NEW CENTURY MORTGAGE SECURITIES, INC.
Depositor
NC CAPITAL CORPORATION
and
NEW CENTURY MORTGAGE CORPORATION
Responsible Parties
EMC MORTGAGE CORPORATION
Master Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2003
New Century Home Equity Loan Trust, Series 2003-B
Asset Backed Pass-Through Certificates
Series 2003-B
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.................................................-2-
SECTION 1.02. Allocation of Certain Interest Shortfalls....................-49-
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of the Mortgage Loans.............................-51-
SECTION 2.02. Acceptance of REMIC I by Trustee.............................-53-
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
the Responsible Parties......................................-54-
SECTION 2.04. Reserved.....................................................-57-
SECTION 2.05. Representations, Warranties and Covenants of the
............................................................-57-
SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I
Interest.....................................................-59-
SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance of
REMIC II by the Trustee......................................-59-
2.08. [Reserved]...................................................-59-
SECTION 2.09. Issuance of Class R Certificates.............................-59-
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as ...................................-61-
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-
Servicers....................................................-63-
SECTION 3.03. Successor Sub-Servicers......................................-64-
SECTION 3.04. Liability of the Master Servicer.............................-64-
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the
Trustee or Certificateholders................................-65-
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by the
Trustee......................................................-65-
SECTION 3.07. Collection of Certain Mortgage Loan Payments.................-66-
SECTION 3.08. Sub-Servicing Accounts.......................................-66-
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.....................................................-67-
SECTION 3.10. Collection Account and Distribution Account..................-67-
SECTION 3.11. Withdrawals from the Collection Account and Distribution
Account......................................................-70-
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SECTION 3.12. Investment of Funds in the Collection Account and the
Distribution Account.........................................-71-
SECTION 3.13. [Reserved]...................................................-73-
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage............................................-73-
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements
............................................................-74-
SECTION 3.16. Realization Upon Defaulted Mortgage Loans....................-75-
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files..............-77-
SECTION 3.18. Servicing Compensation.......................................-79-
SECTION 3.19. Reports to the Trustee; Collection Account Statements........-79-
SECTION 3.20. Statement as to Compliance...................................-79-
SECTION 3.21. Independent Public Accountants' Servicing Report.............-80-
SECTION 3.22. Access to Certain Documentation..............................-80-
SECTION 3.23. Title, Management and Disposition of REO Property............-81-
SECTION 3.24. Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls..........................................-84-
SECTION 3.25. Obligations of the Master Servicer in Respect of Mortgage Rates
and Monthly Payments.........................................-84-
SECTION 3.26. Advance Facility.............................................-84-
3.28 Net WAC Rate Carryover Reserve Account.............................-85-
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions................................................-88-
SECTION 4.02. Statements to Certificateholders.............................-99-
SECTION 4.03. Remittance Reports; P&I Advances............................-102-
SECTION 4.04. Allocation of Realized Losses...............................-104-
SECTION 4.05. Compliance with Withholding Requirements....................-106-
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificate.............................................-109-
SECTION 5.02. Registration of Transfer and Exchange of Certificates.......-111-
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...........-115-
SECTION 5.04. Persons Deemed Owners.......................................-115-
SECTION 5.05. Certain Available Information...............................-116-
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the .........................-117-
SECTION 6.02. Merger or Consolidation of the Depositor or the ............-117-
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SECTION 6.03. Limitation on Liability of the Depositor, the Master Servicer
and Others..................................................-117-
SECTION 6.04. Limitation on Resignation of the Master Servicer............-118-
SECTION 6.05. Rights of the Depositor in Respect of the Master Servicer...-119-
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default...........................-120-
SECTION 7.02. Trustee to Act; Appointment of Successor....................-122-
SECTION 7.03. Notification to Certificateholders..........................-123-
SECTION 7.04. Waiver of Master Servicer Events of Default.................-123-
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01. Duties of Trustee.................................................-124-
8.02. Certain Matters Affecting the Trustee.............................-125-
8.03. Trustee Not Liable for Certificates or Mortgage Loans.............-126-
8.04. Trustee May Own Certificates......................................-126-
8.05. Trustee's Fees and Expenses.......................................-127-
8.06. Eligibility Requirements for Trustee..............................-127-
8.07. Resignation and Removal of the Trustee............................-128-
8.08. Successor Trustee.................................................-128-
8.09. Merger or Consolidation of Trustee................................-129-
8.10. Appointment of Co-Trustee or Separate Trustee.....................-129-
8.11. [Reserved]........................................................-130-
8.12. Appointment of Office or Agency...................................-130-
8.13. Representations and Warranties of the Trustee.....................-131-
ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or Liquidation of All Mortgage
Loans.......................................................-132-
SECTION 9.02 Additional Termination Requirements.........................-133-
ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration........................................-135-
SECTION 10.02. Prohibited Transactions and Activities......................-137-
SECTION 10.03. Master Servicer and Trustee Indemnification.................-138-
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.................................................-139-
SECTION 11.02. Recordation of Agreement; Counterparts....................-140-
SECTION 11.03. Limitation on Rights of Certificateholders................-141-
SECTION 11.04. Governing Law.............................................-141-
SECTION 11.05. Notices...................................................-141-
SECTION 11.06. Severability of Provisions................................-142-
SECTION 11.07. Notice to Rating Agencies.................................-142-
SECTION 11.08. Article and Section References............................-143-
SECTION 11.09. Grant of Security Interest................................-143-
SECTION 11.10. Waiver of Jury Trial......................................-144-
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EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class A-3A Certificate
Exhibit A-4 Form of Class A-3B Certificate
Exhibit A-5 Form of Class M-1 Certificate
Exhibit A-6 Form of Class M-2 Certificate
Exhibit A-7 Form of Class M-3 Certificate
Exhibit A-8 Form of Class M-4 Certificate
Exhibit A-9 Form of Class M-5 Certificate
Exhibit A-10 Form of Class M-6 Certificate
Exhibit A-11 Form of Class CE Certificate
Exhibit A-12 Form of Class P Certificate
Exhibit A-13 Form of Class R Certificate
Exhibit B Representations and Warranties Regarding the Mortgage Loans
Exhibit C-1 Form of Trustee's Initial Certification
Exhibit C-2 Form of Trustee's Final Certification
Exhibit D Form of Underlying Security Purchase Agreement
Exhibit E Request for Release
Exhibit F-1 Form of Transferor Representation Letter and Form of Transferee
Representation Letter in Connection with Transfer of the Class CE
Certificates, Class P Certificates or Residual Certificates
Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2 Form of Transfer Affidavit and Agreement and Form of Transferor
Affidavit in Connection with Transfer of Residual Certificates
Exhibit G Form of Certification with respect to ERISA and the Code
Exhibit H Form of Report Pursuant to Section 4.06
Exhibit I Form of Lost Note Affidavit
Exhibit J-1 Form of Certification to be Provided by the Depositor with Form
10-K
Exhibit J-2 Form of Certification to be Provided to the Depositor by the
Trustee
Exhibit J-3 Form of Certification to be Provided to the Depositor by the
Master Servicer
Exhibit K [Reserved]
Exhibit L Form of Officer's Certificate Regarding Annual Statement of
Compliance
Schedule 1 Mortgage Loan Schedule
Schedule 2 Prepayment Charge Schedule
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This Pooling and Servicing Agreement, is dated and effective
as of November 1, 2003, among NEW CENTURY MORTGAGE SECURITIES, INC. as
Depositor, NC CAPITAL CORPORATION and NEW CENTURY MORTGAGE CORPORATION as
Responsible Parties, EMC MORTGAGE CORPORATION, as Master Servicer and DEUTSCHE
BANK NATIONAL TRUST COMPANY as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which in the aggregate will evidence the
entire beneficial ownership interest in each REMIC (as defined herein) created
hereunder. The Trust Fund will consist of a segregated pool of assets comprised
of the Mortgage Loans and certain other related assets subject to this
Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than the Master Servicer Prepayment Charge Payment Amount,
the Cap Contracts and the Net WAC Rate Carryover Reserve Account) subject to
this 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 be
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the REMIC I Remittance Rate, the initial Uncertificated Balance
and, solely 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 (as defined herein). None of the REMIC I Regular Interests
will be certificated.
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REMIC I Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ----------------
I-LTAA Variable(2) $436,409,923.77 October 25, 2033
I-LTA1 Variable(2) $ 1,886,115.00 October 25, 2033
I-LTA2 Variable(2) $ 661,475.00 October 25, 2033
I-LTA3A Variable(2) $ 823,550.00 October 25, 2033
I-LTA3B Variable(2) $ 235,920.00 October 25, 2033
I-LTM1 Variable(2) $ 273,870.00 October 25, 2033
I-LTM2 Variable(2) $ 227,110.00 October 25, 2033
I-LTM3 Variable(2) $ 71,250.00 October 25, 2033
I-LTM4 Variable(2) $ 60,120.00 October 25, 2033
I-LTM5 Variable(2) $ 40,080.00 October 25, 2033
I-LTM6 Variable(2) $ 66,795.00 October 25, 2033
I-LTZZ Variable(2) $ 4,560,039.97 October 25, 2033
I-LT1SUB Variable(2) $ 8.848.47 October 25, 2033
I-LT1GRP Variable(2) $ 46,570.77 October 25, 2033
I-LT2SUB Variable(2) $ 3,103.21 October 25, 2033
I-LT2GRP Variable(2) $ 16,332.71 October 25, 2033
I-LT3SUB Variable(2) $ 4,970.38 October 25, 2033
I-LT3GRP Variable(2) $ 26,159.78 October 25, 2033
I-LTXX Variable(2) $445,210,263.43 October 25, ▇▇▇▇
▇-▇▇▇ Variable(2) $ 100.00 October 25, 2033
_______________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately 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 "REMIC I Remittance Rate"
herein.
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REMIC II
--------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated
Classes of Certificates.
Initial Aggregate
Certificate Principal Latest Possible
Designation Pass-Through Rate Balance Maturity Date(1)
----------- ----------------- --------------------- -----------------
Class A-1 Variable(2) $377,223,000.00 October 25, 2033
Class A-2 Variable(2) $132,295,000.00 October 25, 2033
Class A-3A Variable(2) $164,710,000.00 October 25, 2033
Class A-3B Variable(2) $ 47,184,000.00 October 25, 2033
Class M-1 Variable(2) $ 54,774,000.00 October 25, 2033
Class M-2 Variable(2) $ 45,422,000.00 October 25, 2033
Class M-3 Variable(2) $ 14,250,000.00 October 25, 2033
Class M-4 Variable(2) $ 12,024,000.00 October 25, 2033
Class M-5 Variable(2) $ 8,016,000.00 October 25, 2033
Class M-6 Variable(2) $ 13,359,000.00 October 25, 2033
Class CE Variable(2) $ 21,375,497.49(3) October 25, 2033
Class P N/A(5) $ 100.00 October 25, 2033
_______________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loans with the latest maturity date has been designated as
the "latest possible maturity date" for each Class of Certificates.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class CE Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class CE Certificates
outstanding from time to time which shall equal the Uncertificated Balance
of the REMIC I Regular Interests. The Class CE Certificates will not accrue
interest on their Certificate Principal Balance.
(4) The Class P Certificates will not accrue interest.
As of the Cut-off Date, the Group I Mortgage Loans had an
aggregate Stated Principal Balance equal to $465,707,716.02, the Group II
Mortgage Loans had an aggregate Stated Principal Balance equal to
$163,327,125.08 and the Group III Mortgage Loans had an aggregate Stated
Principal Balance equal to $261,597,756.39.
In consideration of the mutual agreements herein contained,
the Depositor, the Responsible Parties, the Master Servicer and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.
"Accepted Servicing Practices": The servicing standards set
forth in Section 3.01.
"Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate or Class CE Certificate and each Distribution
Date, interest accrued during the related Interest Accrual Period at the
Pass-Through Rate for such Certificate for such Distribution Date on the
Certificate Principal Balance, in the case of the Class A Certificates and the
Mezzanine Certificates, or on the Notional Amount, in the case of the Class CE
Certificates, of such Certificate immediately prior to such Distribution Date.
The Class P Certificates are not entitled to distributions in respect of
interest and, accordingly, will not accrue interest. All distributions of
interest on the Class A Certificates and the Mezzanine Certificates will be
calculated on the basis of a 360-day year and the actual number of days in the
applicable Interest Accrual Period. All distributions of interest on the Class
CE Certificates will be based on a 360-day year consisting of twelve 30-day
months. Accrued Certificate Interest with respect to each Distribution Date, as
to any Class A Certificate, Mezzanine Certificate or Class CE Certificate, shall
be reduced by an amount equal to the portion allocable to such Certificate
pursuant to Section 1.02 hereof of the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such Distribution Date to the extent not covered
by payments pursuant to Section 3.24 and (b) the aggregate amount of any Relief
Act Interest Shortfall, if any, for such Distribution Date. In addition, Accrued
Certificate Interest with respect to each Distribution Date, as to any Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Class CE Certificate of Realized Losses, if any, pursuant to Section 4.04
hereof.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans
identified in the Mortgage Loan Schedule as having a Mortgage Rate that is
subject to adjustment.
"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 Mortgage Loan Schedule.
"Advancing Servicer": As defined in Section 3.26(a) hereof.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
-2-
voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining undistributed from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account as of the
close of business on the related Determination Date, (b) the aggregate of any
amounts received in respect of an REO Property withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls for
such Distribution Date pursuant to Section 3.24, (d) the aggregate of any P&I
Advances made by the Master Servicer for such Distribution Date pursuant to
Section 4.03 and (e) the aggregate of any advances made by the Trustee as
successor Master Servicer or any other successor Master Servicer for such
Distribution Date pursuant to Section 7.02, reduced (to not less than zero), by
(2) the portion of the amount described in clause (1)(a) above that represents
(i) Monthly Payments on the Mortgage Loans received from a Mortgagor on or prior
to the Determination Date but due during any Due Period subsequent to the
related Due Period, (ii) Principal Prepayments on the Mortgage Loans received
after the related Prepayment Period (together with any interest payments
received with such Principal Prepayments to the extent they represent the
payment of interest accrued on the Mortgage Loans during a period subsequent to
the related Prepayment Period), (iii) Liquidation Proceeds and Insurance
Proceeds received in respect of the Mortgage Loans after the related Prepayment
Period, (iv) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Responsible Parties or any Sub-Servicer pursuant to
Section 3.11 or Section 3.12 or otherwise payable in respect of Extraordinary
Trust Fund Expenses, (v) the Trustee Fee payable from the Distribution Account
pursuant to Section 8.05 and (vi) amounts deposited in the Collection Account or
the Distribution Account in error.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting
-3-
from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificate": The Class A Certificates and the
Mezzanine Certificates for so long as the Certificates of such Class shall be
registered in the name of the Depository or its nominee.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings institutions in the State of Delaware, the State
of New York, the State of California, the State of Texas or in the city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"Cap Contracts": Collectively, the Class A-2 Cap Contract, the
Class A-3 Cap Contract and the Mezzanine Cap Contract.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal amount in excess of the principal
balance of any existing first mortgage or subordinate mortgage on the related
Mortgaged Property and related closing costs.
"Certificate": Any one of the Asset Backed Pass-Through
Certificates, Series 2003-B, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, ▇▇▇▇▇ ▇-▇▇, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class CE, Class P or
Class R issued under this Agreement.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (or the Notional Amount, in the case of the Class CE
Certificates) of such Class of Certificates on such Distribution Date (after
giving effect to any distributions of principal and allocations of Realized
Losses in reduction of the Certificate Principal Balance (or the Notional
Amount, in the case of the Class CE Certificates) of such Class of Certificates
to be made on such Distribution Date), and the denominator of which is the
initial
-4-
aggregate Certificate Principal Balance (or the Notional Amount, in the case of
the Class CE Certificates) of such Class of Certificates as of the Closing Date.
"Certificate Margin": With respect to the Class A-1
Certificates and REMIC I Regular Interest I-LTA1 for purposes of the definition
of Marker Rate, 0.360% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans (and properties acquired in respect thereof) remaining in
the Trust Fund is reduced to less than 10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date and 0.720% in the case of
each Distribution Date thereafter.
With respect to the Class A-2 Certificates and REMIC I Regular
Interest I-LTA2 for purposes of the definition of Marker Rate, 0.360% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.720% in the case of each Distribution Date
thereafter.
With respect to the Class A-3A Certificates and REMIC I
Regular Interest I-LTA3A for purposes of the definition of Marker Rate, 0.240%
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.480% in the case of each Distribution Date
thereafter.
With respect to the Class A-3BCertificates and REMIC I Regular
Interest I-LTA3B or purposes of the definition of Marker Rate, 0.570% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 1.140% in the case of each Distribution Date
thereafter.
With respect to the Class M-1 Certificates and REMIC I Regular
Interest I-LTM1 for purposes of the definition of Marker Rate, 0.650% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.975% in the case of each Distribution Date
thereafter.
With respect to the Class M-2 Certificates and REMIC I Regular
Interest I-LTM2 for purposes of the definition of Marker Rate, 1.650% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the sum of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date and 2.475% in the case of each
Distribution Date thereafter.
With respect to the Class M-3 Certificates and REMIC I Regular
Interest I-LTM3 for
-5-
purposes of the definition of Marker Rate, 1.850% in the case of each
Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
10% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date and 2.775% in the case of each Distribution Date thereafter.
With respect to the Class M-4 Certificates and REMIC I Regular
Interest I-LTM4 for purposes of the definition of Marker Rate, 3.000% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 4.500% in the case of each Distribution Date
thereafter.
With respect to the Class M-5 Certificates and REMIC I Regular
Interest I-LTM5 for purposes of the definition of Marker Rate, 3.750% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 5.625% in the case of each Distribution Date
thereafter.
With respect to the Class M-6 Certificates and REMIC I Regular
Interest I-LTM6 for purposes of the definition of Marker Rate, 4.500% in the
case of each Distribution Date through and including the Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and 6.750% in the case of each Distribution Date
thereafter.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus all
distributions allocable to principal made thereon and in the case of a Mezzanine
Certificate, Realized Losses allocated thereto on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the first Distribution Date, the initial Certificate Principal Balance
of such Certificate, as stated on the face thereof). With respect to each Class
CE Certificate as of any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times the excess, if any, of
(A) the then aggregate Uncertificated Balances of the REMIC I Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.
"Certificate Register": The register maintained pursuant to
Section 5.02.
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"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A Certificate": Any one of the Class A-1 Certificates,
the Class A-2 Certificates or the Class A-3 Certificates.
"Class A Principal Distribution Amount": The sum of (i) the
Class ▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇) the Class A-2 Principal
Distribution Amount and (iii) the Class A-3 Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class A-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal Balance
of the Class A-1 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 62.00% and (ii) the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group I Allocation Percentage of
$4,453,162.98.
"Class A-2 Cap Contracts": The cap contracts between the
Trustee and the counterparty thereunder for the benefit of the Holders of the
Class A-2 Certificates.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class A-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal Balance
of the Class A-2 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 62.00% and (ii) the aggregate Stated
Principal Balance of the Group II Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group II Allocation Percentage of
$4,453,162.98.
"Class A-3 Cap Contract": The cap contract between the Trustee
and the counterparty thereunder for the benefit of the Holders of the Class A-3
Certificates.
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"Class A-3 Certificate": Any one of the Class A-3A
Certificates or the Class A-3B Certificates.
"Class A-3A Certificate": Any one of the Class A-3A
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-3 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A-3B Certificate": Any one of the Class A-3B
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-4 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.
"Class A-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal Balance
of the Class A-3 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 62.00% and (ii) the aggregate Stated
Principal Balance of the Group III Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group III Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Group III Allocation Percentage of
$4,453,162.98.
"Class CE Certificate": Any one of the Class CE Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date) and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 74.30% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $4,453,162.98.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6
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and evidencing a Regular Interest in REMIC II for purposes of the REMIC
Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date) and (iii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 84.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $4,453,162.98.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-7 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date) and (iv) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 87.70% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $4,453,162.98.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-8 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking
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into account the distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 90.40% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $4,453,162.98.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-9 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account the distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (vi) the Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 92.20% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $4,453,162.98.
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-10 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates
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(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the distribution of the Class M-4 Principal
Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 95.20% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $4,453,162.98.
"Class P Certificate": Any one of the Class P Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-12 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and evidencing the ownership of the Class R-I
Interest and the Class R-II Interest.
"Class R-I Interest": The uncertificated Residual Interest in
REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in
REMIC II.
"Closing Date": November 14, 2003.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained, or caused to be created and maintained, by the Master Servicer
pursuant to Section 3.10(a), which shall be entitled "EMC Mortgage Corporation,
as Master Servicer for Deutsche Bank National Trust Company, as Trustee, in
trust for the registered holders of New Century Mortgage Securities, Inc., New
Century Home Equity Loan Trust, Series 2003-B, Asset Backed Pass-Through
Certificates." The Collection Account must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
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"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: NC030B, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor and the Master Servicer.
"Corresponding Certificate": With respect to each REMIC I
Regular Interest set forth below, the Regular Certificate set forth in the table
below:
REMIC I REGULAR INTEREST CERTIFICATE
------------------------ -----------
I-LTA1 Class ▇-▇
▇-▇▇▇▇ ▇▇▇▇▇ ▇-▇
▇-▇▇▇▇▇ Class A-3A
I-LTA3B Class ▇-▇▇
▇-▇▇▇▇ ▇▇▇▇▇ ▇-▇
▇-▇▇▇▇ Class M-2
I-LTM3 Class M-3
I-LTM4 Class M-4
I-LTM5 Class M-5
I-LTM6 Class M-6
I-LTP Class P
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class CE Certificates calculated after taking into account payments of
principal on the Mortgage Loans and distribution of the Group I Principal
Distribution Amount, the Group II Principal Distribution Amount and the Group
III Principal Distribution Amount to the Certificates then entitled to
distributions of principal on such Distribution Date, and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period).
