Common use of Liquidity Reserve Clause in Contracts

Liquidity Reserve. The Servicer, in its discretion, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall with respect to the Mortgage Loans. If the Servicer elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified Depository. The Liquidity Reserve Account shall be held in trust for the benefit of the Owner and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer may fund the Liquidity Reserve with such portion of distributions on the Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requested. At the termination of this Agreement, all remaining funds held in the Liquidity Reserve shall be distributed to the Owner. Amounts on deposit in the Liquidity Reserve Account shall be invested in Eligible Investments, shall not be used to pay costs or expenses other than Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, and shall be used to pay such amounts only in any month in which the distributions on the Mortgage Loans received during that month are insufficient to provide sufficient cash to pay all such amounts due and payable during that month. No funds from any other source (other than interest or earnings on the funds held in the Liquidity Reserve Account) shall be commingled in the Liquidity Reserve Account. Amounts on deposit in the Liquidity Reserve Account (including interest and earnings thereon) shall be used and may be withdrawn and disbursed only in accordance with the provisions of this paragraph. The Servicer shall be authorized and directed to withdraw funds from the Liquidity Reserve Account only to make disbursements in accordance with this Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(a) to the contrary, it is expressly understood that the Servicer’s failure to establish or require the Owner to establish or fund a Liquidity Reserve shall not preclude the Servicer from seeking reimbursement from the Owner for Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.

Liquidity Reserve. The Servicer, in its discretion, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Advances (including other than litigation costs and expenses (including attorneys’ fees), which may be funded through the use of a Litigation Reserve pursuant to Section 2.17(b), P&I Advances and Interest Shortfall with respect to the Mortgage Loans). If the Servicer elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified Depository. The Liquidity Reserve Account shall be held in trust for the benefit of the Owner and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer may fund the Liquidity Reserve with such portion of distributions on the Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requested. At the termination of this Servicing Agreement, all remaining funds held in the Liquidity Reserve shall be distributed to the Owner. Amounts on deposit in the Liquidity Reserve Account shall be invested in Eligible Investments, shall not be used to pay costs or expenses other than Servicing Advances (including excluding litigation costs and expenses (including attorneys’ feesexpenses)), P&I Advances and Interest Shortfall, and shall be used to pay such amounts Servicing Advances (other than litigation costs and expenses) only in any month in which the distributions on the Mortgage Loans received during that month are insufficient to provide sufficient cash to pay all such amounts Servicing Advances due and payable (without prepayment) during that month. No funds from any other source (other than interest or earnings on the funds held in the Liquidity Reserve Account) shall be commingled in the Liquidity Reserve Account. Amounts on deposit in the Liquidity Reserve Account (including interest and earnings thereon) shall be used and may be withdrawn and disbursed only in accordance with the provisions of this paragraph. The Servicer shall be authorized and directed to withdraw funds from the Liquidity Reserve Account only to make disbursements in accordance with this Servicing Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(a) to the contrary, it is expressly understood that the Servicer’s failure to establish or require the Owner to establish or fund a Liquidity Reserve shall not preclude the Servicer from seeking reimbursement from the Owner for Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.

Liquidity Reserve. The Servicer, in its discretion, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Advances with respect to the Non-Agency Mortgage Loans (including other than litigation costs and expenses (including attorneys’ fees), which may be funded through the use of a Litigation Reserve pursuant to Section 4.17(b), P&I Advances and Interest Shortfall with respect to the Mortgage Loans). If the Servicer elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified Depository. The Liquidity Reserve Account shall be held in trust for the benefit of the Owner and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer may fund the Liquidity Reserve with such portion of distributions on the Non-Agency Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requested. At the termination of this Agreement, all remaining funds held in the Liquidity Reserve shall be distributed to the Owner. Amounts on deposit in the Liquidity Reserve Account shall be invested in Eligible Investments, shall not be used to pay costs or expenses other than Servicing Advances (including excluding litigation costs and expenses (including attorneys’ feesexpenses)), P&I Advances and Interest Shortfall, and shall be used to pay such amounts Servicing Advances (other than litigation costs and expenses) only in any month in which the distributions on the Non-Agency Mortgage Loans received during that month are insufficient to provide sufficient cash to pay all such amounts Servicing Advances due and payable (without prepayment) during that month. No funds from any other source (other than interest or earnings on the funds held in the Liquidity Reserve Account) shall be commingled in the Liquidity Reserve Account. Amounts on deposit in the Liquidity Reserve Account (including interest and earnings thereon) shall be used and may be withdrawn and disbursed only in accordance with the provisions of this paragraph. The Servicer shall be authorized and directed to withdraw funds from the Liquidity Reserve Account only to make disbursements in accordance with this Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(a) to the contrary, it is expressly understood that the Servicer’s failure to establish or require the Owner to establish or fund a Liquidity Reserve shall not preclude the Servicer from seeking reimbursement from the Owner for Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.

