NOMURA HOME EQUITY LOAN, INC.,
Depositor
NOMURA CREDIT & CAPITAL, INC.,
Sponsor
[______________],
Servicer
[______________________________],
Master Servicer and Securities Administrator
and
[______________________________]
Trustee
_____________________________
FORM OF
POOLING AND SERVICING AGREEMENT
Dated as of [___________]
_________________________________________________________
NOMURA HOME EQUITY LOAN, INC.
ASSET-BACKED CERTIFICATES, SERIES [________]
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.01 Defined Terms.............................................................................
Section 1.02 Allocation of Certain Interest Shortfalls.................................................
ARTICLE II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund..................................................................
Section 2.02 Acceptance of the Mortgage Loans..........................................................
Section 2.03 Representations, Warranties and Covenants of the Servicer and the Sponsor.................
Section 2.04 Representations and Warranties of the Depositor...........................................
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases...........
Section 2.06 Issuance of the REMIC I Regular Interests and the Class R Certificates....................
Section 2.07 Conveyance of the REMIC I Regular Interests; Issuance and Conveyance of the REMIC II
Regular Interests.........................................................................
Section 2.08 Issuance of Class R Certificates..........................................................
Section 2.09 Establishment of Trust....................................................................
Section 2.10 Purpose and Powers of the Trust...........................................................
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section 3.01 Servicer to act as Servicer of the Related Mortgage Loans.................................
Section 3.02 Due-on-Sale Clauses; Assumption Agreements................................................
Section 3.03 Subservicers..............................................................................
Section 3.04 Documents, Records and Funds in Possession of the Servicer To Be Held for Trustee.........
Section 3.05 Maintenance of Hazard Insurance...........................................................
Section 3.06 Presentment of Claims and Collection of Proceeds..........................................
Section 3.07 Maintenance of Insurance Policies.........................................................
Section 3.08 Reserved..................................................................................
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds
and Realized Losses; Repurchases of Certain Mortgage Loans................................
Section 3.10 Servicing Compensation....................................................................
Section 3.11 REO Property..............................................................................
Section 3.12 Liquidation Reports.......................................................................
Section 3.13 Annual Statement as to Compliance.........................................................
Section 3.14 Assessments of Compliance and Attestation Reports.........................................
Section 3.15 Books and Records.........................................................................
Section 3.16 The Trustee...............................................................................
Section 3.17 REMIC-Related Covenants...................................................................
Section 3.18 Annual Certification; Additional Information..............................................
Section 3.19 Release of Mortgage Files.................................................................
Section 3.20 Documents, Records and Funds in Possession of the Servicer to be held for Trustee.........
Section 3.21 Possession of Certain Insurance Policies and Documents....................................
Section 3.22 [Reserved]................................................................................
Section 3.23 UCC.......................................................................................
Section 3.24 Optional Purchase of Defaulted Mortgage Loans.............................................
Section 3.25 Obligations of the Servicer Under Credit Risk Management Agreement........................
Section 3.26 Collection of Mortgage Loan Payments; Custodial Accounts..................................
Section 3.27 Permitted Withdrawals From the Custodial Accounts.........................................
Section 3.28 Reports to Master Servicer................................................................
Section 3.29 Collection of Taxes; Assessments and Similar Items; Escrow Accounts.......................
Section 3.30 Adjustments to Mortgage Rate and Scheduled Payment........................................
Section 3.31 Distribution Account......................................................................
Section 3.32 Permitted Withdrawals and Transfers from the Distribution Account.........................
Section 3.33 Duties of the Credit Risk Manager; Termination............................................
Section 3.34 Limitation Upon Liability of the Credit Risk Manager......................................
ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
Section 4.01 The Master Servicer.......................................................................
Section 4.02 Monitoring of the Servicer................................................................
Section 4.03 Fidelity Bond.............................................................................
Section 4.04 Power to Act; Procedures..................................................................
Section 4.05 Due-on-Sale Clauses; Assumption Agreements................................................
Section 4.06 Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee......
Section 4.07 Standard Hazard Insurance and Flood Insurance Policies....................................
Section 4.08 Presentment of Claims and Collection of Proceeds..........................................
Section 4.09 Maintenance of the Primary Mortgage Insurance Policies....................................
Section 4.10 Trustee to Retain Possession of Certain Insurance Policies and Documents..................
Section 4.11 Realization Upon Defaulted Loans..........................................................
Section 4.12 Compensation for the Master Servicer......................................................
Section 4.13 REO Property..............................................................................
Section 4.14 Master Servicer Annual Statement as to Compliance.........................................
Section 4.15 Master Servicer Assessments of Compliance and Attestation Reports.........................
Section 4.16 [Reserved]................................................................................
Section 4.17 Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls............
ARTICLE V ADVANCES AND DISTRIBUTIONS
Section 5.01 Advances; Advance Facility................................................................
Section 5.02 Compensating Interest Payments............................................................
Section 5.03 REMIC Distributions.......................................................................
Section 5.04 Distributions.............................................................................
Section 5.05 Allocation of Realized Losses.............................................................
Section 5.06 Monthly Statements to Certificateholders..................................................
Section 5.07 REMIC Designations, REMIC I and REMIC II Allocations......................................
Section 5.08 Prepayment Charges........................................................................
Section 5.09 Class P Certificate Account...............................................................
Section 5.10 Basis Risk Shortfall Reserve Fund.........................................................
Section 5.11 Supplemental Interest Trust...............................................................
Section 5.12 Tax Treatment of Swap Payments and Swap Termination Payments..............................
Section 5.13 Reports Filed with Securities and Exchange Commission.....................................
ARTICLE VI THE CERTIFICATES
Section 6.01 The Certificates..........................................................................
Section 6.02 Certificate Register; Registration of Transfer and Exchange of Certificates...............
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................
Section 6.04 Persons Deemed Owners.....................................................................
Section 6.05 Access to List of Certificateholders' Names and Addresses.................................
Section 6.06 Book-Entry Certificates...................................................................
Section 6.07 Notices to Depository.....................................................................
Section 6.08 Definitive Certificates...................................................................
Section 6.09 Maintenance of Office or Agency...........................................................
ARTICLE VII THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER
Section 7.01 Liabilities of the Depositor, the Servicer and the Master Servicer........................
Section 7.02 Merger or Consolidation of the Depositor, the Servicer or the Master Servicer.............
Section 7.03 Indemnification of Depositor and the Servicer.............................................
Section 7.04 Limitations on Liability of the Depositor, the Securities Administrator, the Master
Servicer, the Servicer and Others.........................................................
Section 7.05 Servicer Not to Resign....................................................................
Section 7.06 Appointment of Special Servicer; Termination of the Servicer..............................
Section 7.07 Limitation on Resignation of the Master Servicer..........................................
Section 7.08 Assignment of Master Servicing............................................................
Section 7.09 Rights of the Depositor in Respect of the Servicer and the Master Servicer................
ARTICLE VIII DEFAULT; TERMINATION OF THE SERVICER AND MASTER SERVICER
Section 8.01 Events of Default.........................................................................
Section 8.02 Master Servicer to Act; Appointment of Successor..........................................
Section 8.03 Notification to Certificateholders........................................................
Section 8.04 Waiver of Servicer Defaults and Master Servicer Defaults..................................
ARTICLE IX CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee and Securities Administrator............................................
Section 9.02 Certain Matters Affecting the Trustee and Securities Administrator........................
Section 9.03 Trustee and Securities Administrator not Liable for Certificates or Mortgage Loans........
Section 9.04 Trustee and Securities Administrator May Own Certificates.................................
Section 9.05 Fees and Expenses of Trustee and Securities Administrator.................................
Section 9.06 Eligibility Requirements for Trustee and Securities Administrator.........................
Section 9.07 Resignation and Removal of Trustee and Securities Administrator...........................
Section 9.08 Successor Trustee or Securities Administrator.............................................
Section 9.09 Merger or Consolidation of Trustee or Securities Administrator............................
Section 9.10 Appointment of Co-Trustee or Separate Trustee.............................................
Section 9.11 Appointment of Office or Agency...........................................................
Section 9.12 Representations and Warranties............................................................
Section 9.13 Tax Matters...............................................................................
ARTICLE X TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..........................
Section 10.02 Final Distribution on the Certificates....................................................
Section 10.03 Additional Termination Requirements.......................................................
ARTICLE XI MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.................................................................................
Section 11.02 Recordation of Agreement; Counterparts....................................................
Section 11.03 Governing Law.............................................................................
Section 11.04 Intention of Parties......................................................................
Section 11.05 Notices...................................................................................
Section 11.06 Severability of Provisions................................................................
Section 11.07 Assignment................................................................................
Section 11.08 Limitation on Rights of Certificateholders................................................
Section 11.09 Certificates Nonassessable and Fully Paid.................................................
Section 11.10 Third Party Beneficiaries.................................................................
Section 11.11 Intention of the Parties and Interpretation...............................................
EXHIBITS
Exhibit A-1 Form of Class [______________] Certificates
Exhibit A-2 Form of Class [______________] Certificates
Exhibit A-3 Form of Class [______________] Certificates
Exhibit A-4 Form of Class X Certificates
Exhibit A-5 Form of Class P Certificates
Exhibit A-6 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C Mortgage Loan Purchase Agreement
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Master Servicing Standard File Layout
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Prepayment Charge Schedule
Exhibit L Form of Servicer's Certification
Exhibit M Form of Power of Attorney
Exhibit N Appendix E of the Standard & Poor's Glossary For File Format
For LEVELS(R) Version 5.6 Revised
Exhibit O Servicing Criteria
Exhibit X-1 Form of Schedule of Default Loan Data
Exhibit X-2 Form of Schedule of Realized Losses/Gains
POOLING AND SERVICING AGREEMENT, dated as of [___________], among NOMURA
HOME EQUITY LOAN, INC., a Delaware corporation, as depositor (the "Depositor"),
NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, as seller (in such
capacity, the "Sponsor"), [___________________], a national banking association,
as master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), [________________], a [__________] corporation, as
servicer (the "Servicer") and [_______________________], a national banking
association, not in its individual capacity, but solely as trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Trust Fund (exclusive of the Basis
Risk Shortfall Reserve Fund and, for the avoidance of doubt, the Supplemental
Interest Trust and the Swap Agreement) as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC I".
The Class R-I Interest will represent the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions.
The following table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate, the initial Uncertificated Principal
Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests. None of the REMIC I Regular Interests will be certificated.
Uncertificated REMIC I Initial Certificate Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
[_____] (2) $ [_______________] [___________]
P (3) $ 100.00 [___________]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein. (3) The REMIC I Regular Interest LT-P will
not be entitled to distributions of interest.
REMIC II
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC I Regular Interest) for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The R-II Interest will represent the sole class of
"residual interests" in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Uncertificated REMIC
II Pass-Through Rate, the Initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC II Regular Interests. None
of the REMIC II Regular Interests will be certificated.
Uncertificated
Initial Uncertificated REMIC II Assumed Final Distribution
Designation Principal Balance Pass-Through Rate Date(1)
---------------------- ----------------------------- ---------------------- -----------------------------
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] (4) (2) [___________]
LT-[__] $ [___________] (3) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
LT-[__] $ [___________] (2) [___________]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC II Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate" herein. (3) The REMIC II Regular Interest LT-P will
not be entitled to distributions of interest. (4) REMIC II Regular
Interest LT-IO will not have an Uncertificated Principal Balance, but
will accrue interest
on its Uncertificated Notional Amount, as defined herein.
REMIC III
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The R-III Interest will represent the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions. The
following table irrevocably sets forth the Class designation, Pass-Through Rate
and Initial Certificate Principal Balance for each Class of Certificates that
represents one or more of the "regular interests" in REMIC III created
hereunder:
Initial Certificate Assumed Final Distribution
Class Designation Principal Balance Pass-Through Rate Date(1)
--------------------- ------------------------ ------------------------------------- --------------------------
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass-Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class [__] $ [___________] Class [__] Pass Through Rate [___________]
Class X(2) Class X Pass Through Rate [___________]
Class P $ N/A(3) [___________]
100
Class IO Interest (4) (5) [___________]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the second month following the maturity date
for the Mortgage Loan with the latest maturity date has been designated
as the "latest possible maturity date" for each Class of Certificates.
(2) The Class X Certificates will not accrue interest on their Certificate
Principal Balance, but will accrue interest at the Class X Pass-Through
Rate on the Certificate Notional Balance of the Class X Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests
(other than REMIC II Regular Interest LT-P).
(3) The Class P Certificates will not be entitled to distributions of
interest.
(4) For federal income tax purposes, the Class IO Interest will not have a
Pass-Through Rate, but will be entitled to 100]% of the amounts
distributed on REMIC II Regular Interest LT-IO.
(5) For federal income tax purposes, the Class IO Interest will not have an
Uncertificated Principal Balance, but will have a notional amount equal
to the Uncertificated Notional Amount of REMIC II Regular Interest IO.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Master Servicer, the Securities Administrator, the
Sponsor and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 3.01 hereof, but in no event below the standard set forth in
clause (x).
Accepted Servicing Practices: As defined in Section 3.01.
Account: Either the Distribution Account or the Custodial Account.
Accrual Period: With respect to the Group I, Group II, Subordinate and
Class X Certificates and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or with respect to the first Accrual
Period, the Closing Date) and ending on the day immediately preceding the
related Distribution Date. All calculations of interest on the Group I, Group II
and Subordinate Certificates will be based on a 360-day year and the actual
number of days elapsed in the related Accrual Period. All calculations of
interest on the Class X Certificates REMIC I Regular Interests and REMIC II
Regular Interests will be based on a 360-day year consisting of twelve 30-day
months.
Adjustment Date: With respect to each adjustable rate Mortgage Loan,
the first day of the month in which the Mortgage Rate of such Mortgage Loan
changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-Off Date as to each adjustable rate Mortgage Loan is set forth
in the Loan Schedule.
Advance: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Servicer or by the Master
Servicer pursuant to Section 5.01.
Advance Facility: As defined in Section 5.01(b)(i).
Advance Facility Notice: As defined in Section 5.01(b)(ii).
Advance Financing Person: As defined in Section 5.01(b)(i).
Advance Reimbursement Amount: As defined in Section 5.01(b)(ii).
Affected Party: As defined in the Swap Agreement.
Aggregate Loan Balance: With respect to the Mortgage Loans and any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans as of the last day of the related Due Period.
Aggregate Loan Group Balance: With respect to any Loan Group and any
Distribution Date, the aggregate of the Stated Principal Balances of the
Mortgage Loans in such Loan Group as of the last day of the related Due Period.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Servicer's Custodial Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the related
Mortgage Loans due after the related Due Period and (ii) Principal Prepayments
and Liquidation Proceeds received in respect of the related Mortgage Loans after
the last day of the related Prepayment Period.
Annual Statement of Compliance: As defined in Section 3.13.
Applied Loss Amount: With respect to the Publicly Offered Certificates
and the Class B Certificates and any Distribution Date, the excess of the
aggregate Certificate Principal Balance of the Publicly Offered Certificates and
the Class B Certificates over the Aggregate Loan Balance of the Mortgage Loans
after giving effect to all Realized Losses incurred with respect to the Mortgage
Loans during the related Due Period and payments of principal to the Publicly
Offered Certificates and Class B Certificates on such Distribution Date.
Appraised Value: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
Assessment of Compliance: As defined in Section 3.14.
Assumed Final Distribution Date: The Distribution Date in
[___________].
Attestation Report: As defined in Section 3.18.
Authorized Servicer Representative: Any officer of the Servicer
involved in, or responsible for, the administration and servicing of the related
Mortgage Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Trustee and the Master Servicer by the Servicer on the
Closing Date, as such list may from time to time be amended.
Available Distribution Amount: The sum of the Interest Remittance
Amount and Principal Remittance Amount, exclusive of amounts pursuant to Section
5.04.
Bankruptcy Code: Title 11 of the United States Code.
Basis Risk Shortfall Reserve Fund: The segregated non-interest bearing
trust account created and maintained by the Securities Administrator pursuant to
Section 5.10 hereof.
Basis Risk Shortfall: With respect to any Class of Group I, Group II or
Subordinate Certificates and any Distribution Date, the sum of (i) the excess,
if any, of the related Current Interest (calculated without regard to the Net
Funds Cap) over the related Current Interest (as it may have been limited by the
applicable Net Funds Cap) for the applicable Distribution Date; (ii) any amount
described in clause (i) remaining unpaid from prior Distribution Dates; and
(iii) interest on the amount in clause (ii) for the related Accrual Period
calculated on the basis of the lesser of (x) One Month LIBOR plus the applicable
Certificate Margin and (y) the applicable Maximum Interest Rate.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Publicly Offered Certificates constitutes a Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the State of New York, the State of
Delaware, the city in which any Corporate Trust Office of the Securities
Administrator is located or the States in which any Servicer's servicing
operations are located are authorized or obligated by law or executive order to
be closed.
Carryforward Interest: With respect to any Class of Publicly Offered
Certificates and any Class of Class B Certificates and any Distribution Date,
the sum of (i) the amount, if any, by which (x) the sum of (A) Current Interest
for that Class of Certificates for the immediately preceding Distribution Date
and (B) any unpaid Carryforward Interest for such Class from previous
Distribution Dates exceeds (y) the actual amount distributed on such Class in
respect of interest on the immediately preceding Distribution Date and (ii)
interest on such amount for the related Accrual Period at the applicable
Pass-Through Rate.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Securities Administrator in substantially the forms
attached hereto as Exhibits A-1 through A-6.
Certificate Margin: With respect to each Distribution Date on or prior
to the first possible Optional Termination Date with respect to the Mortgage
Loans, the Certificate Margins for the Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__] and Class [__]
Certificates are [_____]%, [_____]%, [_____]%, [_____]%, [_____]%, [_____]%,
[_____]% [_____]%, [_____]%, [_____]%, [_____]%, [_____]%, [_____]%, [_____]%,
[_____]%, [_____]% and [_____]%, respectively. With respect to each Distribution
Date following the first possible optional termination date with respect to the
Mortgage Loans, the Certificate Margins for the Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__] and Class
[__] Certificates are [_____]%, [_____]%, [_____]%, [_____]%, [_____]%,
[_____]%, [_____]% [_____]%, [_____]%, [_____]%, [_____]%, [_____]%, [_____]%,
[_____]%, [_____]%, [_____]% and [_____]%, respectively.
Certificate Notional Balance: With respect to the Class X Certificates
and any Distribution Date, the Uncertificated Principal Balance of the REMIC II
Regular Interests (other than REMIC II Regular Interest LT-P) for such
Distribution Date. As of the Closing Date, the Certificate Notional Balance of
the Class X Certificates is equal to $[________________].
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Publicly Offered Certificate,
Class B Certificate or Class P Certificate and as of any Distribution Date, the
Initial Certificate Principal Balance of such Certificate plus any Subsequent
Recoveries added to the Certificate Principal Balance pursuant to Section
5.05(f) less (i) the sum of (a) all amounts distributed with respect to such
Certificate in reduction of the Certificate Principal Balance thereof on
previous Distribution Dates pursuant to Section 5.04 and (b) with respect to any
Class of Subordinate Certificates, any reductions in the Certificate Principal
Balance of such Certificate deemed to have occurred in connection with the
allocations of Realized Losses, if any, plus (ii) with respect to the
Subordinate Certificates, any Subsequent Recoveries added to the Certificate
Principal Balance of any such Certificate pursuant to Section 5.05(d), in each
case up to the amount of Applied Loss Amounts but only to the extent that any
such Applied Loss Amount has not been paid to any Class of Certificates as a
Deferred Amount. With respect to the Class X Certificates and any date of
determination, the excess, if any, of (i) the then Aggregate Loan Balance over
(ii) the then aggregate Certificate Principal Balance of the Publicly Offered
Certificates and the Class B Certificates. References herein to the Certificate
Principal Balance of a Class of Certificates shall mean the Certificate
Principal Balances of all Certificates in such Class.
Certificate Register: The register maintained pursuant to Section 6.02.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
Class: All Certificates bearing the same Class designation as set forth
in Section 6.01.
Class B Certificates: The Class [__] Certificates and Class [__]
Certificates.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, will be the amount, if any, by
which (x) the sum of (i) the Certificate Principal Balances of the Senior
Certificates and the Mezzanine Certificates, in each case, after giving effect
to payments on such Distribution Date and (ii) the Certificate Principal Balance
of the Class [__] Certificates immediately prior to such Distribution Date
exceeds (y) the lesser of (A) the product of (i) approximately [_____]% and (ii)
the Aggregate Loan Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds
(ii) [_____]% of the Aggregate Loan Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, will be the amount, if any, by
which (x) the sum of (i) the Certificate Principal Balances of the Senior
Certificates, the Mezzanine Certificates and the Class [__] Certificates, in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class [__] Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
approximately [_____]% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) [_____]% of the Aggregate Loan Balance as of
the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class IO Distribution Amount: As defined in Section 5.11 hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution Date
shall equal the amount payable to the Supplemental Interest Trust on such
Distribution Date in excess of the amount payable on the Class IO Interest on
such Distribution Date, all as further provided in Section 5.11 hereof.
Class IO Interest: An uncertificated interest in the Trust Fund held by
the Trustee, evidencing a REMIC Regular Interest in REMIC III for purposes of
the REMIC Provisions.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and (i) a REMIC Regular Interest
in REMIC III, (ii) the right to receive the related Basis Risk Shortfall and
(iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior Certificates, in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class [__] Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
[_____]% and (ii) the Aggregate Loan Balance for such Distribution Date and (B)
the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) [_____]% of the Aggregate Loan Balance as of the
Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior Certificates and
the Class [__] Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the Class
[__] Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) [_____]% and (ii) the Aggregate Loan Balance
for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) [_____]% of the
Aggregate Loan Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__]
Certificates and Class [__] Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Certificate Principal Balance of
the Class [__] Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) [_____]% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) [_____]% of the
Aggregate Loan Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__] and Class [__] Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Certificate Principal Balance of
the Class [__] Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) [_____]% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) [_____]% of the
Aggregate Loan Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__], Class [__] and Class [__] Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the Certificate Principal
Balance of the Class [__] Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) [_____]% and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii)
[_____]% of the Aggregate Loan Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__], Class [__], Class [__] and Class [__] Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class [__] Certificates immediately prior
to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
[_____]% and (ii) the Aggregate Loan Balance for such Distribution Date and (B)
the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) [_____]% of the Aggregate Loan Balance as of the
Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__], Class [__], Class [__], Class [__] and Class [__] Certificates, in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class [__] Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i)
[_____]% and (ii) the Aggregate Loan Balance for such Distribution Date and (B)
the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) [_____]% of the Aggregate Loan Balance as of the
Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__] and Class [__]
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Certificate Principal Balance of the Class [__] Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) [_____]% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) [_____]% of the Aggregate Loan
Balance as of the Cut-off Date.
Class [__] Certificate: Any Certificate designated as a "Class [__]
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [__] Certificates as set forth herein and evidencing (i) a REMIC
Regular Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class [__] Pass-Through Rate: With respect to each Distribution Date, a
per annum rate equal to the lesser of (i) the sum of One-Month LIBOR for that
Distribution Date plus (A) on or prior to the first possible Optional
Termination Date, [_____]% or (B) after the first possible Optional Termination
Date, [_____]% and (ii) the applicable Net Funds Cap.
Class [__] Principal Payment Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior, Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__] and Class
[__] Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class [__]
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) [_____]% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) [_____]% of the Aggregate Loan
Balance as of the Cut-off Date.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class P Certificates as set forth herein and evidencing (i) a REMIC Regular
Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class P Certificate Account: The Eligible Account established and
maintained by the Securities Administrator pursuant to Section 5.09.
Class R Certificate: Any Certificate designated as a "Class R"
Certificate on the face thereof in the form of Exhibit A-6 hereto, representing
the right to its Percentage Interest of distributions provided for the Class R
Certificates as set forth herein and evidencing the Class R-I Interest, Class
R-II Interest and Class R-III Interest.
Class R-I Interest: The uncertificated residual interest in REMIC I.
Class R-II Interest: The uncertificated residual interest in REMIC II.
Class R-III Interest: The uncertificated residual interest in REMIC
III.
Class X Certificate: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X Certificates as set forth herein and evidencing (i) a REMIC Regular
Interest in REMIC III, (ii) the right to receive the related Basis Risk
Shortfall and (iii) the obligation to pay any Class IO Distribution Amount.
Class X Distribution Amount: With respect to any Distribution Date and
the Class X Certificates, the sum of (i) the Current Interest and Carryforward
Interest and (ii) any Overcollateralization Release Amount for such Distribution
Date remaining after payments pursuant to items 1 through 28 of Section
5.04(iii); provided, however that on and after the Distribution Date on which
the Certificate Principal Balances of the Publicly Offered Certificates and the
Class B Certificates have been reduced to zero, the Class X Distribution Amount
shall include the Overcollateralization Amount.
Class X Pass-Through Rate: On any Distribution Date, a per annum rate
equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (A) through (R) below, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___]
and REMIC II Regular Interest LT-ZZ. For purposes of calculating the
Pass-Through Rate for the Class X Certificates, the numerator is equal to the
sum of the following components:
(A) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-AA minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-AA;
(B) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(C) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___], minus the Marker Rate, applied to
an amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT-[___];
(D) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___], minus the Marker Rate, applied to
an amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT-[___];
(E) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___], minus the Marker Rate, applied to
an amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT-[___];
(F) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___], minus the Marker Rate, applied to
an amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT-[___];
(G) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(H) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(I) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(J) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(K) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___]; and
(L) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(M) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(N) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(O) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(P) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___];
(Q) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-[___] minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-[___]; and
(R) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-ZZ minus the Marker Rate, applied to an
amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT-ZZ.
Cleanup Call: As defined in Section 10.01.
Closing Date: [___________].
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan as of
any Determination Date, the ratio on such Determination Date of the Stated
Principal Balance of the Mortgage Loan and any other mortgage loan which is
secured by a lien on the related Mortgaged Property to the Appraised Value of
the Mortgaged Property.
Compensating Interest: With respect to any Distribution Date, an amount
to be deposited in the Distribution Account by the Servicer or the Master
Servicer to offset a Prepayment Interest Shortfall on a Mortgage Loan in
accordance with this Agreement; provided, however that the amount of
Compensating Interest required to be paid in respect of the Mortgage Loans shall
not exceed the applicable Servicing Fee payable to the Servicer on such
Distribution Date or, in the case of the Master Servicer, shall not exceed the
Master Servicing Compensation payable to the Master Servicer with respect to the
related Prepayment Period.
Corporate Trust Office: The principal corporate trust office of the
Trustee which office at the date of the execution of this instrument is located
at [_______________________] Attention: [___________________] or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Servicer. The office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at
[_______________________], Attention: [___________________], and for all other
purposes is located at [_______________________], Attention:
[___________________] (or for overnight deliveries, at
[_______________________], Attention: [___________________]).
Corresponding Certificate: With respect to:
(i) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(ii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(iii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(iv) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(v) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(vi) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(vii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(viii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(ix) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(x) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xi) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xiii) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xiv) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xv) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xvi) REMIC II Regular Interest LT-[__], the Class [__] Certificates;
(xvii) REMIC II Regular Interest LT-P, the Class P Certificates.
Credit Risk Management Agreement: Each of the agreements between the
Credit Risk Manager and the Servicer and/or Master Servicer, dated as of
[_____________].
Credit Risk Management Fee: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Credit Risk Management Fee
Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the
last day of the related Due Period. The Credit Risk Management Fee shall be
payable to the Credit Risk Manager and/or the Sponsor pursuant to Section
3.32(a)(vii) and 3.33(b).
Credit Risk Management Fee Rate: [_____]% per annum.
Credit Risk Manager: [________________], a [___________] corporation,
and its successors and assigns.
Current Interest: With respect to any Class of Publicly Offered
Certificates and Class B Certificates and any Distribution Date, the amount of
interest accruing at the applicable Pass-Through Rate on the related Certificate
Principal Balance during the related Accrual Period; provided, that as to each
Class of Publicly Offered Certificates and Class B Certificates, the Current
Interest will be reduced by a pro rata portion of any Net Interest Shortfalls to
the extent not covered by excess interest. No Current Interest will be payable
with respect to any Class of Publicly Offered Certificates or Class B
certificate after the Distribution Date on which the outstanding Certificate
Principal Balance of such Certificate has been reduced to zero.
Custodial Account: Each account established and maintained by the
Servicer with respect to receipts on the applicable Mortgage Loans and related
REO Properties in accordance with Section 3.26(b).
Custodial Agreement: The Custodial Agreement dated as of [___________]
among [___________], in its capacity as Custodian, the Servicer and the Trustee.
Custodian: [________________].
Cut-off Date: [___________].
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
DBRS: Dominion Bond Rating Services.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Defaulting Party: As defined in the Swap Agreement.
Deferred Amount: With respect to any Class of Subordinate Certificates
and any Distribution Date, the amount by which (x) the aggregate of the Applied
Loss Amounts previously applied in reduction of the Certificate Principal
Balance thereof exceeds (y) the aggregate of amounts previously paid in
reimbursement thereof and the amount by which the Certificate Principal Balance
of any such Class has been increased due to the collection of Subsequent
Recoveries.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 6.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquency Rate: With respect to the Mortgage Loans and any calendar
month will be, generally, the fraction, expressed as a percentage, the numerator
of which is the Aggregate Loan Balance of all Mortgage Loans sixty (60) or more
days delinquent (including all Mortgage Loans in bankruptcy or foreclosure and
all REO Properties) as of the close of business on the last day of such month,
and the denominator of which is the Aggregate Loan Balance of all Mortgage Loans
as of the close of the last day of the related Due Period.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Principal Balance of this
Certificate".
Depositor: Nomura Home Equity Loan, Inc., a Delaware corporation, or
its successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.
The Depository shall initially be 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 Agreement: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.
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 any Distribution Date, the
[___________] day of the month of such Distribution Date or, if such day is not
a Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.31 in the name
of the Trustee for the benefit of the Certificateholders and designated
"[___________________], in trust for registered holders of Nomura Home Equity
Loan, Inc., Asset-Backed Certificates, Series [___________]". 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 twenty-fifth (25th) day of each calendar month
after the initial issuance of the Certificates, or if such twenty-fifth (25th)
day is not a Business Day, the next succeeding Business Day, commencing in
[___________].
Due Date: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through the close of business on the first day of the
calendar month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which are rated by each Rating Agency in one of its two highest long-term and
its highest short-term rating categories respectively, at the time any amounts
are held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC (to
the limits established by the FDIC) and the uninsured deposits in which accounts
are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced in writing by
the Rating Agencies. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee
or Securities Administrator.
Escrow Account: Shall mean the account or accounts maintained by the
Servicer pursuant to Section 3.29. Each Escrow Account shall be an Eligible
Account.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificate: Each of the Class X, Class P and Residual
Certificates.
Excess Liquidation Proceeds: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
Exchange Act: Securities and Exchange Act of 1934, as amended.
Exemption: Prohibited Transaction Exemption 93-32, as amended from time
to time.
Expense Fee Rate: The sum of the Credit Risk Management Fee Rate and
Servicing Fee Rate attributable to the Mortgage Loans.
Extra Principal Distribution Amount: With respect to any Distribution
Date, is the lesser of (x) the Overcollateralization Deficiency Amount for such
Distribution Date and (y) the sum of (i) the Monthly Excess Cashflow for such
Distribution Date and (ii) amounts available from the Supplemental Interest
Trust to pay principal as provided in Section 5.04(b)(ii).
Xxxxxx Xxx: Xxxxxx Xxx (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Sponsor or the Master Servicer pursuant to or as contemplated by Section
2.03(c) or Section 10.01), a determination made by the Servicer pursuant to this
Agreement that all Insurance Proceeds, Liquidation Proceeds and other payments
or recoveries which the Servicer, in its reasonable good faith judgment, expects
to be finally recoverable in respect thereof have been so recovered. The
Servicer shall maintain records of each Final Recovery Determination made
thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended.
Fitch: Fitch Ratings.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor
thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
Group I Certificates: The Class [__] Certificates.
Group I Allocation Amount: With respect to any Distribution Date, the
product of the Senior Principal Payment Amount for that Distribution Date and a
fraction the numerator of which is the Principal Remittance Amount derived from
the Group I Mortgage Loans and the denominator of which is the Principal
Remittance Amount (without regard to any payments made pursuant to the Swap
Agreement with respect to Realized Losses), in each case for that Distribution
Date.
Group I Allocation Percentage: With respect to any Distribution Date,
the Aggregate Loan Group Balance of the Group I Mortgage Loans divided by the
Aggregate Loan Balance.
Group I Excess Interest Amount: With respect to any Distribution Date,
the product of the Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to Section 5.04(iii)(1)(A) and a fraction the
numerator of which is the Principal Remittance Amount (without regard to any
payments made pursuant to the Swap Agreement with respect to Realized Losses)
derived from the Group I Mortgage Loans and the denominator of which is the
Principal Remittance Amount, in each case for that Distribution Date.
Group I Mortgage Loans: Those Mortgage Loans identified on the Mortgage
Loan Schedule as Group I Mortgage Loans.
Group II Certificates: The Class [__], Class [__] and Class [__]
Certificates.
Group II Allocation Amount: With respect to any Distribution Date, the
product of the Senior Principal Payment Amount for that Distribution Date and a
fraction the numerator of which is the Principal Remittance Amount derived from
the Group II Mortgage Loans and the denominator of which is the Principal
Remittance Amount (without regard to any payments made pursuant to the Swap
Agreement with respect to Realized Losses), in each case for that Distribution
Date.
Group II Allocation Percentage: With respect to any Distribution Date,
the Aggregate Loan Group Balance of the Group II Mortgage Loans divided by the
Aggregate Loan Balance.
Group II Excess Interest Amount: With respect to any Distribution Date,
the product of the Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to Section 5.04(iii)(1)(A) and a fraction the
numerator of which is the Principal Remittance Amount derived from the Group II
Mortgage Loans and the denominator of which is the Principal Remittance Amount
(without regard to any payments made pursuant to the Swap Agreement with respect
to Realized Losses), in each case for that Distribution Date.
Group II Mortgage Loans: Those Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Indemnified Persons: The Trustee, the Servicer (including any successor
to the Servicer), the Master Servicer, the Securities Administrator, the
Custodian, the Trust Fund and their officers, directors, agents and employees
and, with respect to the Trustee, any separate co-trustee and its officers,
directors, agents and employees.
Index: As of any Adjustment Date, the index applicable to the
determination of the Mortgage Rate on each adjustable rate Mortgage Loan which
will generally be based on Six-Month LIBOR.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer of the related Mortgage Loan or the trustee under the
deed of trust and are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the servicing standard
set forth in Section 3.01 hereof, other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by any Insurance Policy with respect
to the Mortgage Loans.
Interest Determination Date: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
Interest Remittance Amount: With respect to any Distribution Date and
each Loan Group, that portion of the Available Distribution Amount for such
Distribution Date generally equal to (i) the sum, without duplication, of (a)
all scheduled interest received during the related Due Period with respect to
the related Mortgage Loans less the Servicing Fee, the Credit Risk Management
Fee and the fee payable to any provider of lender-paid mortgage insurance, if
any, (b) all Advances relating to interest with respect to the related Mortgage
Loans made on or prior to the related Remittance Date, (c) all Compensating
Interest with respect to the related Mortgage Loans and required to be remitted
by the Servicer or the Master Servicer pursuant to this Agreement with respect
to such Distribution Date, (d) Liquidation Proceeds and Subsequent Recoveries
with respect to the related Mortgage Loans collected during the related
Prepayment Period (to the extent such Liquidation Proceeds and Subsequent
Recoveries relate to interest), (e) all amounts relating to interest with
respect to each related Mortgage Loan repurchased by the Sponsor pursuant to
Sections 2.02 and 2.03 and (f) all amounts in respect of interest paid by the
Master Servicer pursuant to Section 10.01 to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement, minus (ii) all
amounts required to be reimbursed by the Trust pursuant to Section 3.32 or as
otherwise set forth in this Agreement or the Custodial Agreement, allocated to
the respective Loan Group on a pro rata basis, based on the Aggregate Loan Group
Balance as of the last day of the related Due Period, to the extent such amounts
are attributable to both Loan Groups, and otherwise allocated to the Loan Group
to which such amounts are attributable.
Interest Shortfall: With respect to any Distribution Date, the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act.
ISDA Master Agreement: The ISDA Master Agreement dated as of
[___________], as amended and supplemented from time to time, between the Swap
Provider and the Trustee, as trustee on behalf of the Supplemental Interest
Trust.
Last Scheduled Distribution Date: With respect to the Certificates, the
Distribution Date in [___________].
Latest Possible Maturity Date: The second Distribution Date following
the final scheduled maturity date of the Mortgage Loan in the Trust Fund having
the latest scheduled maturity date as of the Cut-off Date. For purposes of the
Treasury Regulations under Code Section 860A through 860G, the latest possible
maturity date of each regular interest issued by each REMIC shall be the Latest
Possible Maturity Date.
LIBOR Business Day: Shall mean any day other than a Saturday or a
Sunday or a day on which banking institutions in the State of New York or in the
city of London, England are required or authorized by law to be closed.
LIBOR Determination Date: The second LIBOR Business Day before the
first day of the related Accrual Period.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Servicer of such Mortgage Loan has certified in
the related Prepayment Period in writing to the Securities Administrator that it
has made a Final Recovery Determination.