"Cut-off Date": With respect to each Original Mortgage Loan,
November 1, 2003. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
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"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a fraction, the numerator of which is
the aggregate Stated Principal Balance of all Mortgage Loans that, as of the
last day of the previous calendar month, are 60 or more days delinquent, are in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties as of the last day of
the previous calendar month; provided, however, that any Mortgage Loan purchased
by the Master Servicer pursuant to Section 3.16(c) shall not be included in
either the numerator or the denominator for purposes of calculating the
Delinquency Percentage.
"Depositor": New Century Mortgage Securities, Inc., a Delaware
corporation, or its successor in interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(5) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations (or,
in the case of a depository institution that is the principal subsidiary of a
holding company, such holding company has unsecured commercial paper or other
short-term unsecured debt obligations) that are rated at least P-1 by ▇▇▇▇▇'▇
and A-1+ by S&P.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
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"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (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 (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for ▇▇▇▇▇▇▇ Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other Person as set forth in an Opinion of
Counsel delivered to the Trustee and the Depositor to the effect that the
holding of an Ownership Interest in a Residual Certificate by such Person may
cause any of REMIC I or REMIC II or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Residual Certificate to such Person.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b), which shall be
entitled "Deutsche Bank National Trust Company, as Trustee, in trust for the
registered holders of New Century Mortgage Securities, Inc., New Century Home
Equity Loan Trust, Series 2003-B, Asset Backed Pass-Through Certificates." The
Distribution Account must be an Eligible Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in December 2003.
"Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is
generally the day of the month on which the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution Date occurs and ending on the related Due Date.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository
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Institution, (ii) an account or accounts the deposits in which are fully insured
by the FDIC 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 acting in its fiduciary
capacity. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after assuming that 100% of the Principal
Remittance Amount on such Distribution Date has been distributed) over (ii) the
Overcollateralization Target Amount for such Distribution Date.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate (in the
case of any Adjustable-Rate Mortgage Loan) or Mortgage Rate (in the case of any
Fixed Rate Mortgage Loan) thereon as of the close of business on the first day
of the calendar month preceding the month in which the Distribution Date occurs
minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee Rate.
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate thereon as of the close
of business on the first day of the calendar month preceding the month in which
the Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii)
the Servicing Fee Rate.
"Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee or any director, officer, employee or agent of the Trustee from
the Trust Fund pursuant to Section 8.05 or Section 10.01(c), any amounts payable
from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii), any costs incurred by the Trustee endorsing any Mortgage Notes
delivered in blank under Section 2.01 or recording the Assignments pursuant to
Section 2.01 (to the extent the Responsible Parties are unable to pay such
costs) and any amounts reimbursable to the Trustee, the Depositor or the Master
Servicer, or any director, officer, employee or agent of the Depositor or the
Master Servicer pursuant to Section 3.02, Section 3.06 or Section 6.03 and any
other amounts payable or reimbursable from the Trust Fund as Extraordinary Trust
Fund Expenses pursuant to the terms of this Agreement.
"▇▇▇▇▇▇ ▇▇▇": ▇▇▇▇▇▇ ▇▇▇, formally known as the Federal
National Mortgage Association, or any successor thereto.
"FDIC": 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 Responsible Parties,
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the Depositor or the Master Servicer pursuant to or as contemplated by Section
2.03, Section 3.16(c) or Section 9.01), a determination made by the Master
Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered. The
Master Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) One-Month LIBOR
plus the related Certificate Margin and (ii) the Maximum Cap Rate.
"▇▇▇▇▇▇▇ Mac": ▇▇▇▇▇▇▇ Mac, formally known as the 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 Adjustable-Rate
Mortgage Loan.
"Group I Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group I Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest on the Group I Mortgage Loans.
"Group I Mortgage Loan": A first lien or second lien
fixed-rate Mortgage Loan or Adjustable-Rate Mortgage Loan with a principal
balance at origination that conforms to ▇▇▇▇▇▇▇ Mac loan limits. The Group I
Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group I Mortgage Loans due during the related Due Period, actually
received or advanced on or prior to the related Determination Date; (ii) the
Stated Principal Balance of any Group I Mortgage Loan that was purchased during
the related Prepayment Period pursuant to or as contemplated by Section 2.03 or
Section 3.16(c) and the amount of any shortfall deposited in the Collection
Account in connection with the substitution of a Deleted Mortgage Loan in Loan
Group I pursuant to Section 2.03 during the related Prepayment Period; (iii) the
principal portion of all other unscheduled collections (including, without
limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds and
REO Principal Amortization) received during the related Prepayment Period on the
Group I Mortgage Loans, net of any portion thereof that represents a recovery of
principal for which an advance was made by the Master Servicer pursuant to
Section 4.03 in respect of a preceding Distribution Date; (iv) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Section 9.01, that portion of the Termination Price,
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in respect of principal on the Group I Mortgage Loans and (v) the Group I
Allocation Percentage of the amount of any Overcollateralization Increase Amount
for such Distribution Date MINUS (vi) the Group I Allocation Percentage of the
amount of any Overcollateralization Reduction Amount for such Distribution Date.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts set forth in clauses (i) through (iii)
of the definition of Group I Principal Distribution Amount.
"Group II Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group II Principal Remittance Amount for such Distribution Date
and the denominator of which is (y) the Principal Remittance Amount for such
Distribution Date.
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest on the Group II Mortgage Loans.
"Group II Mortgage Loan": A first lien or second lien
fixed-rate Mortgage Loan or Adjustable-Rate Mortgage Loan with a principal
balance at origination that conforms to ▇▇▇▇▇▇ Mae loan limits. The Group II
Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group II Mortgage Loans due during the related Due Period, actually
received or advanced on or prior to the related Determination Date; (ii) the
Stated Principal Balance of any Group II Mortgage Loan that was purchased during
the related Prepayment Period pursuant to or as contemplated by Section 2.03 or
Section 3.16(c) and the amount of any shortfall deposited in the Collection
Account in connection with the substitution of a Deleted Mortgage Loan in Loan
Group II pursuant to Section 2.03 during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections (including, without
limitation, Principal Prepayments, Insurance Proceeds, Liquidation Proceeds and
REO Principal Amortization) received during the related Prepayment Period on the
Group II Mortgage Loans, net of any portion thereof that represents a recovery
of principal for which an advance was made by the Master Servicer pursuant to
Section 4.03 in respect of a preceding Distribution Date; (iv) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Section 9.01, that portion of the Termination Price, in respect of principal on
the Group II Mortgage Loans and (v) the Group II Allocation Percentage of the
amount of any Overcollateralization Increase Amount for such Distribution Date
MINUS (vi) the Group II Allocation Percentage of the amount of any
Overcollateralization Reduction Amount for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts set forth in clauses (i) through (iii)
of the definition of Group II Principal Distribution Amount.
"Group III Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group III Principal Remittance
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Amount for such Distribution Date and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date.
"Group III Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Distribution Amount for such
Distribution Date allocable to interest on the Group III Mortgage Loans.
"Group III Mortgage Loan": A first lien or second lien
fixed-rate Mortgage Loan or Adjustable-Rate Mortgage Loan with a principal
balance at origination that may or may not conform to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae
loan limits. The Group III Mortgage Loans are identified as such on the Mortgage
Loan Schedule.
"Group III Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of each Monthly Payment
on the Group III Mortgage Loans due during the related Due Period, actually
received or advanced on or prior to the related Determination Date; (ii) the
Stated Principal Balance of any Group III Mortgage Loan that was purchased
during the related Prepayment Period pursuant to or as contemplated by Section
2.03 or Section 3.16(c) and the amount of any shortfall deposited in the
Collection Account in connection with the substitution of a Deleted Mortgage
Loan in Loan Group III pursuant to Section 2.03 during the related Prepayment
Period; (iii) the principal portion of all other unscheduled collections
(including, without limitation, Principal Prepayments, Insurance Proceeds,
Liquidation Proceeds and REO Principal Amortization) received during the related
Prepayment Period on the Group III Mortgage Loans, net of any portion thereof
that represents a recovery of principal for which an advance was made by the
Master Servicer pursuant to Section 4.03 in respect of a preceding Distribution
Date; (iv) on the Distribution Date on which the Trust Fund is to be terminated
pursuant to Section 9.01, that portion of the Termination Price, in respect of
principal on the Group III Mortgage Loans and (v) the Group III Allocation
Percentage of the amount of any Overcollateralization Increase Amount for such
Distribution Date MINUS (vi) the Group III Allocation Percentage of the amount
of any Overcollateralization Reduction Amount for such Distribution Date.
"Group III Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts set forth in clauses (i) through (iii)
of the definition of Group III Principal Distribution Amount.
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor, the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor, the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent of
the Depositor, the Master Servicer or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of securities issued
by the Depositor, the Master Servicer or any Affiliate thereof, as the case may
be.
"Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section
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856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership tests set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35% or more of any Class of
Certificates), so long as REMIC I does not receive or derive any income from
such Person and provided that the relationship between such Person and REMIC I
is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the
Trustee has received an Opinion of Counsel to the effect that the taking of any
action in respect of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be taken by an
Independent Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan
and each related Adjustment Date, the average of the interbank offered rates for
six-month or one-month United States dollar deposits in the London market as
published in THE WALL STREET JOURNAL and as most recently available either (i)
as of the first business day 45 days prior to such Adjustment Date or (ii) as of
the first business day of the month preceding the month of such Adjustment Date,
as specified in the related Mortgage Note. In the event that the Index becomes
unavailable or otherwise unpublished, "Index" shall mean a comparable
alternative index selected by the Master Servicer over which the Master Servicer
has no control and which is readily available.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, subject to the terms and conditions of the related Mortgage Note and
Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates and the Mezzanine Certificates, the period
commencing on the Distribution Date of the month immediately preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, commencing on the Closing Date) and ending on the day
preceding such Distribution Date. With respect to any Distribution Date and the
Class CE Certificates, the REMIC I Regular Interests, the one-month period
ending on the last day of the calendar month preceding the month in which such
Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and the Class A Certificates or the Mezzanine Certificates,
the sum of (i) the amount, if any, by which (a) the Interest Distribution Amount
for such Class of Certificates as of the immediately preceding Distribution Date
exceeded (b) the actual amount distributed on such Class of Certificates in
respect of interest on such immediately preceding Distribution Date, (ii) the
amount of any Interest Carry Forward Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date and (iii) accrued interest
on the sum of (i) and (ii) above calculated at the related Pass-Through Rate for
the most recently ended Interest Accrual Period.
"Interest Determination Date": With respect to the Class A
Certificates, the
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Mezzanine Certificates, REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTA3A, REMIC I Regular Interest
I-LTA3B, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5 and REMIC I Regular Interest I-LTM6 and any Interest Accrual
Period therefor, the second London Business Day preceding the commencement of
such Interest Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificates, any Mezzanine Certificates and
any Class CE Certificates, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.
"Interim Servicer": New Century Mortgage Corporation, or its
successor in interest.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.
"Loan Group": Loan Group I, Loan Group II or Loan Group III,
as the context requires.
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.
"Loan Group III": The group of Mortgage Loans identified in
the Mortgage Loan
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Schedule as having been assigned to Loan Group III.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.
"London Business Day": Any day on which banks in the City of
London and New York are open and conducting transactions in United States
dollars.
"Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA1,
REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I- LTA3A, REMIC I
Regular Interest I-LTA3B, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6 and
REMIC I Regular Interest I-LTZZ, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the related Formula Rate for the purpose of
this calculation for such Distribution Date and with the rate on REMIC I Regular
Interest I-LTZZ subject to a cap of zero for the purpose of this calculation;
provided, however, each cap shall be multiplied by a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days elapsed in
the related Interest Accrual Period.
"Master Servicer": EMC Mortgage Corporation, or any successor
master servicer appointed as herein provided, in its capacity as Master Servicer
hereunder.
"Master Servicer Event of Termination": One or more of the
events described in Section 7.01.
"Master Servicer Remittance Date": With respect to any
Distribution Date, by 1:00 p.m. New York time on the Business Day preceding the
related Distribution Date.
"Maximum Cap Rate": For any Distribution Date with respect to
the Class A-1 Certificates, a per annum rate equal to the product of (x) the
weighted average of the Expense Adjusted Maximum Mortgage Rates of the Group I
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs and (y) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the equivalent of the foregoing shall
be expressed as a per annum rate equal to the weighted average of the REMIC I
Remittance Rate on REMIC I Regular Interest I-LT1GRP, weighted on the basis of
the Uncertificated Balance of such REMIC I Regular Interest.
For any Distribution Date with respect to the Class A-2
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Maximum Mortgage Rates of the Group II Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Distribution Date occurs and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the equivalent of the foregoing
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shall be expressed as a per annum rate equal to the weighted average of the
REMIC I Remittance Rate on REMIC I Regular Interest I-LT2GRP, weighted on the
basis of the Uncertificated Balance of such REMIC I Regular Interest.
For any Distribution Date with respect to the Class A-3
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Maximum Mortgage Rates of the Group III Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Distribution Date occurs and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the equivalent of the foregoing shall be expressed
as a per annum rate equal to the weighted average of the REMIC I Remittance Rate
on REMIC I Regular Interest I-LT3GRP, weighted on the basis of the
Uncertificated Balance of such REMIC I Regular Interest.
For any Distribution Date with respect to the Mezzanine
Certificates, a per annum rate equal to the product of (x) the weighted average
of the weighted average of the Expense Adjusted Maximum Mortgage Rates of the
Group I Mortgage Loans, the Group II Mortgage Loans and the Group III Mortgage
Loans, weighted based on their Stated Principal Balances as of the first day of
the calendar month preceding the month in which the Distribution Date occurs,
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group the Certificate Principal Balance of the
related Class A Certificates and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the equivalent of the
foregoing shall be expressed as a per annum rate equal to the weighted average
of the REMIC I Remittance Rates on the REMIC I Regular Interests (other than
REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2GRP and REMIC I
Regular Interest I-LT3GRP), weighted on the basis of the Uncertificated Balance
of each such REMIC I Regular Interest.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTM6 for such Distribution Date, with the rate on each of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTM6 subject to a cap equal to the related Formula Rate; provided,
however, each cap shall be multiplied by a fraction, the numerator of which is
the actual number of days in the related Interest Accrual Period and the
denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
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"Mezzanine Cap Contract": The cap contract between the Trustee
and the counterparty thereunder for the benefit of the Holders of the Mezzanine
Certificates.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate, Class M-4 Certificate, the Class M-5
Certificate or the Class M-6 Certificate.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07 and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ 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 documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and delivered to the Trustee pursuant to Section 2.01 or Section
2.03(b) of this Agreement, as held from time to time as a part of the Trust
Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, separately identifying the Group I
Mortgage Loans, the Group II Mortgage Loans and the Group III Mortgage Loans,
attached hereto as Schedule 1. The Mortgage Loan Schedule shall set forth the
following information with respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) [reserved];
(iii) the state and zip code of the Mortgaged Property;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
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(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the
Cut-off Date based on the original amortization
schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) (A) the date on which the first Monthly Payment was
due on the Mortgage Loan and (B) if such date is not consistent with
the Due Date currently in effect, such Due Date;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment due on the first
Due Date after the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as
of the close of business on the Cut-off Date;
(xvii) with respect to each Adjustable-Rate Mortgage Loan,
the Adjustment Dates, the Gross Margin, the Maximum Mortgage Rate, the Minimum
Mortgage Rate, the Periodic Rate Cap and the maximum first Adjustment Date
Mortgage Rate adjustment, the first Adjustment Date immediately following the
origination date;
(xviii) a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xix) the Mortgage Rate at origination;
(xx) a code indicating the documentation program (i.e.,
Full Documentation, Limited Documentation, Stated Income Documentation);
(xxi) the risk grade;
(xxii) the Value of the Mortgaged Property;
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(xxiii) the sale price of the Mortgaged Property, if
applicable;
(xxiv) the actual unpaid principal balance of the Mortgage
Loan as of the Cut-off Date;
(xxv) the type and term of the related Prepayment Charge;
(xxvi) the rounding code (i.e., nearest 0.125%, next highest
0.125%);
(xxvii) the program code;
(xxviii) the total amount of points and fees charged such
Mortgage Loan;
(xxix) the Servicing Transfer Date of such Mortgage Loan;
and
(xxx) the purchase price percentage.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut- off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 and existing from time to time thereafter, and any REO Properties
acquired in respect thereof.
"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 (i) with
respect to each fixed-rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with respect to the Adjustable-Rate Mortgage
Loans, (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 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
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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, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of
(A) the Senior Interest Distribution Amount payable to the holders of the Class
A Certificates and the Interest Distribution Amount payable to the holders of
the Mezzanine Certificates and (B) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net WAC Pass-Through Rate": For any Distribution Date with
respect to the Class A-1 Certificates, a per annum rate equal to the product of
(x) the weighted average of the Expense Adjusted Mortgage Rates of the Group I
Mortgage Loans, weighted based on their Stated Principal Balances as of the
first day of the calendar month preceding the month in which the Distribution
Date occurs and (y) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days elapsed in the related Interest Accrual
Period. For federal income tax purposes, the equivalent of the foregoing shall
be expressed as a per annum rate equal to the weighted average of the REMIC I
Remittance Rate on REMIC I Regular Interest I-LT1GRP, weighted on the basis of
the Uncertificated Balance of such REMIC I Regular Interest.
For any Distribution Date with respect to the Class A-2
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans, weighted
based on their Stated Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the equivalent of the foregoing shall be expressed
as a per annum rate equal to the weighted average of the REMIC I Remittance Rate
on REMIC I Regular Interest I-LT2GRP, weighted on the basis of the
Uncertificated Balance of such REMIC I Regular Interest.
For any Distribution Date with respect to the Class A-3
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Mortgage Rates of the Group III Mortgage Loans, weighted
based on their Stated Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs and (y) a
fraction, the
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numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Interest Accrual Period. For federal income tax
purposes, the equivalent of the foregoing shall be expressed as a per annum rate
equal to the weighted average of the REMIC I Remittance Rate on REMIC I Regular
Interest I-LT3GRP, weighted on the basis of the Uncertificated Balance of such
REMIC I Regular Interest.
For any Distribution Date with respect to the Mezzanine
Certificates, a per annum rate equal to the product of (x) the weighted average
of the weighted average of the Expense Adjusted Mortgage Rates of the Group I
Mortgage Loans, the Group II Mortgage Loans and the Group III Mortgage Loans,
weighted based on their Stated Principal Balances as of the first day of the
calendar month preceding the month in which the Distribution Date occurs,
weighted in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group the Certificate Principal Balance of the
related Class A Certificates and (y) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the equivalent of the
foregoing shall be expressed as a per annum rate equal to the weighted average
of the REMIC I Remittance Rates on the REMIC I Regular Interests (other than
REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2GRP and REMIC I
Regular Interest I-LT3GRP), weighted on the basis of the Uncertificated Balance
of each such REMIC I Regular Interest.
"Net WAC Rate Carryover Reserve Account": The account
established and maintained pursuant to Section 3.28.
"Net WAC Rate Carryover Amount": With respect to any Class of
Class A Certificates and any Class of Mezzanine Certificates and any
Distribution Date on which the applicable Pass-Through Rate is based on the Net
WAC Pass-Through Rate, the sum of (A) the positive excess of (i) the amount of
interest accrued on such Class of Certificates for such Distribution Date at the
related Formula Rate for such Distribution Date over (ii) the amount of interest
accrued on such Class of Certificates at the related Net WAC Pass-Through Rate
for such Distribution Date and (B) the related Net WAC Rate Carryover Amount for
the previous Distribution Date not previously distributed, together with
interest thereon at a rate equal to the related Formula Rate for such Class of
Certificates for such Distribution Date.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.
"Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO Property as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not or, in the case of a proposed Servicing Advance, would
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not be ultimately recoverable from related Late Collections, Insurance Proceeds
or Liquidation Proceeds on such Mortgage Loan or REO Property as provided
herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the Uncertificated Balance of the REMIC I Regular
Interests for such Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the
Originator, the Responsible Parties or the Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates and for purposes of the Formula Rate, REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTM6 and any Interest Accrual Period therefor, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination
Date; provided that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates of the
Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date. In such event, the Trustee will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If on such Interest Determination Date, two or more
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16%). If on
such Interest Determination Date, fewer than two Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the higher of (i) LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the
foregoing, if, under the priorities described above, LIBOR for an Interest
Determination Date would be based on LIBOR for the previous Interest
Determination Date for the third consecutive Interest Determination Date, the
Trustee, after consultation with the Master Servicer, shall select an
alternative comparable index (over which the Trustee has no control), used for
determining one-month Eurodollar lending rates that is calculated and published
(or otherwise made available) by an independent party.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master
Servicer, acceptable to the Trustee, except that any opinion of counsel relating
to (a) the qualification of any Trust REMIC as a REMIC or (b) compliance with
the REMIC Provisions, must be an opinion of Independent counsel.
"Original Mortgage Loan": Any of the Mortgage Loans included
in REMIC I as of the Closing Date.
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"Originator": New Century Mortgage Corporation, or its
successor in interest, in its capacity as originator of the Mortgage Loans.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only,
after assuming that 100% of the Principal Remittance Amount on such Distribution
Date has been distributed).
