------
Authenticated:
By:
-----------------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
D-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-1
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as GSAA Home Equity Trust 2006-1 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 Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of payment
set forth in the Agreement, or, if not, by check mailed by first class mail to
the address of such Certificateholder appearing in the Certificate Register.
The final distribution on each Certificate will be made in like manner, but
only upon presentment and surrender of such Certificate at the office
designated by the Securities Administrator for such purposes or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Trustee and the other parties to the Agreement
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by
D-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Securities Administrator upon surrender of
this Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator
and any agent of the Trustee, the Depositor or the Securities Administrator
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Trustee, the Depositor, the
Securities Administrator, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Cut-off Date Principal Balance, the Person specified in Section 11.01 of the
Agreement will have the option to repurchase, 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 the Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-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 Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
_____________________________________
Signature by or on behalf of assignor
Dated:
D-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.
D-9
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
_____________________
_____________________
Re: Master Servicing and Trust Agreement, dated as of January 1,
2006, among GS Mortgage Securities Corp., as depositor, U.S.
Bank National Association, as trustee, JPMorgan Chase Bank,
National Association, as Master Servicer and Securities
Administrator, Deutsche Bank National Trust Company, as a
custodian and JPMorgan Chase 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, a duly executed
assignment of the Mortgage (which may be included in a blanket
assignment or assignments).
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related
to such Mortgage Loan.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Trust Agreement. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the
E-1
assignment of and transfer to the assignee thereof, under the Mortgage to
which the assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY], [JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION], not in its individual
capacity, but solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Servicer]
[Originator]
_____________________
_____________________
Re: Master Servicing and Trust Agreement, dated as of January 1,
2006, among GS Mortgage Securities Corp., as depositor, U.S.
Bank National Association, as trustee, JPMorgan Chase Bank,
as Master Servicer and Securities Administrator, Deutsche
Bank National Trust Company, as a custodian and JPMorgan
Chase 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 any);
(d) the related original Mortgage and evidence of its
recording or, in limited circumstances, a certified copy of the
mortgage with evidence of recording with the standard Xxxxxx
Xxx/FHLMC Condominium Rider or PUD Rider be attached if the mortgaged
property is a condominium or is located in a PUD;
F-1
(e) except with respect to a MERS Loan, originals of any
intervening Mortgage assignment or certified copies in either case
evidencing recording; provided that the assignment may be in the form
of a blanket assignment or assignments, a copy of which with evidence
of recording shall be acceptable;
(f) originals of all assumption, modification, agreements or
certified copies thereof, in either case with evidence of recording
if required to maintain the lien of the mortgage or if otherwise
required, or, if recordation is not required, an original or copy of
the agreement;
(g) an original or copy of a title insurance policy, a
certificate of title, or attorney's opinion of title and abstract of
title;
(h) to the extent applicable, (1) an original power of
attorney, or a certified copy thereof, in either case with evidence
of recordation if the document to which such power of attorney
relates is recorded, and (2) an original or copy of any surety
agreement or guaranty agreement;
(i) for each Mortgage Loan with respect to which the
Xxxxxxxxx's name as it appears on the note does not match the
borrower's name on the mortgage loan schedule, one of the following:
the original of the assumption agreement, or a certified copy
thereof, in either case with evidence of recording thereon if
required to maintain the lien of the mortgage or if otherwise
required, or, if recordation is not so required, an original or copy
of such assumption agreement;
(j) a security agreement, chattel mortgage or equivalent
document executed in connection with the mortgage, if any.
Based on its review and examination and only as to the
foregoing documents, (a) such documents appear regular on their face and
related to such Mortgage Loan, and (b) the information set forth in items 2,
8, 33 and 34 of the Mortgage Loan Schedule accurately reflects information set
forth in the Custodial File.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.