Liquidation Proceeds: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees and Servicing Advances and all expenses of
liquidation, including property protection expenses and foreclosure and sale
costs, including court and reasonable attorneys fees.
Loan Group: Either Loan Group I or Loan Group II. "Loan Group I" refers
to the Group I Mortgage Loans and "Loan Group II" refers to the Group II
Mortgage Loans.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the Mortgage Loan and
the denominator of which is the Appraised Value of the related Mortgaged
Property.
Majority Class X Certificateholder: The Holder of a 50.01% or greater
Percentage Interest in the Class X Certificates.
Marker Rate: With respect to the Publicly Offered Certificates and the
Class B Certificates and any Distribution Date, a per annum rate equal to two
(2) times the weighted average of the Uncertificated REMIC II Pass-Through Rates
for REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___],
REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___] and REMIC II Regular Interest
LT-ZZ, with the per annum rate on each such REMIC II Regular Interest (other
than REMIC II Regular Interest LT-ZZ) subject to a cap equal to the Pass-Through
Rate on the Corresponding Certificate for the purpose of this calculation; and
with the per annum rate on REMIC II Regular Interest LT-ZZ subject to a cap of
zero for the purpose of this calculation; provided, however, that for this
purpose, the calculation of the Uncertificated REMIC II Pass-Through Rate and
the related cap with respect to each such REMIC II Regular Interest (other than
REMIC II Regular Interest LT-ZZ) shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period and the
denominator of which is thirty (30).
Master Servicer: As of the Closing Date, [________________] and
thereafter, its respective successors in interest who meet the qualifications of
this Agreement. The Master Servicer and the Securities Administrator shall at
all times be the same Person or Affiliates.
Master Servicer Assessment of Compliance: As defined in Section 4.14.
Master Servicer Attestation Report: As defined in Section 4.15.
Master Servicer Certification: A written certification signed by an
officer of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of
2002, as amended from time to time, and (ii) the February 21, 2003 Statement by
the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules
13a-14 and 15d-14, as in effect from time to time; provided that if, after the
Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the Statement
referred to in clause (ii) is modified or superseded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the Xxxxxxxx-Xxxxx Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Sponsor following a negotiation in good
faith to determine how to comply with any such new requirements.
Master Servicing Compensation: As defined in Section 4.12.
Master Servicer Default: One or more of the events described in Section
8.01(b).
Maximum Interest Rate: With respect to any Distribution Date and the
related Accrual Period and the Senior Certificates, an annual rate equal to the
weighted average of the Maximum Mortgage Interest Rates of the Mortgage Loans in
the related Loan Group as stated on the Mortgage Loan Schedule minus the
weighted average Expense Fee Rate of the Mortgage Loans in the related Loan
Group. With respect to any Distribution Date and the related Accrual Period and
the Subordinate Certificates, an annual rate equal to the weighted average of
the Maximum Mortgage Interest Rates of the Mortgage Loans as stated on the
Mortgage Loan Schedule minus the weighted average Expense Fee Rate of the
Mortgage Loans. The calculation of the Maximum Interest Rate will be based on a
360-day year and the actual number of days elapsed during the related Accrual
Period.
Maximum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum interest rate.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
Mezzanine Certificates: The Class [__], Class [__], Class, [__], Class
[__], Class [__], Class [__], Class [__], Class [__] and Class [__]
Certificates.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
Minimum Servicing Requirements: With respect to a successor Xxxxxxxx
appointed pursuant to Section 7.06(b) hereunder:
(ii) the proposed Successor Servicer is (1) an affiliate of the Master
Servicer that services mortgage loans similar to the Mortgage Loans in
the jurisdictions in which the related Mortgaged Properties are located
or (2) the proposed Successor Servicer has a rating of at least "Above
Average" by S&P and either a rating of at least "RPS2" by Fitch or a
rating of at least "SQ2" by Moody's; and
(iii) the proposed Successor Servicer has a net worth of at least
$25,000,000.
MOM Loan: Any Mortgage Loan as to which MERS is acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Excess Cashflow: With respect to any Distribution Date, means
the sum of (a) the Monthly Excess Interest, (b) the Overcollateralization
Release Amount, if any, for such Distribution Date, and (c) the Principal
Remittance Amount remaining following payments of the Principal Payment Amount
to the Senior Certificates and Subordinate Certificates.
Monthly Excess Interest: With respect to any Distribution Date, the
excess of (x) the Interest Remittance Amount for such Distribution Date over (y)
the sum of Current Interest and Carryforward Interest on the Senior Certificates
and Subordinate Certificates for such Distribution Date.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 5.06.
Moody's: Xxxxx'x Investors Service, Inc. or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on, or first or second priority security interest in, a
Mortgaged Property securing a Mortgage Note.
Mortgage File: The Mortgage Loan Documents pertaining to a particular
Mortgage Loan and any additional documents delivered to the Trustee to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loan Documents: As defined in Section 2.01.
Mortgage Loans: Each of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof, as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of [___________], between the Sponsor, as seller and the Depositor, as
purchaser.
Mortgage Loan Purchase Price: The price, calculated as set forth in
Section 10.01, to be paid in connection with the purchase of the Mortgage Loans
pursuant to Section 10.01.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Servicer of the related Mortgage Loans to reflect the
deletion of Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant to the provisions of this Agreement) transferred to the Trustee
as part of the Trust Fund and from time to time subject to this Agreement,
setting forth the following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) a code indicating to which Loan Group a Mortgage Loan has been
assigned;
(iii) a code indicating whether the Mortgaged Property is owner-occupied;
(iv) the type of Residential Dwelling constituting the Mortgaged Property;
(v) the original months to maturity;
(vi) the original date of the Mortgage Loan and the remaining months to
maturity from the Cut-off Date, based on the original amortization
schedule;
(vii) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable,
at origination;
(viii) the Mortgage Rate in effect immediately following the Cut-off Date;
(ix) the date on which the first Monthly Payment was due on the Mortgage
Loan;
(x) the stated maturity date;
(xi) the amount of the Monthly Payment at origination;
(xii) the amount of the Monthly Payment as of the Cut-off Date;
(xiii) the last Due Date on which a Monthly Payment was actually applied to
the unpaid Stated Principal Balance;
(xiv) the original principal amount of the Mortgage Loan;
(xv) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date;
(xvi) with respect to each adjustable rate Mortgage Loan, the first
Adjustment Date;
(xvii) with respect to each adjustable rate Mortgage Loan, the Gross Margin;
(xviii) a code indicating the purpose of the loan (i.e., purchase financing,
rate/term refinancing, cash-out refinancing);
(xix) with respect to each adjustable rate Mortgage Loan, the Maximum
Mortgage Rate under the terms of the Mortgage Note;
(xx) with respect to each adjustable rate Mortgage Loan, the Minimum
Mortgage Rate under the terms of the Mortgage Note;
(xxi) the Mortgage Rate at origination;
(xxii) with respect to each adjustable rate Mortgage Loan, the Periodic Rate
Cap;
(xxiii) with respect to each adjustable rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(xxiv) with respect to each adjustable rate Mortgage Loan, the Index;
(xxv) the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date;
(xxvi) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a fixed rate Mortgage Loan;
(xxvii) a code indicating the documentation style (i.e., full, stated or
limited);
(xxviii) a code indicating if the Mortgage Loan is subject to a primary
insurance policy or lender paid mortgage insurance policy and the name
of the insurer;
(xxix) the Appraised Value of the Mortgaged Property;
(xxx) the sale price of the Mortgaged Property, if applicable;
(xxxi) a code indicating whether the Mortgage Loan is subject to a Prepayment
Charge, the term of such Prepayment Charge and the amount of such
Prepayment Charge;
(xxxii) the product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30
balloon, etc.);
(xxxiii) the Mortgagor's debt to income ratio;
(xxxiv) the FICO score at origination; and
(xxxv) the Servicer.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate with respect to
each adjustable rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following
the Cut-off Date and (B) as of any date of determination thereafter shall be the
rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to
the nearest 0.125% as provided in the Mortgage Note, of the Index, as most
recently available as of a date prior to the Adjustment Date as set forth in the
related Mortgage Note, plus the related Gross Margin; provided that the Mortgage
Rate on such adjustable rate Mortgage Loan on any Adjustment Date shall never be
more than the lesser of (i) the sum of the Mortgage Rate in effect immediately
prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and
(ii) the related Maximum Mortgage Rate, and shall never be less than the greater
of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less
the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Funds Cap: With respect to any Distribution Date for the Group I
Certificates, a per annum rate (adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis) equal to the product of (I)(a) a
fraction, expressed as a percentage, the numerator of which is the related
Optimal Interest Remittance Amount for such Distribution Date and the
denominator of which is the Aggregate Loan Group Balance of the Group I Mortgage
Loans for the immediately preceding Distribution Date, minus (b) the sum of (1)
the Group I Allocation Percentage of the Net Swap Trust Payment payable to the
Swap Provider on such Distribution Date, divided by the Stated Principal Balance
of the Group I Mortgage Loans for the immediately preceding Distribution Date,
(2) the Group I Allocation Percentage of any Net Swap Trust Payment for such
Distribution Date, divided by the outstanding Stated Principal Balance of the
Group I Mortgage Loans for the immediately preceding Distribution Date and (3)
the Group I Allocation Percentage of any Swap Termination Payment not due to a
Swap Provider Trigger Event payable to the Swap Provider on such Distribution
Date, divided by the Stated Principal Balance of the Group I Mortgage Loans for
the immediately preceding Distribution Date and (II) 12. With respect to any
Distribution Date and the REMIC III Regular Interests the ownership of which is
represented by the Group I Certificates, a per annum rate equal to the weighted
average (adjusted for the actual number of days elapsed in the related Accrual
Period) of the Uncertificated REMIC II Pass-Through Rate on REMIC II Regular
Interest LT-1GRP, weighted on the basis of the Uncertificated Principal Balance
of such REMIC II Regular Interest immediately prior to such Distribution Date.
With respect to any Distribution Date for the Group II Certificates, a
per annum rate (adjusted to an effective rate reflecting the accrual of interest
on an actual/360 basis) equal to the product of (I)(a) a fraction, expressed as
a percentage, the numerator of which is the related Optimal Interest Remittance
Amount for such Distribution Date and the denominator of which is the aggregate
Loan Group Balance of the Group II Mortgage Loans for the immediately preceding
Distribution Date, minus (b) the sum of (1) the Group II Allocation Percentage
of the Net Swap Trust Payment payable to the Swap Provider on such Distribution
Date, divided by the Stated Principal Balance of the Group II Mortgage Loans for
the immediately preceding Distribution Date, (2) the Group II Allocation
Percentage of the any Net Swap Trust Payment for such Distribution Date, divided
by the outstanding Stated Principal Balance of the Group II Mortgage Loans for
the immediately preceding Distribution Date and (3) the Group II Allocation
Percentage of the any Swap Termination Payment not due to a Swap Provider
Trigger Event payable to the Swap Provider on such Distribution Date, divided by
the Stated Principal Balance of the Group II Mortgage Loans for the immediately
preceding Distribution Date and (II) 12. With respect to any Distribution Date
and the REMIC III Regular Interests the ownership of which is represented by the
Group II Certificates, a per annum rate equal to the weighted average (adjusted
for the actual number of days elapsed in the related Accrual Period) of the
Uncertificated REMIC II Pass-Through Rate on REMIC II Regular Interest LT-1GRP,
weighted on the basis of the Uncertificated Principal Balance of such REMIC II
Regular Interest immediately prior to such Distribution Date.
With respect to any Distribution Date and the Subordinate Certificates,
a per annum rate (adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis) equal to the weighted average (weighted on the
basis of the results of subtracting from the Aggregate Loan Group Balance the
current aggregate Certificate Principal Balance of the related Senior
Certificates) of the Net Funds Cap for the Group I Certificates and the Net
Funds Cap for the Group II Certificates. For federal income tax purposes, the
equivalent of the foregoing shall be expressed as the weighted average of the
Uncertificated REMIC II Pass-Through Rates on REMIC II Regular Interest LT-1SUB
and REMIC II Regular Interest LT-2SUB, in each case subject to a cap and a floor
equal Net Funds Cap for the Group I Certificates and the Net Funds Cap for the
Group II Certificates, respectively, weighted in each case on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest. With
respect to any Distribution Date and the REMIC III Regular Interests the
ownership of which is represented by the Subordinate Certificates, a per annum
rate equal to the weighted average (adjusted for the actual number of days
elapsed in the related Accrual Period) of (a) REMIC II Regular Interest LT-1SUB,
subject to a cap and a floor equal to the Uncertificated REMIC II Pass-Through
Rate on REMIC II Regular Interest LT-1GRP and (b) REMIC II Regular Interest
LT-2SUB, subject to a cap and a floor equal to the Uncertificated REMIC II
Pass-Through Rate on REMIC II Regular Interest LT-2GRP, in each case as
determined for such Distribution Date, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC II Regular Interest
immediately prior to such Distribution Date.
Net Interest Shortfalls: Shall mean Interest Shortfalls net of payments
by the Servicer or the Master Servicer in respect of Compensating Interest.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate, (ii) the Credit Risk Management Fee Rate and (iii) the rate at which
the fee payable to any provider of lender-paid mortgage insurance is calculated,
if applicable.
Net Swap Trust Payment: With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Swap Agreement by
either the Swap Provider or the Supplemental Interest Trust, which net payment
shall not take into account any Swap Termination Payment.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: With respect any Mortgage Loans, any portion of
an Advance or Servicing Advance previously made or proposed to be made by the
Servicer pursuant to this Agreement or the Master Servicer as Successor
Servicer, that, in the good faith judgment of the Servicer or the Master
Servicer as Successor Servicer, will not or, in the case of a proposed Advance
or Servicing Advance, would not, be ultimately recoverable by it from the
related Mortgagor, related Liquidation Proceeds, Insurance Proceeds or
otherwise.
Notional Amount: For each Distribution Date shall be equal to the
lesser of (a) the aggregate Certificate Principal Balance of the Offered
Certificates and the Class B Certificates immediately preceding such
distribution date and (b) the Swap Notional Amount for such Distribution Date as
set forth in the Swap Agreement, but in no instance less than the Minimum Swap
Notional Amount for such Distribution Date as set forth in the Swap Agreement.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Trustee (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (ii), if provided for
in this Agreement, signed by an Authorized Servicer Representative, as the case
may be, and delivered to the Depositor, the Sponsor, the Master Servicer, the
Securities Administrator and/or the Trustee, as the case may be, as required by
this Agreement.
One-Month LIBOR: With respect to any Accrual Period (other than the
first Accrual Period), the rate determined by the Securities Administrator on
the related Interest Determination Date on the basis of the rate for U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date. If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Securities Administrator), One-Month LIBOR for the applicable Accrual Period
will be the Reference Bank Rate. If no such quotations can be obtained by the
Securities Administrator and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination Date by the
Securities Administrator and the Securities Administrator's calculation of the
rate of interest applicable to the Senior Certificates and the Subordinate
Certificates for the related Accrual Period shall, in the absence of manifest
error, be final and binding. With respect to the first Accrual period, One-Month
LIBOR shall equal [_____]% per annum.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Sponsor, the Master Servicer, the Depositor or the Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 7.05 or 11.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the Sponsor, the
Master Servicer, Depositor and the Servicer, (ii) not have any direct financial
interest in the Sponsor, the Depositor, the Master Servicer or any Servicer or
in any affiliate of any of them, and (iii) not be connected with the Sponsor,
the Depositor, the Master Servicer or any Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Optimal Interest Remittance Amount: With respect to any Distribution
Date and (A) the Senior Certificates, will be equal to the excess of (i) the
product of (1)(x) the weighted average Net Mortgage Rates of the Mortgage Loans
in the related Loan Group as of the first day of the related Due Period divided
by (y) 12 and (2) the Aggregate Loan Balance of the Mortgage Loans in the
related Loan Group for the immediately preceding Distribution Date, over (ii)
any expenses that reduce the Interest Remittance Amount that did not arise as a
result of a default or delinquency of the Mortgage Loans in the related Loan
Group or were not taken into account in computing the expense fee rate, and (B)
the Subordinate Certificates, will be equal to the excess of (i) the product of
(1)(x) the weighted average Net Mortgage Rates of the Mortgage Loans as of the
first day of the related Due Period divided by (y) 12 and (2) the Aggregate Loan
Balance of the Mortgage Loans for the immediately preceding Distribution Date,
over (ii) any expenses that reduce the Interest Remittance Amount that did not
arise as a result of a default or delinquency of the Mortgage Loans or were not
taken into account in computing the expense fee rate.
Optional Termination: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any
related REO Property pursuant to Section 10.01.
Optional Termination Date: The first Distribution Date on which the
Master Servicer may purchase, at its option, the Mortgage Loans and related REO
Properties as described in Section 10.01.
OTS: The Office of Thrift Supervision or any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(b) 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 date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Overcollateralization Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Aggregate Loan Balance for such Distribution Date
over (b) the aggregate Certificate Principal Balance of the Publicly Offered
Certificates and the Class B Certificates on such Distribution Date (after
taking into account the payment of 100% of the Principal Remittance Amount
(without regard to any payments made pursuant to the Swap Agreement with respect
to Realized Losses) on such Distribution Date).
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the Targeted
Overcollateralization Amount for such Distribution Date exceeds (y) the
Overcollateralization Amount for such Distribution Date, calculated for this
purpose after giving effect to the reduction on such Distribution Date of the
aggregate Certificate Principal Balance of the Publicly Offered Certificates and
the Class B Certificates resulting from the payment of the Principal Remittance
Amount (without regard to any payments made pursuant to the Swap Agreement with
respect to Realized Losses) on such Distribution Date, but prior to allocation
of any Applied Loss Amount on such Distribution Date.
Overcollateralization Release Amount: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount (without regard to any
payments made pursuant to the Swap Agreement with respect to Realized Losses)
for such Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date exceeds (2) the Targeted
Overcollateralization Amount for such Distribution Date.
Ownership Interest: As to any 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.
Pass-Through Rate: The Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__] and Class X
Pass-Through Rate, as applicable.
Payahead: Any Scheduled Payment intended by the related Mortgagor to be
applied in a Due Period subsequent to the Due Period in which such payment was
received.
Percentage Interest: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class.
Periodic Rate Cap: With respect to the Adjustment Date for any
adjustable rate Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage Rate for such
adjustable rate Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on such
Adjustment Date from the Mortgage Rate in effect immediately prior to such
Adjustment Date.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) direct obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
thereof, provided such obligations are unconditionally backed by the
full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving the highest
commercial or finance company paper rating of each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by each Rating Agency,
as evidenced by a signed writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or
state banking authorities (including the Trustee or the Master Servicer
in its commercial banking capacity), provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company are then rated one of the two highest
long-term and the highest short-term ratings of each such Rating Agency
for such securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by any bank
or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation containing, at the time of the issuance of
such agreements, such terms and conditions as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any such Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described
in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or instruments
sold at a purchase price in excess of 115% of the face amount thereof)
bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest long
term ratings of each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) units of money market funds registered under the Investment Company Act
of 1940 including funds managed or advised by the Trustee, the Master
Servicer or an affiliate of either, having a rating by S&P of AAAm-G,
AAA-m, or AA-m, and if rated by Xxxxx'x, rated Aaa, Aa1 or Aa2;
(x) short term investment funds sponsored by any trust company or banking
association incorporated under the laws of the United States or any
state thereof (including any such fund managed or advised by the
Trustee, the Master Servicer or any affiliate thereof) which on the
date of acquisition has been rated by each Rating Agency in their
respective highest applicable rating category or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity and bearing
interest or sold at a discount acceptable to each Rating Agency as will
not result in the downgrading or withdrawal of the rating then assigned
to the Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
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, any possession of the United States 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) that 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 citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or 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 United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person based upon an Opinion of Counsel (which
shall not be an expense of the Trustee) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
to fail to qualify as a REMIC at any time that any 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 Freddie Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Prepayment Assumption: The assumed rate of prepayment, as described in
the Prospectus Supplement relating to each Class of Publicly Offered
Certificates.
Prepayment Charge: With respect to any Principal Prepayment, any
prepayment premium, penalty or charge payable by a Mortgagor in connection with
any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note (other than any Servicer Prepayment Charge Payment Amount) as
shown on the Prepayment Charge Schedule.
Prepayment Charge Schedule: As of any date, the list of Mortgage Loans
providing for a Prepayment Charge included in the Trust Fund on such date,
attached hereto as Exhibit K (including the prepayment charge summary attached
thereto). The Depositor shall deliver or cause the delivery of the Prepayment
Charge Schedule to the Servicer, the Master Servicer and the Trustee on the
Closing Date. The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on the
related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related Mortgage Loan;
and
(vi) the Stated Principal Balance of the related Mortgage Loan as of
the Cut-off Date.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the related Prepayment Period, (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
3.24 or 10.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment.
Prepayment Period: With respect to any Distribution Date, the sixteenth
(16th) of the immediately preceding calendar month (or with respect to the first
Prepayment Period, the Closing Date) through the fifteenth (15th) of the month
in which the Distribution Date occurs.
Principal Payment Amount: With respect to each Distribution Date, the
Principal Remittance Amount for such date minus the Overcollateralization
Release Amount, if any, for such Distribution Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.26 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.
Principal Remittance Amount: With respect to any Distribution Date and
each Loan Group, (i) the sum, without duplication, of (a) the principal portion
of all Scheduled Payments on the related Mortgage Loans due during the related
Due Period whether or not received on or prior to the related Determination
Date, (b) the principal portion of all unscheduled collections (other than
Payaheads) including Insurance Proceeds, Condemnation Proceeds, Subsequent
Recoveries and all full and partial Principal Prepayments exclusive of
prepayment charges or penalties collected during the related Prepayment Period,
to the extent applied as recoveries of principal on the related Mortgage Loans,
(c) the Stated Principal Balance of each related Mortgage Loan that was
repurchased by the Sponsor during the related Prepayment Period pursuant to
Sections 2.02, 2.03 and 3.24, (d) the aggregate of all Substitution Adjustment
Amounts received during the related Prepayment Period for the related
Determination Date in connection with the substitution of Mortgage Loans in such
Loan Group pursuant to Section 2.03(b), (e) amounts in respect of principal on
the related Mortgage Loans paid by the Master Servicer pursuant to Section
10.01, (f) all Liquidation Proceeds and Subsequent Recoveries with respect to
the related Mortgage Loans collected during the related Prepayment Period (to
the extent such Liquidation Proceeds and Subsequent Recoveries relate to
principal), in each case to the extent remitted by the Servicer to the
Distribution Account pursuant to this Agreement, (g) the principal portion of
Payaheads previously received on the related Mortgage Loans and intended for
application in the related Due Period and (h) any payments made pursuant to the
Swap Agreement with respect to Realized Losses, minus (ii) all amounts required
to be reimbursed by the Trust pursuant to Sections 4.02, 4.05, 4.07, 5.10 and
9.05 or as otherwise set forth in this Agreement or the Custodial Agreement and
to the extent not reimbursed from the Interest Remittance Amount for such
Distribution date, allocated to the respective Loan Group on a pro rata basis,
based on the Aggregate Loan Group Balance as of the last day of the Related Due
Period, to the extent such amounts are attributable to both Loan Groups, and
otherwise allocated to the Loan Group to which such amounts are attributable.
Private Certificate: Each of the Class [__], Class [__], Class X, Class
P and Class R Certificates.
Prospectus Supplement: The Prospectus Supplement dated [__________],
2006 relating to the offering of the Publicly Offered Certificates.
Publicly Offered Certificates: Any Certificates other than the Private
Certificates.
PUD: A planned unit development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Sponsor pursuant to Section 2.02, 2.03 or 3,24 hereof and as
confirmed by an Officer's Certificate from the Sponsor to the Trustee, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus, (ii) 30 days' accrued
interest thereon at the applicable Net Mortgage Rate, plus any portion of the
Servicing Fee, Servicing Advances and Advances payable to the Servicer or Master
Servicer, as applicable, with respect to such Mortgage Loan plus (iii) any costs
and damages of the Trust Fund in connection with any violation by such Mortgage
Loan of any abusive or predatory lending law, including any expenses incurred by
the Trustee with respect to such Mortgage Loan prior to the purchase thereof.
Rating Agency: Each of Xxxxx'x, S&P and DBRS. If any such organization
or its successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the Stated Principal Balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (iii) the proceeds, if
any, received in respect of such Mortgage Loan during the calendar month in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the Servicer pursuant to this Agreement. To the extent the
Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the
amount of the Realized Loss with respect to that Mortgage Loan will be reduced
to the extent that Subsequent Recoveries are applied to reduce the Certificate
Principal Balance of any Class of Certificates on any Distribution Date.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (iii) the aggregate of
all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a
Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
In addition, to the extent the Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such Subsequent Recoveries
are applied to reduce the Certificate Principal Balance of any Class of
Certificates on any Distribution Date.
Record Date: With respect to the Publicly Offered Certificates and
Class B Certificates and any Distribution Date, so long as such Certificates are
Book-Entry Certificates, the Business Day preceding such Distribution Date, and
otherwise, the close of business on the last Business Day of the month preceding
the month in which such Distribution Date occurs. With respect to the Class X,
Class P and Class R Certificates and any Distribution Date, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
Reference Banks: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Sponsor or any Servicer.
Reference Bank Rate: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Publicly Offered Certificates and
Class B Certificates for such Accrual Period, provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean, rounded upwards, if necessary,
to the nearest whole multiple of 0.03125%, of the rates quoted by one or more
major banks in New York City, selected by the Securities Administrator, as of
11:00 a.m., New York City time, on such date for loans in United States dollars
to leading European banks for a period of one month in amounts approximately
equal to the aggregate Certificate Principal Balance of the Publicly Offered
Certificates and Class B Certificates for such Accrual Period.
Regular Certificate: Any Certificate other than a Residual Certificate.
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, 2005)) or by the
staff of the Commission.
Relief Act: The Servicemembers Civil Relief Act of 2003, as amended
from time to time or similar state or local laws.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC I: The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of (i) the Mortgage Loans and
all interest accruing and principal due with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date Principal Balance
thereof and all related Prepayment Charges; (ii) the related Mortgage Files,
(iii) the Custodial Accounts (other than any amounts representing any Servicer
Prepayment Charge Payment Amount), the Distribution Account, the Class P
Certificate Account and such assets that are deposited therein from time to
time, together with any and all income, proceeds and payments with respect
thereto; (iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing, including proceeds of conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property. Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date,
(ii) all Prepayment Charges payable in connection with Principal Prepayments on
the Mortgage Loans made before the Cut-off Date, (iii) the Basis Risk Shortfall
Reserve Fund, (iv) the Swap Agreement and (v) the Supplemental Interest Trust.
REMIC I Group I Regular Interests: REMIC I Regular Interest I and REMIC
I Regular Interest I-1-A through REMIC I Regular Interest I-60-B as designated
in the Preliminary Statement hereto.
REMIC I Group II Regular Interests: REMIC I Regular Interest II and
REMIC I Regular Interest II-1-A through REMIC I Regular Interest II-60-B as
designated in the Preliminary Statement hereto.
REMIC I Regular Interest: Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC I Regular Interests are set
forth in the Preliminary Statement hereto. The REMIC I Regular Interests consist
of the REMIC I Group I Regular Interests, REMIC I Group II Regular Interests and
REMIC I Regular Interest X.
XXXXX XX: The segregated pool of assets consisting of all of the REMIC
I Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the REMIC II Regular Interests and the Holders of the Class R (as
holders of the Class R-II Interest), pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
REMIC II Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.
REMIC II Marker Allocation Percentage: 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___]
and REMIC II Regular Interest LT-ZZ.
REMIC II Overcollateralization Amount: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC II Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___]
and REMIC II Regular Interest LT-P, in each case as of such date of
determination.
REMIC II Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___] and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___] and REMIC II Regular Interest
LT-ZZ.
REMIC II Regular Interests: REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-ZZ,
REMIC II Regular Interest LT-P, REMIC II Regular Interest LT-1SUB, REMIC II
Regular Interest LT-1GRP, REMIC II Regular Interest LT-2SUB, REMIC II Regular
Interest LT-2GRP and REMIC II Regular Interest LT-XX.
REMIC II Regular Interest LT-AA: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-AA shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-IO: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-IO shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, subject to the terms and conditions hereof.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest LT-[___]
shall accrue interest at the related Uncertificated REMIC II Pass-Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
REMIC II Regular Interest LT-1SUB: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-1SUB shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-1GRP: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-1GRP shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-2SUB: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-2SUB shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-2GRP: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-2GRP shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-P shall be entitled
to distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II Regular Interest LT-XX: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-XX shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LT-ZZ shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II Regular Interest LT-ZZ Maximum Interest Deferral Amount: With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
Interest LT-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-ZZ minus the
REMIC II Overcollateralization Amount, in each case for such Distribution Date,
over (ii) the Uncertificated Accrued Interest on REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___]
and REMIC II Regular Interest LT-[___] for such Distribution Date, with the rate
on each such REMIC II Regular Interest subject to a cap equal to the related
Pass-Through Rate.
REMIC II Sub WAC Allocation Percentage: 0.50% of any amount payable or
loss attributable from the Mortgage Loans, which shall be allocated to REMIC II
Regular Interest LT-1SUB, REMIC II Regular Interest LT-1GRP, REMIC II Regular
Interest LT-2SUB, REMIC II Regular Interest LT-2GRP and REMIC II Regular
Interest LT-XX.
REMIC II Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each REMIC II Regular Interest ending with the designation
"SUB", equal to the ratio between, with respect to each such REMIC II Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the Group
I Mortgage Loans and the Group II Mortgage Loans, as applicable, over (y) the
current Certificate Principal Balance of the related Senior Certificates.
REMIC II Targeted Overcollateralization Amount: 0.50% of the Targeted
Overcollateralization Amount.
XXXXX XXX: The segregated pool of assets consisting of all of the REMIC
II Regular Interests conveyed in trust to the Trustee, for the benefit of the
REMIC III Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
REMIC III Certificate: Any Regular Certificate or Class R Certificate.
REMIC III Certificateholder: The Holder of any REMIC III Certificate.
REMIC Opinion: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on any REMIC created hereunder.
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
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Interest: Any REMIC I Regular Interest, REMIC II Regular
Interest, Regular Certificate or Class IO Interest.
Remittance Date: Shall mean, not later than 3:00 p.m. Eastern Time on
the twenty-third (23rd) day of the month and if such day is not a Business Day,
the immediately preceding Business Day.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Sponsor for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a request for release in
accordance with the terms of the Custodial Agreement, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not less than
90% of, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have an
adjustable Mortgage Rate not less than or more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio no higher than that of the
Deleted Mortgage Loan; (v) have a remaining term to maturity no greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (vi)
have the same lien priority as the Deleted Mortgage Loan; (vii) constitute the
same occupancy type as the Deleted Mortgage Loan or be owner occupied; (viii)
have a Maximum Mortgage Interest Rate not less than the Maximum Mortgage
Interest Rate on the Deleted Loan; (ix) have a Minimum Mortgage Interest Rate
not less than the Minimum Mortgage Interest Rate of the Deleted Loan, if
applicable; (x) have a Gross Margin equal to the Gross Margin of the Deleted
Loan; (xi) have a next Adjustment Date not more than two months later than the
next Adjustment Date on the Deleted Loan, if applicable; and (xii) comply with
each representation and warranty set forth in the Mortgage Loan Purchase
Agreement.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Residual Certificates: The Class R Certificates.
Responsible Officer: With respect to the Trustee and the Securities
Administrator, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, any Trust Officer, any other officer customarily
performing functions similar to those performed by any of the above designated
officers or other officers of the Trustee or the Securities Administrator
specified by the Trustee or the Securities Administrator, as the case may be,
having direct responsibility over this Agreement and customarily performing
functions similar to those performed by any one of the designated officers, as
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.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
or its successor in interest.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: As of the Closing Date, [________________]
and thereafter, its respective successors in interest that meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person or Affiliates.
Senior Certificates: The Class [__], Class [__], Class [__], Class [__]
and Class [__] Certificates.
Senior Enhancement Percentage: With respect to any Distribution Date
will be the fraction, expressed as a percentage, the numerator of which is the
sum of the aggregate Certificate Principal Balance of the Subordinate
Certificates and the Overcollateralization Amount, in each case after giving
effect to payments on such Distribution Date (assuming no Trigger Event is in
effect), and the denominator of which is the Aggregate Loan Balance for such
Distribution Date.
Senior Principal Payment Amount: With respect to any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect
with respect to such Distribution Date, the amount, if any, by which (x) the
Certificate Principal Balances of the Senior Certificates, in each case,
immediately prior to such Distribution Date exceed (y) the lesser of (A) the
product of (i) [_____]% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) [_____]% of the Aggregate Loan
Balance as of the Cut-off Date.
Servicer: Shall mean [________________], or any successor thereto
appointed hereunder in connection with the servicing and administration of the
related Mortgage Loans.
Servicer Default: As defined in Section 8.01.
Servicer Prepayment Charge Payment Amount: The amount payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.
Servicer's Assignee: As defined in Section 5.01(b)(ii)
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Servicer of its servicing obligations hereunder, including,
but not limited to, the cost of (i) the preservation, restoration, inspection,
valuation and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, and including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered in the MERS(R) System, (iii) the management and liquidation of
any REO Property (including, without limitation, realtor's commissions), (iv)
compliance with any obligations under Section 3.07 hereof to cause insurance to
be maintained, (v) payment of taxes, (vi) obtaining broker price opinions and
(vii) obtaining any legal documentation required to be included in the Mortgage
File and/or correcting any outstanding title issues (i.e., any lien or
encumbrance on the Mortgaged Property that prevents the effective enforcement of
the intended lien position) reasonably necessary for the Servicer to perform its
obligations under this Agreement. Servicing Advances also include any reasonable
"out-of-pocket" cost and expenses (including legal fees) incurred by the
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments to the extent not recovered from the
Mortgagor or otherwise payable under this Agreement. No Servicer shall be
required to make any Servicing Advances that would constitute a Nonrecoverable
Advance, provided that the Servicer delivers an Officer's Certificate to the
Master Servicer and the Trustee certifying that such Servicing Advance would
constitute a Nonrecoverable Advance.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the applicable Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the last day of the related
Due Period or, in the event of any payment of interest that accompanies a
Principal Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the applicable Servicing Fee
Rate on the same Stated Principal Balance of such Mortgage Loan used to
calculate the payment of interest on such Mortgage Loan.
Servicing Fee Rate: [___]% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and the servicing of Mortgage Loans, whose
name and specimen signature appear on a list of Servicing Officers furnished to
the Master Servicer, the Securities Administrator the Trustee and the Depositor
on the Closing Date, as such list may from time to time be amended.
Six-Month LIBOR: The per annum rate equal to the average of interbank
offered rates for Six-Month U.S. dollar-denominated deposits in the London
market based on quotations of major banks as published in The Wall Street
Journal and most recently available as of the time specified in the related
Mortgage Note.
Sponsor: Nomura Credit & Capital, Inc., a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Startup Day: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Servicer as recoveries of principal in accordance with
Section 3.09 of this Agreement with respect to such Mortgage Loan, that were
received by the Servicer as of the close of business on the last day of the
Prepayment Period related to such Distribution Date and (iii) any Realized
Losses on such Mortgage Loan incurred during the related Prepayment Period. The
Stated Principal Balance of a Liquidated Loan equals zero.
Stepdown Date: The later to occur of (x) the Distribution Date in
[___________] and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose only after taking into
account distributions of principal on the Mortgage Loans, but prior to any
distributions to the holders of the Publicly Offered Certificates and the Class
B Certificates on such Distribution Date) is greater than or equal to [_____]%.
Subordinate Certificates: Shall mean, collectively, the Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__] and Class [__] Certificates.
Subsequent Recoveries: Shall mean all amounts in respect of principal
received by the Servicer (net of reimbursable expenses) on a Mortgage Loan for
which a Realized Loss was previously incurred.
Subservicing Agreement: Any agreement entered into between the Servicer
and a subservicer with respect to the subservicing of any Mortgage Loan subject
to this Agreement by such subservicer.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(d).
Successor Servicer: The Master Servicer or any successor to the
Servicer appointed pursuant to Section 8.02 of this Agreement after the
occurrence of a Servicer Default or upon the resignation of the Servicer
pursuant to this Agreement.
Supplemental Interest Trust: The corpus of a trust created pursuant to
Section 5.11 of this Agreement and designated as the "Supplemental Interest
Trust," consisting of the Swap Agreement, the Class IO Interest and the right to
receive payments in respect of the Class IO Distribution Amount. For the
avoidance of doubt, the Supplemental Interest Trust does not constitute a part
of the Trust Fund.
Swap Agreement: The interest rate swap agreement, dated [___________],
between [___________________], as trustee on behalf of the Supplemental Interest
Trust, and the Swap Provider, which agreement provides for Net Swap Trust
Payments and Swap Termination Payments to be paid, as provided therein, together
with any schedules, confirmations or other agreements relating thereto.
Swap Counterparty: [________________].
Swap LIBOR: LIBOR as determined pursuant to the Swap Agreement.
Swap Provider: The swap provider under the Swap Agreement either (a)
entitled to receive payments from the Supplemental Interest Trust or (b)
required to make payments to the Supplemental Interest Trust, in either case
pursuant to the terms of the Swap Agreement, and any successor in interest or
assign. Initially, the Swap Provider shall be [________________].