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date and (b) the amount of Accrued Certificate Interest
distributable on the Class CE Certificates on such Distribution Date as reduced
by Realized Losses allocated thereto with respect to such Distribution Date
pursuant to Section 4.04.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date (a) prior to the Stepdown Date, an amount equal to 2.40% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date; (b) on or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (i) 4.80% of the then current aggregate outstanding
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (ii)
$4,453,162.98; and (c) on or after the Stepdown Date and if a Trigger Event is
in effect, the Overcollateralization Target Amount for the immediately preceding
Distribution Date.
"Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) over (b) the sum of the
aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates after giving effect to
distributions to be made on such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security 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, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, a rate per annum equal
to the lesser of (i) the related Formula Rate for such Distribution Date and
(ii) the related Net WAC Pass-Through Rate for such Distribution Date.
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With respect to the Class CE Certificates and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (M) below, and the denominator of which is the Uncertificated Balance of
the REMIC I Regular Interests (other than REMIC I Regular Interest I- LTP). For
purposes of calculating the Pass-Through Rate for the Class CE Certificates, the
numerator is equal to the sum of the following components:
(A) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTAA;
(B) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA1;
(C) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA2;
(D) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3A minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA3A;
(E) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTA3B minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTA3B;
(F) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM1;
(G) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM2;
(H) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM3;
(I) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM4;
(J) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM5;
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(K) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTM6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTM6;
(L) the REMIC I Remittance Rate for REMIC I Regular Interest
I-LTZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and
(M) 100% of the interest on REMIC I Regular Interest I-LTP.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
or Notional Amount represented by such Certificate and the denominator of which
is the aggregate initial Certificate Principal Balance or Notional Amount of all
of the Certificates of such Class. The Class A Certificates and the Mezzanine
Certificates are issuable only in minimum Percentage Interests corresponding to
minimum initial Certificate Principal Balances of $25,000 and integral multiples
of $1.00 in excess thereof. The Class P Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances of
$20 and integral multiples thereof. The Class CE Certificates are issuable only
in minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof;
provided, however, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance or Notional Amount of such Class
or to an otherwise authorized denomination for such Class plus such remainder.
With respect to any Residual Certificate, the undivided percentage ownership in
such Class evidenced by such Certificate, as set forth on the face of such
Certificate. The Residual Certificates are issuable in Percentage Interests of
20% and multiples thereof.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security
described in clause (i)
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above entered into with a Depository Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each
Rating Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds that have been rated "AAAm"
or "AAAm-G" by S&P; and
(viii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies as
a permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A Certificates;
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 Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint- stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.03.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
▇▇▇▇▇ plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Prepayment Assumption": As set forth in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Prepayment Period,
any prepayment
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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 Master Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in REMIC I on such date,
attached hereto as Schedule 2 (including the Prepayment Charge Summary attached
thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each related Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage
Loan;
(iv) the date on which the first monthly payment was due
on the related Mortgage Loan;
(v) the term of the related Mortgage Loan; and
(vi) the principal balance of the related Mortgage Loan as
of the Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to
time by the Depositor in accordance with the provisions of this Agreement.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in full or in part that was applied
by the Master Servicer to reduce the outstanding principal balance of such loan
on a date preceding the Due Date in the succeeding Prepayment Period, an amount
equal to one month's interest at the applicable Net Mortgage Rate less any
payments made by the Mortgagor. The obligations of the Master Servicer in
respect of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date,
the period commencing on the 16th day of the calendar month preceding the
calendar month in which such Distribution Date occurs and ending on the 15th day
of the calendar month in which such Distribution Date occurs.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Remittance Amount, (ii)
the Group II Principal Remittance Amount and (iii) the Group III Principal
Remittance Amount.
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"Private Certificates": As defined in Section 5.02(b).
"Prospectus Supplement": That certain Prospectus Supplement
dated November 14, 2003 relating to the public offering of the Class A
Certificates and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c), Section 3.16(e) or Section 9.01, and as confirmed by an Officers'
Certificate from the Master Servicer to the Trustee, an amount equal to the sum
of (i) 100% of the Stated Principal Balance thereof as of the date of purchase
(or such other price as provided in Section 9.01), (ii) in the case of (x) a
Mortgage Loan, accrued interest on such Stated Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Master Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected and (y) an REO Property, the sum of (1)
accrued interest on such Stated Principal Balance at the applicable Mortgage
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or an advance by the Master Servicer
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, plus (2) REO Imputed Interest for such
REO Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and P&I Advances that as of the date of purchase
had been distributed as or to cover REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing Advances and P&I Advances (including
Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances) and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix) and Section
3.16(b), and (v) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03 or purchased by the Master Servicer pursuant to Section
3.16(c), expenses reasonably incurred or to be incurred by the Master Servicer
or the Trustee in respect of the breach or defect giving rise to the purchase
obligation including any costs and damages incurred by the Trust in connection
with any violation by such loan of any predatory or abusive lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) with respect to any Adjustable- Rate
Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage
Rate on the Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate
Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage
Rate of the Deleted Mortgage Loan, (v) with respect to any Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted
Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the
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Deleted Mortgage Loan, (vii) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan, (viii)
have the same Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a
risk grading determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xi) be delinquent not more than 29 days
as of the date os substitution, (xii) be satisfactory to the Master Servicer and
(xiii) conform to each representation and warranty set forth in Exhibit B
applicable to the Deleted Mortgage Loan. In the event that one or more mortgage
loans are substituted for one or more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Mortgage Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Rates, the terms described
in clause (vii) hereof shall be determined on the basis of weighted average
remaining term to maturity, the Loan-to-Value Ratios described in clause (ix)
hereof shall be satisfied as to each such mortgage loan, the risk gradings
described in clause (x) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xi) hereof must be satisfied
as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a nominal amount in excess of the existing
first mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
nominal amount) to satisfy the then existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and
to pay related closing costs.
"Rating Agency or Rating Agencies": ▇▇▇▇▇'▇ and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally recognized statistical rating
agencies, or other comparable Persons, designated by the Depositor, notice of
which designation shall be given to the Trustee and the Master Servicer.
"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 unpaid 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, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)
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 Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.11(a)(iii).
With respect to any REO Property as to which a Final Recovery
Determination has
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been made, an amount (not less than zero) equal to (i) the unpaid 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, plus (iii) REO Imputed Interest for such REO Property for each
calendar month commencing with the calendar month in which such REO Property was
acquired and ending with the calendar month in which such Final Recovery
Determination was made, plus (iv) any amounts previously withdrawn from the
Collection Account in respect of the related Mortgage Loan pursuant to Section
3.11(a)(ix) and Section 3.16(b), minus (v) the aggregate of all P&I Advances and
Servicing Advances (in the case of Servicing Advances, without duplication of
amounts netted out of the rental income, Insurance Proceeds and Liquidation
Proceeds described in clause (vi) below) made by the Master Servicer in respect
of such REO Property or the related Mortgage Loan for which the Master Servicer
has been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.23.
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.
"Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Certificates,
including any Definitive Certificates, the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
"Reference Banks": Deutsche Bank AG, ▇▇▇▇▇▇▇'▇ Bank PLC, The
Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee,
after consultation with the Depositor, which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London and (ii) not controlling, under the
control of or under common control with the Depositor or any Affiliate thereof.
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"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class CE Certificate or Class P Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
"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) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof; (ii) any REO Property, together
with all collections thereon and proceeds thereof; (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; (iv) the
Depositor's rights under the Underlying Security Purchase Agreement (including
any security interest created thereby); and (v) the Collection Account (other
than any amounts representing any Master Servicer Prepayment Charge Payment
Amount), the Distribution Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amount) and any REO Account, and such
assets that are deposited therein from time to time and any investments thereof,
together with any and all income, proceeds and payments with respect thereto.
Notwithstanding the foregoing, however, REMIC I specifically excludes the Net
WAC Rate Carryover Reserve Account, the Cap Contracts, all payments and other
collections of principal and interest due on the Mortgage Loans on or before the
Cut-off Date and all Prepayment Charges payable in connection with Principal
Prepayments made before the Cut-off Date.
"REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTAA minus the Marker Rate, divided by (b) 12.
"REMIC I Marker Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular ▇▇▇▇▇▇▇▇ ▇-
-▇▇-
▇▇▇▇▇, ▇▇▇▇▇ I Regular Interest I-LTA3B, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC I Regular Interest
I-LTM6 and REMIC I Regular Interest I-LTZZ.
"REMIC I Overcollateralized Amount": With respect to any date
of determination, (i) 0.50% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2,
REMIC I Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest I-LTM6 and REMIC I Regular Interest I-LTP, in
each case as of such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) 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 Balances of REMIC I Regular Interest
I-LTA1,REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTA3A, REMIC
I Regular Interest I-LTA3B, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5 and REMIC I Regular Interest I-LTM6 and
the denominator of which is the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5, REMIC
I Regular Interest I-LTM6 and REMIC I Regular Interest I-LTZZ.
"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 REMIC I Remittance 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 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.
"REMIC I Regular Interest I-LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
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"REMIC I Regular Interest I-LTA2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA3A": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA3A
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTA3B": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA3B
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and
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conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTM6": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM6
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall be entitled to any Prepayment Charges collected by the Master Servicer and
to a distribution of principal, subject to the terms and conditions hereof, in
an aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTXX": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTXX
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1GRP
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT1SUB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in
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REMIC I. REMIC I Regular Interest I-LT1SUB shall accrue interest at the related
REMIC I Remittance 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 Balance as set forth in the
Preliminary Statement hereto.
"REMIC I Regular Interest I-LT2GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2GRP
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT2SUB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT2SUB
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT3GRP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3GRP
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Regular Interest I-LT3SUB": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LT3SUB
shall accrue interest at the related REMIC I Remittance 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 Balance as set forth in the Preliminary Statement hereto.
"REMIC I Remittance Rate": With respect to REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I- LTA3A, REMIC I Regular Interest I-LTA3B,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6, REMIC I Regular Interest
I-LTZZ, REMIC I Regular Interest I-LTP, REMIC I Regular Interest I-LT1SUB, REMIC
I Regular Interest I-LT2SUB, REMIC I Regular Interest I-LT3SUB and REMIC I
Regular Interest I-LTXX, the weighted average of the Expense Adjusted Mortgage
Rates of the Mortgage Loans. With respect to REMIC I Regular Interest I-LT1GRP,
the weighted average of the Expense Adjusted Mortgage Rates of the Group I
Mortgage Loans. With respect to REMIC I Regular Interest I-LT2GRP, the weighted
average of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans.
With respect to REMIC I Regular Interest I-LT3GRP, the weighted average of the
Expense Adjusted Mortgage Rates of the Group III Mortgage Loans.
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"REMIC I Required Overcollateralized Amount": 0.50% of the
Overcollateralization Target Amount.
"REMIC I Sub WAC Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC I Regular Interest I- LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC
I Regular Interest I-LT2SUB, REMIC I Regular Interest I-LT2GRP, REMIC I Regular
Interest I-LT3SUB, REMIC I Regular Interest I- LT3GRP and REMIC I Regular
Interest I-LTXX.
"REMIC I Subordinated Balance Ratio": The ratio among the
Uncertificated Balances of each REMIC I Regular Interest ending with the
designation "SUB," equal to the ratio among, with respect to each such REMIC I
Regular Interest, 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 Class A Certificates in the related Loan Group.
"REMIC II": 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 Class R-II Interest pursuant to Section 2.08, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G 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.
"Remittance Report": A report in form and substance acceptable
to the Trustee on a magnetic disk or tape prepared by the Master Servicer
pursuant to Section 4.03 with such additions, deletions and modifications as
agreed to by the Trustee and the Master Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."
"REO Account": The account or accounts maintained, or caused
to be maintained, by the Master Servicer in respect of an REO Property pursuant
to Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar
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month, the excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form of
rental income, sale proceeds (including, without limitation, that portion of the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23(c) in respect of the proper operation, management and
maintenance of such REO Property or (ii) payable or reimbursable to the Master
Servicer pursuant to Section 3.23(d) for unpaid Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and P&I Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee, after consultation with the Master Servicer,
are quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in the event
that the Trustee can determine no such arithmetic mean, the lowest one-month
U.S. dollar lending rate which New York City banks selected by the Trustee,
after consultation with the Master Servicer, are quoting on such Interest
Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) an
attached, detached or semi- detached one-family dwelling, (ii) an attached,
detached or semi-detached two-to four-family dwelling, (iii) a one-family
dwelling unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, or (iv) an attached,
detached or semi-detached one-family dwelling in a planned unit development,
none of which is a co-operative or mobile home (as defined in ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, Section 5402(6)).
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any vice president, managing director, director, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
any associate, any trust officer or assistant trust officer or any other officer
of the Trustee having direct responsibility over this Agreement or otherwise
engaged in performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
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"Responsible Parties": NC Capital Corporation and New Century
Mortgage Corporation.
"S&P": Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor in interest.
"Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for such Distribution Date for the Class
A Certificates.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including but not
limited to foreclosures, in respect of a particular Mortgage Loan, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Section
3.01, Section 3.09, Section 3.14, Section 3.16 and Section 3.23. The Master
Servicer shall not be required to make any Nonrecoverable Servicing Advances.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to the Servicing Fee Rate accrued for one
month (or in the event of any payment of interest which accompanies a Principal
Prepayment in full or in part made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month, calculated on the basis of a 360-day year consisting of twelve
30-day months. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of Servicing Officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"Servicing Transfer Agreement": Either (i) the Mortgage Loan
Servicing Transfer Agreement, dated as of August 28, 2003, between the Master
Servicer and the Interim Servicer or (ii) the Mortgage Loan Servicing Transfer
Agreement, dated as of September 30, 2003, between the Master Servicer and the
Interim Servicer, as applicable.
"Servicing Transfer Costs": All reasonable costs and expenses
(including without limitation reasonable legal fees and expenses) incurred by
the Trustee in connection with the transfer
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of servicing from a predecessor Master Servicer, including, without limitation,
any reasonable costs or 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 Trustee or a successor Master Servicer to correct
any errors or insufficiencies in the servicing data or otherwise to enable the
Trustee or another successor Master Servicer to service the Mortgage Loans
properly and effectively. The term "Servicing Transfer Costs" as used herein
shall not be deemed to refer to the costs of the transfer of servicing from the
Originator to the Master Servicer pursuant to the Servicing Transfer Agreement,
and the parties hereto hereby acknowledge that such costs, subject to and
pursuant to the terms of the Servicing Transfer Agreement, will be expenses of
the Originator.
"Servicing Transfer Date": December 1, 2003.
"Single Certificate": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual
Certificates), a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance or Notional Amount of $1,000. With respect to the Class P Certificates
and the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 100% Percentage Interest in such Class.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the principal balance of such Mortgage Loan
as of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly Payment due on a Due Date subsequent
to the Cut- off Date, to the extent received from the Mortgagor or advanced by
the Master Servicer and distributed pursuant to Section 4.01 on or before such
date of determination, (ii) all Principal Prepayments received after the Cut-off
Date, to the extent distributed pursuant to Section 4.01 on or before such date
of determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied
by the Master Servicer as recoveries of principal in accordance with the
provisions of Section 3.16, to the extent distributed pursuant to Section 4.01
on or before such date of determination, and (iv) any Realized Loss incurred
with respect thereto as a result of a Deficient Valuation made during or prior
to the Prepayment Period for the most recent Distribution Date coinciding with
or preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before
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such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (a) the
Distribution Date occurring in December 2006 and (b) the first Distribution Date
on which the Credit Enhancement Percentage (calculated for this purpose only
after taking into account distributions of principal on the Mortgage Loans but
prior to any distribution of the Group I Principal Distribution Amount, the
Group II Principal Distribution Amount and the Group III Principal Distribution
Amount on the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 38.00%.
"Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Substitution Shortfall Amount": As defined in Section
2.03(b).
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to the classification of portions
thereof as REMICs under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the Dow ▇▇▇▇▇ Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 9.01.
"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a
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Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event is in effect with respect to
any Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 33.00% of the then
current Credit Enhancement Percentage; or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds
the applicable percentages set forth below with respect to such Distribution
Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
----------------------------------- ----------
December 2006 through November 2007 3.00%
December 2007 through November 2008 4.50%
December 2008 through November 2009 5.50%
December 2009 through November 2010 6.00%
December 2010 and thereafter 6.50%
"Trust Fund": Collectively, all of the assets of the Trust
REMICs, and the other assets conveyed by the Depositor to the Trustee pursuant
to Section 2.01.
"Trust REMIC": Any of REMIC I or REMIC II.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor trustee
appointed as herein.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal the Trustee Fee Rate accrued for one month on the aggregate
Stated Principal Balance of the Mortgage Loans and any REO Properties as of the
first day of the related Due Period (or, in the case of the initial Distribution
Date, as of the Cut-off Date), calculated on the basis of a 360-day year
consisting of twelve 30-day months.
"Trustee Fee Rate": 0.0035% per annum.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular
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Interest on such Distribution Date pursuant to Section 4.01 and, if and to the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Section 4.04. The Uncertificated Balance
of REMIC I Regular Interest I-LTZZ shall be increased by interest deferrals as
provided in Section 4.01(a)(1)(i). The Uncertificated Balance of each REMIC I
Regular Interest shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of any REMIC
I Regular Interest shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered by payments pursuant to Section 3.24
and (b) the aggregate amount of any Relief Act Interest Shortfall, if any
allocated, in each case, to such REMIC I Regular Interest pursuant to Section
1.02. In addition, Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest shall be reduced by Realized Losses, if
any, allocated to such REMIC I Regular Interest pursuant to Section 1.02 and
Section 4.04.
"Underlying Security Purchase Agreement": The agreement
between Bear, ▇▇▇▇▇▇▇ & Co. Inc. and the Depositor, regarding the sale of
certain pass-through certificates evidencing a beneficial ownership interest in
the Mortgage Loans by Bear, ▇▇▇▇▇▇▇ & Co. Inc. to the Depositor, substantially
in the form of Exhibit D annexed hereto.
"Underwriter's Exemption": An individual exemption issued by
the United States Department of Labor, as Prohibited Transaction Exemption
("PTE"), 90-30, as amended, to Bear, ▇▇▇▇▇▇▇ & Co. Inc. or any person directly
or indirectly, through one or more intermediaries, controlling, controlled by or
under common control with Bear, ▇▇▇▇▇▇▇ & Co. Inc. is an underwriter, placement
agent or a manager or co-manager of the underwriting syndicate or selling group
where the trust and the offered certificates meet specified conditions.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation, partnership (or other entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate the income of
which 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
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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 trust. The term "United States"
shall have the meaning set forth in Section 7701 of the Code or successor
provisions.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
the Originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the minimum requirements of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac and (b) the value thereof as determined by a review appraisal conducted by
the Originator in accordance with the Originator's underwriting guidelines, and
(ii) the purchase price paid for the related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan; provided, however, (A) in the case of a
Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the lesser of (1) the value determined by an appraisal made for the
Originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and (2) the value thereof as determined by a review
appraisal conducted by the Originator in accordance with the Originator's
underwriting guidelines, and (B) in the case of a Mortgage Loan originated in
connection with a "lease-option purchase," such value of the Mortgaged Property
is based on the lower of the value determined by an appraisal made for the
Originator of such Mortgage Loan at the time of origination or the sale price of
such Mortgaged Property if the "lease option purchase price" was set less than
12 months prior to origination, and is based on the value determined by an
appraisal made for the Originator of such Mortgage Loan at the time of
origination if the "lease option purchase price" was set 12 months or more prior
to origination.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. With respect to any date
of determination, 98% of all Voting Rights will be allocated among the Holders
of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the Holders of the Class P Certificates and 1% of all Voting Rights
will be allocated among the Holders of the Residual Certificates. The Voting
Rights allocated to each Class of Certificates shall be allocated among Holders
of each such Class in accordance with their respective Percentage Interests as
of the most recent Record Date.
SECTION 1.02. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates 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 Notional Amount of each such Certificate and, thereafter,
among the Class A Certificates and the Mezzanine Certificates 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
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Balance of each such Certificate and (2) the aggregate amount of any Realized
Losses and Net WAC Rate Carryover Amounts incurred for any Distribution Date
shall be allocated among the Class CE Certificates 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 Notional Amount of each such Certificate.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date:
(A) the REMIC I Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and the REMIC I Marker
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Interest payable to REMIC I Regular
Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount
equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter among REMIC I Regular Interest I- LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest I-LTM6 and REMIC I Regular Interest
I-LTZZ PRO RATA based on, and to the extent of, one month's interest at the then
applicable respective REMIC I Remittance Rate on the respective Uncertificated
Balance of each such REMIC I Regular Interest; and
(B) the REMIC I Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24) and the REMIC I Sub
WAC Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first, to Uncertificated Interest payable to REMIC I Regular
Interest I-LT1SUB, REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest
I-LT2SUB, REMIC I Regular Interest I-LT2GRP, REMIC I Regular Interest I-LT3SUB,
REMIC I Regular Interest I-LT3GRP and REMIC I Regular Interest I-LTXX, PRO RATA
based on, and to the extent of, one month's interest at the then applicable
respective REMIC I Remittance Rate on the respective Uncertificated Balance of
each such REMIC I Regular Interest.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of the Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse, for the benefit of the Certificateholders, all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Underlying Security Purchase Agreement, and all other assets included or to be
included in REMIC I. Such assignment includes all interest and principal
received by the Depositor or the Master Servicer on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Underlying Security Purchase Agreement.
The Depositor hereby directs the Trustee to enter into the Cap Contracts.