Liquidity Reserve. The ServicerCompany, in its discretion, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Company Advances (including other than litigation costs and expenses (including attorneys’ fees), which may be funded through the use of a Litigation Reserve pursuant to Section 4.03(b), P&I Advances and Interest Shortfall with respect to the Mortgage Loans). If the Servicer Company elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified DepositoryAccount. The Liquidity Reserve Account shall be held in trust for the benefit of Participant and the Owner Company and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer Company may fund the Liquidity Reserve with such portion of distributions on the Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) Loan Proceeds as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requestedaccordance with the provisions of Section 3.03(a). At the termination time of this Agreementthe Final Distribution, all remaining funds held in the Liquidity Reserve shall be distributed to Participant and to the OwnerCompany, in accordance with their respective Participant’s Share and Company’s Share, pursuant to Section 4.01(b). Amounts on deposit in the Liquidity Reserve Account shall be invested in Eligible Permitted Investments, shall not be used to pay costs or expenses other than Servicing Company Advances (including excluding litigation costs and expenses (including attorneys’ feesexpenses)), P&I Advances and Interest Shortfall, and shall be used to pay such amounts Company Advances (other than litigation costs and expenses) only in any month in which the distributions on the Mortgage Loans Loan Proceeds received during that month are insufficient to provide sufficient cash to pay all such amounts Company Advances due and payable (without prepayment) during that month. No funds from any other source (other than interest or earnings on the funds held in the Liquidity Reserve Account) shall be commingled in the Liquidity Reserve Account. Amounts on deposit in the Liquidity Reserve Account (including interest and earnings thereon) shall be used and may be withdrawn and disbursed only in accordance with the provisions of this paragraphSection and Section 3.03(a) and Section 4.01(b). The Servicer shall be authorized and directed to withdraw funds from the Liquidity Reserve Account only to make disbursements in accordance with this Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(aThe Liquidity Reserve Account (and all funds therein) shall be subject to the contrary, it is expressly understood that the Servicer’s failure security interest granted to establish or require the Owner to establish or fund a Liquidity Reserve shall not preclude the Servicer from seeking reimbursement from the Owner for Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.Participant in Section

Liquidity Reserve. (a) The ServicerCollateral Agent, based solely on the information and amounts set forth in its discretionthe related Manager Report, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall with respect shall deposit to the Mortgage Loans. If extent available funds available for such purpose under the Servicer elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified Depository. The Liquidity Reserve Account shall be held in trust for the benefit Priority of the Owner and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer may fund the Liquidity Reserve with such portion of distributions Payments on the Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requested. At the termination of this Agreement, all remaining funds held in the Liquidity Reserve shall be distributed to the Owner. Amounts on deposit in each Payment Date into the Liquidity Reserve Account shall be invested in Eligible Investmentsany amounts necessary to make the amount on deposit therein (without taking into consideration the amount of any Retained Collections Contributions on deposit therein on such Payment Date) plus the Undrawn L/C Face Amount of any Liquidity Reserve Letter of Credit, shall not be used equal to pay costs or expenses other than Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, and shall be used to pay the Required Liquidity Reserve Amount. If on any Payment Date such amounts only in any month in which exceed the distributions on the Mortgage Loans received during that month are insufficient to provide sufficient cash to pay all such amounts due and payable during that month. No funds from any other source (other than interest or earnings on the funds held in the Required Liquidity Reserve AccountAmount, the Loan Parties (or the Manager on their behalf) shall be commingled will direct the Collateral Agent in the Liquidity Reserve Account. Amounts writing to transfer such excess amount then on deposit in the Liquidity Reserve Account (including interest and earnings thereona “Liquidity Reserve Release Amount”) shall be used and may be withdrawn