Swap Provider Trigger Event: A Swap Provider Trigger Event shall have
occurred if any of an Event of Default (under the Swap Agreement) with respect
to which the Swap Provider is a Defaulting Party, a Termination Event (under the
Swap Agreement) with respect to which the Swap Provider is the sole Affected
Party or an Additional Termination Event (under the Swap Agreement) with respect
to which the Swap Provider is the sole Affected Party has occurred.
Swap Termination Payment: Upon the designation of an "Early Termination
Date" as defined in the Swap Agreement, the payment to be made by the
Supplemental Interest Trust to the Swap Provider, or by the Swap Provider to the
Supplemental Interest Trust, as applicable, pursuant to the terms of the Swap
Agreement.
Targeted Overcollateralization Amount: With respect to any Distribution
Date prior to the Stepdown Date, [_____]% of the Aggregate Loan Balance as of
the Cut-off Date; with respect to any Distribution Date on or after the Stepdown
Date and with respect to which a Trigger Event is not in effect, the greater of
(a) [_____]% of the Aggregate Loan Balance for such Distribution Date, or (b)
[_____]% of the Aggregate Loan Balance as of the Cut-off Date; with respect to
any Distribution Date on or after the Stepdown Date with respect to which a
Trigger Event is in effect, the Targeted Overcollateralization Amount for such
Distribution Date will be equal to the Targeted Overcollateralization Amount for
the Distribution Date immediately preceding such Distribution Date.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.
Termination Price: The price, calculated as set forth in Section 10.01,
to be paid in connection with the purchase of the Mortgage Loans pursuant to
Section 10.01.
Transfer Affidavit: As defined in Section 6.02(c).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trigger Event: With respect to any Distribution Date, a Trigger Event
is in effect if either (i) the Delinquency Rate as of the last day of the
related Due Period exceeds [____]% of the Senior Enhancement Percentage for such
Distribution Date or (ii) the cumulative Realized Losses as a percentage of the
original Aggregate Loan Balance on the Closing Date for such Distribution Date
is greater than the percentage set forth in the following table:
Distribution Date Percentage
--------------------------------------------------------- -----------------
[___________] to [___________].......................... [_____]%
[___________] to [___________].......................... [_____]%
[___________] to [___________].......................... [_____]%
[___________] and thereafter............................ [_____]%
*The cumulative loss percentages set forth above are applicable to the
first Distribution Date in the corresponding range of Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between the
percentage applicable to the first Distribution Date in that range and the
percentage applicable to the first Distribution Date in the succeeding range.
Trust Fund: Collectively, the assets of REMIC I, REMIC II, REMIC III
and the Basis Risk Shortfall Reserve Fund. For the avoidance of doubt, the Trust
Fund does not include the Supplemental Interest Trust.
Trustee: [________________], a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Uncertificated Accrued Interest: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass-Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Prepayment Interest Shortfalls and
shortfalls resulting from application of the Relief Act (allocated to such REMIC
Regular Interests as set forth in Sections 1.02 and 5.07).
Uncertificated Notional Amount: With respect to the Class X Interest
and any Distribution Date, an amount equal to the aggregate Uncertificated
Principal Balance of the REMIC II Regular Interests (other than REMIC II Regular
Interest P) for such Distribution Date.
With respect to REMIC II Regular Interest LT-IO and each Distribution
Date listed below, the aggregate Uncertificated Principal Balance of the REMIC 1
Regular Interests ending with the designation "A" listed below:
DISTRIBUTION DATE REMIC 1 REGULAR INTERESTS
----------------------- ---------------------------------------------------
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] through [_____] and [_____] through [_____]
[_____] [_____] and [_____] and [_____] and [_____]
[_____] [_____] and [_____]
thereafter $0.00
With respect to the Class IO Interest and any Distribution Date, an amount equal
to the Uncertificated Notional Amount of the REMIC II Regular Interest IO.
Uncertificated Principal Balance: With respect to each REMIC Regular
Interest (other than REMIC II Regular Interest LT-IO), the principal amount of
such REMIC Regular Interest outstanding as of any date of determination. As of
the Closing Date, the Uncertificated Principal Balance of each such REMIC
Regular Interest shall equal the amount set forth in the Preliminary Statement
hereto as its initial Uncertificated Principal Balance. On each Distribution
Date, the Uncertificated Principal Balance of each REMIC Regular Interest shall
be reduced by all distributions of principal made on such REMIC Regular Interest
on such Distribution Date pursuant to Section 5.07 and, if and to the extent
necessary and appropriate, shall be further reduced on such Distribution Date by
Realized Losses as provided in Section 5.07. The Uncertificated Principal
Balance of each REMIC Regular Interest shall never be less than zero.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate or Uncertificated REMIC II Pass-Through Rate.
Uncertificated REMIC I Pass-Through Rate: With respect to REMIC I
Regular Interest I, a per annum rate equal to the weighted average Net Mortgage
Rate of Loan Group I. With respect to each REMIC I Group I Regular Interest
ending with the designation "A", a per annum rate equal to the weighted average
Net Mortgage Rate of Loan Group I multiplied by 2, subject to a maximum rate of
[_____]%. With respect to each REMIC I Regular Interest ending with the
designation "B", the greater of (x) a per annum rate equal to the excess, if
any, of (i) 2 multiplied by the weighted average Net Mortgage Rate of Loan Group
I over (ii) [_____]% and (y) 0.00%. With respect to REMIC I Regular Interest II,
a per annum rate equal to the weighted average Net Mortgage Rate of Loan Group
II. With respect to each REMIC I Group II Regular Interest ending with the
designation "A", a per annum rate equal to the weighted average Net Mortgage
Rate of Loan Group II multiplied by 2, subject to a maximum rate of [_____]%.
With respect to each REMIC I Group II Regular Interest ending with the
designation "B", the greater of (x) a per annum rate equal to the excess, if
any, of (i) 2 multiplied by the weighted average Net Mortgage Rate of Loan Group
II over (ii) [_____]% and (y) 0.00%.
Uncertificated REMIC II Pass-Through Rate: With respect to REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-ZZ, REMIC II Regular Interest LT-1SUB,
REMIC II Regular Interest LT-2SUB, and REMIC II Regular Interest LT-XX, a per
annum rate (but not less than zero) equal to the weighted average of (w) with
respect to REMIC I Regular Interest I, REMIC I Regular Interest II, the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest for
each such Distribution Date, (x) with respect to REMIC I Regular Interests
ending with the designation "B", the weighted average of the Uncertificated
REMIC I Pass-Through Rates for such REMIC I Regular Interests, weighted on the
basis of the Uncertificated Principal Balance of such REMIC I Regular Interests
for each such Distribution Date and (y) with respect to REMIC I Regular
Interests ending with the designation "A", for each Distribution Date listed
below, the weighted average of the rates listed below for each such REMIC I
Regular Interest listed below, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest for each such
Distribution Date:
DISTRIBUTION
DATE REMIC 1 REGULAR INTEREST RATE
-------------- ----------------------------- ----------------------------------------------------------------
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate
Uncertificated REMIC 1 Pass-Through Rate
[_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] and [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] and [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
thereafter [_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
With respect to REMIC II Regular Interest LT-1GRP, a per annum rate
(but not less than zero) equal to the weighted average of (w) with respect to
REMIC I Regular Interest I, the Uncertificated REMIC I Pass-Through Rate for
such REMIC I Regular Interest for each such Distribution Date, (x) with respect
to REMIC I Group I Regular Interests ending with the designation "B", the
weighted average of the Uncertificated REMIC I Pass-Through Rates for such REMIC
I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC I Regular Interest for each such Distribution Date
and (y) with respect to REMIC I Group I Regular Interests ending with the
designation "A", for each Distribution Date listed below, the weighted average
of the rates listed below for such REMIC I Regular Interests listed below,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest for each such Distribution Date:
DISTRIBUTION
DATE REMIC 1 REGULAR INTEREST RATE
-------------- ----------------------------- ----------------------------------------------------------------
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
thereafter [_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
With respect to REMIC II Regular Interest LT-2GRP, a per annum rate
(but not less than zero) equal to the weighted average of (w) with respect to
REMIC I Regular Interest II, the Uncertificated REMIC I Pass-Through Rate for
such REMIC I Regular Interest for each such Distribution Date, (x) with respect
to REMIC I Group II Regular Interests ending with the designation "B", the
weighted average of the Uncertificated REMIC I Pass-Through Rates for such REMIC
I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of each such REMIC I Regular Interest for each such Distribution Date
and (y) with respect to REMIC I Group II Regular Interests ending with the
designation "A", for each Distribution Date listed below, the weighted average
of the rates listed below for such REMIC I Regular Interests listed below,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest for each such Distribution Date:
DISTRIBUTION
DATE REMIC 1 REGULAR INTEREST RATE
-------------- ----------------------------- ----------------------------------------------------------------
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
[_____] [_____] through [_____] 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
[_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
thereafter [_____] through [_____] Uncertificated REMIC 1 Pass-Through Rate
With respect to REMIC II Regular Interest LT-IO, the excess of (i) the
Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interests ending
with the designation "A", over (ii) 2 multiplied by Swap LIBOR.
Uncertificated REMIC Regular Interest: The REMIC I Regular Interests,
the REMIC II Regular Interests and the Class IO Interest.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 98% to the Certificates (other
than the Class X, Class P and the Residual Certificates) and (ii) 1% to each of
the Class X Certificates and Class P Certificates. Voting rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests. The Residual Certificates will not be allocated
any voting rights.
Section 1.02
Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Interest Remittance
Amount for any Distribution Date, (1) the aggregate amount of any Net Interest
Shortfalls in respect of the Mortgage Loans for any Distribution Date shall
reduce the Interest Remittance Amount on a pro rata basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Certificate Principal Balance of each class of Publicly
Offered Certificates and (2) the aggregate amount of any Realized Losses
allocated to the Subordinate Certificates and Basis Risk Shortfalls allocated to
the Publicly Offered Certificates and the Class B Certificates for any
Distribution Date shall be allocated to the Class X Certificates based on, and
to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the Certificate Principal Balance thereof on any
Distribution Date.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Group I Regular Interests for any Distribution Date the
aggregate amount of any Net Interest Shortfalls incurred in respect of Loan
Group I for any Distribution Date shall be allocated first, to REMIC I Regular
Interest I and to the REMIC I Group I Regular Interests ending with the
designation "B", PRO RATA based on, and to the extent of, one month's interest
at the then applicable respective Uncertificated REMIC I Pass-Through Rates on
the respective Uncertificated Principal Balances of each such REMIC I Regular
Interest , and then, to REMIC I Group I Regular Interests ending with the
designation "A", pro rata based on, and to the extent of, one month's interest
at the then applicable respective Uncertificated REMIC I Pass-Through Rates on
the respective Uncertificated Principal Balances of each such REMIC I Regular
Interest. For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Group II Regular Interests for any Distribution the
aggregate amount of any Net Interest Shortfalls incurred in respect of Loan
Group II for any Distribution Date shall be allocated first, REMIC I Regular
Interest II and to the REMIC I Group II Regular Interests ending with the
designation "B", PRO RATA based on, and to the extent of, one month's interest
at the then applicable respective Uncertificated REMIC I Pass-Through Rates on
the respective Uncertificated Principal Balances of each such REMIC I Regular
Interest , and then, to REMIC I Group II Regular Interests ending with the
designation "A", pro rata based on, and to the extent of, one month's interest
at the then applicable respective Uncertificated REMIC I Pass-Through Rates on
the respective Uncertificated Principal Balances of each such REMIC I Regular
Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date:
The REMIC II Marker Allocation Percentage of the aggregate amount of
any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC II Regular Interest LT-AA,
REMIC II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___] and REMIC I Regular Interest LT-ZZ,
PRO RATA based on, and to the extent of, one month's interest at the then
applicable respective Uncertificated REMIC I Pass-Through Rate on the respective
Uncertificated Principal Balance of each such REMIC I Regular Interest; and
The REMIC II Sub WAC Allocation Percentage of the aggregate amount of
any Net Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated to Uncertificated Accrued Interest payable
to REMIC II Regular Interest LT-1SUB, REMIC II Regular Interest LT-1GRP, REMIC
II Regular Interest LT-2SUB, REMIC II Regular Interest LT-2GRP and REMIC II
Regular Interest LT-XX, PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC II Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC II
Regular Interest.
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund.
The Sponsor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Sponsor in and to the assets in the Trust Fund.
The Sponsor has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Purchase Agreement, to the extent of the Mortgage Loans sold
under the Mortgage Loan Purchase Agreement. The Trustee hereby accepts such
assignment, and shall be entitled to exercise all rights of the Depositor under
the Mortgage Loan Purchase Agreement as if, for such purpose, it were the
Depositor. The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in creation or assumption by
the Trustee of any obligation of the Depositor, the Sponsor or any other Person
in connection with the Mortgage Loans or any other agreement or instrument
relating thereto except as specifically set forth herein.
In connection with such sale, the Depositor does hereby deliver to, and
deposit with the Custodian pursuant to the Custodial Agreement the documents
with respect to each Mortgage Loan as described under Section 2 of the Custodial
Agreement (the "Mortgage Loan Documents"). In connection with such delivery and
as further described in the Custodial Agreement, the Custodian will be required
to review such Mortgage Loan Documents and deliver to the Trustee, the
Depositor, the Servicer and the Sponsor certifications (in the forms attached to
the Custodial Agreement) with respect to such review with exceptions noted
thereon. In addition, under the Custodial Agreement the Depositor will be
required to cure certain defects with respect to the Mortgage Loan Documents for
the related Mortgage Loans after the delivery thereof by the Depositor to the
Custodian as more particularly set forth therein.
Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files and
preparation and delivery of the certifications shall be performed by the
Custodian pursuant to the terms and conditions of the Custodial Agreement.
The Depositor shall deliver or cause to be delivered to the Servicer
copies of all trailing documents required to be included in the related Mortgage
File at the same time the originals or certified copies thereof are delivered to
the Custodian, such documents including the mortgagee policy of title insurance
and any Mortgage Loan Documents upon return from the recording office. The
Servicer shall not be responsible for any custodial fees or other costs incurred
in obtaining such documents and the Depositor shall cause the Servicer to be
reimbursed for any such costs the Servicer may incur in connection with
performing its obligations under this Agreement.
The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Sponsor that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003, as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004) as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act,
effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9) and
(ii) Qualified Substitute Mortgage Loans (which, by definition as set forth
herein and referred to in the Mortgage Loan Purchase Agreement, are required to
conform to, among other representations and warranties, the representation and
warranty of the Sponsor that no Qualified Substitute Mortgage Loan is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003, as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. Xxx. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind.
Code Xxx. Sections 24-9-1 through 24-9-9). The Depositor and the Trustee on
behalf of the Trust understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003, as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004, as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. Xxx. Laws Ch. 183C) or as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1
through 24-9-9).
Section 2.02 Acceptance of the Mortgage Loans.
(a) Based on the initial trust receipt received by it from the
Custodian pursuant to the Custodial Agreement, the Trustee acknowledges receipt,
subject to the provisions of Section 2.01 hereof and Section 2 of the Custodial
Agreement, of the Mortgage Loan Documents and all other assets included in the
definition of "REMIC I" under clauses (i), (ii) (iii), (v) and (vi) (to the
extent of amounts deposited into the Distribution Account) and declares that it
holds (or the Custodian on its behalf holds) and will hold such documents and
the other documents delivered to it constituting a Mortgage Loan Document, and
that it holds (or the Custodian on its behalf holds) or will hold all such
assets and such other assets included in the definition of "REMIC I" in trust
for the exclusive use and benefit of all present and future Certificateholders.
(b) In conducting the review of the Mortgage Files in accordance with
the Custodial Agreement, the Custodian on the Trustee's behalf will ascertain
whether all required documents have been executed and received and whether those
documents relate to the Mortgage Loans identified in Exhibit B to this
Agreement, as supplemented. If the Custodian finds any document constituting
part of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B, the Sponsor shall
correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Sponsor may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of the
Certificateholders in such Mortgage Loan within sixty (60) days from the date of
notice from the Custodian of the defect and if the Sponsor fails to correct or
cure the defect or deliver such opinion within such period, the Sponsor will,
subject to Section 2.03, within ninety (90) days from the notification of the
Custodian purchase such Mortgage Loan at the Purchase Price; provided, however,
that if such defect relates solely to the inability of the Sponsor to deliver
the Mortgage, assignment thereof to the Custodian, or intervening assignments
thereof with evidence of recording thereon because such documents have been
submitted for recording and have not been returned by the applicable
jurisdiction, the Sponsor shall not be required to purchase such Mortgage Loan
if the Sponsor delivers such documents promptly upon receipt, but in no event
later than 360 days after the Closing Date.
(c) No later than 180 days after the Closing Date, the Custodian on the
Trustee's behalf will review, for the benefit of the Certificateholders, the
Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Sponsor and the Trustee, a final trust receipt substantially in
the form annexed to the Custodial Agreement. In conducting such review, the
Custodian on the Trustee's behalf and in accordance with the terms of the
Custodial Agreement will ascertain whether each document required to be recorded
has been returned from the recording office with evidence of recording thereon
and the Custodian on the Trustee's behalf has received either an original or a
copy thereof, as required in the Custodial Agreement. If the Custodian finds
that any document with respect to a Mortgage Loan has not been received, or is
unrelated to the Mortgage Loans identified in Exhibit B or appears to be
defective on its face, the Custodian shall note such defect in the exception
report attached the final trust receipt issued pursuant to the Custodial
Agreement and the Sponsor shall correct or cure any such defect or, if prior to
the end of the second anniversary of the Closing Date, the Sponsor may
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03 or shall deliver to the Trustee an Opinion of Counsel
to the effect that such defect does not materially or adversely affect the
interests of Certificateholders in such Mortgage Loan within 60 days from the
date of notice from the Trustee of the defect and if the Sponsor is unable
within such period to correct or cure such defect, or to substitute the related
Mortgage Loan with a Replacement Mortgage Loan or to deliver such opinion, the
Sponsor shall, subject to Section 2.03, within 90 days from the notification of
the Trustee, purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Sponsor to
deliver the Mortgage, assignment thereof to the Trustee or intervening
assignments thereof with evidence of recording thereon, because such documents
have not been returned by the applicable jurisdiction, the Sponsor shall not be
required to purchase such Mortgage Loan, if the Sponsor delivers such documents
promptly upon receipt, but in no event later than 360 days after the Closing
Date.
(d) In the event that a Mortgage Loan is purchased by the Sponsor in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Sponsor
shall remit the applicable Purchase Price to the Servicer for deposit in the
applicable Custodial Account and shall provide written notice to the Securities
Administrator detailing the components of the Purchase Price, signed by an
authorized officer. Upon deposit of the Purchase Price in the applicable
Custodial Account and upon receipt of a request for release (in the form
attached to the Custodial Agreement) with respect to such Mortgage Loan, the
Custodian, on behalf of the Trustee, will release to the Sponsor the related
Mortgage File and the Trustee shall execute and deliver all instruments of
transfer or assignment, without recourse, furnished to it by the Sponsor, as are
necessary to vest in the Sponsor title to and rights under the Mortgage Loan.
Such purchase shall be deemed to have occurred on the date on which the deposit
into the applicable Custodial Account was made. The Securities Administrator
shall promptly notify the Rating Agencies of such repurchase. The obligation of
the Sponsor to cure, repurchase or substitute for any Mortgage Loan as to which
a defect in a constituent document exists shall be the sole remedies respecting
such defect available to the Certificateholders or to the Securities
Administrator on their behalf. The Sponsor shall promptly reimburse the
Securities Administrator for any expenses incurred by the Securities
Administrator in respect of enforcing the remedies for such breach.
(e) The Sponsor shall deliver to the Custodian the Mortgage Note and
other documents constituting the Mortgage File with respect to any Replacement
Mortgage Loan, which the Custodian will review as provided in the Custodial
Agreement, provided, that the Closing Date referred to therein shall instead be
the date of delivery of the Mortgage File with respect to each Replacement
Mortgage Loan.
Section 2.03 Representations, Warranties and Covenants of the Servicer
and the Sponsor.
(a) The Servicer hereby represents and warrants to, and covenants with,
the Sponsor, the Depositor, the Master Servicer, the Securities Administrator
and the Trustee as follows, as of the Closing Date:
(i) It is duly organized and is validly existing and in good standing under
the laws of the state of its formation and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged
Property related to a Mortgage Loan serviced by the Servicer is located
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 ensure its
ability to service the related Mortgage Loans in accordance with the
terms of this Agreement and to perform any of its other obligations
under this Agreement in accordance with the terms hereof.
(ii) It has the full power and authority to service each related Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) 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 and further subject to public policy
with respect to indemnity and contribution under applicable securities
law.
(iii) The execution and delivery of this Agreement by it, the servicing of
the related Mortgage Loans by it under this Agreement, the consummation
of any other of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in its
ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which it is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to it of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform
or meet any of its obligations under this Agreement.
(iv) It is an approved Servicer of conventional mortgage loans for Xxxxxx
Xxx or Freddie Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of its knowledge, threatened
in writing, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability
to service the related Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, it has obtained the same.
(vii) The Servicer has accurately and fully reported, and will continue to
accurately and fully report its borrower credit files to each of the
credit repositories in a timely manner materially in accordance with
the Fair Credit Reporting Act and its implementing legislation.
(viii) The Servicer is a member of MERS in good standing, and will comply in
all material respects with the rules and procedures of MERS in
connection with the servicing of the related Mortgage Loans that are
registered with MERS.
(ix) The Servicer will not waive any Prepayment Charge with respect to a
Mortgage Loan serviced by it unless it is waived in accordance with the
standard set forth in Section 3.01.
If the covenant set forth in Section 2.03(a)(ix) above is breached by
the Servicer, that Servicer will pay the amount of such waived Prepayment
Charge, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Custodial Account within ninety (90) days of the
earlier of discovery by the Servicer or receipt of notice by the Servicer of
such breach. Notwithstanding the foregoing, or anything to the contrary
contained in this Agreement, no Servicer shall be liable for a waiver of any
Prepayment Charge in the event that the Servicer's determination to make such a
waiver was made by the Servicer in reliance on information properly received by
the Servicer from any Person in accordance with the terms of this Agreement.
(b) The Sponsor hereby represents and warrants to and covenants with,
the Depositor, the Servicer, the Master Servicer, the Securities Administrator
and the Trustee as follows, as of the Closing Date:
(i) The Sponsor is duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by the Sponsor in any state in which a
Mortgaged Property is located 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 ensure its ability to enforce each Mortgage Loan,
to sell the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Sponsor has the full corporate power and authority to sell each
Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on the part of the
Sponsor the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Sponsor, enforceable against the Sponsor in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) 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 and further subject to public policy with respect to indemnity
and contribution under applicable securities law.
(iii) The execution and delivery of this Agreement by the Sponsor, the sale
of the Mortgage Loans by the Sponsor under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Sponsor and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of the Sponsor or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which the Sponsor is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Sponsor of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Sponsor; and
the Sponsor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Sponsor's ability to perform or
meet any of its obligations under this Agreement.
(iv) The Sponsor is an approved seller of conventional mortgage loans for
Xxxxxx Xxx or Freddie Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act.
(v) No litigation is pending or, to the best of the Sponsor's knowledge,
threatened, against the Sponsor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
the ability of the Sponsor to sell the Mortgage Loans or to perform any
of its other obligations under this Agreement in accordance with the
terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Sponsor of, or compliance by the Sponsor with, this
Agreement or the consummation of the transactions contemplated hereby,
or if any such consent, approval, authorization or order is required,
the Sponsor has obtained the same.
(vii) The representations and warranties set forth in Section 8 of the
Mortgage Loan Purchase Agreement are true and correct as of the Closing
Date.
(viii) No Mortgage Loan is subject to the Home Ownership and Equity Protection
Act of 1994 or any comparable law and no Mortgage Loan is classified
and/or defined as a "high cost", "covered", "high risk home" or
"predatory" loan under any other state, federal or local law or
regulation or ordinance (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees).
(ix) No loan is a High Cost Loan or Covered Loan, as applicable (as such
terms are defined in Appendix E of the Standard & Poor's Glossary For
File Format For LEVELS(R) Version 5.6 Revised (attached hereto as
Exhibit N) and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
(x) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair
housing, predatory, abusive lending or disclosure laws applicable to
the origination and servicing of the Mortgage Loans have been complied
with in all material respects.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice thereof to the other
parties. The Sponsor hereby covenants with respect to the representations and
warranties set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the
Mortgage Loan Purchase Agreement, that within ninety (90) days of the discovery
of a breach of any representation or warranty set forth therein that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach is
not so cured, (i) prior to the second anniversary of the Closing Date, remove
such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the
manner set forth below; provided that any such substitution pursuant to (i)
above or repurchase pursuant to (ii) above shall not be effected prior to the
delivery to the Trustee of an Opinion of Counsel if required by Section 2.05 and
any such substitution pursuant to (i) above shall not be effected prior to the
additional delivery to the related Custodian of a request for release in
accordance with the Custodial Agreement. The Sponsor shall promptly reimburse
the Trustee for any expenses reasonably incurred by the Trustee in respect of
enforcing the remedies for such breach. To enable the Servicer to amend the
Mortgage Loan Schedule, the Sponsor shall, unless it cures such breach in a
timely fashion pursuant to this Section 2.03, promptly notify the Trustee
whether it intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties in
Section 8 of the Mortgage Loan Purchase Agreement that are made to the best of
the Sponsor's knowledge, if it is discovered by any of the Depositor, the
Sponsor or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding the Sponsor's lack of knowledge with
respect to the substance of such representation or warranty, the Sponsor shall
nevertheless be required to cure, substitute for or repurchase the affected
Mortgage Loan in accordance with the foregoing. Notwithstanding the foregoing,
any breach of a representation or warranty contained in clauses (xxxv), (xl),
(xli), (xlii), (xliii), (xlix), (l) and/or (lxvi) of Section 8 of the Mortgage
Loan Purchase Agreement shall be automatically deemed to materially and
adversely affect the interests of the Certificateholders.
With respect to any Replacement Mortgage Loan or Loans, the Sponsor
shall deliver to the Custodian for the benefit of the Certificateholders such
documents and agreements as are required by Section 2 of the Custodial
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due Period related to the Distribution Date on
which such proceeds are to be distributed shall not be part of the Trust Fund
and will be retained by the Sponsor. For the month of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for the related Due Period and thereafter the Sponsor
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans and
shall deliver the amended Mortgage Loan Schedule to the Trustee, the Master
Servicer and the Securities Administrator. Upon such substitution, the
Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Sponsor shall be deemed to have made with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 8 of the
Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any
such substitution and the deposit into the Custodial Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Custodian of a request
for release for such Mortgage Loan in accordance with the Custodial Agreement,
the Custodian on behalf of the Trustee shall release to the Sponsor the Mortgage
File relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the Trustee shall execute and deliver at the Sponsor's
direction such instruments of transfer or assignment as have been prepared by
the Sponsor, in each case without recourse, as shall be necessary to vest in the
Sponsor, or its respective designee, title to the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03. Neither the
Trustee nor the Custodian shall have any further responsibility with regard to
such Mortgage File.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Securities Administrator will
determine the amount (if any) by which the aggregate principal balance of all
the Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be remitted to the Servicer for deposit in the
Custodial Account by the Sponsor delivering such Replacement Mortgage Loan on or
before the Determination Date for the Distribution Date relating to the
Prepayment Period during which the related Mortgage Loan was required to be
purchased or replaced hereunder.
In the event that the Sponsor shall be required to repurchase a
Mortgage Loan, the Purchase Price therefor shall be remitted to the Servicer of
such Mortgage Loan for deposit in the Custodial Account, on or before the
Determination Date immediately following the date on which the Sponsor was
required to repurchase such Mortgage Loan. The Purchase Price shall be remitted
by the Servicer to the Securities Administrator on the Remittance Date occurring
in the month immediately following the month in which the Purchase Price was
deposited in the Custodial Account. In addition, upon such deposit of the
Purchase Price, the delivery of an Officer's Certificate by the Servicer to the
Trustee certifying that the Purchase Price has been deposited in the Custodial
Account, the delivery of an Opinion of Counsel if required by Section 2.05 and
the receipt of a Request for Release, the Trustee shall release the related
Mortgage File held for the benefit of the related Certificateholders to the
Sponsor, and the Trustee shall execute and deliver at such Person's direction
the related instruments of transfer or assignment prepared by the Sponsor, in
each case without recourse, as shall be necessary to transfer title from the
Trustee for the benefit of the Certificateholders and transfer the Trustee's
interest to the Sponsor to any Mortgage Loan purchased pursuant to this Section
2.03. It is understood and agreed that the obligation under this Agreement of
the Sponsor to cure, repurchase or replace any Mortgage Loan as to which a
breach has occurred or is continuing shall constitute the sole remedies against
the Sponsor respecting such breach available to Certificateholder, the Depositor
or the Trustee.
(d) The Master Servicer hereby represents, warrants and covenants with
the Servicer, the Depositor and the Trustee as follows, as of the Closing Date:
(i) The Master Servicer is a national banking association duly formed,
validly existing and in good standing under the laws of the United
States of America and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the
Master Servicer;
(ii) The Master Servicer has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the Master Servicer,
the consummation by the Master Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Master Servicer and will not (A) result in a breach of any term or
provision of charter and by-laws of the Master Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which the Master Servicer is a party or by which it may be bound, or
any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer
is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition,
properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to perform any of its other obligations hereunder in accordance with
the terms hereof,
(vi) There are no actions or proceedings against, or investigations known to
it of, the Master Servicer before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the consummation of the transactions contemplated by
this Agreement or (C) that might prohibit or materially and adversely
affect the performance by the Master Servicer of its obligations under,
or validity or enforceability of, this Agreement; and
(vii) 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 by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date.
(e) The representations and warranties set forth in Section 2.03 shall
survive delivery of the respective Mortgage Loans and Mortgage Files to
the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to, and covenants, with
the Servicer, the Sponsor, the Master Servicer, the Securities Administrator and
the Trustee as follows, as of the date hereof and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate 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 corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) 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 and further subject to public policy
with respect to indemnity and contribution under applicable securities
law.
(iii) The execution and delivery of this Agreement by the Depositor, the
consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of the Depositor and will not (A) result in
a material breach of any term or provision of the charter or by-laws of
the Depositor or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
the Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's knowledge,
threatened, against the Depositor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
the ability of the Depositor to perform its obligations under this
Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of the
Closing Date, following the transfer of the Mortgage Loans to it by the Sponsor,
the Depositor had good title to the Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee or the Custodian for the benefit of the Certificateholders. Upon
discovery by the Depositor, any Servicer, the Master Servicer or the Trustee of
a breach of such representations and warranties, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Sponsor delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I, REMIC II or REMIC III or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion of Counsel to the effect that such repurchase or
substitution, as applicable, will not result in the events described in clause
(i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor or the Sponsor that any Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of section
860G(a)(3) of the Code, the party discovering such fact shall promptly (and in
any event within five (5) Business Days of discovery) give written notice
thereof to the other parties and the Trustee. In connection therewith, the
Sponsor, at its option, shall either (i) substitute, if the conditions in
Section 2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within ninety (90) days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty contained in
Section 2.03. The Trustee shall reconvey to the Sponsor the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Issuance of the REMIC I Regular Interests and the Class R
Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the Custodian on its behalf of the related Mortgage Files,
subject to the provisions of Section 2.01 and Section 2.02, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-I
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I Regular
Interests, shall be as set forth in this Agreement.
Section 2.07 Conveyance of the REMIC I Regular Interests; Issuance and
Conveyance of the REMIC II Regular Interests.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee,
without recourse all the right, title and interest of the Depositor in and to
the REMIC I Regular Interests for the benefit of the Class R-II Interest and
REMIC II (as holder of the REMIC I Regular Interests). The Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of all present and
future Holders of the Class R-II Interest and REMIC II (as holder of the REMIC I
Regular Interests). The rights of the Holder of the Class R-II Interest and
REMIC II (as holder of the REMIC I Regular Interests) to receive distributions
from the proceeds of REMIC II in respect of the Class R-II Interest and the
REMIC II Regular Interests, respectively, and all ownership interests evidenced
or constituted by the Class R-II Interest and the REMIC II Regular Interests,
shall be as set forth in this Agreement. The Class R-II Interest and the REMIC
II Regular Interests shall constitute the entire beneficial ownership interest
in REMIC II.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee,
without recourse all the right, title and interest of the Depositor in and to
the REMIC II Regular Interests for the benefit of the Class R-III Interest and
REMIC III (as holder of the REMIC II Regular Interests). The Trustee
acknowledges receipt of the REMIC II Regular Interests and declares that it
holds and will hold the same in trust for the exclusive use and benefit of all
present and future Holders of the Class R-III Interest and REMIC III (as holder
of the REMIC II Regular Interests). The rights of the Holder of the Class R-III
Interest and REMIC III (as holder of the REMIC II Regular Interests) to receive
distributions from the proceeds of REMIC III in respect of the Class R-III
Interest and the Regular Certificates and the Class IO Interest, respectively,
and all ownership interests evidenced or constituted by the Class R-III Interest
and the Regular Certificates and the Class IO Interest, shall be as set forth in
this Agreement. The Class R-III Interest, the Regular Certificates and the Class
IO Interest shall constitute the entire beneficial ownership interest in REMIC
III.
Section 2.08 Issuance of Class R Certificates.
The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and the REMIC II Regular Interests and, concurrently therewith and in
exchange therefor, pursuant to the written request of the Depositor executed by
an officer of the Depositor, the Securities Administrator has executed,
authenticated and delivered to or upon the order of the Depositor, the Class R
Certificates in authorized denominations.
Section 2.09 Establishment of Trust.
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 to be
known, for convenience, as "Nomura Home Equity Loan, Inc., Home Equity Loan
Trust, Series [___________]" and does hereby appoint [________________], as
Trustee in accordance with the provisions of this Agreement.
Section 2.10 Purpose and Powers of the Trust.
The purpose of the common law trust, as created hereunder, is to engage
in the following activities:
(a) acquire and hold the Mortgage Loans and the other assets of the
Trust Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for the
Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities.
The Trustee shall not cause the trust to engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement while any Certificate is outstanding, and this Section
2.10 may not be amended, without the consent of the Certificateholders
evidencing 51% or more of the aggregate voting rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section 3.01 Servicer to act as Servicer of the Related Mortgage Loans.
The Servicer shall service and administer the applicable Mortgage Loans
on behalf of the Trust and in the best interest of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the related Mortgage Loans and
to the extent consistent with such terms and in accordance with and exercising
the same care in performing those practices that the Servicer customarily
employs and exercises in servicing and administering mortgage loans for its own
account and of the same type as such Mortgage Loans in the jurisdiction where
the related Mortgaged Property is located (including, compliance with all
applicable federal, state and local laws).
To the extent consistent with the foregoing, the Servicer shall seek
the timely and complete recovery of principal and interest on the Mortgage Notes
related to Mortgage Loans serviced by the Servicer and shall waive a Prepayment
Charge only under the following circumstances: (i) such waiver is standard and
customary in servicing similar mortgage loans and (ii) either (A) such waiver is
related to a default or reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is related to a default or a reasonably
foreseeable default or (B) such waiver is made in connection with a refinancing
of the related Mortgage Loan unrelated to a default or a reasonably foreseeable
default where (x) the related Mortgagor has stated to the Servicer an intention
to refinance the related Mortgage Loan and (y) the Servicer has concluded in its
reasonable judgment that the waiver of such Prepayment Charge would induce such
Mortgagor to refinance with the Servicer, (iii) the Servicer of the related
Mortgage Loan reasonably believes such Prepayment Charge is unenforceable in
accordance with applicable law or the collection of such related Prepayment
Charge would otherwise violate applicable law or (iv) the Servicer has not been
provided with information sufficient to enable it to collect the Prepayment
Charge. If a Prepayment Charge is waived as permitted by meeting both of the
standards described in clauses (i) and (ii)(B) above, then the Servicer is
required to pay the amount of such waived Prepayment Charge (the "Servicer
Prepayment Charge Payment Amount"), for the benefit of the Holders of the Class
P Certificates, by depositing such amount into the Custodial Account within
ninety (90) days of notice or discovery of such waiver meeting the standard set
forth in both clauses (i) and (ii)(B) above; provided, however, that the
Servicer shall not waive more than five-percent (5%) of the Prepayment Charges
(by number of Prepayment Charges) set forth on the Prepayment Charge Schedule in
accordance with clauses (i) and (ii)(B) above. Notwithstanding any other
provisions of this Agreement, any payments made by the Servicer in respect of
any waived Prepayment Charges pursuant to clauses (i) and (ii)(B) above and the
preceding sentence shall be deemed to be paid outside of the Trust Fund.
Subject only to the above-described applicable servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.03, to do or
cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited to,
the power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
related Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided herein), (iii) to collect any
Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to Section
3.09, to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan.
