Common use of Cap Fee Escrow Clause in Contracts

Cap Fee Escrow. From amounts received with respect to the Pledged Security Collateral, the Pledge Custodian on behalf of the Sponsor shall pay to the Servicer for deposit to a Cap Fee Escrow monthly on the fifteenth (15th) day of each month (commencing on the fifteenth (15th) day of the month next preceding the date that is sixty (60) months prior to the expiration of each existing Hedge), an amount that will result in the accumulation by the expiration of the existing Hedge, without regard to earnings from investments of amounts in the Cap Fee Escrow, of funds estimated by Xxxxxxx Mac to be sufficient to pay the cost of a Cap with a term of five years in a notional amount that will equal the outstanding principal amount of the Class A Certificates at such time. During the first twelve (12) months after the commencement of deposits required hereunder, the monthly deposit shall be equal to a fraction, the numerator of which is 125% of the estimated cost of the Cap required hereunder and the denominator of which 60. Thereafter, the amount of the monthly deposit shall be recomputed by Xxxxxxx Mac annually based upon the Xxxxxxx Mac’s estimation of the cost of such Cap times 125% minus amounts already on deposit in the applicable Cap Fee Escrow divided by the number of months remaining until to the related expiration date of the preceding Hedge. Amounts on deposit in the Cap Fee Escrow shall be invested and reinvested by the Servicer only in the following, having maturities of no more than six months: (i) Bank accounts or certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation. (ii) Direct obligations of the U.S. Government, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Xxxxxx Mae or the Federal Farm Credit Bank. (iii) Obligations, the interest on which is excludable from gross income for federal income tax purposes, with a “Xxxxx’x Investment Grade One” rating or bonds the interest on which is excludable from gross income for purposes of federal income taxation, that are rated not lower than “AA” or “Aa” by either S&P or Xxxxx’x respectively, if only one rating from those agencies has been obtained, and if both agencies have rated the obligations or bonds, not lower than “Aa” or “AA,” as applicable; provided, however, not more than 10% of the total issue of any such obligations may be purchased and issues of at least $20,000,000 in total issue size must be selected. (iv) Commercial paper with a rating of at least “A-1” by S&P and at least P-1 by Xxxxx’x. (v) Corporate notes and bonds with a rating of at least “AA” and “Aa” from S&P and Xxxxx’x. (vi) Shares or other interests in mutual funds that invest exclusively in (A) instruments the interest on which is exempt from federal income taxation and which are rated by at least one nationally recognized statistical rating agency in one of that agency’s two highest rating categories or (B) any of the categories of investments described in paragraphs (i) through (v) above. During any period the Class A Certificates have been converted with the prior written consent of Xxxxxxx Mac to bear interest at a Term Reset Rate and no Hedge is required to be maintained pursuant to Section 5.1 of this Agreement, and provided no Event of Default is existing hereunder, any amounts then held on deposit in the Cap Fee Escrow shall be distributed to the Sponsor upon a written request therefor delivered to the Servicer and Xxxxxxx Mac.

Cap Fee Escrow. From amounts received with respect to the Pledged Security Collateral, the Pledge Custodian on behalf of the Sponsor shall pay to the Servicer for deposit to a Cap Fee Escrow monthly on the fifteenth (15th) day of each month (commencing on the fifteenth (15th) day of the month next preceding the date that is sixty (60) months prior to the expiration of each existing Hedge), an amount that will result in the accumulation by the expiration of the existing Hedge, without regard to earnings from investments of amounts in the Cap Fee Escrow, of funds estimated by Xxxxxxx Fxxxxxx Mac to be sufficient to pay the cost of a Cap with a term of five years in a notional amount that will equal the outstanding principal amount of the Class A Certificates at such timetime (provided, if the Sponsor makes the election as provided in Section 5.1(c) to provide a 3-year cap upon expiration of the initial Caps provided hereunder, then payments to the Cap Fee Escrow for the following escrow period shall begin 36 months prior to the expiration thereof, but nevertheless the monthly deposits to the Cap Fee Escrow shall be those estimated to be sufficient to pay the cost of a Cap with a term of five years). During the first twelve (12) months after the commencement of deposits required hereunder, the monthly deposit shall be equal to a fraction, the numerator of which is 125% of the estimated cost of the Cap required hereunder and the denominator of which 60. Thereafter, the amount of the monthly deposit shall be recomputed by Xxxxxxx Fxxxxxx Mac annually based upon the Xxxxxxx Fxxxxxx Mac’s estimation of the cost of such Cap times 125% minus amounts already on deposit in the applicable Cap Fee Escrow divided by the number of months remaining until to the related expiration date of the preceding Hedge. Amounts on deposit in the Cap Fee Escrow shall be invested and reinvested by the Servicer only in the following, having maturities of no more than six months: (i) Bank accounts or certificates of deposit that are fully insured by the Federal Deposit Insurance Corporation. (ii) Direct obligations of the U.S. Government, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Xxxxxx Fxxxxx Mae or the Federal Farm Credit Bank. (iii) Obligations, the interest on which is excludable from gross income for federal income tax purposes, with a “Xxxxx’x Mxxxx’x Investment Grade One” rating or bonds the interest on which is excludable from gross income for purposes of federal income taxation, that are rated not lower than “AA” or “Aa” by either S&P or Xxxxx’x Mxxxx’x respectively, if only one rating from those agencies has been obtained, and if both agencies have rated the obligations or bonds, not lower than “Aa” or “AA,” as applicable; provided, however, not more than 10% of the total issue of any such obligations may be purchased and issues of at least $20,000,000 in total issue size must be selected. (iv) Commercial paper with a rating of at least “A-1” by S&P and at least P-1 by Xxxxx’xMxxxx’x. (v) Corporate notes and bonds with a rating of at least “AA” and “Aa” from S&P and Xxxxx’xMxxxx’x. (vi) Shares or other interests in mutual funds that invest exclusively in (A) instruments the interest on which is exempt from federal income taxation and which are rated by at least one nationally recognized statistical rating agency in one of that agency’s two highest rating categories or (B) any of the categories of investments described in paragraphs (i) through (v) above. During any period the Class A Certificates have been converted with the prior written consent of Xxxxxxx Fxxxxxx Mac to bear interest at a Term Reset Rate and no Hedge is required to be maintained pursuant to Section 5.1 of this Agreement, and provided no Event of Default is existing hereunder, any amounts then held on deposit in the Cap Fee Escrow shall be distributed to the Sponsor upon a written request therefor delivered to the Servicer and Xxxxxxx Fxxxxxx Mac.