and disbursed only to the Collection Account for distribution in accordance with the provisions Priority of this paragraph. The Servicer Payments on such Payment Date. (b) Each Liquidity Reserve Letter of Credit (i) shall name each of the Manager and the Collateral Agent, for the benefit of the Secured Parties, as the beneficiaries thereof; (ii) shall allow the Collateral Agent or the Manager on the Collateral Agent’s behalf to submit a notice of drawing in respect of such Liquidity Reserve Letter of Credit whenever amounts would otherwise be authorized and directed required to withdraw funds be withdrawn from the Liquidity Reserve Account only pursuant to make disbursements this Agreement; (iii) shall have an expiration date of no later than ten (10) Business Days prior to the Maturity Date; and (d) shall indicate by its terms that the proceeds in respect of drawings under such Liquidity Reserve Letter of Credit will be paid directly into the Liquidity Reserve Account. (c) If the Liquidity Reserve Draw Amount, as set forth in the Manager Report delivered on the Reporting Date immediately preceding any Payment Date, is greater than zero, (i) the Manager Report shall direct the Collateral Agent to withdraw from the Liquidity Reserve Account, on such Payment Date, an amount equal to the lesser of (x) the Liquidity Reserve Draw Amount and (y) the amount on deposit in the Liquidity Reserve Account, and (ii) to the extent that the amount set forth in clause (i) is less than the Liquidity Reserve Draw Amount set forth in such Manager Report, the Manager (on behalf of the Collateral Agent) shall draw on any Liquidity Reserve Letters of Credit in an amount equal to such shortfall, and, in each case, shall cause such amounts to be deposited into the Collection Account on or prior to such Payment Date. (d) The Manager, acting on behalf of the Loan Parties, will direct the Collateral Agent in a Direction Letter to distribute to the Manager amounts on deposit in the Liquidity Reserve Account (or direct the Manager to distribute amounts available under any Liquidity Reserve Letter of Credit) in order for the Manager to pay any due and unpaid Reserved Fixed Costs. (e) If, on any day when a Liquidity Reserve Letter of Credit is outstanding, a Rapid Amortization Period or an Event of Default occurs and is continuing, then, no later than the Business Day following the occurrence of such Rapid Amortization Period or Event of Default, the Manager (on behalf of the Collateral Agent) shall (i) submit a notice of drawing under such Liquidity Reserve Letter of Credit, with a copy to the Administrative Agent and the Borrower, and (ii) use the proceeds of such drawing to fund the Liquidity Reserve Account in an amount equal to the amount by which the Required Liquidity Amount exceeds the amounts on deposit in the Liquidity Reserve Account (without taking into consideration the amount of any Retained Collections Contributions on deposit therein) on such date (calculated as if such Liquidity Reserve Letter of Credit had not been issued). (f) If, on the date that is five Business Days prior to the expiration of any Liquidity Reserve Letter of Credit, such Liquidity Reserve Letter of Credit has not been replaced or renewed and is not scheduled to renew automatically pursuant to its terms, and the Borrower has not otherwise deposited funds into the Liquidity Reserve Account in an amount equal to the amount by which the Required Liquidity Amount exceeds the sum of (i) the amounts on deposit in the Liquidity Reserve Account on such date (without taking into consideration the amount of any Retained Collections Contributions on deposit therein on such date) and (ii) the amount available to be drawn under any other Liquidity Reserve Letters of Credit (that will not expire within such five Business Day period) on such date (such excess amount, the “Liquidity Reserve Deficiency Amount”), the Manager (on behalf of the Collateral Agent) shall (i) submit a notice of drawing under such Liquidity Reserve Letter of Credit, with a copy to the Administrative Agent and Borrower, and (ii) use the proceeds thereof to fund a deposit into the Liquidity Reserve Account in an amount equal to the Liquidity Reserve Deficiency Amount. (g) If, on any day a Liquidity Reserve Letter of Credit is outstanding, such Liquidity Reserve Letter of Credit becomes an Ineligible Liquidity Reserve Letter of Credit, then (a) on the fifth (5th) Business Day after such day, either (i) the Borrower shall fund a deposit into the Liquidity Reserve Account, or (ii) the Manager (on behalf of the Collateral Agent) will submit a notice of drawing under such Liquidity Reserve Letter(s) of Credit and apply the proceeds of such drawing to fund the Liquidity Reserve Account, in either case in an amount equal to the Liquidity Reserve Deficiency Amount on such date, in each case calculated as if such Liquidity Reserve Letter(s) of Credit had not been