Without limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Trust, the Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the related Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The Servicer shall
prepare and deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable the Servicer to service and administer the related Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Servicer. In addition, the Trustee shall
execute, at the written request of the Servicer, and furnish to it any special
or limited powers of attorney in the form of Exhibit M hereto for each county in
which a Mortgaged Property is located and other documents necessary or
appropriate to enable that Servicer to carry out its servicing and
administrative duties hereunder, provided such limited powers of attorney or
other documents shall be prepared by the Servicer and submitted to the Trustee
for review prior to execution. Notwithstanding anything to the contrary herein,
the Trustee shall in no way be liable or responsible for the willful malfeasance
of any Servicer, or for the wrongful or negligent actions taken by any Servicer,
while the Servicer is acting pursuant to the powers granted to it in this
paragraph.
In accordance with the standards of the first paragraph of this Section
3.01, the Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans is serviced by the Servicer in order
to preserve the lien on the Mortgaged Property, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.27, and further as provided in Section 3.32. All costs
incurred by the Servicer, if any, in effecting the payments of such taxes and
assessments on the related Mortgaged Properties and related insurance premiums
shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balance under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
Section 3.02 Due-on-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.02, when any
Mortgaged Property has been or is about to be conveyed by the Mortgagor, the
Servicer shall to the extent that it has knowledge of such conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, no Servicer
shall be required to exercise such rights with respect to a Mortgage Loan if the
Person to whom the related Mortgaged Property has been conveyed or is proposed
to be conveyed satisfies the terms and conditions contained in the Mortgage Note
and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such Mortgage Note
or Mortgage as a condition to such transfer. In the event that the Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.02(b), to take or enter into an assumption and modification
agreement from or with the person to whom such property has been or is about to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the related Mortgage Loan shall continue to be
covered (if so covered before the Servicer enters into such an agreement) by the
applicable Required Insurance Policies. The Servicer, subject to Section
3.02(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Xxxxxxxxx and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, no Servicer shall be deemed to
be in default under this Section 3.02(a) by reason of any transfer or assumption
that it reasonably believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.02(a), in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or if
an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the related Mortgage Loan, the Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Index, Gross Margin, Periodic Rate Cap, Adjustment Date, Maximum
Interest Rate or Minimum Mortgage Interest Rate, and any other term affecting
the amount or timing of payment on the related Mortgage Loan) may be changed. In
addition, the substitute Mortgagor and the Mortgaged Property must be acceptable
to the Servicer in accordance with the servicing standard set forth in Section
3.01. The Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Custodian the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Servicer as additional servicing compensation.
Section 3.03 Subservicers.
The Servicer shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Servicer of a subservicer
shall not release the Servicer from any of its obligations hereunder with
respect to the related Mortgage Loans. Any subservicing arrangement and the
terms of the related subservicing Agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder and the Servicer shall cause any subservicer to comply
with the provisions of this Agreement (including, without limitation, to provide
the information required to be delivered under Sections 3.13, 3.14 and 3.18
hereof), to the same extent as if such Sub-Servicer were the related Servicer.
The related Servicer shall be responsible for obtaining from each Sub-Servicer
and delivering to the Master Servicer any annual statement of compliance,
assessment of compliance, attestation report and Xxxxxxxx-Xxxxx related
certification as and when required to be delivered. The Servicer shall pay all
fees of each of its subservicers from its own funds.
Notwithstanding the foregoing, with respect to the Mortgage Loans, the
Servicer shall be entitled to outsource one or separate servicing functions to a
Person (each, a "Subcontractor") that does not meet the eligibility requirements
for a Subservicer, so long as such outsourcing does not constitute the
delegation of the Servicer's obligation to perform all or substantially all of
the servicing of the related Mortgage Loans to such Subcontractor. The Servicer
shall promptly, upon request, provide to the Master Servicer, the Trustee and
the Depositor a written description (in form and substance satisfactory to the
Master Servicer, the Trustee and the Depositor) of the role and function of each
Subcontractor utilized by the Servicer, 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 subsection. In such event, the use by the Servicer of any such
Subcontractor shall not release the Servicer from any of its obligations
hereunder and the Servicer shall remain responsible hereunder for all acts and
omissions of such Subcontractor as fully as if such acts and omissions were
those of the Servicer, and the Servicer shall pay all fees and expenses of the
Subcontractor from the Servicer's own funds.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by it for
the benefit of the Master Servicer, the Trustee and the Depositor to comply with
the provisions of Sections 3.13, 3.14 and 3.18 of this Agreement to the same
extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each Subcontractor and delivering to the Master
Servicer, the Trustee and any Depositor any assessment of compliance,
attestation report and Xxxxxxxx-Xxxxx related certification required to be
delivered by such Subcontractor under Section 3.13, 3.14 and 3.18, in each case
as and when required to be delivered.
At the cost and expense of the Servicer, without any right of
reimbursement from its Custodial Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Servicer, at its option, from electing to service the Mortgage Loans itself.
In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 8.01, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
with respect to the Mortgage Loans effective as of the date of the Servicer's
termination. The Servicer shall pay all fees, expenses or penalties necessary in
order to terminate the rights and responsibilities of each subservicer from the
Servicer's own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Servicer shall not be relieved of
its obligations hereunder with respect to the Mortgage Loans and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Servicer alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities with respect
to such subservicer including any obligation, duty or liability of Master
Servicer or the Trustee to pay such subservicer's fees and expenses or any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any successor servicer to act as successor servicer under
this Agreement and the transactions provided for in this Agreement. For purposes
of remittances to the Securities Administrator pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.
Section 3.04 Documents, Records and Funds in Possession of the Servicer
To Be Held for Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Securities
Administrator for any funds received by the Servicer or that otherwise are
collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any such Mortgage Loan. All Mortgage Files and funds collected or
held by, or under the control of, the Servicer in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Custodial Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. The Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Custodial Account, the Distribution Account or in any
Escrow Account, or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to it
under this Agreement.
Section 3.05 Maintenance of Hazard Insurance.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
serviced by it hazard insurance with extended coverage on the Mortgaged Property
in an amount which is at least equal to the lesser of (i) the Stated Principal
Balance of such Mortgage Loan and (ii) the amount necessary to fully compensate
for any damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
hazard insurance with extended coverage on each REO Property in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such REO Property and (ii) the Stated Principal
Balance of the related Mortgage Loan at the time it became an REO Property. The
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and in accordance with the servicing standard set forth in Section
3.01) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.27. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the Stated Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If a Mortgaged Property or REO Property is at any time in
an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer shall cause to be maintained a flood insurance policy in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the Stated Principal Balance of the related Mortgage Loan and (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of B:VI or better in
Best's Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.05, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Custodial Account maintained by the
Servicer from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the related Mortgage Loans, the Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of its obligations under this Agreement, which policy or
policies shall be in such form and amount that would meet the requirements of
Xxxxxx Xxx or Freddie Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from Xxxxxx Xxx or
Freddie Mac. The Servicer shall provide the Master Servicer, upon request, with
copies of such insurance policies and fidelity bond (or waiver thereof). The
Servicer shall also maintain a fidelity bond in the form and amount that would
meet the requirements of Xxxxxx Xxx or Freddie Mac, unless the Servicer has
obtained a waiver of such requirements from Xxxxxx Xxx or Freddie Mac. The
Servicer shall be deemed to have complied with this provision if one of its
Affiliates has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Servicer. Any such errors and omissions policy and
fidelity bond shall by its terms not be cancelable without thirty (30) days'
prior written notice to the Master Servicer. The Servicer shall also cause its
subservicers to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.06 Presentment of Claims and Collection of Proceeds.
The Servicer shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the applicable Insurance Policies and take
such reasonable actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to permit recovery
under such Insurance Policies. Any proceeds disbursed to the Servicer in respect
of such Insurance Policies shall, within two Business Days of its receipt, be
deposited in the Custodial Account, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted). Notwithstanding any provision to the contrary, no Servicer shall
have any responsibility to a primary mortgage insurance policy unless it has
been made aware of such policy, as reflected on the Mortgage Loan Schedule or
otherwise and has been provided with adequate information to administer such
policy.
Section 3.07 Maintenance of Insurance Policies.
Except as required by applicable law or the related Mortgage Loan
documents, no Servicer shall take any action that would result in noncoverage
under any applicable Insurance Policy of any loss which, but for the actions of
the Servicer would have been covered thereunder. The Servicer shall use its best
efforts to keep in force and effect (to the extent that the related Mortgage
Loan requires the Mortgagor to maintain such insurance), any applicable
Insurance Policy. No Servicer shall cancel or refuse to renew any Insurance
Policy that is in effect at the date of the initial issuance of a Mortgage Note
and is required to be kept in force hereunder.
Section 3.08 Reserved.
Section 3.09 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Liquidation Proceeds and Realized Losses; Repurchases of Certain
Mortgage Loans.
(a) The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Servicer shall not be required to expend its own funds in connection with
any foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account). If the Servicer reasonably
believes that Liquidation Proceeds with respect to any such Mortgage Loan would
not be increased as a result of such foreclosure or other action, such Mortgage
Loan will be charged-off and will become a Liquidated Loan. The Servicer will
give notice of any such charge-off to the Securities Administrator. The Servicer
shall be responsible for all other costs and expenses incurred by it in any such
proceedings; provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 3.27.
If the Servicer has knowledge that a Mortgaged Property that it is contemplating
acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a
one-mile radius of any site with environmental or hazardous waste risks known to
it, the Servicer shall, prior to acquiring the Mortgaged Property, consider such
risks and only take action in accordance with its established environmental
review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Servicer shall ensure that the
title to such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself, or through an agent selected by it, protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of the Servicer
and the Certificateholders for the period prior to the sale of such REO
Property. The Servicer shall prepare for and deliver to the Securities
Administrator a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Securities Administrator to comply with the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Custodial Account no
later than the close of business on each Determination Date. The Servicer shall
perform the tax reporting and withholding related to foreclosures, abandonments
and cancellation of indebtedness income as specified by Sections 6050H, 6050J
and 6050P of the Code by preparing and filing such tax and information returns,
as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
three years after its acquisition by the Trust Fund or, at the expense of the
Trust Fund, request from the Internal Revenue Service more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period. The Trustee and the Securities Administrator shall
be supplied with an Opinion of Counsel (such opinion not to be an expense of the
Trustee, the Securities Administrator or the Trust Fund) to the effect that the
holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of REMIC I, REMIC II or REMIC III as defined in section 860F of
the Code or cause either REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject either REMIC I, REMIC II or REMIC III to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of the Code or otherwise, unless the Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
unreimbursed master servicing fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for all
purposes in the Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Custodial Account.
To the extent the income received during a Prepayment Period is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the Mortgage Loan, such excess shall be considered to be a
partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Custodial Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date, except that any
Excess Liquidation Proceeds shall be retained by the Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, shall be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 3.27 or this Section 3.09; second, to
reimburse the Servicer for any unreimbursed Advances, pursuant to Section 3.27
or this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Mortgage Loan or related REO
Property, at the Net Mortgage Rate to the first day of the month in which such
amounts are required to be distributed; and fourth, as a recovery of principal
of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, with respect to any Mortgage Loan for the related Prepayment Period and
report the same to the Securities Administrator pursuant to Section 3.28.
(c) No Servicer has any intent to foreclose on any Mortgage Loan
serviced by it based on the delinquency characteristics as of the Closing Date;
provided, however, that the foregoing does not prevent the Servicer from
initiating foreclosure proceedings on any date hereafter if the facts and
circumstances of such Mortgage Loans, including delinquency characteristics, in
the Servicer's discretion so warrant such action.
Section 3.10 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from its Custodial Account out of each payment of
interest on each Mortgage Loan serviced by it included in the Trust Fund an
amount equal to the applicable Servicing Fee. In addition, the Servicer shall be
entitled to recover any unpaid Servicing Fees payable to it out of Liquidation
Proceeds, Insurance Proceeds or condemnation proceeds related to the Mortgage
Loans serviced by the Servicer to the extent permitted by Section 3.27.
Additional servicing compensation with respect to Mortgage Loans in the
form of any Excess Liquidation Proceeds, assumption fees, late payment charges,
insufficient funds charges and ancillary income to the extent such fees or
charges are received by the Servicer, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Custodial Account shall be retained by the Servicer to the extent not required
to be deposited in the Custodial Account pursuant to Section 3.27. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.05 and maintenance of the other forms of
insurance coverage required by Section 3.07 and shall not be entitled to
reimbursement therefor except as specifically provided in herein.
Section 3.11 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Servicer shall sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Pursuant to
its efforts to sell such REO Property, the Servicer shall protect and conserve
such REO Property in the manner and to the extent required herein, in accordance
with the REMIC Provisions.
(b) Any Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property into its Custodial Account.
(c) The Servicer, upon the final disposition of any REO Property, shall
be entitled to reimbursement for any related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Advances or Servicing Fees as well as any unpaid Servicing
Fees may be reimbursed or paid, as the case may be, prior to final disposition,
out of any net rental income or other net amounts derived from such REO
Property.
Section 3.12 Liquidation Reports.
Upon the foreclosure of any Mortgaged Property or the acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the
Servicer shall submit a liquidation report to the Trustee containing such
information as shall be mutually acceptable to it and the Trustee with respect
to such Mortgaged Property.
Section 3.13 Annual Statement as to Compliance.
(a) Not later than March 1st of each calendar year beginning in [____],
the Servicer will deliver to the Trustee, the Master Servicer and the Depositor
an Officers' Certificate (an "Annual Statement of Compliance") (upon which the
Master Servicer can conclusively rely in connection with its obligations under
Section 5.06) stating, as to each signatory thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of performance
under this Agreement has been made under such Servicing Officers' supervision
and (ii) to the best of such Servicing Officers' knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
in all material respects throughout such year, or, if there has been a failure
to fulfill any such obligation in any material respect, specifying each such
failure known to such Servicing Officer and the nature and status of cure
provisions thereof. Such Annual Statement of Compliance shall contain no
restrictions or limitations on its use. In the event that the Servicer has
delegated any servicing responsibilities with respect to the Mortgage Loans to a
subservicer, the Servicer shall deliver an Officer's Certificate of each
subservicer as described above as and when required with respect to the
Servicer.
(b) If the Servicer cannot deliver the related Annual Statement of
Compliance by March 1st of such year, the Master Servicer, at its sole option,
may permit a cure period for the Servicer to deliver such Annual Statement of
Compliance, but in no event later than March 10th of such year.
(c) Failure of the Servicer to comply timely with this Section 3.13
shall be deemed a Servicer Event of Default as to the Servicer, automatically,
without notice and without any cure period, and the Master Servicer may, in
addition to whatever rights the Master Servicer may have under this Agreement
and at law or in equity or to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
Section 3.14 Assessments of Compliance and Attestation Reports.
(a) On and after [___________], the Servicer shall service and
administer the Mortgage Loans in accordance with all applicable requirements of
the Servicing Criteria. The Servicer shall deliver to the Master Servicer on or
before March 1st of each calendar year beginning in [_____], a report (an
"Assessment of Compliance") reasonably satisfactory to the Master Servicer
regarding the Servicer's assessment of compliance with the Servicing Criteria
during the preceding calendar year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB, which as of the date hereof,
require a report by an authorized officer of the Servicer that contains the
following:
(i) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Servicer;
(ii) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to
the Servicer;
(iii) An assessment by such officer of the Servicer's compliance with the
applicable Servicing Criteria for the period consisting of the
preceding calendar year, including disclosure of any material instance
of noncompliance with respect thereto during such period, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving the
Servicer, that are backed by the same asset type as the Mortgage Loans;
(iv) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's Assessment of Compliance for the
period consisting of the preceding calendar year; and
(v) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer, which statement shall be based on the
activities it performs with respect to asset-backed securities
transactions taken as a whole involving the Master Servicer, that are
backed by the same asset type as the Mortgage Loans.
(b) Such report at a minimum shall address each of the Servicing
Criteria specified on a certification substantially in the form of Exhibit O
hereto delivered to the Master Servicer concurrently with the execution of this
Agreement.
(c) On or before March 1st of each calendar year beginning in [_____],
the Servicer shall furnish to the Master Servicer a report (an "Attestation
Report") by a registered public accounting firm that attests to, and reports on,
the Assessment of Compliance made by the Company, as required by Rules 13a-18
and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
(d) The Servicer shall cause any subservicer, any Subcontractor and
each subcontractor determined by the Servicer to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Master Servicer, the Trustee and the Depositor an assessment of
compliance and accountant's attestation report.
(e) If the Servicer cannot deliver the related Assessment of Compliance
or Attestation Report by March 1st of such year, the Master Servicer, at its
sole option, may permit a cure period for the Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than March
10th of such year.
Failure of the Servicer to comply timely with this Section 3.18 shall
be deemed a Servicer Event of Default as to the Servicer, automatically, without
notice and without any cure period, and the Master Servicer may, in addition to
whatever rights the Master Servicer may have under this Agreement and at law or
in equity or to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof without compensating
the Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
Section 3.15 Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans serviced by the
Servicer which shall be appropriately identified in the Servicer's computer
system to clearly reflect the ownership of such Mortgage Loans by the Trust. In
particular, the Servicer shall maintain in its possession, available for
inspection by the Trustee and the Master Servicer and shall deliver to the
Trustee or the Master Servicer upon reasonable prior request and during normal
business hours, evidence of compliance with all federal, state and local laws,
rules and regulations. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Servicer may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the
Servicer complies with the requirements of Accepted Servicing Practices.
The Servicer shall maintain with respect to each Mortgage Loan serviced
by the Servicer and shall upon reasonable prior request and during normal
business hours make available for inspection by the Trustee and the Master
Servicer the related servicing file during the time such Mortgage Loan is
subject to this Agreement and thereafter in accordance with applicable law.
Section 3.16 The Trustee.
The Trustee shall furnish the Servicer with any powers of attorney and
other documents prepared and submitted by the Servicer to the Trustee in a form
agreeable to the Trustee and necessary or appropriate to enable the Servicer to
service and administer the related Mortgage Loans and REO Properties.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee 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. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver as directed in writing by the
Servicer any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or otherwise available at law or equity.
Section 3.17 REMIC-Related Covenants.
For as long as each REMIC shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to treat each REMIC as a REMIC,
and the Trustee and the Securities Administrator shall comply with any
directions of the Sponsor, the Servicer or the Master Servicer with respect to
such treatment. In particular, the Trustee shall not (a) knowingly sell or
permit 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 repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.18 Annual Certification; Additional Information.
(a) If requested by the Master Servicer or the Depositor, the Servicer
shall deliver no later than March 1st of each year in which the Trust is
required to file an execute and Annual Report on Form 10-K, to the Master
Servicer, the Depositor and any other Person that will be responsible for
signing the Master Servicer Certification, a certification in the form attached
hereto as Exhibit [__] signed by the appropriate officer of the Servicer. The
Servicer acknowledges that the Master Servicer, the Depositor and any other
Person that will be responsible for signing a Master Servicer Certification may
rely on the certification provided by the Servicer in signing a Master Servicer
Certification and filing such with the Commission. Such certification shall be
signed by the senior officer in charge of servicing of the Servicer.
(b) The Servicer shall indemnify and hold harmless the Master Servicer,
the Securities Administrator, the Trustee, the Depositor and their respective
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.18 or the Servicer's negligence, bad faith or
willful misconduct in connection therewith. Such indemnity shall survive the
termination or resignation of the parties hereto or the termination of this
Agreement. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, the Securities Administrator,
the Trustee and the Depositor, then the Servicer agrees that it shall contribute
to the amount paid or payable by the Master Servicer, the Securities
Administrator, the Trustee and the Depositor as a result of the losses, claims,
damages or liabilities of the Master Servicer, the Securities Administrator, the
Trustee and the Depositor in such proportion as is appropriate to reflect the
relative fault of the Master Servicer, the Securities Administrator, the Trustee
and the Depositor on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under this Section 3.18.
(c) The Servicer shall provide to the Master Servicer prompt notice of
the occurrence of any of the following:
(i) any Servicer Event of Default under the terms of this Agreement, any
merger, consolidation or sale of substantially all of the assets of the
Servicer, the Servicer's engagement of any subservicer to perform or
assist in the performance of any of the Servicer's obligations under
this Agreement, any material litigation involving the Servicer, and any
affiliation or other significant relationship between the Servicer and
other transaction parties.
(ii) If the Servicer has knowledge of the occurrence of any of the events
described in this clause (ii), then no later than ten days prior to the
deadline for the filing of any Distribution Report on Form 10-D in
respect of any Trust that includes any of the Mortgage Loans serviced
by the Servicer, the Servicer shall provide to the Master Servicer
notice of the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related Distribution Report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool
asset terms, fees, penalties or payments during the
distribution period or that have cumulatively become material
over time (Item 1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties
or transaction covenants (Item 1121(a)(12) of Regulation AB);
and
(C) information regarding new asset-backed securities issuances
backed by the same pool assets, any pool asset changes (such
as, additions, substitutions or repurchases), and any material
changes in origination, underwriting or other criteria for
acquisition or selection of pool assets (Item 1121(a)(14) of
Regulation AB).
The Servicer shall provide to the Master Servicer such additional information as
the Master Servicer may reasonably request, including evidence of the
authorization of the person signing any certification or statement, financial
information and reports and of the fidelity bond and errors and omissions
insurance policy required to be maintained by the Servicer pursuant to this
Agreement, and such other information related to the Servicer or its performance
hereunder.
Section 3.19 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by the Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will (or if the
Servicer does not, the Master Servicer may) promptly furnish to the Trustee and
the Custodian, on behalf of the Trustee, two copies of a request for release
substantially in the form attached to the Custodial Agreement signed by an
Authorized Servicer Representative or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from an Authorized
Servicer Representative (which certification shall include a statement to the
effect that all amounts received in connection with such payment that are
required to be deposited in the Custodial Account pursuant to Article V have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Servicer the related Mortgage File. Within five (5)
Business Days of receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall release the related Mortgage File to the Servicer
and the Trustee and the Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, the Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the related Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Custodial Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with this Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by the Servicer (in form reasonably acceptable to the Trustee) and as
are necessary to the prosecution of any such proceedings. The Custodian, on
behalf of the Trustee, shall, upon the written request of the Servicer, and
delivery to the Custodian, on behalf of the Trustee, of two copies of a request
for release signed by an Authorized Servicer Representative substantially in the
form attached to the Custodial Agreement (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from an
Authorized Servicer Representative), release the related Mortgage File held in
its possession or control to the Servicer. Such request for release shall
obligate the Servicer to return the Mortgage File to the Custodian on behalf of
the Trustee, when the need therefor by such Person no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of an Authorized Servicer Representative similar to that hereinabove specified,
the Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to the Servicer.
Section 3.20 Documents, Records and Funds in Possession of the Servicer
to be held for Trustee.
(a) The Servicer (to the extent required by this Agreement) shall
transmit to the Trustee or the Custodian such documents and instruments coming
into the possession of the Servicer from time to time as are required by the
terms hereof to be delivered to the Trustee or the Custodian. Any funds received
by the Servicer in respect of any Mortgage Loan or which otherwise are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan serviced by it shall be held for the benefit of the Trustee and
the Certificateholders subject to the right of the Servicer to retain its
Servicing Fee and other amounts as provided in this Agreement.
Section 3.21 Possession of Certain Insurance Policies and Documents.
The Servicer shall retain possession and custody of the originals (to
the extent available) of any Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be issued
from time to time that comes into the possession of the Servicer, as
contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full, the Trustee (or the Custodian,
as directed by the Trustee) shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions of this
Agreement.
Section 3.22 [Reserved].
Section 3.23 UCC.
The Sponsor agrees to execute and file continuation statements for any
Uniform Commercial Code financing statements which the Sponsor has informed the
Trustee were filed on the Closing Date in connection with the Trust. The Sponsor
shall file any financing statements or amendments and continuation statements
thereto required by any change in the Uniform Commercial Code.
Section 3.24 Optional Purchase of Defaulted Mortgage Loans.
With respect to any Mortgage Loan which is delinquent in payment by
ninety-one (91) days or more or is an REO Property, the Sponsor shall have the
right to purchase such Mortgage Loan or REO Property from the Trust at a price
equal to the Purchase Price. The Purchase Price shall be remitted to the
Servicer of the related Mortgage Loan for deposit in the Custodial Account and
remitted by the Servicer to the Securities Administrator on the applicable
Remittance Date in the month immediately following the month in which the
Purchase Price was deposited in the Custodial Account.
If at any time the Sponsor remits to the Servicer a payment for deposit
in the Custodial Account covering the amount of the Purchase Price for such a
Mortgage Loan and the Servicer delivers an Officer's Certificate to the Trustee
certifying that the Purchase Price has been deposited in the Custodial Account,
the Trustee shall execute the assignment of such Mortgage Loan at the request of
the Sponsor without recourse to the Sponsor which shall succeed to all the
Trustee's, right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Sponsor will thereupon own such Mortgage, and
all such security and documents, free of any further obligation to the Trustee
or the Certificateholders with respect thereto. The Sponsor shall be responsible
for any transfer costs incurred with respect to a Mortgage Loan purchased
pursuant to this Section 3.24.
If the Sponsor is required to repurchase a Mortgage Loan pursuant to
this Section 3.24, the Servicer shall continue to service such Mortgage Loan
unless the Sponsor shall repurchase the servicing rights thereon on terms
mutually agreed to by the Sponsor and the Servicer. Notwithstanding the
foregoing, the Master Servicer shall have no obligation to master service any
Mortgage Loan that has been so repurchased.
Section 3.25 Obligations of the Servicer Under Credit Risk Management
Agreement.
Notwithstanding anything in this Agreement or the Credit Risk
Management Agreements to the contrary, the Trustee shall not have any duty or
obligation to enforce any Credit Risk Management Agreement or to supervise,
monitor or oversee the activities of the Credit Risk Manager or the Servicer
under the Credit Risk Management Agreements or this Agreement with respect to
any action taken or not taken by the Servicer pursuant to a recommendation of
the Credit Risk Manager or otherwise in connection with obligations of the
Servicer under the related Credit Risk Management Agreement.
Section 3.26 Collection of Mortgage Loan Payments; Custodial Accounts.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge and (ii) extend the due dates
for payments due on a Mortgage Note for a Mortgage Loan for a period not greater
than 180 days; provided, however no such extension shall be materially adverse
to the Certificateholders. In the event of any such arrangement, the Servicer
shall make Advances on the Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 5.01. The Servicer shall not
be required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Servicer delivers to the Trustee and the Securities
Administrator a REMIC Opinion, the Servicer may, (A) amend the related Mortgage
Note to reduce the Mortgage Rate applicable thereto and (B) amend any Mortgage
Note for a Mortgage Loan to extend the maturity thereof.
(b) The Servicer shall establish and maintain a segregated Custodial
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Servicer for the benefit of the Trustee on behalf
of the Certificateholders and designated "[________________], as trustee for
registered holders of Nomura Home Equity Loan, Inc., Asset-Backed Certificates,
Series [___________]." On behalf of the Trust Fund, the Servicer shall deposit
or cause to be deposited in the clearing account in which it customarily
deposits payments and collection on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis and in no event more than
one Business Day after the Servicer's receipt thereof, and shall thereafter
deposit in the Custodial Account, in no event more than two Business Days after
the Servicer's receipt thereof, except as otherwise specifically provided
herein, the following payments and collections remitted by subservicers or
received by it in respect of the Mortgage Loans subsequent to the Cut-off Date
(other than in respect of principal and interest due on the Mortgage Loans on or
before the Cut-off Date) and the following amounts required to be deposited
hereunder:
(i) all payments on account of principal, including Principal Prepayments
and Subsequent Recoveries, on the related Mortgage Loans;
(ii) all payments on account of interest on the related Mortgage Loans net
of the related Servicing Fee permitted under Section 3.10;
(iii) all Liquidation Proceeds, Insurance Proceeds and condemnation proceeds
with respect to the related Mortgage Loans, other than proceeds to be
applied to the restoration or repair of the related Mortgaged
Properties or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Servicer pursuant to Section
3.26(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.05;
(vi) any amounts paid by an Advance Financing Person in respect of Advances
or Servicing Advances;
(vii) any Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans serviced by the
Servicer and any Servicer Prepayment Charge Payment Amounts;
(viii) the Purchase Price with respect to any Mortgage Loans serviced by the
Servicer and purchased by the Sponsor pursuant to Section 2.02 or 2.03,
any amounts which are to be treated pursuant to Section 2.04 of this
Agreement as the payment of such a Purchase Price and the Purchase
Price with respect to any Mortgage Loans serviced by the Servicer and
purchased by the Sponsor pursuant to Section 3.24; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposit by the Servicer into the
Custodial Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be deposited by the
Servicer. In the event that the Servicer shall deposit any amount not required
to be deposited and not otherwise subject to withdrawal pursuant to Section
3.27, it may at any time withdraw or direct the institution maintaining the
Custodial Account, to withdraw such amount from the applicable Custodial
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
institution maintaining the Custodial Account, that describes the amounts
deposited in error in the Custodial Account. The Servicer shall maintain
adequate records with respect to all withdrawals made pursuant to this Section.
All funds deposited in the Custodial Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.27.
(c) The institution that maintains a Custodial Account, or other
authorized entity shall invest the funds in such Custodial Account, in the
manner directed by the Servicer, in Permitted Investments which shall mature not
later than the next succeeding Remittance Date and shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be made in the
name of the Trustee, for the benefit of the Certificateholders. All income and
gain net of any losses realized from any such investment shall be for the
benefit of the Servicer as servicing compensation and shall be remitted to it
monthly as provided herein. The amount of any losses incurred in the Servicer's
Custodial Account in respect of any such investments shall be deposited by the
Servicer into such Custodial Account immediately as realized, out of its own
funds.
(d) The Servicer shall give at least thirty (30) days' advance notice
to the Trustee, the Securities Administrator, the Master Servicer the Sponsor,
each Rating Agency and the Depositor of any proposed change of location of its
Custodial Account prior to any change thereof.
Section 3.27 Permitted Withdrawals From the Custodial Accounts.
(a) The Servicer may from time to time make withdrawals from its
Custodial Account for the following purposes:
(i) to pay itself (to the extent not previously paid to or withheld by it),
as servicing compensation in accordance with Section 3.10, that portion
of any payment of interest that equals the Servicing Fee for the period
with respect to which such interest payment was made, and, as
additional servicing compensation, those other amounts set forth in
Section 3.10;
(ii) to reimburse itself or an Advance Financing Person for (A) any
unreimbursed Advances to the extent of amounts received which represent
late recoveries of payments of principal and/or interest (net of the
related Servicing Fees), Liquidation Proceeds and Insurance Proceeds on
the related Mortgage Loans with respect to which such Advances were
made in accordance with the provisions of Section 5.01; and (B) any
unreimbursed Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the extent
that late recoveries of payments of principal and/or interest,
Liquidation Proceeds and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse the Servicer or an
Advance Financing Person for such unreimbursed Advances or (C) subject
to Section 3.27(b), any unreimbursed Advances to the extent of Amounts
Held For Future Distribution funds held in its Custodial Account
relating to the Mortgage Loans that were not included in the Available
Distribution Amount for the preceding Distribution Date;
(iii) to reimburse itself or an Advance Financing Person for any
Nonrecoverable Advances;
(iv) to reimburse itself from Insurance Proceeds for Insured Expenses
covered by the related Insurance Policy;
(v) to pay itself any unpaid Servicing Fees and to reimburse itself or any
Advance Financing Person for any unreimbursed Servicing Advances,
provided, however, that the Servicer's or such Advance Financing
Person's right to reimbursement for Servicing Advances pursuant to this
subclause (v) with respect to any Mortgage Loan shall be limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, late recoveries of payments of principal and/or interest,
Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and
purchase and repurchase proceeds) that represent late recoveries of the
payments for which such Servicing Advances were made;
(vi) to pay to the Sponsor or the Depositor with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.24, all amounts received thereon
and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(vii) to pay any expenses recoverable by pursuant to Section 7.04;
(viii) to withdraw any amount deposited in its Custodial Account and not
required to be deposited therein; and
(ix) to clear and terminate its Custodial Account upon termination of this
Agreement pursuant to Section 10.01 hereof.
In addition, no later than 3:00 p.m. Eastern time on the Remittance
Date, the Servicer shall withdraw from the Custodial Account and remit to the
Securities Administrator (a) all amounts deposited in the Custodial Account as
of the close of business on the last day of the related Due Period (net of
charges against or withdrawals from such Custodial Account pursuant to this
Section 3.27(a)), plus (b) all Advances, if any, which the Servicer is obligated
to make pursuant to Section 5.01, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or condemnation
proceeds received after the applicable Prepayment Period, which amounts shall be
remitted on the following Remittance Date, together with any Compensating
Interest required to be deposited in the Custodial Account in connection with
such Principal Prepayment in accordance with Section 5.02, and minus (d) any
amounts attributable to Scheduled Payments collected but due on a Due Date or
Due Dates subsequent to the first day of the month in which such Remittance Date
occurs, which amounts shall be remitted on the Remittance Date next succeeding
the Due Date related to such Scheduled Payment.
With respect to any remittance received by the Securities Administrator
after the Business Day on which such payment was due, the Securities
Administrator shall send written notice thereof to the Servicer. The Servicer
shall pay to the Securities Administrator interest on any such late payment by
the Servicer at an annual rate equal to Prime Rate (as defined in The Wall
Street Journal) plus one percentage point, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be paid by the
Servicer to the Securities Administrator on the date such late payment is made
and shall cover the period commencing with the day following the Business Day on
which such payment was due and ending with the Business Day on which such
payment is made, both inclusive. The payment by the Servicer of any such
interest, or the failure of the Securities Administrator to notify the Servicer
of such interest, shall not be deemed an extension of time for payment or a
waiver of any Servicer Default by the Servicer.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
its Custodial Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from the Custodial Account pursuant to
subclause (iii), the Servicer shall deliver to the Master Servicer an Officer's
Certificate of an Authorized Servicer Representative indicating the amount of
any previous Advance or Servicing Advance determined by the Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their
respective portions of such Nonrecoverable Advance.
(b) Notwithstanding the foregoing, any Amounts Held For Future
Distribution withdrawn by the Servicer as permitted in Section 3.27(a)(ii) in
reimbursement of Advances previously made by the Servicer shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the applicable Custodial Account, no later than the close of business on any
future Remittance Date on which the funds on deposit in such Custodial Account
shall be less than the amount required to be remitted to the Trust on such
Remittance Date; provided, however that if the rating of the Servicer (including
any Successor Servicer) is less than "BBB", the Servicer shall be required to
replace such funds by deposit to the Distribution Account, no later than the
close of business on the Remittance Date immediately following the Due Period or
Prepayment Period for which such amounts relate. The amount at any time credited
to a Custodial Account may be invested by the Servicer in Permitted Investments.
Section 3.28 Reports to Master Servicer.
Not later than 3:00 p.m. Eastern time on the eighteenth (18th) calendar
day of each month (or if such eighteenth calendar day is not a Business Day, the
immediately following Business Day), the Servicer shall furnish to the Master
Servicer (i) (a) monthly loan data in a mutually agreed-upon format, (b) default
loan data in the format set forth in Exhibit X-1 hereto (or in such other format
mutually agreed-upon between the Servicer and the Master Servicer) and (c)
information regarding realized losses and gains in the format set forth in
Exhibit X-2 hereto (or in such other format mutually agreed between the Servicer
and the Master Servicer), in each case relating to the period ending on the last
day of the preceding calendar month, (ii) all such information reasonably
required pursuant to clause (i)(a) above on a magnetic tape, electronic mail, or
other similar media reasonably acceptable to the Master Servicer and (iii) all
supporting documentation with respect to the information required pursuant to
clause (i)(c) above.
Section 3.29 Collection of Taxes; Assessments and Similar Items; Escrow
Accounts.
To the extent required by the Mortgage Note related to a Mortgage Loan,
the Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit, promptly upon receipt, and retain therein all collections
from the Mortgagors (or advances by the Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Servicer to compel a Mortgagor
to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Servicer out of related collections for any payments made with respect to
each Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required by law or the terms of the related
Mortgage or Mortgage Note, to such Mortgagors on balances in the Escrow Account,
to remove amounts deposited in error or to clear and terminate the Escrow
Account at the termination of this Agreement in accordance with Section 10.01
thereof. The Escrow Account shall not be a part of the Trust Fund.
Section 3.30 Adjustments to Mortgage Rate and Scheduled Payment.
On each applicable Adjustment Date, the Mortgage Rate with respect to
each adjustable rate Mortgage Loan shall be adjusted, in compliance with the
requirements of the related Mortgage and Mortgage Note, to equal the sum of the
Index plus the Gross Margin (rounded in accordance with the related Mortgage
Note) subject to the applicable Periodic Rate Cap, Maximum Mortgage Interest
Rate and Minimum Mortgage Interest Rate, as set forth in the Mortgage Note. The
Servicer shall execute and deliver the notices required by each Mortgage and
Mortgage Note, applicable laws and regulations regarding interest rate
adjustments. The Servicer shall also provide timely notification to the Master
Servicer of all applicable data and information regarding such interest rate
adjustments and the Servicer's methods of implementing such interest rate
adjustments. Upon the discovery by the Servicer or the Master Servicer that the
Servicer has failed to adjust a Mortgage Rate or a Scheduled Payment pursuant to
the terms of the related Mortgage Note and Mortgage, the Servicer shall
immediately deposit in its Custodial Account from its own funds the amount of
any interest loss caused thereby without reimbursement therefor.
Section 3.31 Distribution Account.