In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and deposit with the Trustee the following
documents or instruments with respect to each Mortgage Loan so transferred and
assigned (in each case, a "Mortgage File") :
(i) the original Mortgage Note, endorsed in blank or in the
following form "Pay to the order of Deutsche Bank National Trust
Company, as Trustee under the applicable agreement, without recourse,"
with all prior and intervening endorsements showing a complete chain of
endorsement from the originator to the Person so endorsing to the
Trustee;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon;
(iii) an original Assignment in blank;
(iv) the original recorded Assignment or Assignments showing a
complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii);
(v) the original or copies of each assumption, modification or
substitution agreement, if any; and
(vi) the original lender's title insurance policy or, if the
original title policy has not been issued, the irrevocable commitment
to issue the same.
With respect to a maximum of approximately 2.0% of the
Original Mortgage Loans, by outstanding principal balance of the Original
Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to
in Section 2.01(i) above cannot be located, the obligations of the
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Depositor to deliver such documents shall be deemed to be satisfied upon
delivery to the Trustee of a photocopy of such Mortgage Note, if available, with
a lost note affidavit substantially in the form of Exhibit I attached hereto. If
any of the original Mortgage Notes for which a lost note affidavit was delivered
to the Trustee is subsequently located, such original Mortgage Note shall be
delivered to the Trustee within three Business Days.
If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has, as of the Closing Date, been submitted for recording
but either (x) has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained the original
of such document, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon (1) delivery to the Trustee of a copy of
each such document certified by the Originator in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Originator, delivery to the Trustee promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. Notice shall be provided to the Trustee and the Rating Agencies by the
Depositor if delivery pursuant to clause (2) above will be made more than 180
days after the Closing Date. If the original lender's title insurance policy was
not delivered pursuant to Section 2.01(vi) above, the Depositor shall deliver or
cause to be delivered to the Trustee, promptly after receipt thereof, the
original lender's title insurance policy. The Depositor shall deliver or cause
to be delivered to the Trustee promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
The Responsible Parties shall promptly (within sixty Business
Days following the later of the Closing Date and the date of receipt by the
Responsible Parties of the recording information for a Mortgage, but in no event
later than ninety days following the Closing Date) submit or cause to be
submitted for recording, at no expense to the Trust Fund, the Trustee or the
Depositor, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and the Depositor
shall execute each original Assignment or cause each original Assignment to be
executed in the following form: "Deutsche Bank National Trust Company, as
Trustee under the applicable agreement." In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Responsible
Parties shall promptly prepare or cause to be prepared a substitute Assignment
or cure or cause to be cured such defect, as the case may be, and thereafter
cause each such Assignment to be duly recorded. If the Responsible Parties are
unable to pay the cost of recording the Assignments, such expense will be paid
by the Trustee and shall be reimbursable to the Trustee as an Extraordinary
Trust Fund Expense. Notwithstanding the foregoing, the Trustee shall not be
responsible for determining whether any Assignment delivered by the Depositor
hereunder is in recordable form.
In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date, the Trustee shall cause
(at the expense of the Responsible Parties) such endorsements to be completed in
the following form: "Pay to the order of Deutsche Bank National Trust Company,
as Trustee, without recourse."
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All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall be held by or on behalf of the
Responsible Parties, the Depositor or the Master Servicer, as the case may be,
in trust for the benefit of the Trustee on behalf of the Certificateholders. In
the event that any such original document is required pursuant to the terms of
this Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee. Any such original document delivered to or held by the
Depositor that is not required pursuant to the terms of this Section to be a
part of a Mortgage File, shall be delivered promptly to the Master Servicer.
SECTION 2.02. Acceptance of REMIC I by Trustee.
The Trustee acknowledges receipt, subject to the provisions of
Section 2.01 and subject to any exceptions noted on the exception report
described in the next paragraph below, of the documents referred to in Section
2.01 (other than such documents described in Section 2.01(v)) above and all
other assets included in the definition of "REMIC I" under clauses (i), (iii),
(iv) and (v) (to the extent of amounts deposited into the Distribution Account)
and declares that it holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it 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.
On or before the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to review each Mortgage File on or before the
Closing Date (or, with respect to any document delivered after the Closing Date,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage
Loan, within 45 days of receipt of the Qualified Substitute Mortgage Loan) and
to certify in substantially the form attached hereto as Exhibit C-1 that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(v)) required to be delivered to it pursuant to this
Agreement are in its possession, (ii) such documents have been reviewed by it
and appear regular on their face and relate to such Mortgage Loan and (iii)
based on its examination and only as to the foregoing, the information set forth
in the Mortgage Loan Schedule that corresponds to items (i) through (iii), (vi),
(xi), (xii), (xv) and, solely with respect to Adjustment Dates and Gross
Margins, (xvii) of the definition of "Mortgage Loan Schedule" accurately
reflects information set forth in the Mortgage File. It is herein acknowledged
that, in conducting such review, the Trustee was under no duty or obligation (i)
to inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face or (ii) to determine
whether any Mortgage File should include any of the documents specified in
clause (v) of Section 2.01.
Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon, and the Master Servicer shall forward a copy thereof to any
Sub-Servicer.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case
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may be, the certifications referred to above, the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect, at the conclusion of its review the Trustee shall so
notify the Depositor and the Master Servicer. In addition, upon the discovery by
the Depositor, the Master Servicer or the Trustee of a breach of any of the
representations and warranties made by the Responsible Parties in Exhibit B in
respect of any Mortgage Loan which materially adversely affects such Mortgage
Loan or the interests of the related Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
the Responsible Parties.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Responsible Parties of any representation, warranty or
covenant in Exhibit B in respect of any Mortgage Loan that materially adversely
affects the value of such Mortgage Loan or the interest therein of the
Certificateholders, the Trustee shall promptly notify the Responsible Parties
and the Master Servicer of such defect, missing document or breach and request
that the Responsible Parties deliver such missing document or cure such defect
or breach within 60 days from the date the Responsible Parties was notified of
such missing document, defect or breach, and if the Responsible Parties do not
deliver such missing document or cure such defect or breach in all material
respects during such period, the Responsible Parties shall repurchase such
Mortgage Loan from REMIC I at the Purchase Price within 90 days after the date
on which the Responsible Parties were notified (subject to Section 2.03(c)) of
such missing document, defect or breach. The Purchase Price for the repurchased
Mortgage Loan shall be remitted to the Master Servicer for deposit in the
Collection Account and the Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release to the Responsible Parties
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Responsible Parties shall furnish to it and as shall be necessary to vest in the
Responsible Parties any Mortgage Loan released pursuant hereto. The Trustee
shall not have any further responsibility with regard to such Mortgage File. In
lieu of repurchasing any such Mortgage Loan as provided above, the Responsible
Parties may cause such Mortgage Loan to be removed from REMIC I (in which case
it shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(b). Subject to Section 2.03(d), it is understood and agreed that
the obligation of the Responsible Parties to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing, together with the indemnity obligations specified in
the next paragraph, shall constitute the sole remedies respecting such omission,
defect or breach available to the Trustee and the Certificateholders. The
Trustee will be reimbursed for expenses reasonably incurred in connection with
any breach or defect giving rise to the purchase obligation under this Section
2.03 pursuant to Section 3.11(a)(viii).
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In addition to the foregoing, each of the Responsible Parties,
jointly and severally, agrees to indemnify and to hold each of the Trust Fund,
the Trustee, the Master Servicer and the Depositor harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that any of the Trust Fund,
the Trustee, the Master Servicer or the Depositor may sustain in any way (i)
related to the failure of the Responsible Parties to perform their duties in
compliance with the terms of this Agreement, (ii) arising from a breach by the
Responsible Parties of their representations and warranties in Exhibit B of this
Agreement or (iii) related to the origination or prior servicing of the Mortgage
Loans by reason of any acts, omissions, or alleged acts or omissions of the
Responsible Parties or any prior servicer. The Responsible Parties shall
immediately notify the other parties hereto if a claim is made by a third party
with respect to this Agreement. The Responsible Parties shall assume the defense
of any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Trust Fund, the Trustee, the Master
Servicer and the Depositor in respect of such claim.
With respect to the representations and warranties made by the
Responsible Parties in Exhibit B, the Trustee shall not be charged with
knowledge of any breach of any such representation or warranty by the
Responsible Parties unless a Responsible Officer of the Trustee at the Corporate
Trust Office obtains actual knowledge of such breach or the Trustee receives
written notice of such breach from the Depositor, the Master Servicer or the
Certificateholders.
(b) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Responsible
Parties substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Responsible Parties delivering to the
Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee shall acknowledge receipt for such Qualified
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
shall review such documents as specified in Section 2.02 and deliver to the
Depositor and the Master Servicer, with respect to such Qualified Substitute
Mortgage Loan or Loans, a certification substantially in the form attached
hereto as Exhibit C-1, with any applicable exceptions noted thereon. Within one
year of the date of substitution, the Trustee shall deliver to the Depositor and
the Master Servicer a certification substantially in the form of Exhibit C-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by the Responsible Parties. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Deleted Mortgage Loan on or before the Due Date in the month
of substitution, and the Responsible Parties shall thereafter be entitled to
retain all amounts subsequently received in respect of such Deleted Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken
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place, shall amend the Mortgage Loan Schedule to reflect the removal of such
Deleted Mortgage Loan from the terms of this Agreement and the substitution of
the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the
Mortgage Pool and shall be subject in all respects to the terms of this
Agreement, including, all applicable representations and warranties thereof
included in Exhibit B.
For any month in which the Responsible Parties substitutes one
or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer will determine the amount (the "Substitution
Shortfall Amount"), if any, by which the aggregate Purchase Price of all such
Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified
Substitute Mortgage Loan, the Stated Principal Balance thereof as of the date of
substitution, together with one month's interest on such Stated Principal
Balance at the applicable Mortgage Rate, plus all outstanding P&I Advances and
Servicing Advances (including Nonrecoverable P&I Advances and Nonrecoverable
Servicing Advances) related thereto. On the date of such substitution, the
Responsible Parties shall deliver or cause to be delivered to the Master
Servicer for deposit in the Collection Account an amount equal to the
Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the
related Qualified Substitute Mortgage Loan or Loans and certification by the
Master Servicer of such deposit, shall release to the Responsible Parties the
related Mortgage File or Files and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, the
Responsible Parties shall deliver to it and as shall be necessary to vest
therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Responsible Parties shall obtain at its own
expense and deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any Trust
REMIC, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any Trust REMIC
to fail to qualify as a REMIC at any time that any Certificate is outstanding.
(c) Upon discovery by the Depositor, the Responsible Parties,
the Master Servicer or the Trustee 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 within two Business Days give written notice
thereof to the other parties. In connection therewith, the Responsible Parties
shall repurchase or, subject to the limitations set forth in Section 2.03(b),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a).
The Trustee shall reconvey to the Responsible Parties 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.
(d) To the extent that the Responsible Parties are required to
repurchase or substitute a Deleted Mortgage Loan pursuant to this Agreement,
such repurchase or substitution shall be effected first, by NC Capital
Corporation and second, in the event that NC Capital Corporation fails to effect
such repurchase or substitution, by New Century Mortgage Corporation. Each of
the
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Responsible Parties hereby acknowledges and affirms its obligations under
Section 1(a) and Section 6 of the Underlying Security Purchase Agreement
relating to any such repurchase or substitution.
SECTION 2.04. Reserved
SECTION 2.05. Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of the Certificateholders, and to the Depositor
that as of the Closing Date or as of such date specifically provided herein:
(i) The Master Servicer is a corporation duly organized and
validly existing 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 Master Servicer 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
and to service the Mortgage Loans in accordance with the terms of this
Agreement;
(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 Depositor and the Trustee,
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 servicing of the Mortgage Loans by the Master
Servicer hereunder, 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 the charter or 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
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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 is a HUD approved servicer. No event
has occurred, including but not limited to a change in insurance
coverage, that would make the Master Servicer unable to comply with HUD
eligibility requirements or that would require notification to HUD;
(v) 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;
(vi) [Reserved];
(vii) 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 service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(viii) 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;
(ix) 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; and
(x) The Master Servicer has fully furnished and will continue
to fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors
on a monthly basis.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt
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written notice (but in no event later than two Business Days following such
discovery) to the Trustee. Subject to Section 7.01, unless such breach shall not
be susceptible of cure within 90 days, the obligation of the Master Servicer set
forth in this Section 2.05 to cure breaches shall constitute the sole remedy
against the Master Servicer available to the Certificateholders, the Depositor
and the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05.
SECTION 2.06. Issuance of the REMIC I Regular Interests and
the Class R-I Interest.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the 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.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Class R Certificates (in respect of the Class R-I
Interest) in authorized denominations. 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 Class R-I Interest
and REMIC II (as holder of the REMIC I Regular Interest) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, 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;
Acceptance of REMIC II by the Trustee.
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-
Certificateholders 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 Class R Certificateholders and REMIC II (as holder of
the REMIC I Regular Interests). The rights of the Class R Certificateholders 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 Certificates and REMIC
II Certificates, respectively, and all ownership interests evidenced or
constituted by the Class R Certificates and the REMIC II Certificates, shall be
as set forth in this Agreement.
SECTION 2.08. [Reserved].
SECTION 2.09. Issuance of Class R Certificates.
The Trustee acknowledges the assignment to it of the REMIC I
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 Trustee has executed, authenticated and delivered to or
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upon the order of the Depositor, the Class R Certificates in authorized
denominations.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer;
Accepted Servicing Standards.
Prior to the applicable Servicing Transfer Date, the parties
hereto acknowledge that the Originator shall service and administer the Mortgage
Loans on behalf of the Master Servicer and the Trustee and in the best interests
of and for the benefit of the Certificateholders (as determined by the
Originator in its reasonable judgment) in accordance with the terms of this
Agreement, the Servicing Transfer Agreement, the respective Mortgage Loans and
applicable law. Commencing on the applicable Servicing Transfer Date, the Master
Servicer shall service and administer the Mortgage Loans on behalf of the
Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement (collectively, the
"Accepted Servicing Standards"), the respective Mortgage Loans and applicable
law and, to the extent consistent with the Accepted Servicing Standards, service
and administer the Mortgage Loans in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's respective obligation to make P&I
Advances or Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to any
particular transaction.
The parties hereto, and each Certificateholder by its
acceptance of an interest in any Certificate, expressly acknowledges that the
Master Servicer shall have no duties or obligations (whether express or implied)
to, and shall not, service or master service the Mortgage Loans prior to the
applicable Servicing Transfer Date (including, without limitation, the period
from the Cut-off Date to the applicable Servicing Transfer Date), and the Master
Servicer shall have no liability in any way relating to or arising out of the
servicing or master servicing of the Mortgage Loans prior to the applicable
Servicing Transfer Date. Notwithstanding any of the foregoing, as of the Cut-off
Date, all servicing rights relating to or arising out of the Mortgage Loans, and
all rights to receive Servicing Fees, servicing income and other payments made
as compensation for such servicing shall be owned by EMC Mortgage Corporation
until a servicing transfer is made pursuant to Article VII of this Agreement.
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To the extent consistent with the foregoing, the Master
Servicer (a) shall seek to maximize the timely and complete recovery of
principal and interest on the Mortgage Notes and (b) shall waive (or permit a
Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and (ii) such waiver would, in the reasonable judgement of the
Master 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.
Subject only to the servicing standards set forth in this
Section 3.01 and the terms of this Agreement and of the respective Mortgage
Loans, the Master Servicer shall have full power and authority, acting alone or
through Sub-Servicers as provided in Section 3.02, to do or cause to be done any
and all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
the Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon written notice to the Trustee, 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 Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Trustee and Certificateholders. The Master Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall execute, at the
written request of the Master Servicer, and deliver to the Master Servicer and
any Sub-Servicer any special or limited powers of attorney and other documents
furnished to the Trustee by the Master Servicer necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder and the Trustee shall not be liable for the
actions of the Master Servicer or any Sub- Servicers under such powers of
attorney.
Subject to Section 3.09 hereof, in accordance with Accepted
Servicing Standards, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11.
Any cost incurred by the Master Servicer or by Sub-Servicers in effecting the
timely payment of taxes and assessments on a Mortgaged Property shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that
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would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder).
The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing
Agreements with Sub- Servicers for the servicing and administration of the
Mortgage Loans; provided, however, that such agreements would not result in a
withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates. The Trustee is hereby authorized to acknowledge, at the request of
the Master Servicer, any Sub-Servicing Agreement that meets the requirements
applicable to Sub- Servicing Agreements set forth in this Agreement and that is
otherwise permitted under this Agreement as certified to the Trustee by the
Master Servicer. The Trustee shall not be required to review or consent to any
Sub-Servicing Agreement and shall have no liability in connection therewith.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub- Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders without the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights; provided, further, that the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the
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Master Servicer, are conclusively deemed to be inconsistent with this Agreement
and therefore prohibited. Upon the Trustee's request, the Master Servicer shall
deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee, the Certificateholders and if
applicable, for its own benefit, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement and of the Interim
Servicer under the Servicing Transfer Agreement, including, without limitation,
any obligation to make advances in respect of delinquent payments as required by
a Sub-Servicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Sub- Servicing Agreements, 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 related Mortgage
Loans. The Master Servicer shall be reimbursed for the costs of such enforcement
first (i) from a general recovery resulting from such enforcement, to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed and
second, to the extent any recovery pursuant to clause first is not sufficient to
fully reimburse the Master Servicer, as an Extraordinary Trust Fund Expense.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee (if the Trustee is
acting as Master Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Master Servicer (or the Trustee, if it is then
acting as Master Servicer) shall, for any reason, no longer be the Master
Servicer (including termination due to a Master Servicer Event of Termination).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans from and after the applicable Servicing Transfer Date in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Sub-
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Servicing Agreements or arrangements or by virtue of indemnification from the
Sub-Servicer and to the same extent and under the same terms and conditions as
if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and the Trustee or
Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and neither the Trustee nor the Certificateholders shall
be deemed parties thereto and neither the Trustee nor the Certificateholders
shall have any claims, rights, obligations, duties or liabilities with respect
to the Sub-Servicer except as set forth in Section 3.06. The Master Servicer
shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective
of whether the Master Servicer's compensation pursuant to this Agreement is
sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing
Agreements by the Trustee.
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Termination), the Trustee or its designee or other successor
master servicer shall thereupon assume all of the rights and obligations of the
Master Servicer under each Sub-Servicing Agreement that the Master Servicer may
have entered into, unless the Trustee or other successor master servicer elects
to terminate any Sub-Servicing Agreement in accordance with its terms as
provided in Section 3.03. Upon such assumption, the Trustee, its designee or the
successor master servicer for the Trustee appointed pursuant to Section 7.02
shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) none of the Trustee, its designee or any successor Master Servicer
shall be deemed to have assumed any liability or obligation of the Master
Servicer that arose before it ceased to be the Master Servicer. All Servicing
Transfer Costs shall be paid by the predecessor Master Servicer (or, if the
predecessor Master Servicer is the Trustee, the Master Servicer that immediately
preceded the Trustee) upon presentation of reasonable documentation of such
costs, and if such predecessor Master Servicer defaults in its obligation to pay
such costs, such costs shall be paid by the successor Master Servicer or the
Trustee (in which case the successor Master Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor as an Extraordinary
Trust Fund Expense).
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SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event of
any such arrangement pursuant to clause (ii) above, the Master Servicer shall
make timely advances on such Mortgage Loan during such extension pursuant to
Section 4.03 and in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangement. Notwithstanding
the foregoing, in the event that any Mortgage Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer, consistent with the standards set forth in Section 3.01, may
also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan (such payment, a
"Short Pay- off"), or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor.
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections 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 Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
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SECTION 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer shall establish and maintain, or cause to
be established and maintained, one or more accounts (the "Servicing Accounts"),
into which all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments") shall
be deposited and retained. Servicing Accounts shall be Eligible Accounts. The
Master Servicer shall deposit in the clearing account in which it customarily
deposits payments and collections 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 Master Servicer's receipt thereof, all Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
payment of taxes, assessments, hazard insurance premiums, and comparable items
in a manner and at a time that assures the lien priority of the Mortgage Loans
is not jeopardized; (ii) reimburse the Master Servicer (or a Sub- Servicer to
the extent provided in the related Sub-Servicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.14 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Servicing Account; or (v) clear and terminate the Servicing Account at the
termination of the Master Servicer's obligations and responsibilities in respect
of the Mortgage Loans under this Agreement in accordance with Article IX. In the
event the Master Servicer shall deposit in a Servicing Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
such Servicing Account, any provision herein to the contrary notwithstanding.
The Master Servicer will be responsible for the administration of the Servicing
Accounts and will be obligated to make Servicing Advances to such accounts when
and as necessary to avoid the lapse of insurance coverage on the Mortgaged
Property, or which the Master Servicer knows, or in the exercise of the required
standard of care of the Master Servicer hereunder should know, is necessary to
avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure as
a result of a tax lien. If any such payment has not been made and the Master
Servicer receives notice of a tax lien with respect to the Mortgage being
imposed, the Master Servicer will, within 10 Business Days of such notice,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in the Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited (commencing
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on the Servicing Transfer Date) in the clearing account in which it customarily
deposits payments and collections 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 Master Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the Master Servicer's receipt thereof, as and when received or as
otherwise required hereunder, the following payments and collections received or
made by it subsequent to the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments (but not Prepayment Charges), on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to Section
3.12(b) in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master
Servicer pursuant to the second paragraph of Section 3.14(a) in respect
of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage Loans
pursuant to Section 2.03; and
(viii) all Prepayment Charges collected by the Master Servicer
in connection with the Principal Prepayment of any of the Mortgage
Loans.