issued or (b) prior to the fifth (5th) Business Day after such day, the Borrower shall obtain one or more replacement Liquidity Reserve Letters of Credit (that is not an Ineligible Liquidity Reserve Letter of Credit) on substantially the same terms as each such Liquidity Reserve Letter of Credit being replaced. (h) In the event that a Liquidity Reserve Letter of Credit has been issued in full or partial satisfaction of the Required Liquidity Amount, the Borrower shall be entitled to submit an amendment to such Liquidity Reserve Letter of Credit and/or the excess amount of the related Liquidity Reserve Letter of Credit may be reduced by delivering a replacement or amended Liquidity Reserve Letter of Credit to the Manager reflecting such reduced amount. If the existing Liquidity Reserve Letter of Credit is so amended, the Collateral Agent and the Manager shall execute or acknowledge such amendment based solely on the written direction to do so and confirmation from the Manager (in the form of an Officer’s Certificate) acting in accordance with this Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(a) the Operation Standards as to the contrary, it is expressly understood that amount reflected in such amendment being at least equal difference between the Servicer’s failure to establish or require Required Liquidity Amount and the Owner to establish or fund a amount on deposit in the Liquidity Reserve shall not preclude Account as of the Servicer from seeking reimbursement immediately following Payment Date (after the allocation of all amounts on such Payment Date pursuant to the Priority of Payments). The Manager will (without the consent of any Secured Party) deliver to the Issuing Bank any replaced Liquidity Reserve Letter of Credit for termination simultaneously with the receipt by the Collateral Agent and the Manager of the related replacement Liquidity Reserve Letter of Credit, upon the Collateral Agent’s and the Manager’s receipt of the written confirmation from the Owner for Servicing Advances Manager (including litigation costs and expenses in the form of an Officer’s Certificate) acting in accordance with the Operation Standards that no deficit in the Required Liquidity Amount will exist on the immediately following Payment Date (including attorneys’ feesafter the allocation of all amounts on such Payment Date pursuant to the Priority of Payments)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.

Liquidity Reserve. The Servicer, in its discretion, may establish a liquidity reserve (the “Liquidity Reserve”) from which to fund Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall with respect to the Mortgage Loans. If the Servicer elects to establish a Liquidity Reserve it shall establish a Liquidity Reserve Account at a Qualified Depository. The Liquidity Reserve Account shall be held in trust for the benefit of the Owner and shall be established and maintained for the sole purpose of holding and distributing the Liquidity Reserve funds. The Servicer may fund the Liquidity Reserve with such portion of distributions on the Mortgage Loans (but such portion shall nonetheless be deemed to have been distributed to Owner) as it deems appropriate, in the exercise of its reasonable discretion, or otherwise request Owner to fund such Liquidity Reserve, in which case Owner shall fund such Liquidity Reserve as so requested. At the termination of this Agreement, all remaining funds held in the Liquidity Reserve shall be distributed to the Owner. Amounts on deposit in the Liquidity Reserve Account shall be invested in Eligible Investments, shall not be used to pay costs or expenses other than Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, and shall be used to pay such amounts only in any month in which the distributions on the Mortgage Loans received during that month are insufficient to provide sufficient cash to pay all such amounts due and payable during that month. No funds from any other source (other than interest or earnings on the funds held in the Liquidity Reserve Account) shall be commingled in the Liquidity Reserve Account. Amounts on deposit in the Liquidity Reserve Account (including interest and earnings thereon) shall be used and may be withdrawn and disbursed only in accordance with the provisions of this paragraph. The Servicer shall be authorized and directed to withdraw funds from the Liquidity Reserve Account only to make disbursements in accordance with this Agreement and not for any other purpose. Notwithstanding anything in this Section 4.17(a) to the contrary, it is expressly understood that the Servicer’s failure to establish or require the Owner to establish or fund a Liquidity Reserve shall not preclude the Servicer from seeking reimbursement from the Owner for Servicing Advances (including litigation costs and expenses (including attorneys’ fees)), P&I Advances and Interest Shortfall, all of which remain the obligations of the Owner.. 38