(a) The Securities Administrator shall establish and maintain in the
name of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated non-interest bearing trust account or accounts. The
Securities Administrator will deposit in the Distribution Account as identified
by the Securities Administrator and as received by the Securities Administrator,
the following amounts:
(i) All payments and recoveries in respect of principal on the Mortgage
Loans, including, without limitation, Principal Prepayments, Subsequent
Recoveries, Liquidation Proceeds, Insurance Proceeds, condemnation
proceeds and all payments and recoveries in respect of interest on the
Mortgage Loans withdrawn by the Servicer from the Custodial Accounts
and remitted by the Servicer to the Securities Administrator;
(ii) Any Advance and any Compensating Interest Payments;
(iii) Any Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans (including any
Servicer Prepayment Charge Payment Amounts);
(iv) Any Insurance Proceeds or Liquidation Proceeds received by or on behalf
of the Securities Administrator or which were not deposited in a
Custodial Account;
(v) The Purchase Price with respect to any Mortgage Loans purchased by the
Sponsor or Section 2.02 or 2.03, any amounts which are to be treated
pursuant to Section 2.04 of this Agreement as the payment of such a
Purchase Price, the Purchase Price with respect to any Mortgage Loans
purchased by the Depositor pursuant to Section 3.24, and all proceeds
of any Mortgage Loans or property acquired with respect thereto
repurchased by the Master Servicer pursuant to Section 10.01;
(vi) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vii) Any other amounts received by or on behalf of the Securities
Administrator and required to be deposited in the Distribution Account
pursuant to this Agreement.
(b) All amounts deposited to the Distribution Account shall be held by
the Securities Administrator in the name of the Trustee in trust for the benefit
of the Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Securities
Administrator to the Distribution Account.
(c) The amount at any time credited to the Distribution Account may be
invested by the Securities Administrator in Permitted Investments as directed by
the Master Servicer. All such investment income shall be for the benefit of the
Master Servicer, and any losses incurred shall be deposited by the Master
Servicer in the Distribution Account immediately as realized.
Section 3.32 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Securities Administrator will from time to time make or cause
to be made such withdrawals or transfers from the Distribution Account pursuant
to this Agreement for the following purposes:
(i) to pay to the Trustee any expenses recoverable by the Trustee pursuant
to this Agreement.
(ii) to reimburse the Master Servicer as Successor Servicer or any Servicer
for any Advance or Servicing Advance of its own funds, the right of the
Master Servicer as Successor Servicer or the Servicer to reimbursement
pursuant to this subclause (ii) being limited to amounts received on a
particular Mortgage Loan (including, for this purpose, the Purchase
Price therefor, Insurance Proceeds, Liquidation Proceeds and
condemnation proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Advance or Servicing Advance was made;
(iii) to reimburse the Master Servicer or the Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan
for amounts expended by the Master Servicer as Successor Servicer or
the Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged by an uninsured cause or
in connection with the liquidation of such Mortgage Loan;
(iv) to reimburse the Master Servicer as Successor Servicer or the Servicer
from Insurance Proceeds relating to a particular Mortgage Loan for
insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer as Successor Servicer or the Servicer
from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan;
(v) to reimburse the Master Servicer as Successor Servicer or the Servicer
for advances of funds pursuant to this Agreement, and the right to
reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Purchase Price therefor, Insurance Proceeds, Liquidation Proceeds and
condemnation proceeds) which represent late recoveries of the payments
for which such advances were made;
(vi) to reimburse the Master Servicer as Successor Servicer or the Servicer
for any Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Advance or advance has
not been reimbursed pursuant to clauses (ii) and (v);
(vii) to pay the Credit Risk Management Fee to the Credit Risk Manager;
provided, however, that upon the termination of the Credit Risk Manager
pursuant to Section 3.33 hereof, the amount of the Credit Risk
Management Fee (or any portion thereof) previously payable to the
Credit Risk Manager as described herein shall be paid to the Sponsor;
(viii) to reimburse the Trustee or the Securities Administrator for expenses,
costs and liabilities incurred by and reimbursable to it pursuant to
this Agreement (including the expenses of the Securities Administrator
in connection with a tax audit in connection with the performance of
its obligations pursuant to Section 9.13);
(ix) to pay to the Trust Fund, as additional servicing compensation, any
Excess Liquidation Proceeds to the extent not retained by the Servicer;
(x) to reimburse or pay the Servicer any such amounts as are due thereto
under this Agreement and have not been retained by or paid to the
Servicer, to the extent provided herein or therein;
(xi) to reimburse the Trustee for expenses incurred in the transfer of
servicing responsibilities of any terminated servicer after the
occurrence and continuance of a Servicer Default to the extent not paid
by the terminated servicer;
(xii) to reimburse the Master Servicer for any costs and expenses
reimbursable to the Master Servicer pursuant to this Agreement;
(xiii) to reimburse the Custodian for expenses, costs and liabilities incurred
or reimbursable to it pursuant to this Agreement or the Custodial
Agreements;
(xiv) to remove amounts deposited in error; and
(xv) to clear and terminate the Distribution Account pursuant to Section
10.01.
(b) The Securities Administrator shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (ii) through (v), inclusive, and (vii) or with respect to any such
amounts which would have been covered by such subclauses had the amounts not
been retained by the Securities Administrator without being deposited in the
Distribution Account under Section 3.31.
(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount, to the extent of funds on deposit
in the Distribution Account to the holders of the Certificates in accordance
with Section 5.04.
Section 3.33 Duties of the Credit Risk Manager; Termination.
(a) The Depositor appoints Xxxxxxx Fixed Income Services Inc. (formerly
known as The Murrayhill Company) as Credit Risk Manager. For and on behalf of
the Depositor, the Credit Risk Manager will provide reports and recommendations
concerning the Mortgage Loans that are past due, as to which there has been
commencement of foreclosure, as to which there has been forbearance in exercise
of remedies which are in default, as to which a Mortgagor is the subject of
bankruptcy, receivership, or an arrangement of creditors, or as to which have
become REO Properties. Such reports and recommendations will be based upon
information provided to the Credit Risk Manager pursuant to the related Credit
Risk Management Agreement and the Credit Risk Manager shall look solely to the
Servicer and/or Master Servicer for all information and data (including loss and
delinquency information and data) and loan level information and data relating
to the servicing of the related Mortgage Loans. If the Credit Risk Manager is no
longer able to perform its duties hereunder, the Credit Risk Manager may be
terminated by the Depositor at the direction of Certificateholders evidencing
not less than 66 2/3% of the Voting Rights. The Depositor may, at its option,
cause the appointment of a successor Credit Risk Manager. Upon any termination
of the Credit Risk Manager or the appointment of a successor Credit Risk
Manager, the Depositor shall give written notice thereof to the Servicer, the
Trustee, each Rating Agency and the Credit Risk Manager. Notwithstanding the
foregoing, the termination of the Credit Risk Manager pursuant to Section
3.33(b) shall not become effective until the appointment of a successor Credit
Risk Manager.
(b) Within six months of the Closing Date, the Sponsor may, at its
option, terminate the Credit Risk Manager if, in its reasonable judgment, (i)
the value of the servicing rights with respect to the Mortgage Loans is
adversely affected as a result of the presence of the Credit Risk Manager or
(ii) the presence of the Credit Risk Manager impairs the ability of the Sponsor
to transfer the servicing rights with respect to the Mortgage Loans as permitted
by this Agreement. Upon the termination of the Credit Risk Manager, the Sponsor
may, at its option, cause the Depositor to appoint a successor Credit Risk
Manager. Notice of such termination shall be provided by the Sponsor to the
Rating Agencies, the Trustee, the Securities Administrator, the Depositor, the
Servicer and the Credit Risk Manager. Upon the appointment of a successor Credit
Risk Manager, the Depositor shall provide written notice thereof to each Rating
Agency, the Trustee, the Servicer, the Securities Administrator and the Credit
Risk Manager.
If the Credit Risk Manager is terminated pursuant to this Section
3.33(b), the Credit Risk Manager shall only be entitled to a fee equal to
0.0050% with respect to each Mortgage Loan for the one year period following
such termination. After the expiration of such one year period, the Credit Risk
Manager shall not be entitled to the Credit Risk Management Fee or any portion
thereof with respect to any Mortgage Loan. The excess of the Credit Risk
Management Fee with respect to each Mortgage Loan over the amount payable to the
Credit Risk Manager as described in this paragraph shall be paid to the Sponsor
pursuant to Section 5.04(a).
Section 3.34 Limitation Upon Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
any Servicer, the Master Servicer, the Securities Administrator, the Trustee,
the Certificateholders or the Depositor for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer and/or Master Servicer under
the related Credit Risk Management Agreement or of errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, bad faith or gross negligence in its performance of its
duties under this Agreement or the applicable Credit Risk Management Agreement.
The Credit Risk Manager and any director, officer, employee or agent of the
Credit Risk Manager 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, and may rely in good faith upon the accuracy of information
furnished by any Servicer and/or Master Servicer pursuant to the related Credit
Risk Management Agreement in the performance of its duties thereunder and
hereunder.
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
Section 4.01 The Master Servicer.
The Master Servicer shall supervise, monitor and oversee the obligation
of the Servicer to service and administer the Mortgage Loans in accordance with
the terms of this Agreement and shall have full power and authority to do any
and all things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations hereunder,
the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult
with the Servicer as necessary from time-to-time to carry out the Master
Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicer and shall cause the Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
this Agreement. The Master Servicer shall independently and separately monitor
the Servicer's servicing activities with respect to each Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, provide such information relating to the Mortgage Loans
to the Securities Administrator as shall be necessary to enable it to prepare
the statements specified in Section 5.06 and any other information and
statements required to be provided by the Securities Administrator hereunder.
The Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicer to the Distribution Account.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not have any duty or obligation to enforce any Credit Risk
Management Agreement that the Servicer is a party to (the "Servicer Credit Risk
Management Agreement") or to supervise, monitor or oversee the activities of the
Credit Risk Manager under the Servicer Credit Risk Management Agreement with
respect to any action taken or not taken by the Servicer pursuant to a
recommendation of the Credit Risk Manager.
The Trustee shall furnish the Servicer and the Master Servicer with any
limited powers of attorney and other documents in form agreeable to the Trustee
necessary or appropriate to enable the Servicer and the Master Servicer to
service or master service and administer the Mortgage Loans and REO Property.
The Trustee shall have no responsibility for any action of the Master Servicer
or any Servicer pursuant to any such limited power of attorney or any other
executed document delivered by the Trustee pursuant to this paragraph and shall
be indemnified by the Master Servicer and the Servicer for any cost, liability
or expense arising from the misuse thereof by the Master Servicer or the
Servicer.
The Trustee, the Custodian and the Securities Administrator shall
provide access to the records and documentation in possession of the Trustee,
the Custodian or the Securities Administrator regarding the Mortgage Loans and
REO Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours at
the office of the Trustee, the Custodian or the Securities Administrator;
provided, however, that, unless otherwise required by law, none of the Trustee,
the Custodian or the Securities Administrator shall be required to provide
access to such records and documentation if the provision thereof would violate
the legal right to privacy of any Mortgagor. The Trustee, the Custodian and the
Securities Administrator shall allow representatives of the above entities to
photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers the Trustee's, the Custodian's or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the Servicer or the Master
Servicer upon request any court pleadings, requests for trustee's sale or other
documents necessary or desirable and, in each case, provided to the Trustee by
the Servicer or the Master Servicer to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Loan Document;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or any other Mortgage
Loan Document or otherwise available at law or equity.
Section 4.02 Monitoring of the Servicer.
The Master Servicer shall be responsible for monitoring the compliance
by the Servicer with its duties under this Agreement. In the review of the
Servicer's activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to its compliance with the terms of this
Agreement. In the event that the Master Servicer, in its judgment, determines
that the Servicer should be terminated in accordance with this Agreement, or
that a notice should be sent pursuant to this Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Sponsor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under this
Agreement, and shall, in the event that the Servicer fails to perform its
obligations in accordance with this Agreement, subject to this Section and
Article VIII, shall terminate the rights and obligations of the Servicer
hereunder in accordance with the provisions of Article VIII. The Master Servicer
shall act as the Successor Servicer of the Mortgage Loans serviced by such
terminated Servicer or enter in to a new servicing agreement with a Successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed ninety (90) days) before the actual servicing functions can be
fully transferred to the Master Servicer or such Successor Servicer. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense,
provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have
received indemnity reasonably acceptable to it for its costs and expenses in
pursuing such action.
To the extent that the costs and expenses related to the termination of
the Servicer, appointment of a Successor Servicer or the transfer and assumption
of servicing by the Master Servicer (including, without limitation, (i) all
legal costs and expenses and all due diligence costs and expenses associated
with an evaluation of the potential termination of the Servicer as a result of
an event of default by the Servicer and (ii) all costs and expenses associated
with the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Successor Servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Successor
Servicer to service the Mortgage Loans in accordance with this Agreement) are
not fully and timely reimbursed by the terminated Servicer, the Master Servicer
shall be entitled to reimbursement of such costs and expenses from the
Distribution Account.
The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in this Agreement.
If the Master Servicer acts as a Successor Servicer, it shall not
assume liability for the representations and warranties of the Servicer, if any,
that it replaces.
Section 4.03 Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy that shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
Any such errors and omissions policy and fidelity bond may not be cancelable
without thirty (30) days' prior written notice to the Trustee.
Section 4.04 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Section 9.13 hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Loan, in each case, in
accordance with the provisions of this Agreement; provided, however, that the
Master Servicer shall not (and, consistent with its responsibilities under
Section 4.02, shall not permit any Servicer to) knowingly or intentionally take
any action, or fail to take (or fail to cause to be taken) any action reasonably
within its control and the scope of duties more specifically set forth herein,
that, under the REMIC Provisions, if taken or not taken, as the case may be,
would cause any REMIC to fail to qualify as a REMIC or result in the imposition
of a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
any REMIC to fail to qualify as a REMIC or result in the imposition of a tax
upon any REMIC. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer or an Authorized Servicer Representative, with
any powers of attorney, in form agreeable to the Trustee, empowering the Master
Servicer, or the Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal, prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer or the Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for the misuse of
any such powers of attorney by the Master Servicer or any Servicer and shall be
indemnified by the Master Servicer and the Servicer, as applicable, for any
costs, liabilities or expenses incurred by the Trustee in connection with such
misuse). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.10 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action
authorized pursuant to this Agreement to be taken by it in the name of the
Trustee, be deemed to be the agent of the Trustee.
Section 4.05 Due-on-Sale Clauses; Assumption Agreements.
To the extent Mortgage Loans contain enforceable due-on-sale clauses,
the Master Servicer shall cause the Servicer to enforce such clauses in
accordance with this Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this Agreement.
Section 4.06 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
The Master Servicer shall transmit to the Trustee or Custodian such
documents and instruments coming into the possession of the Master Servicer from
time to time as are required by the terms hereof to be delivered to the Trustee
or the Custodian. Any funds received by the Master Servicer in respect of any
Mortgage Loan or which otherwise are collected by the Master Servicer as
Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of
any Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer's right to retain or withdraw
from the Distribution Account the Master Servicing Compensation and other
amounts provided in this Agreement. The Master Servicer, to the extent required
by Article III, shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans serviced by the Servicer to the
Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the OTS, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the OTS or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and the Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
the Servicer under this Agreement.
Section 4.07 Standard Hazard Insurance and Flood Insurance Policies.
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under this Agreement to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in this Agreement and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Pursuant to Section 3.31, any amounts collected by the Master Servicer,
under any insurance policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with this Agreement) shall be deposited
into the Distribution Account, subject to withdrawal pursuant to Section 3.32.
Section 4.08 Presentment of Claims and Collection of Proceeds.
The Master Servicer shall enforce the Servicer's obligation to, prepare
and present on behalf of the Trustee and the Certificateholders all claims under
any insurance policies and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such policies. Any proceeds disbursed to the
Master Servicer (or disbursed to the Servicer and remitted to the Master
Servicer) in respect of such policies, bonds or contracts shall be promptly
deposited in the Distribution Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable insurance policy need
not be so deposited (or remitted).
Section 4.09 Maintenance of the Primary Mortgage Insurance Policies.
The Master Servicer shall not take, or (to the extent within its
control) permit any Servicer (to the extent such action is prohibited under this
Agreement) to take, any action that would result in noncoverage under any
primary mortgage insurance policy or any loss which, but for the actions of the
Master Servicer or the Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause the Servicer to keep in
force and effect (to the extent that the related Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan in accordance with the provisions of this Agreement. The
Master Servicer shall not, and (to the extent within its control) shall not
permit any Servicer to, cancel or refuse to renew any primary mortgage insurance
policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder except in accordance with the
provisions of this Agreement.
The Master Servicer agrees to cause the Servicer to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
primary mortgage insurance policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any primary mortgage
insurance policies respecting defaulted Mortgage Loans. Pursuant to Section
3.31, any amounts collected by the Master Servicer or any Servicer under any
primary mortgage insurance policies shall be deposited by the Servicer or by the
Master Servicer in the Distribution Account, subject to withdrawal pursuant to
Section 3.32.
Section 4.10 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee or the Custodian, shall retain possession and custody of
the originals (to the extent available) of any primary mortgage insurance
policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer and the
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee or the Custodian shall also retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions of this
Agreement and the Custodial Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee or the Custodian, upon the
execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.
Section 4.11 Realization Upon Defaulted Loans.
The Master Servicer shall cause the Servicer to foreclose upon,
repossess or otherwise comparably convert the ownership of Mortgaged Properties
securing such of the Mortgage Loans serviced by the Servicer as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments, all in accordance with this Agreement.
Section 4.12 Compensation for the Master Servicer.
As compensation for its services hereunder, the Master Servicer shall
be entitled to receive all income and gain realized from any investment of funds
in the Distribution Account (the "Master Servicing Compensation"). The Master
Servicer 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.
The amount of the Master Servicing Compensation payable to the Master
Servicer in respect of any Distribution Date shall be reduced in accordance with
Section 4.18.
Section 4.13 REO Property.
In the event the Trust Fund acquires ownership of any REO Property in
respect of any Mortgage Loan, the deed or certificate of sale shall be issued to
the Trustee, or to its nominee, on behalf of the Certificateholders. The Master
Servicer shall cause the Servicer to sell, and the Servicer agrees to sell, any
REO Property as expeditiously as possible and in accordance with the provisions
of this Agreement. Further, the Master Servicer shall cause the Servicer to sell
any REO Property prior to three (3) years after the end of the calendar year of
its acquisition by REMIC I, unless (i) the Trustee and the Securities
Administrator shall have been supplied with an Opinion of Counsel to the effect
that the holding by the Trust Fund of such REO Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in Section 860F of the Code or
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel) or (ii) the Servicer shall have applied for, prior to the expiration of
such three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable extension period. The Master Servicer
shall cause the Servicer to protect and conserve, such REO Property in the
manner and to the extent required by this Agreement, in accordance with the
REMIC Provisions and in a manner that does not result in a tax on "net income
from foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
The Master Servicer shall cause the Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Custodial Account maintained by the Servicer.
The Master Servicer and the Servicer, upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Advances and other unreimbursed advances as well as any unpaid Servicing Fees
and master servicing fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid master servicing fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
Section 4.14 Master Servicer Annual Statement as to Compliance.
(a) The Master Servicer will deliver to the Trustee, not later than
March 1st of each calendar year beginning in [_____], an Officers' Certificate
(a "Master Servicer Annual Statement of Compliance") stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such Servicing Officers' supervision and (ii) to the best of
such Servicing Officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement in all material
respects throughout such year, or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such Servicing Officer and the nature and status of cure provisions thereof.
Such Master Servicer Annual Statement of Compliance shall contain no
restrictions or limitations on its use. In the event that the Master Servicer
has delegated any responsibilities with respect to the Mortgage Loans to a
servicer, the Master Servicer shall deliver an Officer's Certificate of the
servicer as described above as to each servicer as and when required with
respect to the Master Servicer.
(b) If the Master Servicer cannot deliver the related Master Servicer
Annual Statement of Compliance by March 1st of such year, the Trustee, at its
sole option, may permit a cure period for the Master Servicer to deliver such
Master Servicer Annual Statement of Compliance, but in no event later than March
10th of such year.
(c) Failure of the Master Servicer to comply timely with this Section
4.15 shall be deemed a Master Servicer Event of Default, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or in equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Master
Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
(d) Copies of such Master Servicer Annual Statements of Compliance
shall be provided to any Certificateholder upon request, by the Master Servicer
or by the Trustee at the Master Servicer's expense if the Master Servicer failed
to provide such copies (unless (i) the Master Servicer shall have failed to
provide the Trustee with such statement or (ii) the Trustee shall be unaware of
the Master Servicer's failure to provide such statement).
Section 4.15 Master Servicer Assessments of Compliance and Attestation
Reports.
(a) On and after [____________], the Master Servicer shall supervise,
monitor and oversee the obligations of the servicing and administration of the
Mortgage Loans by the Servicer under this Agreement in accordance with all
applicable requirements of the Servicing Criteria. The Master Servicer shall
deliver to the Trustee on or before March 1st of each calendar year beginning in
[_____], a report (a "Master Servicer Assessment of Compliance") reasonably
satisfactory to the Trustee regarding the Master Servicer's assessment of
compliance with the Servicing Criteria during the preceding calendar year as
required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB, which as of the date hereof, require a report by an authorized
officer of the Master Servicer that contains the following:
(i) A statement by such officer of its responsibility for
assessing compliance with the Servicing Criteria applicable to
the Master Servicer;
(ii) A statement by such officer that such officer used the
Servicing Criteria to assess compliance with the Servicing
Criteria applicable to the Master Servicer;
(iii) An assessment by such officer of the Master Servicer's
compliance with the applicable Servicing Criteria for the
period consisting of the preceding calendar year, including
disclosure of any material instance of noncompliance with
respect thereto during such period, which assessment shall be
based on the activities it performs with respect to
asset-backed securities transactions taken as a whole
involving the Master Servicer, that are backed by the same
asset type as the Mortgage Loans;
(iv) A statement that a registered public accounting firm has
issued an attestation report on the Master Servicer's
Assessment of Compliance for the period consisting of the
preceding calendar year; and
(v) A statement as to which of the Servicing Criteria, if any, are
not applicable to the Master Servicer, which statement shall
be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole
involving the Master Servicer, that are backed by the same
asset type as the Mortgage Loans.
(b) Such report at a minimum shall address each of the Servicing
Criteria specified on a certification substantially in the form of Exhibit E
hereto delivered to the Trustee concurrently with the execution of this
Agreement.
(c) On or before March 1st of each calendar year beginning in [_____],
the Master Servicer shall furnish to the Trustee a report (a "Master Servicer
Attestation Report") by a registered public accounting firm that attests to, and
reports on, the Master Servicer Assessment of Compliance made by the Master
Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122(b) of Regulation AB, which Master Servicer Attestation Report must be made
in accordance with standards for attestation reports issued or adopted by the
Public Company Accounting Oversight Board.
(d) The Master Servicer shall cause any subservicer, and each
subcontractor determined by the Master Servicer to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Trustee and the Depositor an assessment of compliance and accountants'
attestation.
(e) If the Master Servicer cannot deliver the related Master Servicer
Assessment of Compliance or Master Servicer Attestation Report by March 1st of
such year, the Trustee, at its sole option, may permit a cure period for the
Master Servicer to deliver such Master Servicer Assessment of Compliance or
Master Servicer Attestation Report, but in no event later than March 10th of
such year.
Failure of the Master Servicer to comply timely with this Section 4.15
shall be deemed a Master Servicer Event of Default, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or in equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Master
Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
Section 4.16 [Reserved].
Section 4.17 Obligation of the Master Servicer in Respect of Prepayment
Interest Shortfalls.
The Master Servicer shall deposit in the Distribution Account not later
than each Distribution Date an amount equal to the lesser of (i) the aggregate
amounts required to be paid by the Servicer under this Agreement with respect to
Prepayment Interest Shortfalls on the Mortgage Loans for the related
Distribution Date, and not so paid by any the Servicer and (ii) the Master
Servicing Compensation for such Distribution Date without reimbursement
therefor.
ARTICLE V
ADVANCES AND DISTRIBUTIONS
Section 5.01 Advances; Advance Facility.
(a) The Servicer shall make an Advance with respect to any Mortgage
Loan serviced by it and deposit such Advance in the Distribution Account no
later than noon Eastern time on the Remittance Date in immediately available
funds. The Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Nonrecoverable Advance. If the Servicer
shall have determined that it has made a Nonrecoverable Advance or that a
proposed Advance or a lesser portion of such Advance would constitute a
Nonrecoverable Advance, the Servicer shall deliver (i) to the Securities
Administrator for the benefit of the Certificateholders funds constituting the
remaining portion of such Advance, if applicable, and (ii) to Master Servicer an
Officer's Certificate setting forth the basis for such determination.
In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to its Custodial Account that any Amounts Held for Future Distribution
has been used by it in discharge of its obligation to make any such Advance and
(ii) transfer such funds from its Custodial Account to the Distribution Account.
Any funds so applied and transferred shall be replaced by the Servicer by
deposit in the Distribution Account, no later than the close of business on any
future Remittance Date on which the funds on deposit in its Custodial Account
shall be less than the amount required to be remitted to the Securities
Administrator on such Remittance Date; provided, however that if the rating of
the Servicer (including any Successor Servicer) is less than "BBB", the Servicer
shall be required to replace such funds by deposit to the Distribution Account,
no later than the close of business on the Remittance Date immediately following
the Due Period or Prepayment Period for which such amounts relate.
The Servicer shall be entitled to be reimbursed from its Custodial
Account for all Advances of its own funds made pursuant to this Section as
provided in Section 3.27. The obligation to make Advances with respect to any
Mortgage Loan shall continue until such Mortgage Loan is paid in full or the
related Mortgaged Property or related REO Property has been liquidated or until
the purchase or repurchase thereof (or substitution therefor) from the Trust
Fund pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 5.01.
Subject to and in accordance with the provisions of Article VIII
hereof, in the event that the Servicer fails to make such Advance, then the
Master Servicer, as a Successor Servicer, shall be obligated to make such
Advance only to the extent such Advance, if made, would not constitute a
Nonrecoverable Advance, subject to the provisions of Sections 5.01 and 8.02.
(b) (i) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 5.01(b)(v) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, the Securities Administrator, the Master Servicer, the
Certificateholders or any other party shall be required before the Servicer may
enter into an Advance Facility nor shall the Trustee, the Securities
Administrator, the Master Servicer or the Certificateholders be a third party
beneficiary of any obligation of an Advance Financing Person to the Servicer.
Notwithstanding the existence of any Advance Facility under which an Advance
Financing Person agrees to fund Advances and/or Servicing Advances, (A) the
Servicer (i) shall remain obligated pursuant to this Agreement to make Advances
and/or Servicing Advances pursuant to and as required by this Agreement and (ii)
shall not be relieved of such obligations by virtue of such Advance Facility and
(B) neither the Advance Financing Person nor any Servicer Assignee (as
hereinafter defined) shall have any right to proceed against or otherwise
contact any Mortgagor for the purpose of collecting any payment that may be due
with respect to any related Mortgage Loan or enforcing any covenant of such
Mortgagor under the related Mortgage Loan documents.
(ii) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Master Servicer
and the Securities Administrator at the address set forth in Section
11.05 hereof no later than the Remittance Date immediately following
the effective date of such Advance Facility a written notice (an
"Advance Facility Notice"), stating (a) the identity of the Advance
Financing Person and (b) the identity of the Person (the "Servicer's
Assignee") that will, subject to Section 5.01(b)(iii) hereof, have the
right to make withdrawals from the Custodial Account pursuant to
Section 3.27 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts"). Advance
Reimbursement Amounts (i) shall consist solely of amounts in respect of
Advances and/or Servicing Advances for which the Servicer would be
permitted to reimburse itself in accordance with Section 3.27 hereof,
assuming the Servicer had made the related Advance(s) and/or Servicing
Advance(s) and (ii) shall not consist of amounts payable to a Successor
Servicer in accordance with Section 3.27 hereof to the extent permitted
under Section 5.01(b)(v) below.
(iii) Notwithstanding the existence of an Advance Facility, the Servicer, on
behalf of the Advance Financing Person and the Servicer's Assignee,
shall be entitled to receive reimbursements of Advances and/or
Servicing Advances in accordance with Section 3.27 hereof, which
entitlement may be terminated by the Advance Financing Person pursuant
to a written notice to the Master Servicer and the Securities
Administrator in the manner set forth in Section 11.05 hereof. Upon
receipt of such written notice, the Servicer shall no longer be
entitled to receive reimbursement for any Advance Reimbursement Amounts
and the Servicer's Assignee shall immediately have the right to receive
from the Custodial Account all Advance Reimbursement Amounts.
Notwithstanding the foregoing, and for the avoidance of doubt, (i) the
Servicer and/or the Servicer's Assignee shall only be entitled to
reimbursement of Advance Reimbursement Amounts hereunder from
withdrawals from the Custodial Account pursuant to Section 3.27 of this
Agreement and shall not otherwise be entitled to make withdrawals or
receive amounts that shall be deposited in the Distribution Account
pursuant to Section 3.31 hereof, and (ii) none of the Trustee or the
Certificateholders shall have any right to, or otherwise be entitled
to, receive any Advance Reimbursement Amounts to which the Servicer or
the Servicer's Assignee, as applicable, shall be entitled pursuant to
Section 3.27 hereof. An Advance Facility may be terminated by the joint
written direction of the Servicer and the related Advance Financing
Person. Written notice of such termination shall be delivered to the
Trustee in the manner set forth in Section 11.05 hereof. None of the
Depositor, Master Servicer, the Securities Administrator or the Trustee
shall, as a result of the existence of any Advance Facility, have any
additional duty or liability with respect to the calculation or payment
of any Advance Reimbursement Amount, nor, as a result of the existence
of any Advance Facility, shall the Depositor, Master Servicer, the
Securities Administrator or the Trustee have any additional
responsibility to track or monitor the administration of the Advance
Facility or the payment of Advance Reimbursement Amounts to the
Servicer's Assignee. The Servicer shall indemnify the Master Servicer,
the Securities Administrator, the Depositor, the Trustee, any Successor
Servicer and the Trust Fund for any claim, loss, liability or damage
resulting from any claim by the related Advancing Financing Person,
except to the extent that such claim, loss, liability or damage
resulted from or arose out of gross negligence, recklessness or willful
misconduct on the part of the Master Servicer, the Securities
Administrator, the Depositor, the Trustee or any Successor Servicer, as
the case may be. The Servicer shall maintain and provide to any
Successor Servicer and, upon request, the Trustee a detailed accounting
on a loan-by-loan basis as to amounts advanced by, pledged or assigned
to, and reimbursed to any Advancing Financing Person. The Successor
Servicer shall be entitled to rely on any such information provided by
the Servicer, and the Successor Servicer shall not be liable for any
errors in such information.
(iv) An Advance Financing Person who receives an assignment or pledge of
rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing
Advances pursuant to an Advance Facility shall not be required to meet
the criteria for qualification as the Servicer.
(v) As between the Servicer and its Advance Financing Person, on the one
hand, and a Successor Servicer and its Advance Financing Person, if
any, on the other hand, Advance Reimbursement Amounts on a loan-by-loan
basis with respect to each Mortgage Loan as to which an Advance and/or
Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's
Assignee shall have received some or all of an Advance Reimbursement
Amount related to Advances and/or Servicing Advances that were made by
a Person other than the Servicer or its related Advance Financing
Person in error, then the Servicer's Assignee shall be required to
remit any portion of such Advance Reimbursement Amount to each Person
entitled to such portion of such Advance Reimbursement Amount. Without
limiting the generality of the foregoing, the Servicer shall remain
entitled to be reimbursed by the Advance Financing Person for all
Advances and/or Servicing Advances funded by the Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or
pledged to such Advance Financing Person or the Servicer's Assignee.
(vi) For purposes of any Officer's Certificate of a Servicer delivered
pursuant to Section 5.01(a), any Nonrecoverable Advance referred to
therein may have been made by the Servicer. In making its determination
that any Advance or Servicing Advance theretofore made has become a
Nonrecoverable Advance, the Servicer shall apply the same criteria in
making such determination regardless of whether such Advance or
Servicing Advance shall have been made by the Servicer.
(vii) Any amendment to this Section 5.01(b) or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of
an Advance Facility as described generally in this Section 5.01(b),
including amendments to add provisions relating to a Successor
Servicer, may be entered into by the Master Servicer, the Securities
Administrator, the Trustee, the Depositor and the Servicer without the
consent of any Certificateholder, provided such amendment complies with
Section 11.01 hereof. All reasonable costs and expenses (including
attorneys' fees) of each party hereto of any such amendment shall be
borne solely by the Servicer. The parties hereto hereby acknowledge and
agree that: (a) the Advances and/or Servicing Advances financed by
and/or pledged to an Advance Financing Person under any Advance
Facility are obligations owed to the Servicer payable only from the
cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or Servicing Advances only to the extent provided
herein, and none of the Master Servicer, the Securities Administrator,
the Trustee or the Trust are, as a result of the existence of any
Advance Facility, obligated or liable to repay any Advances and/or
Servicing Advances financed by the Advance Financing Person; (b) the
Servicer will be responsible for remitting to the related Advance
Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by such
Advance Financing Person, subject to the provisions of this Agreement;
and (c) none of the Master Servicer, the Securities Administrator or
the Trustee shall have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and
any Advance Financing Person.
Section 5.02 Compensating Interest Payments.
In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Mortgage Loan, the Servicer shall, to the extent of the Servicing
Fee for such Distribution Date, deposit into its Custodial Account, as a
reduction of and to the extent of, the Servicing Fee for such Distribution Date,
no later than the close of business on the Remittance Date immediately preceding
such Distribution Date, an amount equal to the Prepayment Interest Shortfall;
and in case of such deposit, the Servicer shall not be entitled to any recovery
or reimbursement from the Depositor, the Trustee, the Sponsor, the Trust Fund,
the Master Servicer or the Certificateholders.
Section 5.03 REMIC Distributions.
On each Distribution Date the Securities Administrator, shall be deemed
to allocate distributions to the REMIC I Regular Interests and REMIC II Regular
Interests in accordance with Section 5.07 hereof.
Section 5.04 Distributions.
(a) On each Distribution Date, the Securities Administrator will
withdraw funds on deposit in the Distribution Account and make distributions to
the Certificateholders in accordance with the Remittance Report for such
Distribution Date, in the following order of priority:
(i) On each Distribution Date, the Interest Remittance Amount for such
Distribution Date will be paid in the following order of priority:
(1) to the Supplemental Interest Trust from the Interest
Remittance Amount for Loan Group I and Loan Group II, the
Group I Allocation Percentage and the Group II Allocation
Percentage, as applicable, of any Net Swap Trust Payment or
Swap Termination Payment payable by the Supplemental Interest
Trust to the Swap Provider (unless the Swap Provider is the
sole Defaulting Party or the sole Affected Party (as defined
in the Swap Agreement))
(2) from the Interest Remittance Amount for Loan Group I and Loan
Group II, to the Senior Certificates, pro rata based on
amounts due, Current Interest and any Carryforward Interest
for each such Class and such Distribution Date, applied in
accordance with the last paragraph of this Section 5.04;
(3) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(4) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(5) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(6) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(7) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(8) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(9) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(10) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(11) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
(12) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date;
and
(13) first, from the Interest Remittance Amount for Loan Group II
and then from the Interest Remittance Amount for Loan Group I,
to the Class [__] Certificates, Current Interest and any
Carryforward Interest for such Class and Distribution Date.
The Interest Remittance Amount for Loan Group I and Loan Group II
distributed pursuant to Section 5.04(i)(1) above will be applied to the Senior
Certificates as follows: (a) the Interest Remittance Amount for Loan Group I
will be distributed in the following order of priority: (x) first, to the Class
[__] Certificates, Current Interest and any Carryforward Interest for such Class
for such Distribution Date; and then (y) concurrently, to the Class [__], Class
[__], Class [__] and Class [__] Certificates, Current Interest and any
Carryforward Interest for each such Class for such Distribution Date, on a pro
rata basis based on the entitlement of each such Class, after taking into
account the distribution of the Interest Remittance Amount for Loan Group II on
such Distribution Date; and (b) the Interest Remittance Amount for Loan Group II
will be distributed in the following order of priority: (x) first, concurrently,
to the Class [__], Class [__], Class [__] and Class [__] Certificates, Current
Interest and any Carryforward Interest for each such Class for such Distribution
Date on a pro rata basis based on the entitlement of each such Class; and then
(y), to the Class [__] Certificates, Current Interest and any Carryforward
Interest for each such Class for such Distribution Date, after taking into
account the distribution of the Interest Remittance Amount for Loan Group I.