The foregoing requirements for deposit in the Collection
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, modification or assumption fees, or insufficient funds charges need not
be deposited by the Master Servicer in the Collection Account and may be
retained by the Master Servicer as additional servicing compensation. In the
event the Master Servicer shall deposit in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, that portion of the
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Available Distribution Amount (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of all Prepayment Charges collected by the
Master Servicer in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and the amount of any
funds reimbursable to an Advancing Servicer pursuant to Section 3.26.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement such funds held in the Collection Account shall be
deemed to be a part of the Collection Account; provided, however, that the
Trustee shall have the sole authority to withdraw any funds held in such account
of the Trustee (which may be the Distribution Account). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request in
writing that the Trustee withdraw such amount from the Distribution Account and
remit to it any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Trustee
from time to time for deposit, and the Trustee shall so deposit, in the
Distribution Account:
(i) any P&I Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfall;
(v) any amounts required to be paid to the Trustee pursuant to
the Agreement (to the extent required to be paid by the Master
Servicer), including, but not limited to Section 3.06 and Section 7.02
(to the extent required to be paid by the Master Servicer); and
(vi) any amounts required to be deposited pursuant to Section
3.12(b) in connection with any losses realized on Permitted Investments
with respect to funds held in the Distribution Account.
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SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer for P&I Advances, but only to the extent of amounts received
which represent Late Collections (net of the related Servicing Fees) of
Monthly Payments on Mortgage Loans with respect to which such P&I
Advances were made in accordance with the provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Master Servicer
or any Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to the
extent of any Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan and (c) any
Nonrecoverable Servicing Advances with respect to the final liquidation
of a Mortgage Loan, but only to the extent that Late Collections,
Liquidation Proceeds and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse the Master Servicer or
any Sub- Servicer for Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation
(in addition to the Servicing Fee) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Master Servicer or the Responsible Parties,
as the case may be, with respect to each Mortgage Loan that has
previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(c) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any P&I Advance
previously made which the Master Servicer has determined to be a
Nonrecoverable P&I Advance in accordance with the provisions of Section
3.02(b) or Section 4.03;
(vii) to reimburse the Master Servicer or the Depositor for
expenses incurred by or reimbursable to the Master Servicer or the
Depositor, as the case may be, pursuant to Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as the
case may be, for expenses reasonably incurred in connection with any
breach or defect giving rise to the purchase obligation under Section
2.03 of this Agreement, including any expenses arising out of the
enforcement of the purchase obligation;
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(ix) to pay, or to reimburse the Master Servicer for Servicing
Advances in respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.16(b);
(x) to pay itself to the extent permitted under Section 3.06;
(xi) to withdraw any funds deposited in the Collection Account
in error; and
(xii) to clear and terminate the Collection Account pursuant
to Section 9.01.
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclauses
(vi) and (vii) above; provided that an Officers' Certificate in the form
described under Section 4.03(d) shall suffice for such written notification to
the Trustee in respect of clause (vi) hereof.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions to Certificateholders in accordance
with Section 4.01;
(ii) to pay to itself amounts to which it is entitled pursuant
to Section 8.05 or for Extraordinary Trust Fund Expenses;
(iii) to reimburse itself pursuant to Section 7.02;
(iv) to pay any amounts in respect of taxes pursuant to
Section 10.01(g)(iii);
(v) to pay to an Advancing Servicer reimbursements for P&I
Advances and/or Servicing Advances pursuant to Section 3.26;
(vi) to withdraw any funds deposited in the Distribution
Account in error;
(vii) to pay itself the Trustee Fee pursuant to Section 8.05;
and
(viii) to clear and terminate the Distribution Account
pursuant to Section 9.01.
SECTION 3.12. Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account") to invest the funds in such Investment Account in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
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preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
obligor thereon or if such investment is managed or advised by a Person other
than the Trustee or an Affiliate of the Trustee, and (ii) no later than the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if the Trustee is the obligor thereon or if such investment is
managed or advised by the Trustee or any Affiliate. Amounts in the Distribution
Account may be held uninvested. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee for the benefit of the
Certificateholders (in its capacity as such), or in the name of a nominee of the
Trustee. The Trustee shall be entitled to sole possession (except with respect
to investment direction of funds held in the Collection Account and any income
and gain realized thereon) over each such investment, and any certificate or
other instrument evidencing any such investment shall be delivered directly to
the Trustee or its agent, together with any document of transfer necessary to
transfer title to such investment to the Trustee or its nominee. In the event
amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the party with investment discretion
over such Investment Account shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
receipt of written notice by or upon actual knowledge of a Responsible
Officer of the Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds thereafter on
deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
on deposit in the Collection Account and any REO Account held by or on behalf of
the Master Servicer, shall be for the benefit of the Master Servicer shall be
subject to its withdrawal in accordance with Section 3.11 or Section 3.23, as
applicable. The Master Servicer shall deposit in the Collection Account or any
REO Account, as applicable, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss. All income in the nature of interest
from the investment of funds in the Distribution Account shall be for the
benefit of the Trustee. The Trustee shall remit from its own funds for deposit
into the Distribution Account the amount of any loss incurred on Permitted
Investments in the Distribution Account, if amounts on deposit in the
Distribution Account are invested in Permitted Investments by the Trustee in the
absence of direction from another party.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
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(d) The Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable to the Trustee pursuant to Section 3.11 or 3.12 or
otherwise payable in respect of Extraordinary Trust Fund Expenses.
SECTION 3.13. [Reserved].
SECTION 3.14. Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the lesser of the current
principal balance of such Mortgage Loan and 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 Master Servicer shall also
cause to be maintained fire 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 property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Master 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 to be collected by the Master 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 Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid 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 the 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 Master Servicer will
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 unpaid 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).
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In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:X
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 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
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 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
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 Mortgage Loans, the Master 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 Master 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 the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall
be deemed to have complied with this provision if an Affiliate of the Master
Servicer 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 Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days'
prior written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so. If the Master Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale" clause, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized 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
the Mortgagor and becomes
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liable under the Mortgage Note, provided that no such substitution shall be
effective unless such person satisfies the underwriting criteria of the Master
Servicer and has a credit risk rating at least equal to that of the original
Mortgagor. In connection with any assumption or substitution, the Master
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. The
Master Servicer shall not take or enter into any assumption and modification
agreement, however, unless (to the extent practicable in the circumstances) it
shall have received confirmation, in writing, of the continued effectiveness of
any applicable hazard insurance policy. Any fee collected by the Master Servicer
in respect of an assumption, modification or substitution of liability agreement
shall be retained by the Master Servicer as additional servicing compensation.
In connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Trustee that
any such substitution, modification or assumption agreement has been completed
by forwarding to the Trustee the executed original of such substitution,
modification or assumption agreement, which document 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.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatsoever. For purposes of this Section
3.15, the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use its best efforts, consistent
with Accepted Servicing Practices, 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 pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trust
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Fund either (i) obtain title to such Mortgaged Property as a result of or in
lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or
take any other action with respect to, such Mortgaged Property, if, as a result
of any such action, the Trustee, the Trust Fund or the Certificateholders would
be considered to hold title to, to be a "mortgagee-in-possession" of, or to be
an "owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Trust Fund to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; provided that any amounts disbursed by the
Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.03(d). The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (a)(ix), such right
of reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from REMIC
I any Mortgage Loan or related REO Property that is 90 days or more delinquent,
which the Master Servicer determines in good faith will otherwise become subject
to foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee, in form and substance satisfactory to the
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Trustee prior to purchase), at a price equal to the applicable Purchase Price;
provided, however, that the Master Servicer shall purchase any such Mortgage
Loans or related REO Properties on the basis of delinquency, purchasing the most
delinquent Mortgage Loans or related REO Properties first. The applicable
Purchase Price for any Mortgage Loan or related REO Property purchased hereunder
shall be deposited in the Collection Account, and the Trustee, upon receipt of
written certification from the Master Servicer of such deposit, shall release or
cause to be released to the Master Servicer the related Mortgage File and the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the Master Servicer shall furnish and as shall be
necessary to vest in the Master Servicer title to any Mortgage Loan or related
REO Property released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second,
to accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: first, to
unpaid Servicing Fees; and second, to the balance of the interest then due and
owing. The portion of the recovery so allocated to unpaid Servicing Fees shall
be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
(e) If the Master Servicer determines that it is in the best
economic interest of the Certificateholders to sell a Mortgage Loan that is over
90 days delinquent, rather than foreclosing, the Master Servicer may effect such
a sale. The proceeds of such sale shall be Liquidation Proceeds.
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
deliver to the Trustee (or a custodian acting on behalf of the Trustee) one
executed copy of a Request for Release in the form of Exhibit E (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) signed by a Servicing Officer (or in a mutually agreeable
electronic format that will, in lieu of a signature on its face, originate from
a Servicing Officer) and shall request delivery to it of the Mortgage File. Upon
receipt of such certification and request, the Trustee shall, within five
Business Days, release or cause such custodian to release and send by overnight
mail, at the expense of the Master Servicer, the related Mortgage File to the
Master Servicer. In the event that the Trustee or custodian fails to deliver a
Mortgage Note related to a Mortgage Loan that was in its possession within such
five Business Days after so requested and it had previously certified that such
Mortgage Note was in its possession, and that (i) such document is not
outstanding pursuant to a Request for Release and (ii) such document was held by
the Trustee,
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as evidenced by a previously delivered certification in the form of Exhibit F-1
or Exhibit F-2, then the Trustee shall, with respect to any missing Mortgage
Note, promptly deliver a Lost Note Affidavit in the form of Exhibit I hereto.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee
(or a custodian acting on behalf of the Trustee) of one copy of a Request for
Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release or cause such custodian to release
the related Mortgage File to the Master Servicer, and the Trustee shall, at the
direction of the Master Servicer, execute such documents as shall be necessary
to the prosecution of any such proceedings. Such Request for Release shall
obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trustee or such custodian when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered, or caused
to be delivered, to the Trustee (or a custodian acting on behalf of the Trustee)
an additional Request for Release certifying as to such liquidation or action or
proceedings. Upon the request of the Trustee or such custodian, the Master
Servicer shall provide notice to the Trustee and such custodian of the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a Request for
Release from a Servicing Officer stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation that are required to be deposited into the Collection Account have
been so deposited, or that such Mortgage Loan has become an REO Property, one
copy of such Request for Release with respect to such Mortgage Loan shall be
released or caused to be released by the Trustee to the Master Servicer or its
designee.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
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SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Master Servicer may pay from the Servicing Fee any
amounts due to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into
under Section 3.02.
Additional servicing compensation, including without
limitation any late fees, assumption fees, penalties or similar payments with
respect to a Mortgage Loan, fees and income associated with the sale,
administration or collection of premiums with respect to insurance policies
related to a Mortgage Loan, and any interest income customarily received or
retained by a servicer in respect of any payments or other receipts on or with
respect to such Mortgage Loan (subject to Section 3.24 and other than Prepayment
Charges) shall be retained by the Master Servicer only to the extent such fees
or charges are received by the Master Servicer. The Master Servicer shall also
be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums for the insurance required by Section
3.14, to the extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided in Section 8.05, the fees and expenses of the Trustee) and shall not be
entitled to reimbursement therefor except as specifically provided herein.
SECTION 3.19. Reports to the Trustee; Collection Account
Statements.
Not later than twenty days after each Distribution Date, the
Master Servicer shall forward to the Trustee, upon the Trustee's request, and
the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.
SECTION 3.20. Statement as to Compliance.
Not later than March 15th of each calendar year commencing in
2004, the Master Servicer will deliver to the Trustee and the Depositor an
Officers' Certificate (upon which the Trustee can conclusively rely in
connection with its obligations under Section 4.06) substantially in the form of
Exhibit L attached hereto 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 officer's
supervision and (ii) to the best of such officer's
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knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such calendar year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. Copies of any
such statement shall be provided by the Trustee to any Certificateholder and to
any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.
SECTION 3.21. Independent Public Accountants' Servicing
Report.
Not later than March 15th of each calendar year commencing in
2004, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Trust Fund's expense, provided that such
statement is delivered by the Master Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation in the Master Servicer's possession regarding the
Mortgage Loans required by applicable laws and regulations. Such access shall be
afforded without charge, but only upon reasonable request and reasonable advance
notice and during normal business hours at the offices of the Master Servicer
designated by it. In addition, access to the documentation in the Master
Servicer's possession regarding the Mortgage Loans will be provided to any
Certificateholder, the Trustee and to any Person identified to the Master
Servicer as a prospective transferee of a Certificate; provided, however, that
providing access to such Person will not violate any applicable laws, upon
reasonable request and reasonable advance notice and during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
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SECTION 3.23. Title, Management and Disposition of REO
Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC I, shall either
sell any REO Property prior to the end of the third taxable year after REMIC I
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of the three-year grace period, unless the Master Servicer shall have
delivered to the Trustee an Opinion of Counsel, addressed to the Trustee and the
Depositor, to the effect that the holding by REMIC I of such REO Property
subsequent to three years after its acquisition will not result in the
imposition on any Trust REMIC of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any Trust REMIC to fail to qualify
as a REMIC under Federal law at any time that any Certificates are outstanding.
The Master Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by any Trust REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain, or cause to be established and maintained, with respect to REO
Properties an account held in trust for the Trustee for the benefit of the
Certificateholders (the "REO Account"), which shall be an Eligible Account. The
Master Servicer shall be permitted to allow the Collection Account to serve as
the REO Account, subject to separate ledgers for each REO Property. The Master
Servicer shall be entitled to retain or withdraw any interest income paid on
funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account in which it customarily
deposits payments and collections 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 Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Master Servicer's receipt thereof, all revenues received by it with
respect to an REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property including,
without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
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(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts will be recoverable from the rental or sale of the
REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor
the Trustee shall:
(i) authorize the Trust Fund to enter into, renew or extend
any New Lease with respect to any REO Property, if the New Lease by its
terms will give rise to any income that does not constitute Rents from
Real Property;
(ii) authorize any amount to be received or accrued under any
New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize any construction on any REO Property, other
than the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such building
or other improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of Section
856(e)(4)(B) of the Code; or
(iv) authorize any Person to Directly Operate any REO Property
on any date more than 90 days after its date of acquisition by the
Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by REMIC
I, in which case the Master Servicer may take such actions as are specified in
such Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
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(iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its
duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent Contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.
(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall deem
necessary or advisable, as shall be normal and usual in its Accepted Servicing
Practices.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any
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Mortgaged Property and cancellation of indebtedness income with respect to any
Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code,
respectively. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the
Code.
SECTION 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from full or partial Principal Prepayments during the related
Prepayment Period and (ii) the aggregate Servicing Fee for the related
Prepayment Period. Any amounts paid by the Master Servicer pursuant to this
Section 3.24 shall not be reimbursed by any Trust REMIC or the Trust Fund.
SECTION 3.25. Obligations of the Master Servicer in Respect of
Mortgage Rates and Monthly Payments.
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement and the earlier removal or resignation of the Trustee. Notwithstanding
the foregoing, this Section 3.25 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note, as permitted by law.
SECTION 3.26. Advance Facility.
(a) The Master Servicer, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing
Servicer") may make all or a portion of the P&I Advances and/or Servicing
Advances to the Trust Fund under this Agreement, although no such facility shall
reduce or otherwise affect the Master Servicer's obligation to fund such P&I
Advances and/or Servicing Advances. To the extent that an Advancing Servicer
makes all or a portion of any P&I Advance or any Servicing Advance and provides
the Trustee with notice acknowledged by the Master Servicer that such Advancing
Servicer is entitled to reimbursement, such Advancing Servicer shall be entitled
to receive reimbursement pursuant to this Agreement for such amount to the
extent provided in Section 3.26(b). Such notice from the Advancing Servicer must
specify the amount of the reimbursement and must specify which Section of this
Agreement permits the applicable P&I Advance or Servicing Advance to be
reimbursed. The Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Servicer and shall
be entitled to rely without independent investigation on the Advancing
Servicer's statement with respect
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to the amount of any reimbursement pursuant to this Section 3.26 and with
respect to the Advancing Servicer's statement with respect to the Section of
this Agreement which permits the applicable P&I Advance or Servicing Advance to
be reimbursed. An Advancing Servicer whose obligations are limited to the making
of P&I Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Sub-Servicer pursuant to Section 3.02
hereof and will not be deemed to be a Sub-Servicer under this Agreement.
(b) If an Advancing Servicer is entitled to reimbursement for
any particular P&I Advance or Servicing Advance, then the Master Servicer shall
not be permitted to reimburse itself therefor under Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), but instead the Master
Servicer shall include such amounts in the applicable remittance to the Trustee
made pursuant to Section 3.10(b) to the extent of amounts on deposit in the
Collection Account on the related Master Servicer Remittance Date. The Trustee
is hereby authorized to pay to an Advancing Servicer, reimbursements for P&I
Advances and Servicing Advances from the Distribution Account to the same extent
the Master Servicer would have been permitted to reimburse itself for such P&I
Advances and/or Servicing Advances in accordance with Section 3.11(a)(ii),
Section 3.11(a)(iii), Section 3.11(a)(vi) or Section 3.11(a)(ix), as the case
may be, had the Master Servicer made such P&I Advance or Servicing Advance. The
Trustee is hereby authorized to pay directly to the Advancing Servicer such
portion of the Servicing Fee as the parties to any advancing facility agree.
(c) All P&I Advances and Servicing Advances made pursuant to
the terms of this Agreement shall be deemed made and shall be reimbursed on a
"first in first out" (FIFO) basis.
SECTION 3.27. [Reserved].
SECTION 3.28 Net WAC Rate Carryover Reserve Account.
(a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, as agent for the Trustee, a separate,
segregated trust account titled, "Net WAC Rate Carryover Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for the registered
holders of New Century Mortgage Securities, Inc., New Century Home Equity Loan
Trust, Series 2003-B, Asset Backed Pass-Through Certificates." On the Closing
Date, $1,000 will be deposited into the Net WAC Rate Carryover Reserve Account.
In addition the amount deposited in the Net WAC Rate Carryover Reserve Account
will be increased by any payments received by the Trustee under the Cap
Contracts and deposited into the Net WAC Rate Carryover Reserve Account. All
amounts deposited in the Net WAC Rate Carryover Reserve Account shall be
distributed to the Holders of the Class A Certificates and the Mezzanine
Certificates in the manner set forth in Section 4.01(a)(4).
(b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore will, deposit into the Net WAC Rate Carryover Reserve Account
the amounts described in Section 4.01(a)(4), rather than distributing such
amounts to the Class CE Certificateholders. On each such Distribution Date, the
Trustee shall
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hold all such amounts for the benefit of the Holders of the Class A Certificates
and the Mezzanine Certificates, and will distribute such amounts to the Holders
of the Class A Certificates and the Mezzanine Certificates in the amounts and
priorities set forth in Section 4.01(a). If no Net WAC Rate Carryover Amounts
are payable on a Distribution Date, the Trustee shall deposit into the Net WAC
Rate Carryover Reserve Account on behalf of the Class CE Certificateholders,
from amounts otherwise distributable to the Class CE Certificateholders, an
amount such that when added to other amounts already on deposit in the Net WAC
Rate Carryover Reserve Account, the aggregate amount on deposit therein is equal
to $1,000.
(c) For federal and state income tax purposes, the Class CE
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC II to the Holders of the Class CE
Certificates. Upon the termination of the Trust Fund, or the payment in full of
the Class A Certificates and the Mezzanine Certificates, all amounts remaining
on deposit in the Net WAC Rate Carryover Reserve Account will be released by the
Trust Fund and distributed to the Class CE Certificateholders or their
designees. The Net WAC Rate Carryover Reserve Account will be part of the Trust
Fund but not part of any REMIC and any payments to the Holders of the Class A
Certificates or the Mezzanine Certificates of Net WAC Rate Carryover Amounts
will not be payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860(G)(a)(1).
(d) By accepting a Class CE Certificate, each Class CE
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described above on each Distribution Date as to which there is any Net WAC Rate
Carryover Amount rather than distributing such amounts to the Class CE
Certificateholders. By accepting a Class CE Certificate, each Class CE
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.
(e) At the direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall, upon receipt from the Master Servicer of all
documentation required by it to make such investments, invest the funds in
Deutsche Cash Management Fund 541 so long as it is a Permitted Investment or as
otherwise directed in writing by the Depositor on behalf of the Holders of a
majority Percentage Interest in the Class CE Certificates. All income and gain
earned upon such investment shall be deposited into the Net WAC Rate Carryover
Reserve Account.