F-2
[DEUTSCHE BANK NATIONAL TRUST
COMPANY], [JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION] not in its individual
capacity, but solely as Custodian
By:___________________________________
Name:_________________________________
Title:________________________________
F-3
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
GSAA Home Equity Trust 2006-1,
Asset-Backed Certificates, Series 2006-1
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-1][R-2] Certificate
(the "Certificate") issued pursuant to the Master Servicing and Trust
Agreement (the "Agreement"), among GS Mortgage Securities Corp., as depositor
(the "Depositor"), U.S. Bank National Association, as trustee (the "Trustee"),
JPMorgan Chase Bank, as Master Servicer (in such capacity, the "Master
Servicer") and Securities Administrator (in such capacity, the "Securities
Administrator"), Deutsche Bank National Trust Company, as a custodian and
JPMorgan Chase Bank, National Association, as a custodian. Capitalized terms
used, but not defined herein, shall have the meanings ascribed to such terms
in the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee for the benefit of the Depositor, the
Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as
of the date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor,
or, if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that
a tax will be imposed on a "pass-through entity" holding the Certificate if at
any time during the taxable year of the pass through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass through entity
an affidavit that such record holder is a Permitted Transferee and the pass
through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a
G-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit
from any Person to whom the Transferee attempts to Transfer its Ownership
Interest in the Certificate, and in connection with any Transfer by a Person
for whom the Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause any Ownership
Interest to be Transferred to any Person that the Transferee knows is not a
Permitted Transferee. In connection with any such Transfer by the Transferee,
the Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee has historically paid its debts as they
have come due, intends to pay its debts as they come due in the future, and
understands that the taxes payable with respect to the Certificate may exceed
the cash flow with respect thereto in some or all periods and intends to pay
such taxes as they become due. The Transferee does not have the intention to
impede the assessment or collection of any tax legally required to be paid
with respect to the Certificate.
8. The Transferee's taxpayer identification number is
__________.
9. The Transferee is a U.S. Person as defined in Code
Section 7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. person.
12. Check one of the following:
|_| The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does not exceed the
sum of:
G-2
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future distributions
on such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is
assumed to pay tax at the highest rate currently specified in Section 11(b) of
the Code (but the tax rate in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b) of the Code if the
Transferee has been subject to the alternative minimum tax under Section 55 of
the Code in the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate) and (ii) present
values are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and
the compounding period used by the Transferee.
|_| The transfer of the Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as defined
in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to
another "eligible corporation," as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the
U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it
to acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good faith.
|_| None of the above.
13. The Transferee is not an employee benefit plan that is
subject to Title I of ERISA or a plan that is subject to Section 4975 of the
Code or a plan subject to any federal, state or local law that is
substantially similar to Title I of ERISA or Section 4975 of the Code, and the
Transferee is not acting on behalf of or investing plan assets of such a plan.
G-3
IN WITNESS WHEREOF, the Transferee has caused this
instrument to be executed on its behalf, pursuant to authority of its Board of
Directors, by its duly authorized officer and its corporate seal to be
hereunto affixed, duly attested, this ____ day of _______, 20__.
_______________________________
Print Name of Transferee
By:______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_______________________________
[Assistant] Secretary
Personally appeared before me the above-named __________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ___________ of the Transferee, and acknowledged that
he executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
_____________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
JPMorgan Chase Bank, National Association
[Address]
Re: GSAA Home Equity Trust 2006-1, Asset-Backed
Certificates Series 2006-1, 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.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
JPMorgan Chase Bank, National Association.
[Address]
Re: GSAA Home Equity Trust 2006-1, Asset-Backed
Certificates, Series 2006-1, 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
A-1 Certificate, Class A-2 Certificate, Class A-3 Certificate, Class A-4,
Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class
M-4, Class M-5, Class B-1, Class B-2 or a Class B-3 Certificate, or we are not
an employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or a plan subject to any federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code, nor are
we acting on behalf of any such plan or arrangement or using the assets of any
such plan or arrangement to effect such acquisition, or, with respect to a
Class B-3, Class 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
I-1
approached or negotiated with respect to the Certificates, any interest in the
Certificates or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates
and (f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
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
[RESERVED]
J-1
EXHIBIT K
[RESERVED]
K-1
EXHIBIT L
Amended and Restated Mortgage Loan Flow Purchase, Sale &
Servicing Agreement, dated as of December 1, 2005, between
Xxxxxxx Xxxxx Mortgage Company and PHH Mortgage
Corporation (formerly known as Cendant Mortgage Corporation)
and Xxxxxx'x Gate Residential Mortgage Trust (formerly known as
Cendant Residential Mortgage Trust)
[On File with the Depositor]
L-1
EXHIBIT M
Master Mortgage Loan Purchase Agreement, dated April 1, 2004,
as amended by Amendment No. 1, dated as of July 1, 2004, and as
amended by Amendment No. 2, dated as of January 1, 2005,
between GreenPoint Mortgage Funding, Inc. and Xxxxxxx Xxxxx
Mortgage Company
[On File with the Depositor]
M-1
EXHIBIT N
Servicing Agreement, dated as of April 1, 2004, as amended by
Amendment No. 1, dated as of July 1, 2004, and as amended by
Amendment No. 2, dated as of January 1, 2005, between
GreenPoint Mortgage Funding, Inc. and Xxxxxxx Xxxxx Mortgage
Company
[On File with the Depositor]
N-1
EXHIBIT O
Flow Seller's Warranties and Servicing Agreement, dated
November 1, 2004, between Xxxxxxx Xxxxx Mortgage Company
and SunTrust Mortgage, Inc.