(ii) The Principal Payment Amount will be paid on each Distribution Date as
follows:
I. On each Distribution Date (a) prior to the Stepdown Date or
(b) with respect to which a Trigger Event is in effect, the Principal
Payment Amount will be paid in the following order of priority:
(i) to the Supplemental Interest Trust from the Principal
Payment Amount derived from the Group I Mortgage
Loans and the Group II Mortgage Loans, the Group I
Allocation Percentage and the Group II Allocation
Percentage, as applicable, of any Net Swap Trust
Payment and unpaid Swap Termination Payment owed to
the Swap Provider (unless the Swap Provider is the
sole Defaulting Party or the sole Affected Party (as
defined in the Swap Agreement)) to the extent not
paid from the Interest Remittance Amounts;
(ii) (a) from the Principal Payment Amount derived from
the Group I Mortgage Loans remaining after payments
pursuant to clause (i) above, concurrently, to the
Class [__] Certificates, until its Certificate
Principal Balance of each such Class has been reduced
to zero;
(b) from the Principal Payment Amount derived from
the Group II Mortgage Loans remaining after payments
pursuant to clause (i) above, sequentially, to the
Class [__], Class [__], Class [__] and Class [__]
Certificates, in that order, until the Certificate
Principal Balance of each such Class has been reduced
to zero;
(iii) (a) from the Principal Payment Amount derived from
the Group I Mortgage Loans remaining after payments
to the Supplemental Interest Trust pursuant to clause
(i) above and after the Certificate Principal Balance
of the Class [__] Certificates have been reduced to
zero, sequentially, to the Class [__], Class [__],
Class [__] and Class [__] Certificates, in that
order, after taking into account payment pursuant to
clause I(ii) above, until the Certificate Principal
Balance of each such Class has been reduced to zero;
(b) from the Principal Payment Amount derived from
the Group II Mortgage Loans remaining after payments
to the Supplemental Interest Trust pursuant to Claus
(i) above and after the Certificate Principal
Balances of the Class [__], Class [__], Class [__]
and Class [__] Certificates have been reduced to
zero, to the Class [__] Certificates, until its
Certificate Principal Balance has been reduced to
zero;
(iv) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(v) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(vi) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(vii) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(viii) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(ix) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(x) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(xi) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(xii) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(xiii) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(xiv) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero; and
(xv) for application as part of Monthly Excess Cashflow
for such Distribution Date pursuant to subclause
(iii) below, any such Principal Payment Amount
remaining after application pursuant to clauses I(i)
through (xiv) above.
II. On each Distribution Date (a) on or after the Stepdown
Date and (b) with respect to which a Trigger Event is not in effect,
the Principal Payment Amount will be paid in the following order of
priority:
(i) to the Supplemental Interest Trust from the Principal
Payment Amount derived from the Group I Mortgage
Loans and the Group II Mortgage Loans, the Group I
Allocation Percentage and the Group II Allocation
Percentage, as applicable, of the Principal Payment
Amount, any Net Swap Trust Payment and any unpaid
Swap Termination Payment owed to the Swap Provider
(unless the Swap Provider is the sole Defaulting
Party or the sole Affected Party (as defined in the
Swap Agreement)) to the extent not paid from the
Interest Remittance Amount;
(ii) (a) from the Group I Allocation Amount, to the Class
[__] Certificates, until its Certificate Principal
Balance of each such Class has been reduced to zero;
(b) from the Group II Allocation Amount,
sequentially, to the Class [__], Class [__], Class
[__] and Class [__] Certificates, in that order,
until the Certificate Principal Balance has been
reduced to zero;
(iii) (a) from the Group I Allocation Amount remaining
after the Certificate Principal Balance of the Class
[__] Certificates has been reduced to zero,
sequentially, to the Class [__], Class [__], Class
[__] and Class [__] Certificates, in that order after
taking into account payment pursuant to clause II(ii)
above, until the Certificate Principal Balance of
each such Class has been reduced to zero;
(b) from the Group II Allocation Amount remaining
after the Certificate Principal Balances of the Class
[__], Class [__], Class [__] and Class [__]
Certificates have been reduced to zero, concurrently,
to the Class [__] Certificates, until the Certificate
Principal Balance of each such Class has been reduced
to zero;
(iv) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(v) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(vi) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(vii) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(viii) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(ix) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(x) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(xi) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(xii) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero
(xiii) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero;
(xiv) to the Class [__] Certificates, the Class [__]
Principal Payment Amount for such Distribution Date,
until its Certificate Principal Balance is reduced to
zero; and
(xv) for application as part of Monthly Excess Cashflow
for such Distribution Date pursuant to clause (iii)
below, any such Principal Payment Amount remaining
after application pursuant to clauses II(i) through
(xiv) above.
(iii) On each Distribution Date, the Monthly Excess Cashflow will be
distributed in the following order of priority:
(1) (A) until the aggregate Certificate Principal Balance of
the Publicly Offered Certificates and Class B Certificates equals the
Aggregate Loan Balance for such Distribution Date minus the Targeted
Overcollateralization Amount for such Distribution Date, on each
Distribution Date (a) prior to the Stepdown Date or (b) with respect to
which a Trigger Event is in effect, to the extent of Monthly Excess
Interest for such Distribution Date, to the Publicly Offered
Certificates and Class B Certificates, in the following order of
priority:
(a) (i) the Group I Excess Interest Amount in the
following order of priority: (x) first, to the
Class [__] Certificates, until the Certificate
Principal Balance of each such Class has been
reduced to zero; and then (y) sequentially, to the
Class [__], Class [__], Class [__] and Class [__]
Certificates, in that order, after taking into
account the distribution of the Group II Excess
Interest Amount until the Certificate Principal
Balance of each such Class has been reduced to
zero;
(ii) the Group II Excess Interest Amount in the
following order of priority: (x) first,
sequentially, to the Class [__], Class [__], Class
[__] and Class [__] Certificates, in that order,
until the Certificate Principal Balance of each
such Class has been reduced to zero; and then (y),
to the Class [__] Certificates, after taking into
account the distribution of the Group I Excess
Interest Amount, until its Certificate Principal
Balance has been reduced to zero;
(b) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(c) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(d) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(e) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero; and
(f) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(g) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(h) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(i) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(j) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(k) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero; and
(l) to the Class [__] Certificates, until its Certificate
Principal Balance is reduced to zero;
(B) on each Distribution Date on or after the Stepdown Date
and with respect to which a Trigger Event is not in effect, to fund any
principal distributions required to be made on such Distribution Date
set forth in Section 5.04(ii)II after giving effect to the distribution
of the Principal Payment Amount for such date, in accordance with the
priorities set forth therein;
(2) to the Class [__] Certificates, any Deferred Amount for
such Class;
(3) to the Class [__] Certificates, any Deferred Amount for
such Class;
(4) to the Class [__] Certificates, any Deferred Amount for
such Class;
(5) to the Class [__] Certificates, any Deferred Amount for
such Class;
(6) to the Class [__] Certificates, any Deferred Amount for
such Class;
(7) to the Class [__] Certificates, any Deferred Amount for
such Class;
(8) to the Class [__] Certificates, any Deferred Amount for
such Class;
(9) to the Class [__] Certificates, any Deferred Amount for
such Class;
(10) to the Class [__] Certificates, any Deferred Amount for
such Class;
(11) to the Class [__] Certificates, any Deferred Amount for
such Class;
(12) to the Class [__] Certificates, any Deferred Amount for
such Class;
(13) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__], Class [__],
Class [__], Class [__] and Class [__] Certificates, concurrently, any
Basis Risk Shortfall for each such Class, on a pro rata basis based on
the entitlement of each such Class;
(14) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(15) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(16) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(17) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(18) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(19) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(20) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(21) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(22) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(23) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(24) to the Basis Risk Shortfall Reserve Fund and then from
the Basis Risk Shortfall Reserve Fund to the Class [__] Certificates,
any Basis Risk Shortfall for such Class;
(25) to the Supplemental Interest Trust, any Swap Termination
Payment owed to the Swap Provider in the event of a Swap Provider
Trigger Event and the Swap Provider is the sole Defaulting Party or the
sole Affected Party (as defined in the Swap Agreement) and not paid on
prior Distribution Dates;
(26) to the Class X Certificates, the Class X Distribution
Amount; and
(27) to the Class R Certificates, any remaining amount. It is
not anticipated that any amounts will be distributed to the Class R
Certificates under this clause (27).
Notwithstanding the foregoing, distributions pursuant to
clauses (8) through (24) above on any Distribution Date will be made
after giving effect to payments received pursuant to the Swap
Agreement. On each Distribution Date, the Securities Administrator,
after making the required distributions of interest and principal to
the Certificates as described in clauses (i) and (ii) above and after
the distribution of the Monthly Excess Cashflow as described in clause
(iii) above, will withdraw from the Basis Risk Shortfall Reserve Fund
the amounts on deposit therein and distribute such amounts to the
Publicly Offered Certificates and Class B Certificates in respect of
any Basis Risk Shortfalls in the following manner and order of
priority: first, concurrently to the Senior Certificates, on a pro rata
basis, based on the entitlement of each such Class, the amount of any
Basis Risk Shortfalls allocated to such Class for such Distribution
Date; second, to the Class [__] Certificates, the amount of any Basis
Risk Shortfall allocated to such Class for such Distribution Date for
such Class; third, to the Class [__] Certificates, the amount of any
Basis Risk Shortfall allocated to such Class for such Distribution Date
for such Class; fourth, to the Class [__] Certificates, the amount of
any Basis Risk Shortfalls allocated to such Class for such Distribution
Date for such Class; fifth, to the Class [__] Certificates, the amount
of any Basis Risk Shortfalls allocated to such Class for such
Distribution Date; sixth, to the Class [__] Certificates, the amount of
any Basis Risk Shortfalls allocated to such Class for such Distribution
Date; seventh, to the Class [__] Certificates, the amount of any Basis
Risk Shortfall allocated to such Class for such Distribution Date for
such Class; eighth, to the Class [__] Certificates, the amount of any
Basis Risk Shortfall allocated to such Class for such Distribution Date
for such Class; ninth, to the Class [__] Certificates, the amount of
any Basis Risk Shortfall allocated to such Class for such Distribution
Date for such Class; tenth, to the Class [__] Certificates, the amount
of any Basis Risk Shortfall allocated to such Class for such
Distribution Date for such Class; eleventh, to the Class [__]
Certificates, the amount of any Basis Risk Shortfall allocated to such
Class for such Distribution Date for such Class; and twelfth, to the
Class [__] Certificates, the amount of any Basis Risk Shortfall
allocated to such Class for such Distribution Date for such Class.
(iv) Subject to Section 10.02 hereof respecting the final distribution on a
Class of Publicly Offered Certificates or a Class of Class B
Certificates, on each Distribution Date the Securities Administrator
shall make distributions to each Holder of a Publicly Offered
Certificate or Class B certificate of record on the preceding Record
Date either by wire transfer in immediately available funds to the
account of such holder at a bank or other entity having appropriate
facilities therefor, if (i) such Holder has so notified the Securities
Administrator at least five (5) Business Days prior to the related
Record Date and (ii) such Holder shall hold Regular Certificates with
aggregate principal denominations of not less than $1,000,000 or
evidencing a Percentage Interest aggregating ten percent (10%) or more
with respect to such Class or, if not, by check mailed by first class
mail to such Certificateholder at the address of such holder appearing
in the Certificate Register. Notwithstanding the foregoing, but subject
to Section 10.02 hereof respecting the final distribution,
distributions with respect to Publicly Offered Certificates and Class B
Certificates registered in the name of a Depository shall be made to
such Depository in immediately available funds.
(v) Net Swap Trust Payments and Swap Termination Payments (other than Swap
Termination Payments resulting from a Swap Provider Trigger Event)
payable by the Supplemental Interest Trust to the Swap Provider
pursuant to the Swap Agreement shall be deducted from Interest
Remittance Amount, and to the extent of any such remaining amounts due,
from Principal Remittance Amount, prior to any distributions to the
Certificateholders. On each Distribution Date, such amounts will be
remitted to the Supplemental Interest Trust, first to make any Net Swap
Trust Payment owed to the Swap Provider pursuant to the Swap Agreement
for such Distribution Date, and second to make any Swap Termination
Payment (not due to a Swap Provider Trigger Event) owed to the Swap
Provider pursuant to the Swap Agreement for such Distribution Date. Any
Swap Termination Payment triggered by a Swap Provider Trigger Event
owed to the Swap Provider pursuant to the Swap Agreement will be
subordinated to distributions to the Holders of the Publicly Offered
Certificates and Class B Certificates and shall be paid as set forth in
Section 5.04(a)(iii)(1)(25).
(b) On each Distribution Date, the Securities Administrator shall
distribute from the amounts received from the Swap Provider in respect
of any Net Swap Trust Payment then on deposit in the Supplemental
Interest Trust in the following order of priority:
(i) concurrently to the Senior Certificates, on a pro rata basis based on
the entitlement of each such Class, in an amount equal to any
Carryforward Interest for such Class or Classes to the extent not
covered by the Interest Remittance Amount on that Distribution Date and
solely to the extent the amount of any Carryforward Interest is a
result of the allocation of the interest portion of Realized Losses;
(ii) concurrently to the Senior Certificates and Subordinate Certificates,
on a pro rata basis based on the entitlement of each such Class, an
amount equal to any Principal Payment Amount, to the extent not covered
by the Monthly Excess Cashflow on that Distribution Date and solely to
the extent the payment of the Extra Principal Distribution Amount is as
a result of current or prior period Realized Losses, to be included in
the Principal Payment Amount for that Distribution Date and payable as
provided under Section 5.04(a)(ii) above;
(iii) sequentially, to the Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__]
and Class [__] Certificates, in that order, in an amount equal to any
Carryforward Interest for such Class or Classes to the extent not
covered by the Monthly Excess Cashflow on that Distribution Date and
solely to the extent the amount of any Carryforward Interest is as a
result of the allocation of the interest portion of Realized Losses;
(iv) sequentially, to the Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__], Class [__], Class [__]
and Class [__] Certificates, in an amount equal to any Applied Loss
Amount for such Class or Classes, to the extent not covered by the
Monthly Excess Cashflow on that Distribution Date; and
(v) to the Basis Risk Shortfall Reserve Fund, to pay the Senior
Certificates and Subordinate Certificates as follows: first, to the
Senior Certificates, on a pro rata basis based on the entitlement of
each such Class, based on the aggregate amount of Basis Risk Shortfall
Amounts for each such Class of Senior Certificates remaining unpaid,
and second, sequentially, to the to the Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__] and Class [__] Certificates, in that order, any
related Basis Risk Shortfall Amount for such Class or Classes remaining
unpaid on such Distribution Date, in each case to the extent not
covered by the Monthly Excess Cashflow on that Distribution Date.
Section 5.05 Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Securities
Administrator shall determine the amount of any Realized Loss in respect of each
Mortgage Loan that occurred during the immediately preceding calendar month,
based solely on the reports delivered by the Servicer pursuant to this
Agreement.
(b) The interest portion of Realized Losses on the Mortgage Loans shall
be allocated to the Certificates as described in Section 1.02 hereof.
(c) The principal portion of all Realized Losses on the Mortgage Loans
shall be allocated on each Distribution Date as follows: first, in reduction of
the Monthly Excess Cashflow; second, to the Class X Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class [__] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; fourth, to the Class [__] Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; fifth, to the
Class [__] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; sixth, to the Class [__] Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; seventh, to the
Class [__] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; eighth, to the Class [__] Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; ninth, to the
Class [__] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; tenth, to the Class [__] certificates, until the
Certificate Principal Balance thereof has been reduced to zero; eleventh, to the
Class [__] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; thirteenth, to the Class [__] Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and fourteenth,
to the Class [__] Certificates, until the Certificate Principal Balance thereof
has been reduced to zero. All such Realized Losses to be allocated to the
Certificate Principal Balances of the Classes of Subordinate Certificates on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Subordinate Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each case
to be allocated to such Class of Certificates, on such Distribution Date.
Any allocation of the principal portion of Realized Losses to a
Subordinate Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated; any allocation
of Realized Losses to a Class X Certificate shall be made by reducing the amount
otherwise payable in respect thereof pursuant to Section 5.04(iii)(29). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of any class of Senior Certificates or Class P Certificates.
All such Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(d) Notwithstanding anything to the contrary contained herein, if on
any Distribution Date the Securities Administrator discovers, based solely on
the reports delivered by the Servicer under this Agreement that any Subsequent
Recoveries have been collected by the Servicer with respect to the Mortgage
Loans, the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Subordinate Certificates with the
highest payment priority to which Realized Losses on the Mortgage Loans have
been allocated, but not by more than the amount of Realized Losses previously
allocated to that Class of Subordinate Certificates pursuant to this Section
5.05. Any additional Subsequent Recoveries with respect to the Mortgage Loans
will be applied to increase the Certificate Principal Balance of the Subordinate
Certificates, beginning with the Class of Subordinate Certificates with the next
highest payment priority, up to the amount of such Realized Losses previously
allocated to such Class of Certificates pursuant to this Section 5.05 but only
to the extent that any such Applied Loss Amount has not been paid to any Class
of Certificates as a Deferred Amount. Holders of such Certificates will not be
entitled to any payment in respect of current interest on the amount of such
increases for any Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Subordinate Certificate of such Class in accordance
with its respective Percentage Interest.
(e) With respect to the REMIC I Regular Interests, all Realized Losses
on the Group I Loans shall be allocated shall be allocated on each Distribution
Date first, to REMIC I Regular Interest I until the Uncertificated Principal
Balance has been reduced to zero, and second, to REMIC I Regular Interest I-1-A
through REMIC I Regular Interest I-60-B, starting with the lowest numerical
denomination until such REMIC I Regular Interest has been reduced to zero,
provided that, for REMIC I Regular Interests with the same numerical
denomination, such Realized Losses shall be allocated pro rata between such
REMIC I Regular Interests. All Realized Losses on the Group II Loans shall be
allocated on each Distribution Date first, to REMIC I Regular Interest II until
the Uncertificated Principal Balance has been reduced to zero, and second, to
REMIC I Regular Interest II-1-A through REMIC I Regular Interest II-48-B,
starting with the lowest numerical denomination until such REMIC I Regular
Interest has been reduced to zero, provided that, for REMIC I Regular Interests
with the same numerical denomination, such Realized Losses shall be allocated
pro rata between such REMIC I Regular Interests.
(f) The REMIC II Marker Allocation Percentage of all Realized Losses on
the Mortgage Loans shall be allocated on each Distribution Date to the following
REMIC II Regular Interests in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC II Regular Interest LT-[__]
and REMIC II Regular Interest LT-[__] up to an aggregate amount equal to the
REMIC II Interest Loss Allocation Amount, 98% and 2%, respectively; second, to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA and
REMIC II Regular Interest LT-[__] up to an aggregate amount equal to the REMIC
II Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-[___] has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC II Regular Interest LT-[___]
has been reduced to zero; fifth, to the Uncertificated Principal Balances of
REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-[___] and REMIC II
Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC II Regular Interest LT-[___] has been reduced to
zero; sixth, to the Uncertificated Principal Balances of REMIC II Regular
Interest LT-AA, REMIC II Regular Interest LT-[___] and REMIC II Regular Interest
LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest LT-[___] has been reduced to zero; seventh, to the
Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-[___] has been reduced to zero; eighth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC II Regular Interest LT-[___]
has been reduced to zero; ninth, to the Uncertificated Principal Balances of
REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-[___] and REMIC II
Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC II Regular Interest LT-[___] has been reduced to
zero; tenth, to the Uncertificated Principal Balances of REMIC II Regular
Interest LT-AA, REMIC II Regular Interest LT-[___] and REMIC II Regular Interest
LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest LT-[___] has been reduced to zero; eleventh, to the
Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-[___] has been reduced to zero; twelfth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-[___] and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC II Regular Interest LT-[___]
has been reduced to zero; and thirteenth, to the Uncertificated Principal
Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-[___]
and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC II Regular Interest LT-[___] has been
reduced to zero.
The REMIC II Sub WAC Allocation Percentage of all Realized Losses on
the Mortgage Loans shall be applied after all distributions have been made on
each Distribution Date first, so as to keep the Uncertificated Principal Balance
of each REMIC II Regular Interest ending with the designation "GRP" equal to
0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group; second, to each REMIC II Regular Interest ending with the
designation "SUB," so that the Uncertificated Balance of each such REMIC II
Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group over (y) the
current Certificate Principal Balance of the Senior Certificate in the related
Loan Group (except that if any such excess is a larger number than in the
preceding distribution period, the least amount of Realized Losses shall be
applied to such REMIC II Regular Interests such that the REMIC II Subordinated
Balance Ratio is maintained); and third, any remaining Realized Losses shall be
allocated to REMIC II Regular Interest LT-XX.
Section 5.06 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Securities Administrator
shall prepare and make available to each Holder of Certificates, the Depositor
and the Credit Risk Manager via its website a statement setting forth the
following information for the Certificates:
(i) the Record Date, Accrual Period and Determination Date for each Class
of Certificates for each Due Period;
(ii) the Pass-Through Rate for each Class of Certificates with respect to
the current Accrual Period;
(iii) with respect to each loan group, the total cash flows received and the
general sources thereof;
(iv) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount
of any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein, (C) the Monthly
Excess Interest with respect to the Certificates (if any) and (D) the
amount of Prepayment Charges distributed to the Class P Certificates;
(v) the amount distributed to Holders of each Class on such Distribution
Date allocable to interest;
(vi) the Certificate Principal Balance of each Class of Certificates, if
applicable, after giving effect (i) to all distributions allocable to
principal on such Distribution Date and (ii) the allocation of any
Realized Losses for such Distribution Date;
(vii) the aggregate amount of Advances included in the distributions on the
Distribution Date (including the general purpose of such Advances);
(viii) the aggregate amount of Relief Act Interest Shortfalls for such
Distribution Date;
(ix) the aggregate amount of any Prepayment Interest Shortfall for such
Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.27 of this Agreement or the Master
Servicer pursuant to Section 4.14 of this Agreement;
(x) the cumulative amount of Realized Losses to date and, in addition, if
the Certificate Principal Balance of any Class of Certificates have
been reduced to zero, the cumulative amount of any Realized Losses that
have not been allocated to any Class of Certificates;
(xi) the Overcollateralization Amount and the Senior Enhancement Percentage,
any Overcollateralization Deficiency Amount and any
Overcollateralization Release Amount for such Distribution Date
(xii) with respect to each loan group, the amount of any Prepayment Charges
remitted by the Servicer;
(xiii) the number, aggregate principal balance, weighted average remaining
term to maturity and weighted average Mortgage Rate of the Mortgage
Loans as of the related Due Date;
(xiv) with respect to each loan group, the number and Scheduled Principal
Balance of all the Mortgage Loans for the following Distribution Date;
(xv) the number and aggregate principal balance of any Mortgage Loans that
were (A) delinquent (exclusive of Mortgage Loans in foreclosure) using
the "OTS" method (1) one scheduled payment is delinquent, (2) two
scheduled payments are delinquent, (3) three scheduled payments are
delinquent and (4) foreclosure proceedings have been commenced, and
loss information for the period; the number and aggregate principal
balance of any Mortgage Loans in respect of which (A) one scheduled
payment is delinquent, (B) two scheduled payments are delinquent, (C)
three scheduled payments are delinquent and (D) foreclosure proceedings
have been commenced, and loss information for the period;
(xvi) with respect to any Mortgage Loan that was liquidated during the
preceding calendar month, the loan number and the Stated Principal
Balance of, and Realized Loss on, such Mortgage Loan as of the close of
business on the Determination Date preceding such Distribution Date;
(xvii) the total number and principal balance of any real estate owned or REO
Properties in each Loan Group and the Mortgage Loans in the aggregate
as of the close of business on the Determination Date preceding such
Distribution Date;
(xviii) the three month rolling average of the percent equivalent of a
fraction, the numerator of which is the Aggregate Loan Group Balance of
the Mortgage Loans in a Loan Group that are sixty (60) days or more
delinquent or are in bankruptcy or foreclosure or are REO Properties,
and the denominator of which is the Aggregate Loan Group Balance of all
of the Mortgage Loans in such Loan Group as of the last day of such
Distribution Date;
(xix) any material modifications, extensions or waivers to the terms, fees,
penalties or payments of any Mortgage Loans during the Due Period or
that are material in the aggregate;
(xx) the aggregate Servicing Fee received by the Servicer, and the master
servicing fees, if any, received by the Master Servicer during the
related Due Period;
(xxi) the amount of the Credit Risk Management Fees paid to the Credit Risk
Manager and/or the Sponsor for such Distribution Date;
(xxii) the amount, if any, of other fees or expenses accrued and paid, with an
identification of the payee and the general purpose of such fees;
(xxiii) the amount of any Basis Risk Shortfalls and the amount in the Basis
Risk Shortfall Reserve Fund after all deposits and withdrawals on such
Distribution Date;
(xxiv) amounts payable in respect of the Interest Rate Swap Agreement;
(xxv) with respect to each loan group, whether the Stepdown Date has occurred
and whether Trigger Event is in effect; and
(xxvi) any legal proceedings pending against the Sponsor, the Depositor or the
Trustee, or their respective property, that is material to
Certificateholders, including proceedings known to be contemplated by
governmental authorities.
The Securities Administrator may make the foregoing monthly statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders via the
Securities Administrator's internet website. The Securities Administrator's
internet website shall initially be located at "[___________]". Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at [(___) ___-____]. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator may change the way monthly statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
The Securities Administrator shall be entitled to rely on but shall not
be responsible for the content or accuracy of any information provided by third
parties for purposes of preparing such statement and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
(b) The Securities Administrator's responsibility for making the above
information available to the Certificateholders is limited to the availability,
timeliness and accuracy of the information provided by the Servicer and the Swap
Provider. The Securities Administrator will make available a copy of each
statement provided pursuant to this Section 5.06 to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Securities Administrator shall cause to be furnished upon written
request 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) and (a)(ii) of this Section 5.06 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.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Residual Certificates the
applicable Form 1066 and each applicable Form 1066Q and shall respond promptly
to written requests made not more frequently than quarterly by any Holder of a
Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows on the Closing
Date on each Class of regular and residual interests created hereunder
and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of the end
of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on
the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate assumptions
used in determining the projected principal and interest cash flows
described above;
(iv) The original issue discount (or, in the case of the Mortgage Loans,
market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with
each constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage Loans or
the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of a REMIC with
respect to such regular interests or bad debt deductions claimed with
respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of a REMIC; and
(vii) Any taxes (including penalties and interest) imposed on the REMIC,
including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or
local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 9.13.
Section 5.07 REMIC Designations, REMIC I and REMIC II Allocations.
(a) The Trustee shall elect that each of REMIC I, REMIC II and REMIC
III shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The REMIC I Regular Interests shall constitute the assets of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.
(b) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report, shall be
distributed by REMIC I to REMIC II on account of the REMIC I Group I Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R-I Interest, as the case may be: (i) to Holders of each of
REMIC I Regular Interest I and REMIC I Regular Interest I-1-A through I-60-B,
pro rata, in an amount equal to (A) Uncertificated Accrued Interest for such
REMIC I Regular Interests for such Distribution Date, plus (B) any amounts
payable in respect thereof remaining unpaid from previous Distribution Dates;
(ii) to the extent of amounts remaining after the distributions made
pursuant to clause (i) above, payments of principal shall be allocated
as follows: first, to REMIC I Regular Interest I, then to REMIC I
Regular Interests I-1-A through I-60-B starting with the lowest
numerical denomination until the Uncertificated Principal Balance of
each such REMIC I Regular Interest is reduced to zero, provided that,
for REMIC I Regular Interests with the same numerical denomination,
such payments of principal shall be allocated pro rata between such
REMIC I Regular Interests, and second, to the extent of the product of
(a) any Overcollateralization Release Amounts multiplied by (b) a
fraction, the numerator of which is the aggregate Stated Principal
Balance of the Group I Mortgage Loans and the denominator of which is
the aggregate Stated Principal Balance of the Mortgage Loans, to REMIC
I Regular Interest I until the Uncertificated Principal Balance of such
REMIC I Regular Interest is reduced to zero; and
(iii) to the Holders of REMIC I Regular Interest P, (A) on each Distribution
Date, 100% of the amount paid in respect of Prepayment Charges and (B)
on the Distribution Date in [________] until $100 has been distributed
pursuant to this clause.
(c) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report, shall be
distributed by REMIC I to REMIC II on account of the REMIC I Group II Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R-I Interest, as the case may be:
(i) to Holders of each of REMIC I Regular Interest II and REMIC I Regular
Interest II-1-A through II-60-B, pro rata, in an amount equal to (A)
Uncertificated Accrued Interest for such REMIC I Regular Interests for
such Distribution Date, plus (B) any amounts payable in respect thereof
remaining unpaid from previous Distribution Dates;
(ii) to the extent of amounts remaining after the distributions made
pursuant to clause (i) above, payments of principal shall be allocated
as follows: first, to REMIC I Regular Interest I, then to REMIC I
Regular interests II-1-A through II-60-B starting with the lowest
numerical denomination until the Uncertificated Principal Balance of
each such REMIC I Regular Interest is reduced to zero, provided that,
for REMIC I Regular Interests with the same numerical denomination,
such payments of principal shall be allocated pro rata between such
REMIC I Regular Interests, and second, to the extent of the product of
(a) any Overcollateralization Release Amounts multiplied by (b) a
fraction, the numerator of which is the aggregate Stated Principal
Balance of the Group II Mortgage Loans and the denominator of which is
the aggregate Stated Principal Balance of the Mortgage Loans, to REMIC
I Regular Interest II until the Uncertificated Principal Balance of
such REMIC I Regular Interest is reduced to zero
(d) On each Distribution Date, the following amounts, in the following
order of priority and in accordance with the Remittance Report, shall be
distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R-II Interest, as the case may be:
(i) first, to the Holders of REMIC II Regular Interest LT-AA, REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___] and REMIC
II Regular Interest LT-ZZ, pro rata, in an amount equal to (A) the
Uncertificated Accrued Interest for each such REMIC II Regular Interest
for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates. Amounts payable as
Uncertificated Accrued Interest in respect of REMIC II Regular Interest
LT-ZZ shall be reduced and deferred when the REMIC II
Overcollateralization Amount is less than the REMIC II Targeted
Overcollateralization Amount, by the lesser of (x) the amount of such
difference and (y) the REMIC II Regular Interest LT-ZZ Maximum Interest
Deferral Amount and such amount will be payable to the Holders of REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___] and REMIC II Regular Interest LT-[___] in
the same proportion as the Overcollateralization Deficiency is
allocated to the Corresponding Certificates and the Uncertificated
Principal Balance of REMIC II Regular Interest LT-ZZ shall be increased
by such amount;
(ii) second, to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the REMIC II Marker Allocation Percentage of
the Interest Remittance Amount and the Principal Payment Amount for
such Distribution Date after the distributions made pursuant to clause
(i) above, allocated as follows:
(A) 98.00% of such remainder (other than amounts payable under
clause (C) below) to the Holders of REMIC II Regular Interest
LT-AA and REMIC II Regular Interest LT-P, until the
Uncertificated Principal Balance of such REMIC II Regular
Interest is reduced to zero, provided, however, that the
Uncertificated Principal Balance of REMIC II Regular Interest
LT-P shall not be reduced until the Distribution Date in
[________] or any Distribution Date thereafter, at which point
such amount shall be distributed to REMIC II Regular Interest
LT-P, until $100 has been distributed pursuant to this clause;
(B) 2.00% of such remainder, first, to the Holders REMIC II
Regular Interest LT-[___], REMIC II Regular Interest LT-[___],
REMIC II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___], REMIC II Regular
Interest LT-[___], REMIC II Regular Interest LT-[___], REMIC
II Regular Interest LT-[___], REMIC II Regular Interest
LT-[___], REMIC II Regular Interest LT-[___] and REMIC II
Regular Interest LT-[___], 1% in the same proportion as
principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Principal Balances of
such REMIC II Regular Interests are reduced to zero and
second, to the Holders of REMIC II Regular Interest LT-ZZ
(other than amounts payable under the proviso below), until
the Uncertificated Principal Balance of such REMIC II Regular
Interest is reduced to zero; and
(C) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-II Interest).
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC II Regular Interest LT-AA and REMIC II Regular Interest
LT-P, in that order and (ii) REMIC II Regular Interest LT-ZZ, respectively;
provided that REMIC II Regular Interest LT-P shall not be reduced until the
Distribution Date in [_________], at which point such amount shall be
distributed to REMIC II Regular Interest LT-P, until $100 has been distributed
pursuant to this clause.
(iii) third, to the Holders of REMIC II Regular Interest LT-1SUB, REMIC II
Regular Interest LT-1GRP, REMIC II Regular Interest LT-2SUB, REMIC II
Regular Interest LT-2GRP and REMIC II Regular Interest LT-XX, pro rata,
in an amount equal to (A) the Uncertificated Accrued Interest for each
such REMIC II Regular Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates; and
(iv) fourth, to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the REMIC II Sub WAC Allocation Percentage of
the Interest Remittance Amount and the Principal Payment Amount for
such Distribution Date after the distributions made pursuant to clause
(iii) above, such that distributions of principal shall be deemed to be
made to the REMIC II Regular Interests first, so as to keep the
Uncertificated Principal Balance of each REMIC II Regular Interest
ending with the designation "GRP" equal to 0.01% of the aggregate
Stated Principal Balance of the Mortgage Loans in the related Loan
Group; second, to each REMIC II Regular Interest ending with the
designation "SUB," so that the Uncertificated Principal Balance of each
such REMIC II Regular Interest is equal to 0.01% of the excess of (x)
the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the current Certificate Principal Balance
of the Senior Certificates in the related Loan Group (except that if
any such excess is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to such
REMIC II Regular Interests such that the REMIC II Subordinated Balance
Ratio is maintained); and third, any remaining principal to REMIC II
Regular Interest LT-XX.
Section 5.08 Prepayment Charges.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and deposited in the Distribution Account will be withdrawn from the
Distribution Account and distributed by the Securities Administrator in
accordance with the Remittance Report to the Class P Certificates and shall not
be available for distribution to the holders of any other Class of Certificates.
The payment of such Prepayment Charges shall not reduce the Certificate
Principal Balance of the Class P Certificates.
Section 5.09 Class P Certificate Account.
The Securities Administrator shall establish and maintain with itself a
separate, segregated trust account titled "[________________], for the benefit
of Nomura Home Equity Loan, Inc., Home Equity Loan Trust [___________] Class P
Certificate Account". On the Closing Date, the Depositor will deposit, or cause
to be deposited in the Class P Certificate Account $100.00. The amount on
deposit in the Class P Certificate Account shall be held uninvested. On the
[___________] Distribution Date, the Securities Administrator shall withdraw the
amount on deposit in the Class P Certificate Account and remit such amount to
the Holders of the Class P Certificates, in reduction of the Certificate
Principal Balance thereof.
Section 5.10 Basis Risk Shortfall Reserve Fund.
(a) The Securities Administrator shall establish a Basis Risk Shortfall
Reserve Fund on behalf of the holders of the Publicly Offered Certificates and
the Class B Certificates. The Basic Risk Shortfall Reserve Fund must be an
Eligible Account. The Basis Risk Shortfall Reserve Fund shall be entitled "Basis
Risk Shortfall Reserve Fund, [________________], as Trustee for the benefit of
holders of Nomura Home Equity Loan, Inc., Asset-Backed Certificates, Series
[___________], Class [__], Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] Certificates." On the Closing
Date, the Depositor will deposit, or cause to be deposited, into the Basis Risk
Shortfall Reserve Fund $[____]. On each Distribution Date as to which there is a
Basis Risk Shortfall payable to any Class of Certificates, the Securities
Administrator shall deposit the amounts pursuant to paragraphs (13) through (24)
of Section 5.04(a)(iii) into the Basis Risk Shortfall Reserve Fund and the
Securities Administrator has been directed by the Class X Certificateholder to
distribute such amounts to the Holders of the Publicly Offered Certificates and
Class B Certificates in the amounts and priorities set forth in Section
5.04(a)(iii).
(b) The Basis Risk Shortfall Reserve Fund is an "outside reserve fund"
within the meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset
of the Trust Fund but not an asset of any REMIC. The Securities Administrator on
behalf of the Trust shall be the nominal owner of the Basis Risk Shortfall
Reserve Fund. The Class X Certificateholders shall be the beneficial owners of
the Basis Risk Shortfall Reserve Fund, subject to the power of the Securities
Administrator to transfer amounts under Section 5.04(a)(iii). Amounts in the
Basis Risk Shortfall Reserve Fund shall be held either uninvested in a trust or
deposit account of the Securities Administrator with no liability for interest
or other compensation thereof or, at the written direction of the Majority Class
X Certificateholder, be invested in Permitted Investments that mature no later
than the Business Day prior to the next succeeding Distribution Date. All net
income and gain from such investments shall be distributed to the Majority Class
X Certificateholder, not as a distribution in respect of any interest in any
REMIC, on such Distribution Date. All amounts earned on amounts on deposit in
the Basis Risk Shortfall Reserve Fund shall be taxable to the Majority Class X
Certificateholder. Any losses on such investments shall be deposited in the
Basis Risk Shortfall Reserve Fund by the Majority Class X Certificateholder out
of its own funds immediately as realized. In the event that the Majority Class X
Certificateholder shall fail to provide investment instructions to the
Securities Administrator, the amounts on deposit in the Basis Risk Shortfall
Reserve Fund shall be held uninvested.
(c) For federal tax return and information reporting, the value of the
right of the holders of the Senior and Subordinate Certificates to receive
payments from the Basis Risk Shortfall Reserve Fund in respect of any Basis Risk
Shortfall shall be zero dollars ($0.00).
Section 5.11 Supplemental Interest Trust.
(a) On the Closing Date, the Securities Administrator shall establish
and maintain in the name of the Trustee a separate account for the benefit of
the holders of the Publicly Offered Certificates and Class B Certificates (the
"Supplemental Interest Trust"). 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 or of the Securities Administrator held
pursuant to this Agreement.