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(f) For federal tax return and information reporting, the
right of the Class A Certificateholders and the Mezzanine Certificateholders to
receive payments from the Net WAC Rate Carryover Reserve Account in respect of
any Net Wac Rate Carryover Amount shall be assigned a value of zero.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a)(1)(A) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-I Interest), as the case may be:
(i) to the Holders of REMIC I Regular Interest I-LTAA, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular Interest I-LTM5, REMIC I Regular Interest I-LTM6 and REMIC I
Regular Interest I-LTZZ, in an amount equal to (A) the Uncertificated
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates. Amounts
payable as Uncertificated Interest in respect of REMIC I Regular
Interest I-LTZZ shall be reduced when the sum of the REMIC I
Overcollateralized Amount is less than the REMIC I Required
Overcollateralized Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral
Amount and such amounts will be payable to the Holders of REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3A, REMIC I Regular Interest I-LTA3B, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I
Regular Interest I- LTM5 and REMIC I Regular Interest I-LTM6 in the
same proportion as the Overcollateralization Increase Amount is
allocated to the Corresponding Certificates and the Uncertificated
Balance of REMIC I Regular Interest I-LTZZ shall be increased by such
amount; and
(ii) to the Holders of REMIC I Regular Interest I-LT1SUB,
REMIC I Regular Interest I-LT1GRP, REMIC I Regular Interest I-LT2SUB,
REMIC I Regular Interest I- LT2GRP, REMIC I Regular Interest I-LT3SUB,
REMIC I Regular Interest I-LT3GRP and REMIC I Regular Interest I-LTXX,
on a PRO RATA basis, in an amount equal to (A) the Uncertificated
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;
(iii) to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the REMIC I Marker Allocation
Percentage of the Available Distribution Amount for such Distribution
Date after the distributions made pursuant to clause (i) above,
allocated as follows:
(a) to the Holders of REMIC I Regular Interest
I-LTAA, 98.00% of such remainder (less the amount payable in
clause (d) below), until the Uncertificated Balance of such
REMIC I Regular Interest is reduced to zero;
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(b) to the Holders of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTA3A, REMIC I Regular Interest I- LTA3B, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTM6, 1.00% of such remainder (less the amount
payable in clause (d) below), in the same proportion as
principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Balances of such REMIC
I Regular Interests are reduced to zero;
(c) to the Holders of REMIC I Regular Interest
I-LTZZ, 1.00% of such remainder (less the amount payable in
clause (d) below), until the Uncertificated Balance of such
REMIC I Regular Interest is reduced to zero; then
(d) to the Holders of REMIC I Regular Interest I-LTP,
on the Distribution Date immediately following the expiration
of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter
until $100 has been distributed pursuant to this clause; and
(e) any remaining amount to the Holders of the Class
R Certificates (as Holder of the Class R-I Interest);
provided, however, that 98.00% and 2.00% of any principal payments that are
attributable to an Overcollateralization Reduction Amount shall be allocated to
Holders of REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ,
respectively; and
(iv) to the Holders of REMIC I Regular Interests, in an amount
equal to the remainder of the REMIC I Sub WAC Allocation Percentage of
the Available Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) above, such that
distributions of principal shall be deemed to be made to the REMIC I
Regular Interests first, so as to keep the Uncertificated Balance of
each REMIC I 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 I Regular
Interest ending with the designation "SUB," so that the Uncertificated
Balance of each such REMIC I 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 Class A 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 I Regular Interests such that the REMIC I
Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest I-LTXX.
Notwithstanding the distributions pursuant to this Section
4.01(1), distribution of funds shall conform to the distributions made pursuant
to Section 4.01(2), (3) and (4).
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(2)(I) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the Group I Interest Remittance
Amount and distribute to the Certificateholders the following amounts, in the
following order of priority:
(i) to the Holders of the Class A-1 Certificates, an amount
equal to the Senior Interest Distribution Amount allocable to such
Certificates; and
(ii) concurrently, to the Holders of the Class A-2
Certificates and the Class A-3 Certificates (allocated between the
Class A-3A Certificates and the Class A-3B Certificates on a PRO RATA
basis based on the entitlement of each such Class), on a PRO RATA basis
based on the entitlement of each such Class, the Senior Interest
Distribution Amount for such Certificates, to the extent remaining
undistributed after the distribution of the Group II Interest
Remittance Amount as set forth in Section 4.01(a)(2)(II)(i) and the
Group III Interest Remittance Amount as set forth in Section
4.01(a)(2)(III)(i).
(II) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the Group II Interest
Remittance Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:
(i) to the Holders of the Class A-2 Certificates, an amount
equal to the Senior Interest Distribution Amount allocable to such
Certificates; and
(ii) concurrently, to the Holders of the Class A-1
Certificates and the Class A-3 Certificates (allocated between the
Class A-3A Certificates and the Class A-3B Certificates on a PRO RATA
basis based on the entitlement of each such Class), on a PRO RATA basis
based on the entitlement of each such Class, the Senior Interest
Distribution Amount for such Certificates, to the extent remaining
undistributed after the distribution of the Group I Interest Remittance
Amount as set forth in Section 4.01(a)(2)(I)(i) and the Group III
Interest Remittance Amount as set forth in Section 4.01(a)(2)(III)(i).
(III) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the Group III Interest
Remittance Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:
(i) concurrently, to the Holders of the Class A-3
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, an amount equal to the Senior Interest Distribution Amount
allocable to such Certificates; and
(ii) concurrently, to the Holders of the Class A-1
Certificates and the Class A-2 Certificates, on a PRO RATA basis based
on the entitlement of each such Class, the Senior Interest Distribution
Amount for such Certificates, to the extent remaining undistributed
after the distribution of the Group I Interest Remittance Amount as set
forth in Section 4.01(a)(2)(I)(i) and the Group II Interest Remittance
Amount as set forth in Section 4.01(a)(2)(II)(i).
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(IV) On each Distribution Date, following the distributions
made pursuant to Section 4.01(a)(2)(I), (II) and (III) above, the Trustee shall
withdraw from the Distribution Account an amount equal to any remaining Group I
Interest Remittance Amount, Group II Interest Remittance Amount and Group III
Interest Remittance Amount and distribute to the Certificateholders the
following amounts, in the following order of priority:
(i) to the Holders of the Class M-1 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-1
Certificates;
(ii) to the Holders of the Class M-2 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-2
Certificates;
(iii) to the Holders of the Class M-3 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-3
Certificates;
(iv) to the Holders of the Class M-4 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-4
Certificates;
(v) to the Holders of the Class M-5 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-5
Certificates; and
(vi) to the Holders of the Class M-6 Certificates, an amount
equal to the Interest Distribution Amount allocable to the Class M-6
Certificates.
(3)(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Group I Principal
Distribution Amount shall be distributed in the following order of priority:
(i) to the Holders of the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(ii) after taking into account the amount distributed to the
Holders of the Class A-2 Certificates and the Class A-3 Certificates
pursuant to Section 4.01(3)(II)(i) and Section 4.01(3)(III)(i) on such
Distribution Date, concurrently, to the Holders of the Class A-2
Certificates and the Class A-3 Certificates (allocated among the
Classes of Class A-3 Certificates in the priority described below), on
a PRO RATA basis based on the Certificate Principal Balance of each
such Class, until the Certificate Principal Balances thereof have been
reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, the Group II Principal
Distribution Amount shall be distributed in the following order of priority:
(i) to the Holders of the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
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(ii) after taking into account the amount distributed to the
Holders of the Class A-1 Certificates and the Class A-3 Certificates
pursuant to Section 4.01(3)(I)(i) and Section 4.01(3)(III)(i) on such
Distribution Date, concurrently, to the Holders of the Class A-1
Certificates and the Class A-3 Certificates (allocated among the
Classes of Class A-3 Certificates in the priority described below), on
a PRO RATA basis based on the Certificate Principal Balance of each
such Class, until the Certificate Principal Balances thereof have been
reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, the Group III Principal
Distribution Amount shall be distributed in the following order of priority:
(i) to the Holders of the Class A-3 Certificates (allocated
among the Classes of Class A-3 Certificates in the priority described
below), until the Certificate Principal Balances thereof have been
reduced to zero; and
(ii) after taking into account the amount distributed to the
Holders of the Class A-1 Certificates and the Class A-2 Certificates
pursuant to Section 4.01(3)(I)(i) and Section 4.01(3)(II)(i) on such
Distribution Date, concurrently, to the Holders of the Class A-1
Certificates and the Class A-2 Certificates, on a PRO RATA basis based
on the Certificate Principal Balance of each such Class, until the
Certificate Principal Balances thereof have been reduced to zero.
(IV) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, the sum of the Group I Principal
Distribution Amount, the Group II Principal Distribution Amount and the Group
III Principal Distribution Amount remaining undistributed (after taking into
account the amount distributed to the holders of the Class A-1 Certificates, the
Class A-2 Certificates and the Class A-3 Certificates pursuant to Section
4.01(3)(I), Section 4.01(3)(II) and Section 4.01(3)(III) above) for such
Distribution Date shall be distributed in the following order of priority:
(i) to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
(ii) to the Holders of the Class M-2 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
(iii) to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
(iv) to the Holders of the Class M-4 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
(v) to the Holders of the Class M-5 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero;
and
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(vi) to the Holders of the Class M-6 Certificates, until the
Certificate Principal Balance of such Class has been reduced to zero.
(V) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the Group I Principal
Distribution Amount shall be distributed in the following order of priority;
(i) to the Holders of the Class A-1 Certificates, the Class
A-1 Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero; and
(ii) concurrently, to the Holders of the Class A-2
Certificates and the Class A-3 Certificates (allocated among the
Classes of Class A-3 Certificates in the priority described below), on
a PRO RATA basis based on the Certificate Principal Balance of each
such Class, an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(3)(VI)(i) and
Section 4.01(3)(VII)(i) for such Distribution Date over (y) the amount
actually distributed pursuant to Section 4.01(3)(VI)(i) and Section
4.01(3)(VII)(i) from the Group II Principal Distribution Amount and the
Group III Principal Distribution Amount, respectively, on such
Distribution Date.
(VI) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the Group II Principal
Distribution Amount shall be distributed in the following order of priority;
(i) to the Holders of the Class A-2 Certificates, the Class
A-2 Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero; and
(ii) concurrently, to the Holders of the Class A-1
Certificates and the Class A-3 Certificates (allocated among the
Classes of Class A-3 Certificates in the priority described below), on
a PRO RATA basis based on the Certificate Principal Balance of each
such Class, an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(3)(V)(i) and
Section 4.01(3)(VII)(i) for such Distribution Date over (y) the amount
actually distributed pursuant to Section 4.01(3)(V)(i) and Section
4.01(3)(VII)(i) from the Group I Principal Distribution Amount and the
Group III Principal Distribution Amount, respectively, on such
Distribution Date.
(VII) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the Group III Principal
Distribution Amount shall be distributed in the following order of priority;
(i) to the Holders of the Class A-3 Certificates (allocated
among the Classes of Class A-3 Certificates in the priority described
below), the Class A-3 Principal Distribution Amount, until the
Certificate Principal Balances thereof have been reduced to zero; and
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(ii) concurrently, to the Holders of the Class A-1
Certificates and the Class A-2 Certificates, on a PRO RATA basis based
on the Certificate Principal Balance of each such Class, an amount
equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(3)(V)(i) and Section
4.01(3)(VI)(i) for such Distribution Date over (y) the amount actually
distributed pursuant to Section 4.01(3)(V)(i) and Section
4.01(3)(VI)(i) from the Group I Principal Distribution Amount and the
Group II Principal Distribution Amount, respectively, on such
Distribution Date.
(VIII) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the sum of the Group I
Principal Distribution Amount, the Group II Principal Distribution Amount and
the Group III Principal Distribution Amount remaining undistributed (after
taking into account the amount distributed to the holders of the Class A-1
Certificates, the Class A-2 Certificates and the Class A-3 Certificates pursuant
to Section 4.01(3)(V), Section 4.01(3)(VI) and Section 4.01(3)(VII) for such
Distribution Date) shall be distributed in the following order of priority:
(i) to the holders of the Class M-1 Certificates, the Class
M-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) to the holders of the Class M-2 Certificates, the Class
M-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iii) to the holders of the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) to the holders of the Class M-4 Certificates, the Class
M-4 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(v) to the holders of the Class M-5 Certificates, the Class
M-5 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero; and
(iv) to the holders of the Class M-6 Certificates, the Class
M-6 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero.
With respect to the Class A-3 Certificates, all distributions
of principal pursuant to Section 4.01(a)(3) will be distributed first, to the
Holders of the Class A-3A Certificates, until the Certificate Principal Balance
of the Class A-3A Certificates has been reduced to zero and second, to the
Holders of the Class A-3B Certificates, until the Certificate Principal Balance
of the Class A- 3B Certificates has been reduced to zero.
(4) On each Distribution Date, the Net Monthly Excess Cashflow
shall be distributed by the Trustee as follows:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, as part
of the Group I Principal Distribution Amount,
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the Group II Principal Distribution Amount and the Group III Principal
Distribution Amount in an amount equal to the Overcollateralization
Increase Amount for the Certificates, applied to reduce the Certificate
Principal Balance of such Certificates until the aggregate Certificate
Principal Balance of such Certificates is reduced to zero;
(ii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Interest Carry Forward Amount allocable to such
Class of Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an
amount equal to the Interest Carry Forward Amount allocable to such
Class of Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(vi) to the Holders of the Class M-3 Certificates, in an
amount equal to the Interest Carry Forward Amount allocable to such
Class of Certificates;
(vii) to the Holders of the Class M-3 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(viii) to the Holders of the Class M-4 Certificates, in an
amount equal to the Interest Carry Forward Amount allocable to such
Class of Certificates;
(ix) to the Holders of the Class M-4 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(x) to the Holders of the Class M-5 Certificates, in an amount
equal to the Interest Carry Forward Amount allocable to such Class of
Certificates;
(xi) to the Holders of the Class M-5 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(xii) to the Holders of the Class M-6 Certificates, in an
amount equal to the Interest Carry Forward Amount allocable to such
Class of Certificates;
(xiii) to the Holders of the Class M-6 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(xiv) concurrently, to the Holders of the Class A
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, in an amount equal to the aggregate of any Prepayment Interest
Shortfalls and any Relief Act Interest Shortfall on the Mortgage Loans
allocated to such Certificates, PRO RATA based on the entitlement of
each such Class, in each case, without interest accrued thereon;
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(xv) to the Holders of the Class M-1 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xvi) to the Holders of the Class M-2 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xvii) to the Holders of the Class M-3 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xviii) to the Holders of the Class M-4 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xix) to the Holders of the Class M-5 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xx) to the Holders of the Class M-6 Certificates, in an
amount equal to the aggregate of any Prepayment Interest Shortfalls and
any Relief Act Interest Shortfall on the Mortgage Loans allocated to
such Certificates, in each case, without interest accrued thereon;
(xxi) to the Net WAC Rate Carryover Reserve Account, the
amount by which the aggregate Net WAC Rate Carryover Amount for such
Distribution Date exceeds the amounts received by the Trustee under the
Cap Contracts;
(xxii) to the Holders of the Class CE Certificates the
Interest Distribution Amount and any remaining Overcollateralization
Reduction Amount for such Distribution Date; and
(xxiii) to the Holders of the Class R Certificates, any
remaining amounts; provided that if such Distribution Date is the
Distribution Date immediately following the expiration of the latest
Prepayment Charge term on a Mortgage Loan as identified on the Mortgage
Loan Schedule or any Distribution Date thereafter, then any such
remaining amounts will be distributed first, to the Holders of the
Class P Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and second, to the Holders of the Class R
Certificates.
(b) On each Distribution Date, after making the distributions
of the Available Distribution Amount as set forth above, the Trustee will FIRST,
withdraw from the Net WAC Rate Carryover Reserve Account all income from the
investment of funds in the Net WAC Rate Carryover Reserve Account and distribute
such amount to the Holders of the Class CE Certificates, and SECOND, withdraw
from the Net WAC Rate Carryover Reserve Account, to the extent of amounts
remaining on deposit therein, the amount of any Net WAC Rate Carryover Amount
with respect to the Class
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A Certificates and the Mezzanine Certificates for such Distribution Date and
distribute such amount in the following order of priority:
(i) (a) Any amounts received by the Trustee in respect of the
Class A-2 Cap Contracts will be distributed to the Class A-2 Certificates, to
the extent of the related Net WAC Rate Carryover Amount for such Distribution
Date.
(b) Any amounts received by the Trustee in respect of
the Class A-3 Cap Contract will be distributed to the Class A-3 Certificates, on
a PRO RATA basis based on the Net WAC Rate Carryover Amount for each such Class,
to the extent of the related Net WAC Rate Carryover Amount for such Distribution
Date.
(c) Any amounts received by the Trustee in respect of
the Mezzanine Cap Contract will be distributed to the Mezzanine Certificates, on
a PRO RATA basis based on the Net WAC Rate Carryover Amount for each such Class,
to the extent of the related Net WAC Rate Carryover Amount for such Distribution
Date.
(ii) Any amounts deposited in the Net WAC Carryover Reserve
Account from the Net Monthly Excess Cashflow will be distributed as follows, in
each case to the extent of the applicable Net WAC Rate Carryover Amount:
(a) concurrently to each class of Class A
Certificates, on a PRO RATA basis based on the Net WAC Rate Carryover
Amount due on each such Class on such Distribution Date, to the extent
not paid pursuant to Section 4.01(b)(i) above;
(b) to the Class M-1 Certificates;
(c) to the Class M-2 Certificates;
(d) to the Class M-3 Certificates;
(e) to the Class M-4 Certificates;
(f) to the Class M-5 Certificates; and
(g) to the Class M-6 Certificates.
On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans and shall distribute such amounts to the
Holders of the Class P Certificates. Such distributions shall not be applied to
reduce the Certificate Principal Balance of the Class P Certificates.
(c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
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Distribution Date shall be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date, or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate shall be made in like manner, but only upon
presentment and surrender of such Certificate at the office of the Trustee
maintained for such purpose pursuant to Section 8.12 or such other location
specified in the notice to Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.
(d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee or the
Master Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.
(e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than one (1) day before the related Distribution Date (to the extent that
an accurate Remittance Report is received in a timely manner by the Trustee),
mail to each Holder on such date of such Class of Certificates a notice to the
effect that:
(i) the Trustee expects that the final distribution with
respect to such Class of Certificates will be made on such Distribution
Date but only upon presentation and surrender of such Certificates at
the office of the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from and
after the end of the related Interest Accrual Period.
Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months
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after the time specified in such notice, the Trustee shall mail a second notice
to the remaining non- tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to the remaining
non-tendering Certificateholders concerning surrender of their Certificates but
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in the Trust Fund. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to Bear, ▇▇▇▇▇▇▇ & Co. Inc., in accordance with its wiring instructions, all
such amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e). Any such amounts held in trust
by the Trustee shall be held in an Eligible Account and shall be held
uninvested.
(f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Class A Certificate or a
Mezzanine Certificate be reduced more than once in respect of any particular
amount both (a) allocated to such Mezzanine Certificate in respect of Realized
Losses pursuant to Section 4.04 and (b) distributed to the Holder of such
Certificate in reduction of the Certificate Principal Balance thereof pursuant
to this Section 4.01 from Net Monthly Excess Cashflow and (ii) in no event shall
the Uncertificated Balance of a REMIC I Regular Interest be reduced more than
once in respect of any particular amount both (a) allocated to such REMIC I
Regular Interest in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed on such REMIC I Regular Interest in reduction of the Uncertificated
Balance thereof pursuant to this Section 4.01.
SECTION 4.02. Statements to Certificateholders.
On each Distribution Date, the Trustee shall prepare and make available
via its website to each Holder of the Regular Certificates, a statement as to
the distributions made on such Distribution Date setting forth:
(i) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
principal, and the amount of the distribution made on such Distribution
Date to the Holders of the Class P Certificates allocable to Prepayment
Charges;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of the Certificates of each Class allocable to
interest;
(iii) the aggregate Servicing Fee received by the Master
Servicer during the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
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(▇▇) ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇&▇ Advances for such
Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage
Loans and any REO Properties as of the close of business on such
Distribution Date;
(vi) 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;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89
days, (c) delinquent 90 or more days, in each case, as of the last day
of the preceding calendar month, (d) as to which foreclosure
proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable bankruptcy
laws, with respect to whom bankruptcy proceedings are pending or with
respect to whom bankruptcy protection is in force;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance and the Stated Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(ix) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding the
Distribution Date;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during
the related Prepayment Period (or, in the case of Bankruptcy Losses
allocable to interest, during the related Due Period), separately
identifying whether such Realized Losses constituted Bankruptcy Losses
and the aggregate amount of Realized Losses incurred since the Closing
Date;
(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account or the Distribution
Account for such Distribution Date;
(xiii) the aggregate Certificate Principal Balance and
Notional Amount, as applicable, of each Class of Certificates, after
giving effect to the distributions, and allocations of Realized Losses,
made on such Distribution Date, separately identifying any reduction
thereof due to allocations of Realized Losses;
(xiv) the Certificate Factor for each such Class of
Certificates applicable to such Distribution Date;
(xv) the Interest Distribution Amount in respect of the Class
A Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date and the
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Interest Carry Forward Amount, if any, with respect to the Class A
Certificates and the Mezzanine Certificates on such Distribution Date,
and in the case of the Class A Certificates, the Mezzanine Certificates
and the Class CE Certificates, separately identifying any reduction
thereof due to allocations of Realized Losses, Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls;
(xvi) the aggregate amount of any Prepayment Interest
Shortfall for such Distribution Date, to the extent not covered by
payments by the Master Servicer pursuant to Section 3.24;
(xvii) the aggregate amount of Relief Act Interest Shortfalls
for such Distribution Date;
(xviii) the Overcollateralization Target Amount and the Credit
Enhancement Percentage for such Distribution Date;
(xix) the Overcollateralization Increase Amount, if any, for
such Distribution Date;
(xx) the Overcollateralization Reduction Amount, if any, for
such Distribution Date;
(xxi) the respective Pass-Through Rates applicable to the
Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates for such Distribution Date and the Pass-Through Rate
applicable to the Class A Certificates and the Mezzanine Certificates
for the immediately succeeding Distribution Date; and
(xxii) the Net WAC Rate Carryover Amount for the Class A
Certificates and the Mezzanine Certificates, if any, for such
Distribution Date and the amount remaining unpaid after reimbursements
therefor on such Distribution Date.