[On File with the Depositor]
O-1
EXHIBIT P
Amended and Restate Master Mortgage Loan Purchase
Agreement, dated on or about January 1, 2006 between
Countrywide Home Loans, Inc. and Xxxxxxx Xxxxx Mortgage Company
[On File with the Depositor]
P-1
EXHIBIT Q
Servicing Agreement, dated on or about January 1, 2006
between Countrywide Home Loans Servicing LP and Xxxxxxx Xxxxx
Mortgage Company
[On File with the Depositor]
Q-1
EXHIBIT R
Form of Master Loan Purchase Agreement, between various sellers
and Xxxxxxx Xxxxx Mortgage Company
[On File with the Depositor]
R-1
EXHIBIT S
Flow Servicing Agreement, dated as of May 1, 2005, between
Countrywide Home Loans Servicing LP and Xxxxxxx Xxxxx
Mortgage Company
[On File with the Depositor]
S-1
EXHIBIT T-1
FORM OF PERFORMANCE CERTIFICATION
(Master Servicer)
Re: Master Servicing and Trust Agreement, dated as of
January 1, 2006 (the "Agreement"), among GS
Mortgage Securities Corp., as depositor (the
"Depositor"), U.S. Bank, National Association, as
trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as master servicer (the
"Master Servicer") and securities administrator
(the "Securities Administrator"), Deutsche Bank
National Trust Company, as a custodian and JPMorgan
Trust Company, N.A., as a custodian (each, 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"), all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were prepared and
delivered by the Company to the Depositor and the Securities
Administrator pursuant to the Agreement, and as may have been amended
in a report, certification or document subsequently prepared and
delivered by the Company (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which
such statements were made, not misleading with respect to the period
of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the Depositor;
(4) I am responsible for reviewing the activities performed
by the Company as a servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement or the Servicing Assessment, 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
required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been
T-1-1
provided to the Depositor. Any material instances of noncompliance have been
disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
T-1-2
EXHIBIT T-2
FORM OF PERFORMANCE CERTIFICATION
(Securities Administrator)
Re: Master Servicing and Trust Agreement, dated as of
January 1, 2006 (the "Agreement"), among GS
Mortgage Securities Corp., as depositor (the
"Depositor"), U.S. Bank, National Association, as
trustee (the "Trustee"), JPMorgan Chase Bank,
National Association, as master servicer (the
"Master Servicer") and securities administrator
(the "Securities Administrator"), Deutsche Bank
National Trust Company, as a custodian and JPMorgan
Trust Company, N.A., as a custodian (each, a
"Custodian").