(b) On each Distribution Date, the Securities Administrator shall
deposit into the Supplemental Interest Trust amounts distributable to the Swap
Provider by the Supplemental Interest Trust pursuant to Sections 5.04(a)(i)(1)
and 5.04(a)(iii)(25) of this Agreement. On each Distribution Date, the
Securities Administrator shall distribute any such amounts to the Swap Provider
pursuant to the Swap Agreement, first to pay any Net Swap Trust Payment owed to
the Swap Provider for such Distribution Date, and second to pay any Swap
Termination Payment owed to the Swap Provider.
(c) On each Distribution Date, the Securities Administrator shall
deposit into the Supplemental Interest Trust amounts received by it from the
Swap Provider. On each Distribution Date, the Securities Administrator shall
distribute from the Supplemental Interest Trust an amount equal to the amount of
any Net Swap Trust Payment received from the Swap Provider under the Swap
Agreement, in the following order of priority:
(i) FIRST, to the Senior Certificates, pro rata based on amounts due,
Current Interest and any Carryforward Interest for each such Class and
Distribution Date, after giving effect to distributions of such amounts
distributed pursuant to Section 5.04(a)(i) herein;
(ii) SECOND, to the Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__] and
Class [__] Certificates, in that order, Current Interest and any
Carryforward Interest for each such Class and Distribution Date, after
giving effect to distributions of such amounts distributed pursuant to
Section 5.04(a)(i) herein;
(iii) THIRD, to the Class [__], Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__], Class [__] and
Class [__] Certificates, in that order, any applicable Deferred
Amounts, with interest thereon at the applicable Pass-Through Rate,
prior to giving effect to amounts available to be paid in respect of
Deferred Amounts distributed in accordance with Section 5.05(d) herein;
(iv) FOURTH, to the Principal Remittance Amount, up to the amount of
Realized Losses on the Mortgage Loans incurred during the related Due
Period;
(v) FIFTH, to the Publicly Offered Certificates and the Class B
Certificates, any applicable Basis Risk Shortfalls, prior to giving
effect to any withdrawals from the Basis Risk Shortfall Reserve Fund or
from amounts available to be paid in respect of Basis Risk Shortfalls,
distributable in accordance with Section 5.04(a)(iii) herein; and
(vi) SIXTH, any amounts remaining to the Class X Certificates.
(d) The Supplemental Interest Trust constitutes an "outside reserve
fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an
asset of any REMIC. The Holders of the Class X Certificates shall be the
beneficial owner of the Supplemental Interest Trust, subject to the power of the
Securities Administrator to transfer amounts under this Agreement. The
Securities Administrator shall keep records that accurately reflect the funds on
deposit in the Supplemental Interest Trust. The Securities Administrator shall,
at the written direction of the holder of the Majority Class X
Certificateholder, invest amounts on deposit in the Supplemental Interest Trust
in Permitted Investments. In the absence of written direction to the Securities
Administrator from the Majority Class X Certificateholder, all funds in the
Supplemental Interest Trust shall remain uninvested. On each Distribution Date,
the Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Supplemental Interest Trust to the Holders of the Class X
Certificates.
(e) For federal income tax purposes, amounts paid to the Supplemental
Interest Trust on each Distribution Date pursuant to Sections 5.04(a)(i)(1) and
5.04(a)(iii)(25) shall first be deemed paid to the Supplemental Interest Trust
in respect of the Class IO Interest to the extent of the amount distributable on
such Class IO Interest on such Distribution Date, and any remaining amount shall
be deemed paid to the Supplemental Interest Trust in respect of a Class IO
Distribution Amount. For federal income tax purposes, the Supplemental Interest
Trust will be a disregarded entity.
(f) The Securities Administrator shall treat the Holders of
Certificates (other than the Class P, Class X and Class R Certificates) as
having entered into a notional principal contract with respect to the Holders of
the Class X Certificates. Pursuant to each such notional principal contract, all
Holders of Certificates (other than the Class P, Class X and Class R
Certificates) shall be treated as having agreed to pay, on each Distribution
Date, to the Holder of the Class X Certificates an aggregate amount equal to the
excess, if any, of (i) the amount payable on such Distribution Date on the REMIC
III Regular Interest ownership of which is represented by such Class of
Certificates over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a "Class IO Distribution Amount"). A Class IO
Distribution Amount payable from interest collections shall be allocated pro
rata among such Certificates based on the amount of interest otherwise payable
to such Certificates, and a Class IO Distribution Amount payable from principal
collections shall be allocated to the most subordinate Class of such
Certificates with an outstanding principal balance to the extent of such
balance. In addition, pursuant to such notional principal contract, the Holder
of the Class X Certificates shall be treated as having agreed to pay Basis Risk
Shortfalls to the Holders of the Certificates (other than the Class X, Class P
and Class R Certificates) in accordance with the terms of this Agreement. Any
payments to such Certificates from amounts deemed received in respect of this
notional principal contract shall not be payments with respect to a Regular
Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any
payment from the Certificates (other than the Class X, Class P and Class R
Certificates) of a Class IO Distribution Amount shall be treated for tax
purposes as having been received by the Holders of such Certificates in respect
of the REMIC III Regular Interest ownership of which is represented by such
Certificates, and as having been paid by such Holders to the Supplemental
Interest Trust pursuant to the notional principal contract. Thus, each
Certificate (other than the Class P Certificates and Class R Certificates) shall
be treated as representing not only ownership of a Regular Interest in REMIC
III, but also ownership of an interest in, and obligations with respect to, a
notional principal contract.
(g) The Sponsor shall provide to the Securities Administrator the value
of the right of the holders of the Senior and Subordinate Certificates to
receive payments from the Supplemental Interest Trust for federal tax return and
information reporting not later than the [___________].
(h) In the event that the Swap Agreement is terminated prior to the
Distribution Date in [___________], the Sponsor shall use reasonable efforts to
appoint a successor swap provider using any Swap Termination Payments paid by
the Swap Provider. If the Sponsor is unable to locate a qualified successor swap
provider, any such Swap Termination Payments will be remitted to the Securities
Administrator for payment to the holders of the Publicly Offered Certificates
and Class B Certificates of amounts described in Section 5.11(c).
Section 5.12 Tax Treatment of Swap Payments and Swap Termination
Payments.
For federal income tax purposes, each holder of a Senior Certificate or
Subordinate Certificate is deemed to own an undivided beneficial ownership
interest in a REMIC regular interest and the right to receive payments from
either the Basis Risk Shortfall Reserve Fund or the Supplemental Interest Trust
in respect of any Basis Risk Shortfall Carry-Forward Amounts or the obligation
to make payments to the Supplemental Interest Trust. For federal income tax
purposes, the Securities Administrator will account for payments to each Senior
Certificate and Subordinate Certificate as follows: each Senior Certificate and
Subordinate Certificate will be treated as receiving their entire payment from
REMIC III (regardless of any Swap Termination Payment or obligation under the
Swap Agreement) and subsequently paying their portion of any Swap Termination
Payment in respect of each such Class' obligation under the Swap Agreement. In
the event that any such Class is resecuritized in a REMIC, the obligation under
the Swap Agreement to pay any such Swap Termination Payment (or any shortfall in
Net Swap Trust Payment), will be made by one or more of the REMIC Regular
Interests issued by the resecuritization REMIC subsequent to such REMIC Regular
Interest receiving its full payment from any such Senior Certificate and
Subordinate Certificate. Resecuritization of any Senior Certificate and
Subordinate Certificate in a REMIC will be permissible only if the Securities
Administrator hereunder is the trustee/securities administrator in such
resecuritization.
The REMIC Regular Interest corresponding to a Senior Certificate and
Subordinate Certificate will be entitled to receive interest and principal
payments at the times and in the amounts equal to those made on the certificate
to which it corresponds, except that (i) the maximum interest rate of that REMIC
regular interest will equal the Net Funds Cap computed for this purpose by
limiting the Notional Amount of the Swap Agreement to the aggregate Stated
Principal Balance of the Mortgage Loans and (ii) any Swap Termination Payment
will be treated as being payable solely from amounts otherwise payable to the
Class X Certificates. As a result of the foregoing, the amount of distributions
and taxable income on the REMIC Regular Interest corresponding to a Senior
Certificate and Subordinate Certificate may exceed the actual amount of
distributions on the Senior Certificate and Subordinate Certificate.
Section 5.13 Reports Filed with Securities and Exchange Commission.
(a) Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Securities and Exchange Commission via the Electronic Data Gathering and
Retrieval System ("XXXXX"), a Distribution Report on Form 10-D with a copy of
the monthly statement to be furnished by the Trustee to the Certificateholders
for such Distribution Date and detailing all data elements specified in Item
1121(a) of Regulation AB as an exhibit thereto; provided that the Trustee shall
have received no later than 10 days prior to the date such Distribution Report
on Form 10-D is required to be filed, the following information:
(i) Notice of any material modifications, extensions or waivers to Mortgage
Loan terms, fees, penalties or payments during the distribution period
or that have cumulatively become material over time from the Master
Servicer;
(ii) Notice of any material breaches of Mortgage Loan representations or
warranties or transaction covenants from the Master Servicer;
(iii) Notice of any new issuance of asset-backed securities backed by the
same asset pool, any pool asset changes, such as Mortgage Loan
substitutions and repurchases, and cash flows available for future
purchases, if applicable from the Master Servicer.
(iv) A brief description of any legal proceedings pending, including
proceedings known to be contemplated by governmental authorities,
against the Depositor, the Sponsor and the Master Servicer or of which
any property of the foregoing is the subject, that is material to
Certificateholders from each of the Depositor, the Sponsor and the
Master Servicer if applicable;
(v) The information required by Item 2 of Part II of Form 10-Q regarding
any sale of securities that are either backed by the same asset pool or
are otherwise issued by the issuer, regardless of whether the
transaction was registered under the Securities Act during the period
covered by the report, from the Depositor;
(vi) The information required by Item 3 of Part II of Form 10-Q with respect
to defaults upon the senior securities during the period covered by the
report, from the Master Servicer;
(vii) The information required by Item 4 of Part II of Form 10-Q with respect
to submission of matters to a vote of Certificateholders during the
period covered by the report, from the Master Servicer;
(viii) Any information required to be disclosed in a report on Form 8-K during
the period covered by the report on the Form 10-D, but not reported,
whether or not otherwise required by the Form 10-D from the Master
Servicer; and
(ix) Any exhibits to the Form 10-D from the Depositor.
(b) The Securities Administrator will prepare and file Current Reports
on Form 8-K in respect of the Trust at the direction and expense of the
Depositor, provided, that, the Depositor, the Sponsor, the Trustee or the Master
Servicer shall have timely notified the Securities Administrator of an item
reportable on a Current Report on Form 8-K and shall have delivered to the
Securities Administrator no later than two Business Days prior to the filing
deadline for such Current Report, all information, data, and exhibits required
to be provided or filed with such Current Report with respect to:
(i) Any entry into a material definitive agreement, any termination of a
material definitive agreement;
(ii) any bankruptcy or receivership of the Depositor, the Sponsor or the
Master Servicer (including any servicer that does not sign the pooling
and servicing agreement and any subservicer that signs a subservicing
agreement) from the Depositor, the Sponsor or the Master Servicer as
applicable;
(iii) A description of any triggering events that accelerate or increase a
direct financial obligation or an obligation under an off-balance sheet
arrangement from the Master Servicer;
(iv) Any material modification to the rights of Certificateholders;
(v) Any amendments of the articles of incorporation or bylaws or a change
of the fiscal year of any transaction party from each of the Depositor,
the Sponsor or the Master Servicer, as applicable;
(vi) Any change in servicer, trustee, credit enhancement or other external
support or failure to make a required distribution from the Master
Servicer or Trustee as applicable; and
(vii) Any Securities Act update provided by the Depositor.
(c) Prior to January 30 in each year commencing in [_____], the
Securities Administrator shall, in accordance with industry standards, file a
Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior
to (x) March 15, [_____] and (y) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Trustee with a Master Servicer Annual Statement of
Compliance, together with a copy of the Master Servicer Assessment of Compliance
and Master Servicer Attestation Report to be delivered by the Master Servicer
pursuant to Sections 4.14 and 4.15. Prior to (x) March 31, [_____] and (y)
unless and until a Form 15 Suspension Notice shall have been filed, March 31 of
each year thereafter, the Master Servicer shall, subject to subsection (d)
below, file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust Fund. Such Form 10-K shall include the Master Servicer
Assessment of Compliance, Master Servicer Attestation Report, Master Servicer
Annual Statement of Compliance and other documentation provided by the Master
Servicer pursuant to Sections 4.14 and 4.15 and the Form 10-K certification
signed by the Depositor. The Depositor, the Sponsor and Master Servicer shall
provide the following information, as applicable, no later than March 1 of each
calendar year prior to the filing deadline for the Form 10-K:
(i) Any exhibits or financial statement schedules required by Item 15 of
Form 10-K from each of the Depositor, the Sponsor and Master Servicer;
(ii) A description of any legal proceedings pending, including proceedings
known to be contemplated by governmental authorities, against the
Depositor, the Sponsor and the Master Servicer or of which any property
of the foregoing is the subject, that is material to Certificateholders
from each of the Depositor, the Sponsor and the Master Servicer if
applicable;
(iii) A description of any affiliations between the transaction parties
pursuant to Item 1119 of Regulation AB from the Sponsor; and
(iv) The Master Servicer Assessment of Compliance, Master Servicer
Attestation Report, Master Servicer Annual Statements of Compliance and
other documentation provided by the Master Servicer pursuant to
Sections 4.14 and 4.15.
(d) The Depositor hereby grants to the Securities Administrator a
limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(x) receipt by the Securities Administrator from the Depositor of written
termination of such power of attorney and (y) the termination of the Trust Fund.
The Depositor, the Master Servicer and the Trustee each agree to promptly
furnish to the Securities Administrator, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement, the Mortgage Loans as the Securities Administrator reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 5.13; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Exchange Act. Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to the Depositor. Fees and
expenses incurred by the Securities Administrator in connection with this
Section 5.13 shall not be reimbursable from the Trust Fund.
(e) In connection with the filing of any 10-K hereunder, the Securities
Administrator shall sign a certification (in the form attached hereto as Exhibit
[___]) for the Depositor regarding certain aspects of the Form 10-K
certification signed by the Depositor, provided, however, that the Securities
Administrator shall not be required to undertake an analysis of any accountant's
report attached as an exhibit to the Form 10-K.
(f) The Securities Administrator shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 5.13 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith.
Notwithstanding the provisions of Section 11.01, this Section 5.13 may
be amended without the consent of the Certificateholders
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates.
(a) The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-6. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof (except that one Certificate of each Class may be issued in a
different amount which must be in excess of the applicable minimum dollar
denomination) and aggregate dollar denominations as set forth in the following
table:
MINIMUM INTEGRAL MULTIPLE IN ORIGINAL CERTIFICATE
CLASS DENOMINATION EXCESS OF MINIMUM PRINCIPAL BALANCE PASS-THROUGH RATE
------------ --------------- --------------------- ----------------------- ----------------------------
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
[__] $100,000 $1 $ [_____________] Class [__] Pass-Through Rate
X $1 $1 $ [_____________] Class X Pass-Through Rate
P $1 $1 $ 100.00 N/A
R N/A N/A N/A N/A
Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
The Depositor shall provide, or cause to be provided, to the Securities
Administrator on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
(b) The Class X Certificates and Class P Certificates offered and sold to
Qualified Institutional Buyers in reliance on Rule 144A under the Securities Act
("Rule 144A") will be issued in the form of Definitive Certificates.
Section 6.02 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 6.09, a Certificate
Register for the Certificates 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 authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
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 that 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.
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 canceled 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 the Securities Act and such state securities
laws. In the event that a Transfer 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 and such Certificateholder's prospective transferee shall each certify
to the Securities Administrator in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit E (the "Transferor Certificate")
and (x) deliver a letter in substantially the form of either Exhibit F (the
"Investment Letter") or Exhibit G (the "Rule 144A Letter") or (y) there shall be
delivered to the Securities Administrator an Opinion of Counsel, at the expense
of the transferor, that such Transfer may be made pursuant to an exemption from
the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Sponsor, the Securities Administrator, the Trustee or the Trust
Fund. 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 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 Securities
Administrator, the Depositor and the Sponsor 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.
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 to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA and/or a plan
subject to Section 4975 of the Code, or a Person acting on behalf of any such
plan or using the assets of any such plan, or (ii) in the case of any such ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or a plan subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Securities Administrator for the benefit of the
Securities Administrator, the Depositor and the Servicer and on which they may
rely to the effect that the purchase and holding of such ERISA Restricted
Certificate is permissible under applicable law, will not result in any
prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Securities Administrator, the Depositor or any Servicer to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Depositor, any Servicer or the Trustee. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA Restricted Certificate to or
on behalf of an employee benefit plan subject to Section 406 of ERISA and/or a
plan subject to Section 4975 of the Code other than in compliance with the
foregoing shall be void and of no effect; provided that the restriction set
forth in this sentence shall not be applicable if there has been delivered to
the Securities Administrator an Opinion of Counsel meeting the requirements of
clause (ii) of the first sentence of this paragraph. The Securities
Administrator shall not be under any liability to any Person for any
registration of transfer of any ERISA Restricted Certificate that is in fact not
permitted by this Section 6.02(b) 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 any ERISA
Restricted Certificate that was in fact an employee benefit plan subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code or a Person
acting on behalf of any such plan at the time it became a Holder or, at such
subsequent time as it became such a plan or Person acting on behalf of such a
plan, all payments made on such ERISA Restricted 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
Holder of such Certificate that is not such a plan or Person acting on behalf of
a plan.
For so long as the Supplemental Interest Trust is in existence, each
beneficial owner of a Publicly Offered Certificate or any interest therein,
shall be deemed to have represented, by virtue of its acquisition or holding of
the Publicly Offered Certificate, or interest therein, that either (i) it is not
a Plan or (ii)(A) it is an accredited investor within the meaning of Prohibited
Transaction Exemption 2002-41, as amended from time to time (the "Exemption")
and (B) the acquisition and holding of such Certificate and the separate right
to receive payments from the Supplemental Interest Trust are eligible for the
exemptive relief available under Prohibited Transaction Class Exemption ("PTCE")
84-14 (for transactions by independent "qualified professional asset managers"),
91-38 (for transactions by bank collective investment funds), 90-1 (for
transactions by insurance company pooled separate accounts), 95-60 (for
transactions by insurance company general accounts) or 96-23 (for transactions
effected by "in-house asset managers").
Each beneficial owner of a Class [__], Class [__], Class [__], Class
[__], Class [__], Class [__], Class [__], Class [__] or Class [__] Certificate
or any interest therein that is acquired after the termination of the
Supplemental Interest Trust shall be deemed to have represented, by virtue of
its acquisition or holding of that certificate or interest therein, that either
(i) it is not a Plan or investing with "Plan Assets", (ii) it has acquired and
is holding such certificate in reliance on the Exemption, and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or Xxxxx'x, and the
certificate is so rated or (iii) (1) it is an insurance company, (2) the source
of funds used to acquire or hold the certificate or interest therein is an
"insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60 and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
Each beneficial owner of a Class [__] Certificate or Class [__]
Certificate shall be deemed to have represented, by virtue of its acquisition or
holding of that certificate or interest therein, that either (i) it is not a
Plan or investing with "Plan Assets" or (ii) (1) it is an insurance company, (2)
the source of funds used to acquire or hold the certificate or interest therein
is an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60 and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.
If any Certificate, or any interest therein, is acquired or held in
violation of this section 5.02(c), the next preceding permitted beneficial owner
will be treated as the beneficial owner of that Certificate, retroactive to the
date of transfer to the purported beneficial owner. Any purported beneficial
owner whose acquisition or holding of a Certificate, or interest therein, was
effected in violation of this Section shall indemnify to the extent permitted by
law and hold harmless the Depositor, the Sponsor, the Master Servicer, the
Securities Administrator, the Servicer, the Underwriter and the Trustee from and
against any and all liabilities, claims, costs or expenses incurred by such
parties as a result of such acquisition or holding.
(c) (i) 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:
(A) 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.
(B) In connection with any proposed Transfer of any Ownership Interest in a
Residual Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Residual Certificate until its
receipt of, an affidavit and agreement (a "Transfer Affidavit and
Agreement," in the form attached hereto as Exhibit B-3) from the
proposed Transferee, in form and substance satisfactory to the
Securities Administrator, representing and warranting, among other
things, that such Transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate that is
the subject of the proposed Transfer as a nominee, trustee or agent for
any Person that is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 6.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a
proposed Transferee under clause (B) above, if an authorized officer of
the Securities Administrator who is assigned to this transaction has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a Residual
Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (Y) not
to transfer its Ownership Interest unless it provides a Transferor
Affidavit (in the form attached hereto as Exhibit [__]) to the
Securities Administrator stating that, among other things, it has no
actual knowledge that such other Person is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership Interest in a Residual
Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Securities Administrator written notice that it is a
"pass-through interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it is, or is holding
an Ownership Interest in a Residual Certificate on behalf of, a
"pass-through interest holder."
(ii) The Securities Administrator will register the Transfer of any
Residual Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the
Securities Administrator as a condition to such registration.
In addition, no Transfer of a Residual Certificate shall be
made unless the Securities Administrator shall have received a
representation letter from the Transferee of such Certificate
to the effect that such Transferee is a Permitted Transferee.
(iii) (A) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this
Section 6.02(d), then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all
rights as holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate.
The Securities Administrator shall be under no liability to
any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section
6.02(d) or for making any payments due on such Certificate to
the holder thereof or for taking any other action with respect
to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder of
a Residual Certificate in violation of the
restrictions in this Section 6.02(d) and to the
extent that the retroactive restoration of the rights
of the holder of such Residual Certificate as
described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Securities
Administrator shall have the right, without notice to
the holder or any prior holder of such Residual
Certificate, to sell such Residual Certificate to a
purchaser selected by the Securities Administrator on
such terms as the Securities Administrator may
choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in
accordance with the instructions of the Securities
Administrator. Such purchaser may be the Securities
Administrator itself or any Affiliate of the
Securities Administrator. The proceeds of such sale,
net of the commissions (which may include commissions
payable to the Securities Administrator or its
Affiliates), expenses and taxes due, if any, will be
remitted by the Securities Administrator to such
purported Transferee. The terms and conditions of any
sale under this clause (iii)(B) shall be determined
in the sole discretion of the Securities
Administrator, and the Securities Administrator shall
not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of its
exercise of such discretion.
(iv) The Securities Administrator shall make available to the
Internal Revenue Service and those Persons specified by the
REMIC Provisions all information necessary to compute any tax
imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be
charged or collected by the Securities Administrator.
(v) The provisions of this Section 6.02(d) set forth prior to this
subsection (v) may be modified, added to or eliminated,
provided that there shall have been delivered to the
Securities Administrator at the expense of the party seeking
to modify, add to or eliminate any such provision the
following:
(A) written notification from each Rating Agency to the
effect that the modification, addition to or
elimination of such provisions will not cause such
Rating Agency to downgrade its then-current ratings
of any Class of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Securities Administrator, to the
effect that such modification of, addition to or
elimination of such provisions will not cause any
Trust REMIC to cease to qualify as a REMIC and will
not cause any Trust REMIC, as the case may be, to be
subject to an entity-level tax caused by the Transfer
of any Residual Certificate to a Person that is not a
Permitted Transferee or a Person other than the
prospective transferee to be subject to a REMIC-tax
caused by the Transfer of a Residual Certificate to a
Person that is not a Permitted Transferee.
(d) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(e) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. 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 transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest
respectively, in each case that was evidenced by the Class R Certificate being
exchanged.
(f) No service charge to the Certificateholders shall be made for any
transfer or exchange of 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 Certificates.
(g) The preparation and delivery of all certificates and opinions
referred to above in this Section 6.02 shall not be an expense of the Trust
Fund, the Securities Administrator, the Depositor or the Sponsor.
(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Securities Administrator in accordance with its
customary procedures.
Section 6.03 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 of the
ownership thereof and (b) there is delivered to the Securities Administrator
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Securities Administrator that
such Certificate has been acquired by a bona fide 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 6.03, the Securities
Administrator may require the 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
6.03 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time. All Certificates surrendered
to the Securities Administrator under the terms of this Section 6.03 shall be
canceled and destroyed by the Securities Administrator in accordance with its
standard procedures without liability on its part.
Section 6.04 Persons Deemed Owners.
The Depositor, the Servicer, the Trustee, the Master Servicer, the
Securities Administrator and any of their agents 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 Depositor, the Servicer, the Trustee,
the Master Servicer, the Securities Administrator nor any of their agents shall
be affected by any notice to the contrary.
Section 6.05 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 that such Certificateholders propose to
transmit or if the Depositor 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 or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the 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 6.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book- Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
6.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Depositor, the Servicer, the Trustee, the Master Servicer and
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
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 6.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Securities Administrator shall give all such
notices and communications to the Depository.
Section 6.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Securities
Administrator that the Depository is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Certificates and the Securities Administrator or the Depositor is unable to
locate a qualified successor, (b) the Depositor, at its sole option, advises the
Securities Administrator that it elects to terminate the book-entry system with
respect to such Certificates through the Depository or (c) after the occurrence
and continuation of either of the events described in clauses (a) or (b) above,
Certificate Owners of such Book-Entry Certificates having not less than fifty
one percent (51%) of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Securities Administrator and the Depository in writing
through the Depository Participants that the continuation of a book-entry system
with respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of such
Class, then the Securities Administrator shall notify all Certificate Owners of
such Certificates, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to applicable Certificate
Owners requesting the same. The Depositor shall provide the Securities
Administrator with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the
Securities Administrator of any such Certificates by the Depository, accompanied
by registration instructions from the Depository for registration, the
Securities Administrator shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such 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 such Definitive Certificates as
Certificateholders hereunder.
Section 6.09 Maintenance of Office or Agency.
Certificates may be surrendered for registration of transfer or
exchange at the applicable Corporate Trust Office of the Securities
Administrator. The Securities Administrator will give prompt written notice to
the Certificateholders of any change in such location of any such office or
agency.
ARTICLE VII
THE DEPOSITOR, THE SERVICERS AND THE MASTER SERVICER
Section 7.01 Liabilities of the Depositor, the Servicer and the Master
Servicer.
Each of the Depositor, the Servicer and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Depositor, the Servicer or
the Master Servicer.
(a) Each of the Depositor and the Servicer will keep in full force and
effect its rights and franchises as a corporation, under the laws of the state
of its formation, and will 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,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement. The Master Servicer will keep in full force and effect its
existence, rights and franchises as a national banking association, and will
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, the Certificates or
any of the Mortgage Loans and to perform its duties under this Agreement.
(b) The Depositor, the Servicer or the Master Servicer may be merged or
consolidated, or any entity resulting from any merger or consolidation to which
the Depositor, the Servicer or the Master Servicer shall be a party, or any
Person succeeding to the business of the Depositor, the Servicer or the Master
Servicer shall be the successor of the Depositor, the Servicer or the Master
Servicer hereunder, 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, provided that any Successor Servicer shall have represented
that it meets the eligibility criteria set forth in Section 8.02.
Section 7.03 Indemnification of Depositor and the Servicer.
(a) The Depositor agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Depositor's
failure to perform its duties in compliance with this Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or (ii) incurred by reason of the Depositor's willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. This indemnity
shall survive the resignation and the termination of this Agreement.
(b) The Servicer agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to the Servicer's gross negligence in the performance of its duties
under this Agreement or failure to service the related Mortgage Loans in
material compliance with the terms of this Agreement and for a material breach
of any representation, warranty or covenant of the Servicer contained herein.
The Servicer shall immediately notify the Trustee if a claim is made by a third
party with respect to this Agreement or the related Mortgage Loans, assume (with
the consent of the Trustee and with counsel reasonably satisfactory to the
Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly appeal or pay, discharge and
satisfy any judgment or decree which may be entered against it or any
Indemnified Person in respect of such claim, but failure to so notify the
Servicer shall not limit its obligations hereunder. The Servicer agrees that it
will not enter into any settlement of any such claim without the consent of the
Indemnified Persons unless such settlement includes an unconditional release of
such Indemnified Persons from all liability that is the subject matter of such
claim. The provisions of this Section 7.03(b) shall survive termination of this
Agreement.
Section 7.04 Limitations on Liability of the Depositor, the Securities
Administrator, the Master Servicer, the Servicer and
Others.
Subject to the obligation of the Depositor and the Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:
(a) Neither the Depositor, the Securities Administrator, the Master
Servicer nor any of the directors, officers, employees or agents of the
Depositor, the Securities Administrator and the Master Servicer shall be under
any liability to the Indemnified Persons, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Securities Administrator, the Master Servicer or any such Person against any
breach of warranties, representations or covenants made herein or against any
specific liability imposed on any such Person pursuant hereto or against any
liability which would otherwise be imposed by reason of such Person's willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(b) The Depositor, the Securities Administrator, the Master Servicer
and any director, officer, employee or agent of the Depositor, the Securities
Administrator and the Master Servicer 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.
(c) The Depositor, the Securities Administrator, the Master Servicer,
the Servicer, the Trustee, the Custodian and any director, officer, employee or
agent of the Depositor, the Securities Administrator, the Master Servicer, the
Servicer, the Trustee or the Custodian shall be indemnified by the Trust Fund
and held harmless thereby against any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to this
Agreement, the Custodial Agreement or the Certificates (including any pending or
threatened claim or legal action), other than (i) with respect to the Servicer,
such loss, liability or expense related to the Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or, with
respect to the Custodian, to the Custodian's failure to perform its duties under
the Custodial Agreement, (ii) with respect to the Servicer, any such loss,
liability or expense incurred by reason of the Servicer's willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or
(iii) with respect to the Custodian, any such loss, liability or expense
incurred by reason of the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder.
(d) The Depositor the Securities Administrator or the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties under this Agreement and that in its
opinion may involve it in any expense or liability; provided, however, that each
of the Depositor, the Securities Administrator and the Master Servicer may in
its discretion, undertake any such action which it may deem necessary or
desirable with 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 (except 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) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Securities Administrator and the Master Servicer shall be
entitled to be reimbursed therefor out of the Distribution Account as provided
by Section 3.32. Nothing in this Subsection 7.04(d) shall affect the Master
Servicer's obligation to take such actions as are necessary to ensure the
servicing and administration of the Mortgage Loans pursuant to this Agreement.
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Trustee shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course of
action by reason of the condition of the Mortgaged Properties.
(f) The Trustee shall not be liable for any acts or omissions of any
Servicer, the Depositor or the Custodian.
Section 7.05 Servicer Not to Resign.
(a) No Servicer shall resign from the obligations and duties hereby
imposed on it except upon the determination that its duties hereunder are no
longer permissible under applicable law or the performance of such duties are no
longer possible in order to comply with applicable law and such incapacity or
impossibility cannot be cured by the Servicer. Any determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Master Servicer which Opinion of Counsel shall be in
form and substance acceptable to the Master Servicer. No appointment of a
successor to the Servicer shall be effective hereunder unless (a) the Rating
Agencies have confirmed in writing that such appointment will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in Section 8.02 and (c) such successor has agreed
in writing to assume the obligations of the Servicer hereunder. The Servicer
shall provide a copy of the written confirmation of the Rating Agencies and the
agreement executed by such successor to the Master Servicer. No such resignation
shall become effective until a Successor Servicer or the Master Servicer shall
have assumed the Servicer's responsibilities and obligations hereunder. The
Servicer shall notify the Master Servicer and the Rating Agencies of its
resignation.
(b) Except as expressly provided herein, no Servicer shall 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 Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Subservicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.03, no Subservicer shall be a third-party
beneficiary hereunder and the parties hereto shall not be required to recognize
any Subservicer as an indemnitee under this Agreement.
Section 7.06 Appointment of Special Servicer; Termination of the
Servicer.
(a) The Sponsor may appoint a special servicer with respect to certain
of the Mortgage Loans. The Sponsor and the Servicer shall negotiate in good
faith with any proposed special servicer with respect to the duties and
obligations of such special servicer with respect to any such Mortgage Loan. Any
subservicing agreement shall contain terms and provisions not inconsistent with
this Agreement and shall obligate the special servicer to service such Mortgage
Loans in accordance with Accepted Servicing Practices. The fee payable to the
special servicer for the performance of such duties and obligations will be paid
from the Servicing Fee collected by the Servicer with respect to each such
Mortgage Loan and will be remitted to such special servicer by the Servicer. The
Sponsor shall reimburse the Servicer for Servicing Fee shortfalls, if any,
incurred as a result of the fee payable to such special servicer.
(b) If at any time the Sponsor retains or comes into possession of any
servicing rights with respect to any of the Mortgage Loans, the Sponsor may, at
its option, terminate the servicing responsibilities of the Servicer hereunder
with respect to such Mortgage Loans without cause. No such termination shall
become effective unless and until a successor to the Servicer shall have been
appointed to service and administer the related Mortgage Loans pursuant to the
terms and conditions of this Agreement. No appointment shall be effective unless
(i) such Successor Servicer meets the eligibility criteria contained in Section
8.02, (ii) the Master Servicer shall have consented to such appointment, (iii)
the Rating Agencies have been notified in writing of such appointment and such
Successor Servicer meets the Minimum Servicing Requirements, (iv) such successor
has agreed to assume the obligations of the Servicer hereunder to the extent of
the related Mortgage Loans and (v) all amounts reimbursable to the terminated
Servicer pursuant to the terms of this Agreement shall have been paid to the
Servicer by the Successor appointed pursuant to the terms of this Section 7.06
or by the Sponsor including without limitation, all unpaid Servicing Fees
accrued and unreimbursed Advances and Servicing Advances made by the terminated
Servicer and all out-of-pocket expenses of the Servicer incurred in connection
with the transfer of servicing to such successor. The Sponsor shall provide a
copy of the agreement executed by such successor to the Trustee and the Master
Servicer.
Section 7.07 Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer meeting the criteria specified in Section 7.08 shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
Section 7.08 Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation and assuming the obligations of the Master Servicer
hereunder (a) shall have a net worth of not less than $15,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (b)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (c) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
Master Servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning the master servicing shall deliver to the
Trustee an officer's certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.
Section 7.09 Rights of the Depositor in Respect of the Servicer and the
Master Servicer.
Each of the Master Servicer and the Servicer shall afford (and any
Sub-Servicing Agreement shall provide that each Subservicer shall afford) the
Depositor and the Trustee, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer or the Servicer (and any
such Subservicer) in respect of the Servicer's rights and obligations hereunder
and access to officers of the Master Servicer or the Servicer (and those of any
such Subservicer) responsible for such obligations, and the Master Servicer
shall have access to all such records maintained by the Servicer and any
Subservicers. Upon request, each of the Master Servicer and the Servicer shall
furnish to the Depositor and the Trustee its (and any such Subservicer's) most
recent financial statements and such other information relating to the Master
Servicer's or the Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any such Subservicer possesses). To the
extent such information is not otherwise available to the public, the Depositor
and the Trustee shall not disseminate any information obtained pursuant to the
preceding two sentences without the Master Servicer's or the Servicer's written
consent, except as required pursuant to this Agreement or to the extent that it
is appropriate to do so (i) to its legal counsel, auditors, taxing authorities
or other governmental agencies and the Certificateholders, (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Agreement approved in advance
by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that the Trustee advises such recipient
of the confidential nature of the information being disclosed, shall use its
best efforts to assure the confidentiality of any such disseminated non-public
information. Nothing in this Section 7.09 shall limit the obligation of the
Servicer to comply with any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 7.09 as a result of such obligation shall not
constitute a breach of this Section. Nothing in this Section 7.09 shall require
the Servicer to collect, create, collate or otherwise generate any information
that it does not generate in its usual course of business. No Servicer shall be
required to make copies of or ship documents to any party unless provisions have
been made for the reimbursement of the costs thereof. The Depositor may, but is
not obligated to, enforce the obligations of the Master Servicer and the
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer or
the Servicer under this Agreement or exercise the rights of the Master Servicer
or the Servicer under this Agreement; provided that neither the Master Servicer
nor the Servicer shall be relieved of any of its obligations under this
Agreement by virtue of such performance by the Depositor or its designee. The
Depositor shall not have any responsibility or liability for any action or
failure to act by the Master Servicer or the Servicer and is not obligated to
supervise the performance of the Master Servicer or the Servicer under this
Agreement or otherwise.
ARTICLE VIII
DEFAULT; TERMINATION OF THE SERVICER AND MASTER SERVICER
Section 8.01 Events of Default.