The Trustee shall make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Master Servicer and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇.▇▇▇/▇▇▇▇ and
assistance in using the website can be obtained by calling the Trustee's
customer service desk at 1-800-735- 7777. 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
Trustee shall have the right to change the way such statements are distributed
in order to make such distribution more convenient and/or more accessible to the
above parties and the Trustee shall provide timely and adequate notification to
all above parties regarding any such changes.
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Regular
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Certificate a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time are in force.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder.
The Trustee shall, upon request, furnish to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Master Servicer.
On each Distribution Date the Trustee shall provide Bloomberg
Financial Markets, L. P. (" Bloomberg") CUSIP level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.
SECTION 4.03. Remittance Reports; P&I Advances.
(a) On the Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee by telecopy (or by such other means
as the Master Servicer or the Trustee, as the case may be, may agree from time
to time) a Remittance Report with respect to the related Distribution Date. On
the same date, the Master Servicer shall electronically transmit (in a format
acceptable to the Trustee), a data file containing the information set forth in
such Remittance Report with respect to the related Distribution Date or if
electronic transmission is not available, the Master Servicer shall forward to
the Trustee by overnight mail a computer readable magnetic tape. Such Remittance
Report will include (i) the amount of P&I Advances to be made by the Master
Servicer in respect of the related Distribution Date, the aggregate amount of
P&I Advances outstanding after giving effect to such P&I Advances, and the
aggregate amount of Nonrecoverable P&I Advances in respect of such Distribution
Date and (ii) such other information with respect to the Mortgage Loans as the
Trustee may reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.02. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
(b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of, (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of
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the close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Prepayment Period and as to which REO Property an REO Disposition did
not occur during the related Prepayment Period, an amount equal to the excess,
if any, of the REO Imputed Interest (net of any related Servicing Fee) on such
REO Property for the most recently ended calendar month, over the net income
from such REO Property transferred to the Distribution Account pursuant to
Section 3.23 for distribution on such Distribution Date; provided, however, that
the Master Servicer shall not be required to make P&I Advances with respect to
Relief Act Interest Shortfalls or Prepayment Interest Shortfalls in excess of
their respective obligations under Section 3.24.
By 1:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Distribution Date either (i) from its own funds
or (ii) from the Collection Account, to the extent of funds held therein for
future distribution (in which case it will cause to be made an appropriate entry
in the records of the Collection Account that amounts held for future
distribution have been, as permitted by this Section 4.03, used by the Master
Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by telecopy by the close of business on
the Business Day prior to the Distribution Date (so long as the Trustee receives
the required remittance from the Master Servicer) in the event that the amount
remitted by the Master Servicer to the Trustee on such date is less than the
amount required to be remitted by the Master Servicer as set forth in the
Remittance Report for the related Distribution Date.
(c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Fund pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such P&I Advance or Servicing Advance would, if made,
constitute a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance,
respectively. The determination by the Master Servicer that it has made a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance or that any
proposed P&I Advance or Servicing Advance, if made, would constitute a
Nonrecoverable P&I Advance or
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Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Trustee.
SECTION 4.04. Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses; and (iii)
the respective portions of such Realized Losses allocable to interest and
allocable to principal. Prior to each Determination Date, the Master Servicer
shall also determine as to each Mortgage Loan: (i) the total amount of Realized
Losses, if any, incurred in connection with any Deficient Valuations made during
the related Prepayment Period; and (ii) the total amount of Realized Losses, if
any, incurred in connection with Debt Service Reductions in respect of Monthly
Payments due during the related Due Period. The information described in the two
preceding sentences that is to be supplied by the Master Servicer shall be
evidenced by an Officers' Certificate delivered to the Trustee by the Master
Servicer prior to the Determination Date immediately following the end of (i) in
the case of Bankruptcy Losses allocable to interest, the Due Period during which
any such Realized Loss was incurred, and (ii) in the case of all other Realized
Losses, the Prepayment Period during which any such Realized Loss was incurred.
(b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows: first, to the
Accrued Certificate Interest for the Class CE Certificates for the related
Interest Accrual Period; second, to the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-6 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-4
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; sixth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; seventh, to the Class M-2
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and eighth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes 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
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 Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated and any allocation of Realized Losses
to a Class CE Certificate shall be made by reducing the amount otherwise payable
in respect thereof pursuant to Section 4.01(a)(4)(xxii). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.
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As used herein, an allocation of a Realized Loss on a "PRO
RATA basis" among two or more specified Classes of Certificates means an
allocation on a pro rata basis, among the various Classes so specified, to each
such Class of Certificates on the basis of their then outstanding Certificate
Principal Balances prior to giving effect to distributions to be made on such
Distribution Date. All 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.
(c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date as follows:
(i) The REMIC I Marker Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to the following REMIC I Regular Interests in the specified
percentages, as follows: first, to Uncertificated Interest payable to the REMIC
I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate
amount equal to the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Balances of the REMIC I Regular
Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount
equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Balances of REMIC I Regular Interest I- LTAA, REMIC
I Regular Interest I-LTM6 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balances of REMIC I Regular Interest
I-LTM6 has been reduced to zero; fourth to the Uncertificated Balances of REMIC
I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and REMIC I Regular
Interest I-LTZZ, 98%, 1%, and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM5 has been reduced to zero; fifth to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I- LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM4 has been reduced to zero; sixth to the Uncertificated Balances of REMIC I
Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and REMIC I Regular
Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance
of REMIC I Regular Interest I-LTM3 has been reduced to zero; seventh to the
Uncertificated Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero and eighth to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.
(ii) The REMIC I Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date first, so as to keep the Uncertificated Balance of each REMIC
I 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 I Regular Interest ending with the designation
"SUB," so that the Uncertificated Balance of each such REMIC I 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 Class A 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
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Realized Losses shall be applied to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
Realized Losses shall be allocated to REMIC I Regular Interest I-LTXX.
SECTION 4.05. Compliance with Withholding Requirements
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
SECTION 4.06. Exchange Commission; Additional Information.
(a) The Trustee and the Master Servicer shall reasonably
cooperate with the Depositor in connection with the Trust's satisfying the
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Trustee shall prepare on behalf of the Trust any Forms
8-K and 10-K customary for similar securities as required by the Exchange Act
and the Rules and Regulations of the Securities and Exchange Commission
thereunder, and the Depositor shall sign (or shall cause another entity
acceptable to the Securities and Exchange Commission to sign) and the Trustee
shall file (via the Securities and Exchange Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Depositor (or such
other entity). The Depositor hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. Notwithstanding anything
herein to the contrary, the Depositor, and not the Trustee, shall be responsible
for executing each Form 10-K filed on behalf of the Trust.
(b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Master Servicer's annual statement of
compliance described under Section 3.20 and the accountant's report described
under Section 3.21, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence or willful misconduct. The
Form 10-K shall also include a certification in the form attached hereto as
Exhibit J-1 (the "Certification"), which shall be signed by the senior officer
of the Depositor in charge of securitization.
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(c) In addition, (x) the Trustee shall sign a certification
(in the form attached hereto as Exhibit J-2) for the benefit of the Depositor
and its officers, directors and Affiliates regarding certain aspects of the
Certification (the "Trustee's Certification"); provided, however, that the
Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K and (y) the Master Servicer shall sign a
certification (in the form attached hereto as Exhibit J-3) for the benefit of
the Depositor and its officers, directors and Affiliates regarding certain
aspects of the Certification (the "Master Servicer Certification"). The Master
Servicer Certification shall be delivered to the Depositor no later than March
18th (or if such day is not a Business Day, the preceding Business Day). The
Trustee's certification shall be delivered to the Depositor by no later than
March 19th of each year (or if such day is not a Business Day, the immediately
preceding Business Day) and the Depositor shall deliver the Certification to the
Trustee for filing no later than March 20th of each year (or if such day is not
a Business Day, the immediately preceding Business Day).
In addition, (A) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
actual losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of third party claims based upon a breach of the Trustee's obligations under
this Section 4.06(c) or the Trustee's negligence, bad faith or willful
misconduct in connection therewith, (B) the Master Servicer shall indemnify and
hold harmless the Depositor and its officers, directors and Affiliates from and
against any actual losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses that such Person may sustain arising out of third party claims based
upon a breach of the Master Servicer's obligations under this Section 4.06(c),
any material misstatement or omission contained in the Master Servicer's
Certification or any information correctly derived by the Trustee and included
in a Form 8-K or Form 10-K from erroneous information provided to the Trustee by
the Master Servicer under this Agreement due to the Master Servicer's
negligence, bad faith or willful misconduct and (C) the Responsible Parties
shall indemnify and hold harmless the Trustee and its officers, directors and
Affiliates from and against any actual losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain arising out of third
party claims based upon a breach of the Master Servicer's obligations under this
Section 4.06(c), any material misstatement or omission contained in the Master
Servicer's Certification or any information correctly derived by the Trustee and
included in a Form 8-K or Form 10-K from erroneous information provided to the
Trustee by the Master Servicer under this Agreement due to the Master Servicer's
negligence bad faith or willful misconduct. The Responsible Parties shall
indemnify and hold harmless the Trustee, the Master Servicer 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 Depositor's obligations under this Section 4.06 or the
Depositor's negligence, bad faith or willful misconduct in connection therewith
or any material misstatement or omission contained in any 1934 Act reports not
accurately based on the Master Servicer's or the Trustee's Certification. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, the Master Servicer, the Trustee or the Responsible
Parties, as applicable, then the other party, in connection with a breach of its
respective obligations under this Section 4.06 with respect to the Depositor or
Section 4.06(c) with respect to the Trustee or the Master Servicer or its
respective negligence, bad faith or willful misconduct in
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connection therewith, agrees that it shall contribute to the amount paid or
payable by the other party as a result of the losses, claims, damages or
liabilities of the other party in such proportion as is appropriate to reflect
the relative fault and the relative benefit of the Depositor on the one hand and
the Trustee and/or the Master Servicer, as applicable, on the other.
(d) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor and the Master
Servicer a copy of any executed report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.
(f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.06 comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it will reasonably cooperate to
amend the provisions of this Section 4.06 (in accordance with Section 11.01) in
order to comply with such amended reporting requirements and such amendment of
this Section 4.06. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange Act. Notwithstanding the foregoing,
the Trustee shall not be obligated to enter into any amendment pursuant to this
Section that adversely affects its obligations and immunities under this
Agreement.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in the Trust Fund.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-12. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed,
authenticated and delivered by the Trustee upon the written order of the
Depositor. The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Trustee shall bind the Trustee 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 Trustee 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.
(b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no longer qualified to act as such, the Book- Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Trustee is not the Book-Entry Custodian, the Trustee, any other
transfer agent
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(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any such appointment of other than the Depository.
If the Trustee resigns or is removed in accordance with the terms hereof, the
Trustee, the successor Trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any
Certificates held as Book-Entry Certificates by the Book-Entry Custodian.
The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.
If (i)(A) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing, qualified or able to
properly discharge its responsibilities as Depository, and (B) the Depositor is
unable to locate a qualified successor, (ii) the Depositor at its option, and
with the consent of the Master Servicer and the Trustee (such consent not to be
unreasonably withheld), advises the Trustee in writing that it elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of a Master Servicer Event of Termination, Certificate Owners
representing in the aggregate not less than 51% of the Ownership Interests of
the Book-Entry Certificates advise the Trustee through the Depository, in
writing, that the continuation of a book-entry system through the Depository is
no longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Book-Entry Custodian or the Depository, as applicable,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall cause the Definitive Certificates to be issued. Such
Definitive Certificates will be issued in minimum denominations of $25,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $25,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Master Servicer or the Trustee shall be liable for any delay in the delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
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SECTION 5.02. Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.11, a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided.
(b) No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate (the "Private Certificates") shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of a Private Certificate is to be made without
registration or qualification (other than in connection with the initial
transfer of any such Certificate by the Depositor to an Affiliate of the
Depositor), the Trustee shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration (which Opinion of Counsel shall not be an expense of the Trust Fund
or of the Depositor, the Trustee, the Master Servicer in its capacity as such or
any Sub-Servicer), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder's prospective transferee upon which such Opinion of Counsel is
based, if any. Neither the Depositor nor the Trustee is obligated to register or
qualify any such Certificates under the 1933 Act or any other securities laws or
to take any action not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or qualification. Any
Certificateholder desiring to effect the transfer of any such Certificate shall,
and does hereby agree to, indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
(c) No transfer of a Private Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C. F. R. ss.
2510.3-101 ("Plan Assets"), as certified by such transferee in the form of
Exhibit G, unless the Trustee is provided with an Opinion of Counsel addressed
to the Trustee, for the benefit of the Trustee, the Master Servicer and the
Depositor and on which they may rely, which establishes to the satisfaction of
the Trustee that the purchase of such Certificates is permissible under ERISA
and the Code, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Trustee or the Trust Fund to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in this Agreement, which Opinion of
Counsel shall not be an expense of the Depositor, the Master Servicer, the
Trustee or the Trust Fund. Neither an Opinion of Counsel nor any certification
will be required in connection with the initial transfer of any such Certificate
by the Depositor to an Affiliate of the Depositor (in which case, the Depositor
or any Affiliate thereof shall
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have deemed to have represented that such Affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
Each beneficial owner of a Mezzanine Certificate or any
interest therein 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 investor, (ii) it has acquired and is holding such Mezzanine
Certificates in reliance on the Underwriter's Exemption, and that it understands
that there are certain conditions to the availability of the Underwriter's
Exemption, including that the Mezzanine Certificates must be rated, at the time
of purchase, not lower than "BBB-" (or its equivalent) by Fitch Ratings, ▇▇▇▇▇'▇
or S&P and the Certificates are 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 PTCE 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.
If any Private Certificate or Mezzanine Certificate or any
interest therein is acquired or held in violation of the provisions of the
preceding paragraph, 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 any such Certificate or interest therein was effected
in violation of the provisions of the preceding paragraph shall indemnify and
hold harmless the Depositor, the Master Servicer, the Trustee and the Trust Fund
from and against any and all liabilities, claims, costs or expenses incurred by
those parties as a result of that acquisition or holding.
(d) (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 to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. 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 Trustee 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 F-2) from the proposed
Transferee, in form and substance satisfactory to the Trustee,
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
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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 5.02(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 a Responsible Officer of the Trustee 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 in the form attached hereto
as Exhibit F-2 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 F-2) to the Trustee 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 Trustee
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 Trustee 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 Trustee as a condition to such registration. In
addition, no Transfer of a Residual Certificate shall be made unless
the Trustee 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
5.02(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 Trustee 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 5.02(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 5.02(d) and to the extent that the retroactive
restoration of the rights of the holder of such Residual
Certificate as
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described in clause (iii)(A) above shall be invalid, illegal
or unenforceable, then the Trustee shall have the right, but
not the obligation, without notice to the holder or any prior
holder of such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such purported Transferee
shall promptly endorse and deliver each Residual Certificate
in accordance with the instructions of the Trustee. Such
purchaser may be the Trustee itself or any Affiliate of the
Trustee. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Trustee or its
Affiliates), expenses and taxes due, if any, will be remitted
by the Trustee 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 Trustee, and the
Trustee 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 Trustee 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 accepted by the Trustee.
(v) The provisions of this Section 5.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided
that there shall have been delivered to the Trustee 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 Trustee, 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 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.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute, authenticate and deliver, in the name of the
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designated Transferee or Transferees, one or more new Certificates of the same
Class of a like aggregate Percentage Interest.
(f) 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 Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange, the Trustee 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 Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee 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 two
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-1 Interest and the Class R-2 Interest, respectively, in
each case that was evidenced by the Class R Certificate being exchanged.
(g) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trustee 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.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trustee in accordance with its customary
procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) there is delivered to
the Trustee such security or indemnity as may be required by it to save it
harmless, then, in the absence of actual knowledge by the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
Class and of like denomination and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee 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
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the applicable REMIC created hereunder, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Depositor, the Master Servicer, the Trustee and any agent
of any of them may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever,
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and none of the Depositor, the Master Servicer, the Trustee or any agent of any
of them shall be affected by notice to the contrary.
SECTION 5.05. Certain Available Information.
On or prior to the date of the first sale of any Private
Certificate to an Independent third party, the Master Servicer shall provide to
the Trustee ten copies of any private placement memorandum or other disclosure
document used in connection with the offer and sale of such Certificates. In
addition, if any such private placement memorandum or disclosure document is
revised, amended or supplemented at any time following the delivery thereof to
the Trustee, the Master Servicer promptly shall inform the Trustee of such event
and shall deliver to the Trustee ten copies of the private placement memorandum
or disclosure document, as revised, amended or supplemented. The Trustee shall
maintain at its Corporate Trust Office and shall make available free of charge
during normal business hours for review by any Holder of a Certificate, a
Certificate Owner or any Person identified to the Trustee as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder, a Certificate Owner or prospective transferee of a Private
Certificate, the related private placement memorandum or other disclosure
document relating to such Class of Certificates, in the form most recently
provided to the Trustee; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date, (C) all
certifications delivered by a Responsible Officer of the Trustee since the
Closing Date pursuant to Section 10.01(h), (D) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date to evidence the Master Servicer's determination that any P&I Advance or
Servicing Advance was, or if made, would be, a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, and (E) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date pursuant to Section 4.04(a). Copies and mailing of any and all of the
foregoing items will be available from the Trustee upon request at the expense
of the Person requesting the same.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Liability of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer.
Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation. The Depositor and the Master Servicer each 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 respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).
SECTION 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others.
None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of
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willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer may rely in good faith on any document of any
kind which, PRIMA FACIE, is properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Master Servicer and
any director, officer, employee or agent of the Depositor or the Master Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
relating to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Master Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement; provided, however, that each of the
Depositor 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 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 and the Master Servicer shall be entitled to
be reimbursed therefor from the Collection Account as and to the extent provided
in Section 3.11, any such right of reimbursement being prior to the rights of
the Certificateholders to receive any amount in the Collection Account.
SECTION 6.04. 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. No resignation of
the Master Servicer shall become effective until the Trustee or a successor
servicer 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.
Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. The foregoing prohibition on
assignment shall not prohibit the Master Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the Master
Servicer hereunder; provided, however, that as provided in Section 3.06 hereof,
no Sub-Servicer shall be a third-party beneficiary hereunder and the parties
hereto shall not be required to recognize any Sub-Servicer as an indemnitee
under this Agreement. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a successor master
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servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.
SECTION 6.05. Rights of the Depositor in Respect of the Master
Servicer.
The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub-Servicer's) most recent financial
statements and such other information relating to the Master Servicer's capacity
to perform its obligations under this Agreement as it possesses (and that any
such Sub-Servicer 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 written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies or (ii) pursuant to
any law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Trustee or the Trust Fund, and in any case, the Depositor or the Trustee as the
case may be, (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 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 or the Master Servicer, as applicable, 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. The Depositor may, but is not
obligated to, enforce the obligations of the Master 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 under this Agreement or
exercise the rights of the Master Servicer under this Agreement; provided that
the Master Servicer shall not 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 and is not obligated to supervise the
performance of the Master Servicer under this Agreement or otherwise.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Default.
(a) "Master Servicer Event of Termination," wherever used herein, means
any one of the following events:
(i) any failure by the Master Servicer to remit to the Trustee
for distribution to the Certificateholders any payment (other than a
P&I Advance required to be made from its own funds on any Master
Servicer Remittance Date pursuant to Section 4.03) required to be made
under the terms of the Certificates and this Agreement which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Depositor or the
Trustee (in which case notice shall be provided by telecopy), or to the
Master Servicer, the Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the Voting Rights; or
(ii) 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 2.05, which continues unremedied for
a period of 30 days (or if such failure or breach cannot be remedied
within 30 days, then such remedy shall have been commenced within 30
days and diligently pursued thereafter; provided, however, that in no
event shall such failure or breach be allowed to exist for a period of
greater than 90 days) after the earlier of (i) 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, the
Trustee or to the Master Servicer, the Depositor and the Trustee by the
Holders of Certificates entitled to at least 25% of the Voting Rights
and (ii) actual knowledge of such failure by a Servicing Officer of the
Master Servicer; or
(iii) 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 90 days; or
(iv) 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; or
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(v) 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
(vi) any failure of the Master Servicer to make any P&I
Advance on any Master Servicer Remittance Date required to be made from
its own funds pursuant to Section 4.03 which continues unremedied until
3:00 p.m. New York time on the Business Day immediately following the
Master Servicer Remittance Date.
If a Master Servicer Event of Termination described in clauses
(i) through (v) of this Section shall occur, then, and in each and every such
case, so long as a Master Servicer Event of Termination 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 the Depositor, 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. If a Master Servicer Event of
Termination described in clause (vi) hereof shall occur, the Trustee shall, by
notice in writing to the Master Servicer and the Depositor, terminate all of the
rights and obligations of the Master Servicer in its capacity as Master Servicer
under this Agreement 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, 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, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(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, whether in respect of P&I Advances, Servicing
Advances or otherwise, and shall continue to be entitled to the benefits of
Section 6.03, notwithstanding any such termination, with respect to events
occurring prior to such termination). For purposes of this Section 7.01, the
Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Termination 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
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event which is in fact such a Master Servicer Event of Termination is received
by the Trustee and such notice references the Certificates, the Trust Fund or
this Agreement.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a)(1) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein, and all the responsibilities,
duties and liabilities relating thereto and arising thereafter shall be assumed
by the Trustee (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.05 and the obligation to deposit amounts in respect of
losses pursuant to Section 3.12) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make P&I Advances
pursuant to Section 4.03; provided, however, that if the Trustee is prohibited
by law or regulation from obligating itself to make advances regarding
delinquent mortgage loans, then the Trustee shall not be obligated to make P&I
Advances pursuant to Section 4.03; and provided further, that any failure to
perform such duties or responsibilities caused by the Master Servicer's failure
to provide information required by Section 7.01 shall not be considered a
default by the Trustee as successor to the Master Servicer hereunder. As
compensation therefor, the Trustee shall be entitled to the Servicing Fee and
all funds relating to the Mortgage Loans to which the Master Servicer would have
been entitled if it had continued to act hereunder. Notwithstanding the above
and subject to Section 7.02(a)(2) below, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to each Rating Agency and having a net worth of not less than
$15,000,000, as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement.