The Securities Administrator (the "Company"), certifies to the
Depositor, and its officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) The Securities Administrator has 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"), all reports
on Form 10_D containing statements to certificateholders filed in
respect of the period included in the year covered by the annual
report of the Trust Fund (collectively, the "Distribution Date
Statements");
(2) Assuming the accuracy and completeness of the
information delivered to the Company by the Master Servicer as
provided in the Agreement and subject to paragraph (4) below, the
distribution information determined by the Company and set forth in
the Distribution Date Statements contained in all Form 10_D's
included in the year covered by the annual report of such Trust on
Form 10_K for the calendar year 200[ ], is complete and does not
contain any material misstatement of fact as of the last day of the
period covered by such annual report;
(3) Based solely on the information delivered to the Company
by the Master Servicer as provided in the Agreement, (i) the
distribution information required under the Agreement to be contained
in the Trust Fund's Distribution Date Statements and (ii) the
servicing information required to be provided by the Master Servicer
to the Securities Administrator for inclusion in the Trust Fund's
Distribution Date Statements, to the extent received by the
Securities Administrator from the Master Servicer in accordance with
the Agreement, is included in such Distribution Date Statements;
(4) The Company is not certifying as to the accuracy,
completeness or correctness of the information which it received from
the Master Servicer and did not independently verify or confirm the
accuracy, completeness or correctness of the information provided by
the Master Servicer; and
T-2-1
(5) The Servicing Assessment required to be provided by the
Company pursuant to the Agreement, has been provided to the
Depositor. Any material instances of noncompliance described in such
report have been disclosed to the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
report.
Date: _________________________
By: ________________________________
Name:
Title:
T-2-2
EXHIBIT U
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":
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
Policies and procedures are instituted to monitor any
performance or other triggers and events of default
1122(d)(1)(i) in accordance with the transaction agreements.
If any material servicing activities are outsourced
to third parties, policies and procedures are
instituted to monitor the third party's performance
1122(d)(1)(ii) and compliance with such servicing activities.
Any requirements in the transaction agreements to
maintain a back up servicer for the mortgage loans
1122(d)(1)(iii) are maintained.
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the
amount of coverage required by and otherwise in
accordance with the terms of the transaction
1122(d)(1)(iv) agreements. X X
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 days
1122(d)(2)(i) 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 authorized
1122(d)(2)(ii) personnel. X X
U-1
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
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 the
1122(d)(2)(iii) transaction agreements. X
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 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 that meets the
requirements of Rule 13k 1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act. X X(*)
Unissued checks are safeguarded so as to prevent
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 reconciling items are
resolved within 90 calendar days of their original
1122(d)(2)(vii) identification, or such other number of days X X
___________________
* For 1122(d)(2)(v) the Securities Administrator needs to provide only if it is a "custodial
account" for purposes of these servicing criteria. Subject to further clarification from the Commission.
U-2
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
specified in the transaction agreements.
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 trustee's records as to the total unpaid
principal balance and number of mortgage loans
1122(d)(3)(i) serviced by the Servicer. X X
Amounts due to investors are allocated and remitted
in accordance with timeframes, distribution priority
and other terms set forth in the transaction
1122(d)(3)(ii) agreements. X
Disbursements made to an investor are posted within
two business days to the Servicer's investor records,
or such other number of days specified in the
1122(d)(3)(iii) transaction agreements. X
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other form of
1122(d)(3)(iv) payment, or custodial bank statements. X
Pool Asset Administration
Collateral or security on mortgage loans is X
maintained as required by the transaction agreements
1122(d)(4)(i) or related mortgage loan documents.
Mortgage loan and related documents are safeguarded
1122(d)(4)(ii) as required by the transaction agreements. X
U-3
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
Payments on mortgage loans, including any payoffs,
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor
records maintained no more than two business days
after receipt, or such other number of days specified
in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
1122(d)(4)(iv) accordance with the related mortgage loan documents.
The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
1122(d)(4)(v) obligor's unpaid principal balance.
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
1122(d)(4)(vi) documents.
Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis,
or such other period specified in the transaction
1122(d)(4)(viii) agreements, and describe the entity's
U-4
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodian
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
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).
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based
1122(d)(4)(ix) on the related mortgage loan documents.
Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or such
other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of
full repayment of the related mortgage loans, or such
other number of days specified in the transaction
1122(d)(4)(x) agreements.
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
1122(d)(4)(xi) transaction agreements.
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
Disbursements made on behalf of an obligor are posted
1122(d)(4)(xiii) within two business days to the
U-5
obligor's records maintained by the servicer, or such
other number of days specified in the transaction
agreements.
Delinquencies, charge offs and uncollectible accounts
are recognized and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
[NAME OF MASTER SERVICER] [NAME OF
SECURITIES ADMINISTRATOR] [NAME OF
CUSTODIAN]
Date: ______________________________
By:______________________________________
Name:
Title:
U-6