(a) In case one or more of the following events of default by the
Servicer (each, a "Servicer Default") shall occur and be continuing, that is to
say:
(i) any failure by the Servicer to remit to the Securities Administrator
any payment required to be made under the terms of this Agreement which
continues unremedied for a period of two Business Days; or
(ii) failure on the part of the Servicer to duly observe or perform in any
material respect any other of the covenants or agreements on the part
of the Servicer set forth in this Agreement (other than those described
in (viii) and (ix) below), the breach of which has a material adverse
effect and which continue 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 Servicer by the
Master Servicer or to the Servicer and the Master Servicer by the
holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(iii) 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 Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of sixty days; or
(iv) the 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 Servicer or of or relating to all or substantially all
of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally 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; or
(vi) the Servicer attempts to assign its right to servicing compensation
hereunder (other than any payment by the Servicer to the Sponsor of any
portion of the Servicing Fee payable to the Servicer as provided in a
separate side letter between the Sponsor and the Servicer) or the
Servicer attempts to sell or otherwise dispose of all or substantially
all of its property or assets or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof except, in each case as otherwise
permitted herein; or
(vii) the Servicer ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent
such non-qualification materially and adversely affects the Servicer's
ability to perform its obligations hereunder;
(viii) any failure by the Servicer to duly perform, within the required time
period, its obligation described in Sections 3.13, 3.14 and 3.18
hereof; or
(ix) any failure by the Servicer to provide, within the required time period
set forth in Section 3.28 hereof, any required reports or data
pertaining to the Mortgage Loans, 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, has been given to
the Servicer by the Master Servicer;
then, and in each and every such case, so long as a Servicer Default shall not
have been remedied, the Master Servicer, by notice in writing to the defaulting
Servicer and the Trustee, shall with respect to a payment default by the
Servicer pursuant to Section 8.01(i) of this Agreement and, upon the occurrence
and continuance of any other Servicer Default, may, and, at the written
direction of Certificateholders evidencing not less than 25% of the Voting
Rights shall, in addition to whatever rights the Trustee on behalf of the
Certificateholders may have under Section 7.03 and at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the defaulting Servicer under this Agreement and in and to
the related Mortgage Loans and the proceeds thereof without compensating the
defaulting Servicer for the same with respect to a default by the Servicer. On
or after the receipt by the defaulting Servicer of such written notice, all
authority and power of the Servicer under this Agreement whether with respect to
the related Mortgage Loans or otherwise, shall pass to and be vested in the
Master Servicer. Upon written request from the Master Servicer, the defaulting
Servicer shall prepare, execute and deliver, any and all documents and other
instruments, place in the Trustee's possession all Mortgage Files relating to
the related Mortgage Loans, and 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 related
Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The defaulting Servicer shall cooperate with the Master Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the defaulting Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the related Mortgage Loans or any related REO Property
(provided, however, that the defaulting Servicer shall continue to be entitled
to receive all amounts accrued or owing to it under this Agreement on or prior
to the date of such termination, whether in respect of Advances, Servicing
Advances, accrued and unpaid Servicing Fees or otherwise, and shall continue to
be entitled to the benefits of Section 7.04, notwithstanding any such
termination, with respect to events occurring prior to such termination). The
Master Servicer shall not have knowledge of any Servicer Default unless a
Responsible Officer of the Master Servicer has actual knowledge or unless
written notice of such Servicer Default is received by the Master Servicer at
its address for notice and such notice references the Certificates, the Trust
Fund or this Agreement.
(b) In case one or more of the following events of default by the
Master Servicer (each, a "Master Servicer Default") shall occur and be
continuing, that is to say:
(i) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation
and warranty contained in Section 2.03, which 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 Depositor or the Trustee or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least twenty-five percent (25%) of the Voting Rights; or
(ii) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceeding, 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 ninety (90) days; or
(iii) the Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property;
(iv) the Master Servicer shall admit in writing its inability to pay its
debts generally 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; or
(v) failure by the Master Servicer to duly perform, within the required
time period, its obligations under Sections 4.14 or 4.15.
If a Master Servicer Default shall occur, then, and in each and every
such case, so long as such Master Servicer Default shall not have been remedied,
the Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Master Servicer (and to the Depositor if given by the
Trustee or to the Trustee if given by the Depositor) with a copy to each Rating
Agency, terminate all of the rights and obligations of the Master Servicer in
its capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise including, without limitation, the compensation payable to the
Master Servicer under this Agreement, shall pass to and be vested in the Trustee
pursuant to and under this Section, and, without limitation, the Trustee is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Master Servicer, 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. The Master Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the date of such termination and
shall continue to be entitled to the benefits of Section 7.03, notwithstanding
any such termination, with respect to events occurring prior to such
termination). For purposes of this Section 8.01, the Trustee shall not be deemed
to have knowledge of a Master Servicer Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Default is received by the Trustee and such notice
references the Certificates, the Trust or this Agreement. The Trustee shall
promptly notify the Rating Agencies of the occurrence of a Master Servicer
Default of which it has knowledge as provided above.
To the extent that the costs and expenses of the Trustee related to the
termination of the Master Servicer, appointment of a successor Master Servicer
or the transfer and assumption of the master servicing by the Trustee
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Default and
(ii) all costs and expenses associated with the complete transfer of the master
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Notwithstanding the above, the Trustee may, if it shall be unwilling to
continue to so act, or shall, if it is unable to so act, petition a court of
competent jurisdiction to appoint, or appoint on its own behalf, any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
and meeting such other standards for a successor master servicer as are set
forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the Master Servicer.
Section 8.02 Master Servicer to Act; Appointment of Successor.
On and after the time any Servicer receives a notice of termination
pursuant to Section 8.01, the Master Servicer shall become the successor to the
Servicer with respect to the transactions set forth or provided for herein and
after a transition period (not to exceed ninety (90) days), shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and applicable law including the
obligation to make Advances pursuant to Article V hereof, except as otherwise
provided herein; provided, however, that the Master Servicer's obligation to
make Advances in its capacity as Successor Servicer shall not be subject to such
90 day transition period and the Master Servicer will make any Advance required
to be made by the terminated Servicer on the Distribution Date on which the
terminated Servicer was required to make such Advance. Effective on the date of
such notice of termination, as compensation therefor, the Master Servicer shall
be entitled to all fees, costs and expenses relating to the Mortgage Loans that
the terminated Servicer would have been entitled to if it had continued to act
hereunder, provided, however, that the Master Servicer shall not be (i) liable
for any acts or omissions of the terminated Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law or determines
that such Advance, if made, would constitute a Nonrecoverable Advance, (iii)
responsible for expenses of the terminated Servicer pursuant to Section 2.03 or
(iv) obligated to deposit losses on any Permitted Investment directed by the
terminated Servicer. 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 Advances pursuant to Article VI of this Agreement or if it is
otherwise unable to so act, 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 the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any Successor Servicer shall (i) be an institution
that is a Xxxxxx Xxx and Freddie Mac approved seller/servicer in good standing,
that has a net worth of at least $15,000,000 and (ii) be willing to act as
Successor Servicer of the Mortgage Loans under this Agreement, and shall have
executed and delivered to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
terminated Servicer (other than any liabilities of the terminated Servicer
hereof incurred prior to termination of the Servicer under Section 8.01), with
like effect as if originally named as a party to this Agreement, provided that
each Rating Agency shall have acknowledged in writing 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. If
the Master Servicer assumes the duties and responsibilities of the terminated
Servicer in accordance with this Section 8.02, the Master Servicer shall not
resign as the Servicer until a Successor Servicer has been appointed and has
accepted such appointment. Pending appointment of a successor to the terminated
Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall 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 the Mortgage Loans or otherwise as it and such successor shall
agree; provided that no such compensation shall be in excess of that permitted
the terminated Servicer hereunder. 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 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 Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
The costs and expenses of the Master Servicer in connection with the
termination of the Servicer, appointment of a Successor Servicer and, if
applicable, any transfer of servicing, including, without limitation, all costs
and expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer or the Successor Servicer to
service the related Mortgage Loans properly and effectively, to the extent not
paid by the terminated Servicer as may be required herein shall be payable to
the Master Servicer from the Distribution Account pursuant to Section 3.32. Any
successor to the terminated Servicer as Successor Servicer under this Agreement
shall give notice to the applicable Mortgagors of such change of the Servicer
and shall, during the term of its service as Successor Servicer maintain in
force the policy or policies that the terminated Servicer is required to
maintain pursuant to Section 3.05.
Section 8.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer or the Master Servicer, the Trustee shall give prompt written notice
thereof to Certificateholders and to each Rating Agency.
(b) Within sixty (60) days after the occurrence of any Servicer Default
or Master Servicer Default, the Trustee shall transmit by mail to all
Certificateholders notice of each such Servicer Default or Master Servicer
Default hereunder known to the Trustee, unless such default shall have been
cured or waived.
Section 8.04 Waiver of Servicer Defaults and Master Servicer Defaults.
The Trustee may waive only by written notice from Certificateholders
evidencing 66-2/3 of the Voting Rights (unless such default materially and
adversely affects all Certificateholders, in which case the written direction
shall be from all of the Certificateholders) any default by a Servicer or Master
Servicer in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist, and
any Servicer Default or Master Servicer 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 in writing.
ARTICLE IX
CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section 9.01 Duties of Trustee and Securities Administrator.
(a) The Trustee, prior to the occurrence of a Master Servicer Default,
and after the curing or waiver of all Master Servicer Defaults, which may have
occurred, and the Securities Administrator each undertake to perform such duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. If a Master
Servicer Default has occurred and has not been cured or waived, 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. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
(b) Each of the Trustee and the Securities Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to it, which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
(c) The Trustee shall promptly remit to the Servicer any complaint,
claim, demand, notice or other document (collectively, the "Notices") delivered
to the Trustee as a consequence of the assignment of any Mortgage Loan hereunder
and relating to the servicing of the Mortgage Loans; provided than any such
notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) Prior to the occurrence of a Master Servicer Default and after the
curing or waiver of all such Master Servicer Defaults which may have
occurred with respect to the Trustee and at all times with respect to
the Securities Administrator, the duties and obligations of the Trustee
and the Securities Administrator shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the
Securities Administrator shall be liable except for the performance of
its duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Securities Administrator and, in
the absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely and shall be fully
protected in acting or refraining from acting, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be liable in
its individual capacity for an error of judgment made in good faith by
a Responsible Officer or Responsible Officers of the Trustee or an
officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or Securities Administrator,
respectively, was negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be liable
with respect to any action taken, suffered or omitted to be taken by it
in good faith and believed by it to be authorized or within the rights
or powers conferred upon it by this Agreement or in accordance with the
directions of the Holders of Certificates evidencing not less than 25%
of the aggregate Voting Rights of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator or exercising any trust or other power conferred upon the
Trustee or the Securities Administrator under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any default or Master Servicer Default unless a
Responsible Officer of the Trustee shall have actual knowledge thereof.
In the absence of such notice, the Trustee may conclusively assume
there is no such default or Master Servicer Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless
it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Trustee or the Securities Administrator be liable for
special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Trustee or the Securities Administrator has been advised of the
likelihood of such loss or damage and regardless of the form of action
and whether or not any such damages were foreseeable or contemplated;
and
(vii) None of the Sponsor, the Depositor or the Trustee shall be responsible
for the acts or omissions of the other, it being understood that this
Agreement shall not be construed to render them partners, joint
venturers or agents of one another.
Neither the Trustee nor the Securities Administrator shall be required to expend
or risk its own funds or otherwise incur liability, financial or otherwise, in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the terminated Servicer hereunder.
(e) All funds received by the Securities Administrator and required to
be deposited in the Distribution Account pursuant to this Agreement will be
promptly so deposited by the Securities Administrator.
Section 9.02 Certain Matters Affecting the Trustee and Securities
Administrator.
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may conclusively rely and
shall be fully protected in acting or refraining from acting in
reliance on any resolution or certificate of the Sponsor, the Depositor
or the Servicer, any certificates 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;
(ii) The Trustee and the Securities Administrator may consult with counsel
and any advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement, other than its obligation to give notices pursuant to 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 Trustee or the
Securities Administrator, as the case may be, reasonable security or
indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby. Nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of a Master Servicer Default of which a Responsible Officer
of the Trustee has actual knowledge (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to 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 his own affairs;
(iv) Neither the Trustee nor the Securities Administrator shall be liable in
its individual capacity 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;
(v) Prior to the occurrence of a Master Servicer Default hereunder and
after the curing or waiver of all Master Servicer Defaults which may
have occurred with respect to the Trustee and at all times with respect
to the Securities Administrator, neither the Trustee nor the Securities
Administrator shall 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 to do so
by Holders of Certificates evidencing not less than 25% of the
aggregate Voting Rights of the Certificates and provided that the
payment within a reasonable time to the Trustee or 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 Trustee or the Securities Administrator, as applicable, not
reasonably assured to the Trustee or the Securities Administrator, as
applicable, by the security afforded to it by the terms of this
Agreement, the Trustee or the Securities Administrator, as applicable,
may require reasonable indemnity against such expense or liability as a
condition to taking any such action. The reasonable expense of every
such examination shall be paid by the Certificateholders requesting the
investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or through Affiliates,
nominees, custodians, agents or attorneys. The Trustee shall not be
liable or responsible for the misconduct or negligence of any of the
Trustee's agents or attorneys or paying agent appointed hereunder by
the Trustee with due care;
(vii) Should the Trustee deem the nature of any action required on its part
to be unclear, the Trustee may require prior to such action that it be
provided by the Depositor with reasonable further instructions; 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 accountable for other than its gross negligence or willful
misconduct in the performance of any such act;
(viii) The Trustee shall not be required to give any bond or surety with
respect to the execution of the trust created hereby or the powers
granted hereunder;
(ix) The Trustee shall not have any duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by any Person pursuant to this
Agreement, or the eligibility of any Mortgage Loan for purposes of this
Agreement;
(x) The Trustee shall have no duty hereunder with respect to any complaint,
claim, demand, notice or other document it may receive or which may be
alleged to have been delivered or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however that the Trustee shall promptly remit to the Servicer upon
receipt any such complaint, claim, demand, notice or other document (i)
which is delivered to the Trustee at is Corporate Trust Office, (ii) of
which a Responsible Officer has actual knowledge or (iii) which
contains information sufficient to permit the Trustee to make a
determination that the real property to which such document relates is
a Mortgaged Property; and
(xi) The Trustee is hereby directed by the Depositor to execute the Swap
Agreement on behalf of the Supplemental Interest Trust, in the form
presented to it by the Depositor and shall have no responsibility for
the contents of the Swap Agreement, including, without limitation, the
representations and warranties contained therein. Any funds payable by
the Securities Administrator, on behalf of the Trustee, under the Swap
Agreement at closing shall be paid by the Depositor.
(xii) None of the Securities Administrator, the Master Servicer, the
Servicer, the Sponsor, the Depositor, the Custodian or the Trustee
shall be responsible for the acts or omissions of the others or of the
Swap Provider, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another.
Section 9.03 Trustee and Securities Administrator not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgements of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
9.12) shall be taken as the statements of the Depositor, and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 9.12), the Swap
Agreement, the Certificates (other than the signature of the Securities
Administrator and authentication of the Securities Administrator on the
Certificates) or of any Mortgage Loan except as expressly provided in Sections
2.02. The Securities Administrator's signature and authentication (or
authentication of its agent) on the Certificates shall be solely in its capacity
as Securities Administrator and shall not constitute the Certificates an
obligation of the Securities Administrator in any other capacity. The Trustee
and the Securities Administrator shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans.
Section 9.04 Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator in its individual
capacity or in any other capacity other than as Trustee or Securities
Administrator hereunder may become the owner or pledgee of any Certificates and
may transact business with other interested parties and their Affiliates with
the same rights it would have if it were not the Trustee or the Securities
Administrator.
Section 9.05 Fees and Expenses of Trustee and Securities Administrator.
The fees of the Trustee and the Securities Administrator hereunder
shall be paid in accordance with a side letter agreement with the Master
Servicer and at the sole expense of the Master Servicer. In addition, the
Trustee, the Securities Administrator, the Custodian and any director, officer,
employee or agent of the Trustee, the Securities Administrator and the Custodian
shall be indemnified by the Trust and held harmless against any loss, liability
or expense (including reasonable attorney's fees and expenses) incurred by the
Trustee, the Custodian or the Securities Administrator including any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its respective obligations and duties under this
Agreement and any and all other agreements related hereto, other than any loss,
liability or expense (i) for which the Trustee is indemnified by the Master
Servicer or the Servicer, (ii) that constitutes a specific liability of the
Trustee or the Securities Administrator pursuant to this Agreement or (iii) any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder by the Trustee or the
Securities Administrator or by reason of reckless disregard of obligations and
duties hereunder. In no event shall the Trustee or the Securities Administrator
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney's fees and expenses) incurred by the Trustee by reason of the Master
Servicer's willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer's
reckless disregard of its obligations and duties under this Agreement. The
indemnities in this Section 9.05 shall survive the termination or discharge of
this Agreement and the resignation or removal of the Master Servicer, the
Trustee, the Securities Administrator or the Custodian. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer's
own funds, without reimbursement from REMIC I therefor.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator.
The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Sponsor or any
Affiliate of the foregoing) organized and doing business under the laws of any
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 (or a member of a bank holding company whose capital and surplus is
at least $50,000,000) and subject to supervision or examination by federal or
state authority. If such corporation or association publishes reports of
conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 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 conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.
Additionally, the Securities Administrator (i) may not be an
originator, Master Servicer, Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator is in an institutional trust
department, (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 such rating acceptable to Fitch pursuant to a rating confirmation). If no
successor securities administrator shall have been appointed and shall have
accepted appointment within sixty (60) days after Xxxxx Fargo Bank, N.A., as
Securities Administrator, ceases to be the securities administrator pursuant to
this Section 9.06, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth herein as
the Trustee under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Trustee under this Agreement.
Xxxxx Fargo Bank, N.A. shall act as Securities Administrator for so long as it
is Master Servicer under this Agreement.
Section 9.07 Resignation and Removal of Trustee and Securities
Administrator.
The Trustee and the Securities Administrator may at any time resign
(including, without limitation, and in the case of the Securities Administrator,
upon the resignation or removal of the Master Servicer) and be discharged from
the trust hereby created by giving written notice thereof to the Depositor, to
the Master Servicer, to the Securities Administrator (or the Trustee, if the
Securities Administrator resigns) and to the Certificateholders. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
trustee or successor securities administrator by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee or successor securities
administrator, as applicable.
If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor, or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee or the Securities Administrator and
appoint a successor trustee or 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 to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 9.08.
Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.
Section 9.08 Successor Trustee or Securities Administrator.
Any successor trustee or successor securities administrator appointed
as provided in Section 9.07 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities administrator
instrument accepting such appointment hereunder and thereupon the resignation or
removal of the predecessor trustee or predecessor securities administrator shall
become effective and such successor trustee or 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 trustee or Securities
Administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all monies, held by it hereunder,
and the Depositor and the predecessor trustee or 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 trustee or successor securities administrator all
such rights, powers, duties and obligations.
No successor trustee or successor securities administrator shall accept
appointment as provided in this Section 9.08 unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 9.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section 9.08, the successor trustee
or successor securities administrator shall mail notice of the succession of
such trustee or securities administrator hereunder to all Holders of
Certificates. If the successor trustee or successor securities administrator
fails to mail such notice within ten days after acceptance of appointment, the
Depositor shall cause such notice to be mailed at the expense of the Trust Fund.
Section 9.09 Merger or Consolidation of Trustee or Securities
Administrator.
Any corporation, state bank or national banking association into which
the Trustee or Securities Administrator may be merged or converted or with which
it may be consolidated or any corporation, state bank or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee or the Securities Administrator shall be a party, or any corporation,
state bank or national banking association succeeding to substantially all of
the corporate trust business of the Trustee or Securities Administrator or shall
be the successor of the Trustee or Securities Administrator hereunder, provided
that such corporation shall be eligible under the provisions of Section 9.06
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 9.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the REMIC I or property securing the same 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 approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting 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 REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
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 IX. Each separate trustee and co-trustee, upon its acceptance of
the trust 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.
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 or co-trustee.
Section 9.11 Appointment of Office or Agency.
The Certificates may be surrendered for registration of transfer or
exchange at the Securities Administrator's office initially located at
[_______________________], and presented for final distribution at the Corporate
Trust Office of the Securities Administrator where notices and demands to or
upon the Securities Administrator in respect of the Certificates and this
Agreement may be served.
Section 9.12 Representations and Warranties.
The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator, the Servicer and the Depositor as applicable, as of
the Closing Date, that:
(i) It is a national banking association duly organized, validly existing
and in good standing under the laws of the United States of America.
(ii) The execution and delivery of this Agreement by it, and the performance
and compliance with the terms of this Agreement by it, will not violate
its articles of association or bylaws or 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 agreement or
other instrument to which it is a party or which is applicable to it or
any of its assets.
(iii) It has the full power and authority to enter into and consummate all
transactions contemplated by this Agreement, has duly authorized the
execution, delivery and performance of this Agreement, and has duly
executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid, legal and binding
obligation of it, enforceable against it in accordance with the terms
hereof, subject to (A) applicable bankruptcy, insolvency, receivership,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally, and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(v) It is not in violation of, and its execution and delivery of this
Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation, in its good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of it to perform its
obligations under this Agreement or its financial condition.
No litigation is pending or, to the best of its knowledge, threatened
against it, which would prohibit it from entering into this Agreement or, in its
good faith reasonable judgment, is likely to materially and adversely affect
either the ability of it to perform its obligations under this Agreement or its
financial condition.
Section 9.13 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies 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
the Trust Fund. The Securities Administrator, as agent on behalf of the Trust
Fund, shall do or refrain from doing, as applicable, the following: (a) the
Securities Administrator shall prepare and file, or cause to be prepared and
filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed 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 such 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 or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Securities Administrator shall apply for an employer identification number
with the Internal Revenue Service via a Form SS-4 or other comparable method for
each REMIC that is or becomes a taxable entity, and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 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 for the Trust Fund; (c) the
Securities Administrator shall make or cause to be made elections, on behalf of
each REMIC formed hereunder to be treated as a REMIC on the federal tax return
of such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) the Securities Administrator shall prepare and forward, or cause
to be prepared and forwarded, 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 without limitation, the calculation of any
original issue discount using the Prepayment Assumption; (e) the Securities
Administrator shall 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, or an agent (including a broker, nominee or other
middleman) of a Person that is not a Permitted Transferee, or a pass-through
entity in which a Person that is not a 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) the Securities
Administrator shall, to the extent under its control, conduct the affairs of the
Trust Fund at all times that any Certificates are outstanding so as to maintain
the status of each REMIC formed hereunder as a REMIC under the REMIC Provisions;
(g) the Securities Administrator shall not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC formed hereunder; (h) the Securities Administrator shall
pay, from the sources specified in the last paragraph of this Section 9.12, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC formed hereunder prior to the
termination of the Trust Fund 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) the
Trustee shall sign or cause to be signed federal, state or local income tax or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 9.13 requiring a signature thereon by the
Trustee; (j) the Securities Administrator shall maintain records relating to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and adjusted basis of the Trust Fund
property determined at such intervals as may be required by the Code, as may be
necessary to prepare the foregoing returns, schedules, statements or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) the Securities Administrator shall not enter
into any arrangement not otherwise provided for in this Agreement by which the
REMICs will receive a fee or other compensation for services nor permit the
REMICs to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code; and (m) as and when necessary and
appropriate, the Securities Administrator shall represent the Trust Fund 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 any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Securities Administrator to perform its duties
as set forth herein, the Depositor shall provide, or cause to be provided, to
the Securities Administrator within 10 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, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor, any such additional information or data that the
Securities Administrator may, from time to time, request in order to enable the
Securities Administrator to perform its duties as set forth herein. 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.
In the event that any tax is imposed on "prohibited transactions" of
any of REMIC as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to any of REMIC after the startup day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon any
REMIC, and is not paid as otherwise provided for herein, such tax shall be paid
by (i) the Securities Administrator, if any such other tax arises out of or
results from a breach by the Securities Administrator of any of its obligations
under this Section, (ii) any party hereto (other than the Securities
Administrator) to the extent any such other tax arises out of or results from a
breach by such other party of any of its obligations under this Agreement or
(iii) in all other cases, or in the event that any liable party hereto fails to
honor its obligations under the preceding clauses (i) or (ii), any such tax will
be paid first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the following order of priority: first, to the Class
[__] Certificates; second, to the Class [__] Certificates; third, to the Class
[__] Certificates; fourth, to the Class [__] Certificates; fifth, to the Class
[__] Certificates; sixth, to the Class [__] Certificates; seventh, to the Class
[__] Certificates; eighth, to the Class [__] Certificates; ninth, to the Class
[__] Certificates; tenth, to the Class [__] Certificates; eleventh, to the Class
[__] Certificates; and twelfth, to the Senior Certificates (pro rata based on
the amounts to be distributed). Notwithstanding anything to the contrary
contained herein, to the extent that such tax is payable by the Holder of any
Certificates, the Securities Administrator is hereby authorized to retain on any
Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Securities Administrator
shall include in its monthly report to Certificateholders distributions to such
parties taking into account the priorities described in the second preceding
sentence. The Securities Administrator agrees to promptly notify in writing the
party liable for any such tax of the amount thereof and the due date for the
payment thereof. Notwithstanding the foregoing, however, in no event shall the
Securities Administrator have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of this Agreement, (2) for any losses
other than arising out of a grossly negligent performance by the Securities
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Sponsor, the Securities Administrator, the Master Servicer and
the Trustee created hereby with respect to the Trust Fund shall terminate (other
than the obligations of the Master Servicer to the Trustee pursuant to Section
9.05 and of the Securities Administrator to make payments in respect of the
REMIC I Regular Interests or the Classes of Certificates as hereinafter set
forth) upon the earlier of (a) the Master Servicer's exercise of its optional
right to purchase the Mortgage Loans and related REO Properties (the "Cleanup
Call") 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, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of twenty-one (21) years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof and (ii) the Latest Possible Maturity Date.
The Cleanup Call shall be exercisable at a price (the "Termination
Price") equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan, (ii) accrued interest thereon at the applicable Mortgage Rate to,
but not including, the first day of the month of such purchase, (iii) the
appraised value of any related REO Property (up to the Stated Principal Balance
of the related Mortgage Loan), such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee, (iv) unreimbursed
out-of-pocket costs of the Securities Administrator, the Master Servicer, the
Servicer or the Trustee, including unreimbursed servicing advances and the
principal portion of any unreimbursed Advances, made on the related Mortgage
Loans prior to the exercise of such repurchase right, (v) any Swap Termination
Payment payable to the Swap Provider which remains unpaid or which is due to
such Cleanup Call and (vi) any other amounts due and owing to the Trustee, the
Securities Administrator, the Master Servicer and the Custodian payable pursuant
to this Agreement or the Custodial Agreement.
The right to exercise the Cleanup Call pursuant to the preceding
paragraph shall be exercisable if the Stated Principal Balance of all of the
Mortgage Loans at the time of any such repurchase, is less than or equal to ten
percent (10%) of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans.
Section 10.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Securities Administrator
determines based on the reports delivered by the Master Servicer under this
Agreement that there are no Outstanding Mortgage Loans, and no other funds or
assets in the Trust Fund other than the funds in the Distribution Account, the
Securities Administrator shall notify the Trustee and send a final distribution
notice promptly to each related Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Trustee and the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the office of the Securities Administrator set forth herein. If the Master
Servicer elects to terminate the Trust Fund pursuant to Section 10.01, at least
twenty (20) days prior to the date notice is to be mailed to the
Certificateholders, the Master Servicer shall notify the Securities
Administrator and the Trustee of the date the Master Servicer intends to
terminate the Trust Fund. The Master Servicer shall remit the Termination Price
to the Securities Administrator on behalf of the Trust Fund on the Business Day
prior to the Distribution Date for such Optional Termination by the Master
Servicer.
Notice of the exercise of the Cleanup Call, specifying the Distribution
Date on which the Certificateholders may surrender their Certificates for
payment of the final distribution and cancellation, shall be given promptly by
the Securities Administrator by letter to the Certificateholders mailed no later
than the fifteenth (15th) day of the month of such final distribution. Any such
notice shall specify (a) the Distribution Date upon which final distribution on
the Certificates will be made upon presentation and surrender of the
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 to each Rating
Agency at the time such notice is given to the Certificateholders.
In the event such notice is given, the Master Servicer shall deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon certification to the Trustee by the Securities Administrator
of the making of such final deposit, the Trustee shall promptly release or cause
to be released to the Master Servicer the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments delivered to it and necessary to effectuate such transfer.
Upon presentation and surrender of the related Certificates, the
Securities Administrator shall cause to be distributed to Certificateholders of
each Class the amounts allocable to such Certificates held in the Distribution
Account in the order and priority set forth in Section 5.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six (6) months after the date specified in
the above mentioned written notice, the Securities Administrator shall give a
second written notice to the remaining affected Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six (6) 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 affected Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within two (2) years after the second notice all affected Certificates shall not
have been surrendered for cancellation, the related Residual Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto and the Securities Administrator shall release such funds
upon written direction.
Section 10.03 Additional Termination Requirements.
In the event of (i) the exercise by the Master Servicer of the Cleanup
Call pursuant to the terms of this Agreement, or (ii) the final payment on or
other liquidation of the last Mortgage Loan or REO Property in REMIC I pursuant
to Section 10.01, the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Master Servicer
(in the case of the exercise of the Cleanup Call) or the Depositor, to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 10.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
(1) The Master Servicer (in the case of the exercise of the
Cleanup Call) or the Depositor (in all other cases) shall
establish a ninety-day liquidation period and notify the
Trustee thereof, and the Trustee shall in turn specify the
first day of such period in a statement attached to the tax
return for each REMIC pursuant to Treasury Regulation Section
1.860F-1. The Master Servicer or the Depositor, as applicable,
shall satisfy all the requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder,
as evidenced by an Opinion of Counsel obtained at the expense
of the Master Servicer or the Depositor, as applicable;
(2) During such ninety-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the
Master Servicer (in the case of the exercise of the Cleanup
Call) or the Depositor (in all other cases) shall sell all of
the assets of REMIC I for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause
to be distributed or credited, to the Holders of the related
Residual Certificates all cash on hand in the Trust Fund
(other than cash retained to meet claims), and the Trust Fund
shall terminate at that time.
By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer (in the case of the exercise of the Cleanup Call)
or the Depositor (in all other cases) to specify the ninety-day liquidation
period for REMIC I, REMIC II and REMIC III, which authorization shall be binding
upon all successor Certificateholders.
The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer or the Depositor, as applicable, and the receipt of the Opinion of
Counsel referred to in Section 10.03(1) and to take such other action in
connection therewith as may be reasonably requested by the Master Servicer or
the Depositor, as applicable.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by parties hereto,
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein, to change the manner in which the
Distribution Account maintained by the Securities Administrator or the Custodial
Accounts maintained by the Servicer are maintained or to make such other
provisions with respect to matters or questions arising under this Agreement as
shall not be inconsistent with any other provisions herein if such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder (or the Swap Provider unless the
Swap Provider shall have consented to the amendment); provided that any such
amendment shall be deemed not to adversely affect in any material respect the
interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders or the Swap Provider, the parties hereto may at any time and
from time to time amend this Agreement to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of each REMIC created hereunder as a REMIC under the Code or to
avoid or minimize the risk of the imposition of any tax on any of REMIC pursuant
to the Code that would be a claim against any of REMIC at any time prior to the
final redemption of the Certificates, provided that the Trustee has 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 appropriate to
maintain such qualification or to avoid or minimize the risk of the imposition
of such a tax.
This Agreement may also be amended from time to time by the parties
hereto and the Holders of each Class of Certificates affected thereby evidencing
over 50% of the Voting Rights of such Class or Classes for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates (or if such amendment modifies the rights of the Swap Provider
hereunder, with the consent of the Swap Provider); provided 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) cause any REMIC created hereunder to cease
to qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates
of each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of all Certificates of such Class then
outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not (other than an amendment
pursuant to clause (ii) of, and in accordance with, the preceding paragraph)
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to cease to qualify as a REMIC at any time that any Certificates are
outstanding. Further, nothing in this Agreement shall require the Trustee to
enter into an amendment without receiving an Opinion of Counsel, satisfactory to
the Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and (ii) that all requirements for amending this Agreement (including
any consent of the applicable Certificateholders) have been complied with. None
of the parties hereto shall consent to an amendment to this Agreement for which
the consent of the Swap Provider is expressly required without the consent of
the Swap Provider, which consent shall not be unreasonably withheld.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 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.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Sponsor or the Depositor shall effect such recordation
at the Trust's expense upon the request in writing of a Certificateholder, but
only if such direction is accompanied by an Opinion of Counsel (provided at the
expense of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
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 11.03 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 WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF OTHER THAN THE PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
Section 11.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Sponsor to the Depositor, and by the Depositor to the Trust Fund be, and be
construed as, an absolute sale thereof to the Depositor or the Trust Fund, as
applicable. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Sponsor to the Depositor, or by the
Depositor to the Trust Fund. However, in the event that, notwithstanding the
intent of the parties, such assets are held to be the property of the Sponsor or
the Depositor, as applicable, or if for any other reason this Agreement is held
or deemed to create a security interest in 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) each conveyance provided for
in this Agreement shall be deemed to be an assignment and a grant by the Sponsor
or the Depositor, as applicable, for the benefit of the Certificateholders and
the Swap Provider, of a security interest in all of the assets that constitute
the Trust Fund, 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
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
Section 11.05 Notices.
(a) The Trustee 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 Servicer Default or Master Servicer
Default that has not been cured;
(iii) The resignation or termination of the Servicer, the Master
Servicer or the Trustee and the appointment of any successor;
(iv) The final payment to Certificateholders;
(v) Each annual statement as to compliance described in Section
4.14; and
(vi) Each attestation report described in Section 4.15.
In addition, the Servicer shall promptly furnish to each Rating Agency
copies of the following:
(i) Each Annual Statement of Compliance described in Section 3.13
of this Agreement; and
(ii) Each Assessment of Compliance and Attestation Report described
in Section 3.14.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered at or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
or by facsimile transmission to a number provided by the appropriate party if
receipt of such transmission is confirmed to (i) in the case of the Depositor,
Nomura Home Equity Loan, Inc., 2 World Financial Center, Building B, New York,
New York 10281 Attention: Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
Series [___________]; (ii) in the case of the Sponsor, Nomura Credit & Capital,
Inc., 2 World Financial Center, Building B, New York, New York 10281, Attention:
Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series [___________] or
such other address as may be hereafter furnished to the other parties hereto by
the Sponsor in writing; (iii) in the case of the Servicer, [________________],
[__________________________________________]; (iv) in the case of the Trustee,
at each Corporate Trust Office or such other address as the Trustee may
hereafter furnish to the other parties hereto; (v) in the case of
[________________], as Custodian, [________________] (vi) in the case of the
Securities Administrator, its Corporate Trust Office; (vii) in the case of the
Master Servicer, [________________] (or for overnight deliveries,
[___________________], Attention: [________________]) and (viii) in the case of
the Rating Agencies, (a) Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group and (b) Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Home Equity Monitoring. Any notice delivered to the Sponsor or the Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register; any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Section 11.06 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 11.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Sponsor or the Depositor.
Section 11.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, 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
Fund, 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 Xxxxxx previously shall have given to the Trustee, a written notice
of such Servicer Default and of the continuance thereof, as hereinbefore
provided, the Holders of Certificates evidencing not less than twenty five
percent (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
indemnity satisfactory to it as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee or for sixty (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 11.08, each
and every Certificateholder or the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 11.09 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 11.10 Third Party Beneficiaries.
The Swap Provider is an express third party beneficiary to this
Agreement, and shall have to the right to enforce the provisions of this
Agreement.
Section 11.11 Intention of the Parties and Interpretation.
Each of the parties acknowledges and agrees that the purpose of
Sections 3.13, 3.14, 3.18, 4.14, 4.15 and 5.13 of this Agreement is to
facilitate compliance by the Sponsor and the Depositor with the provisions of
Regulation AB promulgated by the SEC under the Exchange Act (17 C.F.R. xx.xx.
229.1100 - 229.1123), as such may be amended from time to time and subject to
clarification and interpretive advice as may be issued by the staff of the SEC
from time to time. Therefore, each of the parties agrees that (a) the
obligations of the parties hereunder shall be interpreted in such a manner as to
accomplish that purpose, (b) the parties' obligations hereunder will be
supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB, (c) the parties
shall comply with requests made by the Sponsor or the Depositor for delivery of
additional or different information as the Sponsor or the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB, and (d) no amendment of this Agreement shall be required to effect any such
changes in the parties' obligations as are necessary to accommodate evolving
interpretations of the provisions of Regulation AB.
IN WITNESS WHEREOF, the Depositor, the Sponsor, the Servicer, the
Master Servicer, the Securities Administrator and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
NOMURA HOME EQUITY LOAN, INC.,
as Depositor
By:
-----------------------------------
Name:
Title:
NOMURA CREDIT & CAPITAL, INC.,
as Sponsor
By:
-----------------------------------
Name:
Title:
[_______________________________],
as Master Servicer and Securities
Administrator
By:
-----------------------------------
Name:
Title:
[_______________________________],
as Trustee
By:
-----------------------------------
Name:
Title:
[_______________________________],
as Servicer
By:
-----------------------------------
Name:
Title:
With respect to Sections 3.33 and 3.34
[_______________________________]
CREDIT RISK MANAGER
By:
-----------------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of [___________]before me, a notary public in
and for said State, appeared _____________, personally known to me on the basis
of satisfactory evidence to be an authorized representative of Nomura Home
Equity Loan, Inc., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of [___________] before me, a notary public
in and for said State, appeared_______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Nomura
Credit & Capital, Inc., that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _________________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[________________], one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[________________] that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[___________________] that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