The Trustee or other successor master servicer shall be
entitled to be reimbursed by the Master Servicer (or by the Trust Fund if the
Master Servicer is unable to fulfill its obligations hereunder) for all
reasonable out-of-pocket costs (such expenses of the Trustee to be documented by
the Trustee to the extent possible) associated with the transfer of servicing
from the predecessor master servicer, including without limitation, any such
costs or 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 Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee to service the Mortgage Loans
properly and effectively.
(2) No appointment of a successor to the Master Servicer under
this Agreement shall be effective until the assumption by the successor of all
of the Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Master Servicer as such hereunder. The Depositor, the Trustee and such successor
shall take such action, consistent with this
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Agreement, as shall be necessary to effectuate any such succession. Pending
appointment of a successor to the Master Servicer under this Agreement, the
Trustee shall act in such capacity as hereinabove provided.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register.
(b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Termination or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of
Termination shall have been cured or waived.
SECTION 7.04. Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights
evidenced by all Classes of Certificates affected by any default or Master
Servicer Event of Termination hereunder may waive such default or Master
Servicer Event of Termination; provided, however, that a default or Master
Servicer Event of Termination under clause (i) or (vi) of Section 7.01 may be
waived only by all of the Holders of the Regular Certificates. Upon any such
waiver of a default or Master Servicer Event of Termination, such default or
Master Servicer Event of Termination shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Master Servicer Event of Termination or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer
Event of Termination and after the curing of all Master Servicer Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. During a Master Servicer
Event of Termination, 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.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its satisfaction, will provide notice thereof to the
Certificateholders.
No provision of this Agreement shall be construed to relieve
the Trustee 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 Event of
Termination, and after the curing of all such Master Servicer Events of
Default which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee
that conform to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Certificates
entitled to at least 25% of the Voting Rights relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred upon it,
under this Agreement.
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SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and conclusively rely upon and
shall be fully protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall not be under any obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
security or indemnity reasonably 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 Event of
Termination (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 such
person's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Termination hereunder and after the curing of all Master Servicer
Events of Default which may have occurred, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Holders of
Certificates entitled to at least 25% of the Voting Rights; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee not
reasonably assured to the Trustee by such Certificateholders, the
Trustee may require reasonable indemnity against such expense or
liability from such Certificateholders as a condition to taking any
such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agents,
accountants or attorneys appointed with due care by it hereunder; and
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(vii) The Trustee shall have no obligation to invest and
reinvest any cash held in the absence of timely and specific written
investment direction from the Master Servicer or the Depositor. In no
event shall the Trustee be liable for the selection of investments or
for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation
of any investment incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Master
Servicer or the Depositor to provide timely written investment
direction.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in the name of the Trustee for the
benefit of all the Holders of such Certificates, subject to the provisions of
this Agreement.
(c) The Trustee is hereby directed by the Depositor to execute
and deliver the Cap Contracts on behalf of the Trust Fund in the respective
forms presented to it by the Depositor. Every provision of this Agreement
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall apply to the Trustee's execution of the Cap Contracts, and the
performance of its duties and satisfaction of its obligations thereunder.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth with respect to such party in Section 8.13) or of the
Certificates (other than the signature of the Trustee and authentication of the
Certificate Registrar on the Certificates) or of any Mortgage Loan or related
document. The Trustee 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 or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than any funds held by or on
behalf of the Trustee and any amounts held by or on behalf of the Trustee in
accordance with Section 3.10.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.
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SECTION 8.05. Trustee's Fees and Expenses.
(a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee, or any
director, officer, employee or agent of the Trustee shall be indemnified by
REMIC I and held harmless against any loss, liability or expense (not including
expenses, disbursements and advances incurred or made by the Trustee including
the compensation and the expenses and disbursements of its agents and counsel,
in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee in connection with any
Master Servicer Event of Termination (not including expenses, disbursements and
advances incurred or made by the Trustee in its capacity as successor master
servicer), default, claim or legal action or any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its obligations and duties under this Agreement, other than
any loss, liability or expense (i) resulting from a breach of the Master
Servicer's obligations and duties under this Agreement and the Mortgage Loans
(for which the Master Servicer shall indemnify pursuant to Section 8.05(b)),
(ii) for the expenses of preparing and filing Tax Returns pursuant to Section
10.01(d) or (iii) any loss, liability or expense incurred by reason of its
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of reckless disregard of its respective obligations and
duties hereunder. Any amounts payable to the Trustee, or any director, officer,
employee or agent of the Trustee in respect of the indemnification provided by
this paragraph (a), or pursuant to any other right of reimbursement from the
Trust Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.
(b) The Master Servicer and the Trustee have entered into a
fee letter governing the terms of reimbursement of certain expenses of the
Trustee not otherwise reimbursable to the Trustee from the Trust Fund as set
forth above. Furthermore, the Master Servicer agrees to indemnify the Trustee
from, and hold it harmless against, any loss, liability or expense resulting
from the negligence or willful misconduct of the Master Servicer in the
performance of its duties hereunder or a breach of the Master Servicer's
obligations and duties under this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee. Any payment hereunder made by the Master Servicer to the Trustee shall
be from the Master Servicer's own funds, without reimbursement from the Trust
Fund therefor.
(c) The Master Servicer shall pay any annual rating agency
fees of the Rating Agencies for ongoing surveillance from its own funds without
right of reimbursement.
The provisions of this Section 8.05 shall survive the
termination of this Agreement or the earlier resignation or removal of the
Trustee.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Responsible Parties, the Master
Servicer 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
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$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
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation of the Trustee, the Depositor shall promptly appoint a successor
trustee by written instrument, in duplicate, which instrument shall be delivered
to the resigning Trustee and to the successor trustee. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee and the Master
Servicer by the Depositor. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation or removal, the Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders 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 and appoint a successor trustee
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 so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
Trustee an instrument accepting
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such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor trustee
shall deliver to the successor trustee all Mortgage Files and related documents
and statements, as well as all moneys, held by it hereunder (other than any
Mortgage Files at the time held by a custodian, which custodian shall become the
agent of any successor trustee hereunder), and the Depositor and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. 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 REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly 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, such title to REMIC I, or any
part thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case a Master Servicer Event of
Termination shall have occurred and be continuing, the Trustee alone shall have
the power to make
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such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, 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 the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to 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 VIII. 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 and a
copy thereof given to the Depositor and the Master Servicer.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. [Reserved].
SECTION 8.12. Appointment of Office or Agency.
The Trustee will designate an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates the office of its
agent located c/o DTC Transfer Agent Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
Entrance, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ for such purposes.
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SECTION 8.13. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants, solely as to
itself, to the Master Servicer and the Depositor, 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.
(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 charter or bylaws.
(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.
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination Upon Repurchase or Liquidation of All
Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to make remittances to the
Trustee and the Trustee to make payments in respect of the REMIC I Regular
Interests and the Classes of Certificates as hereinafter set forth) shall
terminate upon payment to the Certificateholders and the deposit of all amounts
held by or on behalf of the Trustee and required hereunder to be so paid or
deposited on the Distribution Date coinciding with or following the earlier to
occur of (i) the purchase by the Terminator (as defined below) of all Mortgage
Loans and each REO Property remaining in REMIC I and (ii) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or REO Property remaining in REMIC I; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
ambassador of the United States to the Court of St. ▇▇▇▇▇, living on the date
hereof. Subject to Section 3.10 hereof, the purchase by the Terminator of all
Mortgage Loans and each REO Property remaining in REMIC I shall be at a price
equal to the greater of (i) the Stated Principal Balance of the Mortgage Loans
and the appraised value of any REO Properties, such appraisal to be conducted by
an Independent appraiser mutually agreed upon by the Terminator and the Trustee
in their reasonable discretion and (ii) the fair market value of the Mortgage
Loans and the REO Properties (as determined by the Terminator and, to the extent
that the Class A Certificates or a Class of Mezzanine Certificates will not
receive all amounts owed to it as a result of the termination, the Trustee (it
being understood and agreed that any determination by the Trustee shall be made
solely in reliance on an appraisal by an Independent appraiser as provided
above), as of the close of business on the third Business Day next preceding the
date upon which notice of any such termination is furnished to the related
Certificateholders pursuant to Section 9.01(c)), in each case plus accrued and
unpaid interest thereon at the weighted average of the Mortgage Rates through
the end of the Due Period preceding the final Distribution Date plus
unreimbursed Servicing Advances, P&I Advances and any unpaid Servicing Fees
allocable to such Mortgage Loans and REO Properties (the "Termination Price").
If the determination of the fair market value of the Mortgage Loans and REO
Properties shall be required to be made by the Terminator and an Independent
appraiser as provided above, (A) such appraisal shall be obtained at no expense
to the Trustee and (B) the Trustee may conclusively rely on, and shall be
protected in relying on, such appraisal.
(b) The Master Servicer shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
of the preceding paragraph only if the aggregate Stated Principal Balance of the
Mortgage Loans and each REO Property remaining in the
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Trust Fund at the time of such election is reduced to less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.
By acceptance of the Residual Certificates, the Holder of the Residual
Certificates agrees, in connection with any termination hereunder, to assign and
transfer any amounts in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class CE
Certificates.
(c) Notice of the liquidation of the Certificates shall be
given promptly by the Trustee by letter to Certificateholders mailed (a) in the
event such notice is given in connection with the purchase of the Mortgage Loans
and each REO Property by the Terminator, not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
specifying (i) the Distribution Date upon which the Trust Fund will terminate
and the final payment in respect of the REMIC I Regular Interests and the
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC I Regular Interests or the Certificates from and after the Interest
Accrual Period relating to the final Distribution Date therefor and (iv) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Trustee. In the event such notice is given in
connection with the purchase of all of the Mortgage Loans and each REO Property
remaining in REMIC I by the Terminator, the Terminator shall deliver to the
Trustee for deposit in the Distribution Account not later than the last Business
Day of the month next preceding the month of the final distribution on the
Certificates an amount in immediately available funds equal to the Termination
Price. The Trustee shall remit to the Master Servicer from such funds deposited
in the Distribution Account (i) any amounts which the Master Servicer would be
permitted to withdraw and retain from the Collection Account pursuant to Section
3.11 and (ii) any other amounts otherwise payable by the Trustee to the Master
Servicer from amounts on deposit in the Distribution Account pursuant to the
terms of this Agreement, in each case prior to making any final distributions.
Upon certification to the Trustee by the Terminator of the making of such final
deposit, the Trustee shall promptly release to the Terminator the Mortgage Files
for the remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.
SECTION 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:
(i) The Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each Trust REMIC's final
Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section
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860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of REMIC I to the Terminator for
cash; and
(iii) 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 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.
(b) At the expense of the requesting Terminator (or, if the
Trust Fund is being terminated as a result of the occurrence of the event
described in clause (ii) of the first paragraph of Section 9.01, at the expense
of the Master Servicer without the right of reimbursement from the Trust Fund),
the Trustee shall prepare or cause to be prepared documentation required, if
any, in connection with the adoption of a plan of liquidation of each Trust
REMIC pursuant to this Section 9.02.
(c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC, which authorization shall be binding upon all successor
Certificateholders.
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ARTICLE X
REMIC PROVISIONS
SECTION 10.01. REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, the REMIC
I Regular Interests shall be designated as the Regular Interests in REMIC I and
the Class R-I Interest shall be designated as the Residual Interest in REMIC I.
The Class A Certificates, each of the Mezzanine Certificates, the Class CE
Certificates and the Class P Certificates (other than the right to receive
amounts from the Net WAC Rate Carryover Reserve Account, if any) shall be
designated as the Regular Interests in REMIC II and the Class R-II Interest
shall be designated as the Residual Interest in REMIC II. The Trustee shall not
permit the creation of any "interests" in any Trust REMIC (within the meaning of
Section 860G of the Code) other than the REMIC I Regular Interests and the
interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall be reimbursed for any and all expenses
relating to any tax audit of the Trust Fund (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion of
Counsel required to be obtained hereunder. The Trustee, as agent for each Trust
REMIC's tax matters person shall (i) act on behalf of the Trust Fund in relation
to any tax matter or controversy involving any Trust REMIC and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of the Trust REMICs created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.
(d) The Trustee shall prepare, sign and file all of the Tax
Returns (including Form 8811, which must be filed within 30 days following the
Closing Date) in respect of each REMIC created hereunder. The expenses of
preparing and filing such returns shall be borne by the Trustee without any
right of reimbursement therefor.
(e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local
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taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions. The Trustee
shall not take any action or cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of any
Trust REMIC as a REMIC or (ii) 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) (either such event, an "Adverse REMIC
Event") unless the Trustee has received an Opinion of Counsel, addressed to the
Trustee (at the expense of the party seeking to take such action but in no event
at the expense of the Trustee) to the effect that the contemplated action will
not, with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action; provided that the
Master Servicer may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. In addition, prior to taking any action with respect to any Trust REMIC
or the respective assets of each, or causing any Trust REMIC to take any action,
which is not contemplated under the terms of this Agreement, the Master Servicer
will consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any Trust REMIC and the Master Servicer shall not take any such action or cause
any Trust REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could occur; provided that the Master
Servicer may conclusively rely on such writing and shall incur no liability for
its action or failure to act in accordance with such writing. The Trustee may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee. At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of REMIC I will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code, to the extent such obligations are within the Trustee's
control and not otherwise inconsistent with the terms of this Agreement.
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(g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or (iii) against amounts on deposit in the Distribution Account and shall be
paid by withdrawal therefrom.
(h) On or before April 15th of each calendar year, commencing
April 15, 2004, the Master Servicer shall deliver to the Trustee and each Rating
Agency an Officers' Certificate of the Master Servicer stating the Master
Servicer's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis.
(j) Following the Startup Day, neither the Master Servicer nor
the Trustee shall accept any contributions of assets to any Trust REMIC other
than in connection with any Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03 unless it shall have received an Opinion of Counsel
to the effect that the inclusion of such assets in the Trust Fund will not cause
the related REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject such REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services nor knowingly permit either REMIC 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.
SECTION 10.02. Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), sell
or dispose of any investments in the Collection Account or the Distribution
Account for gain, or accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee)
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that such sale, disposition, substitution, acquisition or contribution will not
(a) affect adversely the status of any Trust REMIC as a REMIC or (b) cause any
Trust REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
SECTION 10.03. Master Servicer and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in this Article X.
(b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such actions
shall not, adversely affect in any material respect the interests of any
Certificateholder, as evidenced by either (i) an Opinion of Counsel delivered to
the Master Servicer and the Trustee or (ii) confirmation from the Rating
Agencies that such amendment will not result in the reduction or withdrawal of
the rating of any outstanding Class of Certificates. No amendment shall be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no Opinion of Counsel or
confirmation from the Rating Agencies shall be required to address the effect of
any such amendment on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights 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; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates (as
evidenced by either (i) an Opinion of Counsel delivered to the Trustee or (ii)
written notice to the Depositor, the Master Servicer and the Trustee from the
Rating Agencies that such action will not result in the reduction or withdrawal
of the rating of any outstanding Class of Certificates with respect to which it
is a Rating Agency) in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.
No amendment shall be deemed to adversely affect in any
material respect the interests of any Certificateholder who shall have consented
thereto, and no Opinion of Counsel or Rating Agency confirmation shall be
required to address the effect of any such amendment on any such consenting
Certificateholder.
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
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Counsel to the effect that such amendment (i) will not result in the imposition
of any tax on any Trust REMIC pursuant to the REMIC Provisions or cause any
Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding and (ii) is authorized or permitted hereunder.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.
Notwithstanding the foregoing, any modification of the
provisions of Section 5.02(d) shall be made in accordance with the provisions of
Section 5.02(d)(v) and without the consent of the Certificateholders.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
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 the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Certificateholders accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
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.
-140-
SECTION 11.03. 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 representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor 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
expressly provided for 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 any 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 person 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 of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 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 is
understood and intended, and 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 whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such 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 equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04. Governing Law.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without the
conflicts of laws provisions thereof
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to
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(a) in the case of the Depositor, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or
such other address or telecopy number as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor, (b) in the case of
each of the Responsible Parties, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), or
such other address or telecopy number as may hereafter be furnished to the
Master Servicer, the Trustee and the Depositor in writing by the Responsible
Parties, (c) in the case of the Master Servicer, EMC Mortgage Corporation, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Investor Reporting, or such
other address or telecopy number as may hereafter be furnished to the Trustee
and the Depositor in writing by the Master Servicer and (d) in the case of the
Trustee, Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration-NC030B (telecopy
number: (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or telecopy number as may
hereafter be furnished to the Master Servicer and the Depositor in writing by
the Trustee. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder 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 when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.
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. Notice to Rating Agencies.
The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of
Termination that has not been cured or waived;
3. The resignation or termination of the Master Servicer
or the Trustee;
4. The repurchase or substitution of Mortgage Loans
pursuant to or as contemplated by Section 2.03;
5. The final payment to the Holders of any Class of
Certificates;
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6. Any change in the location of the Collection Account
or the Distribution Account; and
7. Any event that would result in the inability of the
Trustee, as a successor master servicer, to make advances regarding
delinquent Mortgage Loans.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer shall promptly furnish to each Rating Agency copies of the
following:
1. Each annual statement as to compliance described in
Section 3.20; and
2. Each annual independent public accountants' servicing
report described in Section 3.21.
Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to ▇▇▇▇▇'▇ Investors Service, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and to
Standard & Poor's Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other addresses as the
Rating Agencies may designate in writing to the parties hereto.
SECTION 11.08. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 11.09. Grant of Security Interest.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee, be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the aforementioned intent of the
parties, the Mortgage Loans are held to be property of the Depositor, then, (a)
it is the express intent of the parties that such conveyance be deemed a pledge
of the Mortgage Loans by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor and (b)(1) this Agreement shall also be deemed to be
a security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Depositor to the Trustee of a security interest in all of the Depositor's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account and the Distribution Account, whether in the form of
cash, instruments, securities or other property; (3) the obligations secured by
such security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement,
-143-
including the obligation to provide to the Certificateholders the benefits of
this Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the Mortgage Loans
and all other property described in clause (2) of the preceding sentence, for
the purpose of securing to the Trustee the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
to be a true, absolute and unconditional sale of the Mortgage Loans and assets
constituting the Trust Fund by the Depositor to the Trustee.
SECTION 11.10. Waiver of Jury Trial.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY,
WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND
AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.
-144-
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.
NEW CENTURY MORTGAGE SECURITIES INC.,
as Depositor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
NEW CENTURY MORTGAGE CORPORATION,
as Responsible Party
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
NC CAPITAL CORPORATION,
as Responsible Party
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
EMC MORTGAGE CORPORATION,
as Master Servicer
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 12th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇, known to me to be an
Executive Vice President of New Century Mortgage Securities 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 said 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 ORANGE )
On the 12th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇, known to me to be Senior
Vice President of New Century Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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 ORANGE )
On the 12th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇, known to me to be
President of NC Capital Corporation, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said 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 TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 14th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be
Executive Vice President of EMC Mortgage Corporation, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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 ORANGE )
On the 12th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be
an Assistant Vice President of Deutsche Bank National Trust Company, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said 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 ORANGE )
On the 12th day of November 2003, before me, a notary public
in and for said State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇, known to me to be an
Assistant Vice President of Deutsche Bank National Trust Company, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said 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]
EXHIBIT A-1
-----------
FORM OF CLASS A-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ Certificate Principal Balance of the
Class A-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
A-1-1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-1-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be
A-1-3
made for any such registration of transfer or exchange of Certificates, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-1-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-1-5
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS A-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ Certificate Principal Balance of the
Class A-2 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
A-2-1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-2-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate
A-2-3
Percentage Interest, as requested by the Holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-2-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATIONU
------------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-2-5
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS A-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ Certificate Principal Balance of the
Class A-3 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
A-3-1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-3-2
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%
and (ii) the Net WAC Pass-Through Rate for such Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
A-3-3
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-3-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-3-5
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-1 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY
OF THE EXEMPTION,
A-4-1
INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P
OR ▇▇▇▇▇'▇, 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.
A-4-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-4-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-4-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-4-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:_________________________________
Authorized Signatory
A-4-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-4-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE
CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-2 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY
OF THE EXEMPTION,
A-5-1
INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P
OR ▇▇▇▇▇'▇, 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.
A-5-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-5-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-5-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-5-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-5-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-5-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-3 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE EXTENT
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-3 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE
A-6-1
ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P
OR ▇▇▇▇▇'▇, 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.
A-6-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-6-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-6-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-6-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-6-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-4 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS
M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-4 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS AMENDED ("EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE
A-7-1
ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION,
INCLUDING THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P
OR ▇▇▇▇▇'▇, 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.
A-7-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-7-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-7-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-7-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-7-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-7-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-5 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-5 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS
A-8-1
AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE
CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING
THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT
LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR ▇▇▇▇▇'▇, 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.
A-8-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-5 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-8-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-8-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-8-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-8-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-8-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS M-6 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
CERTIFICATES, THE CLASS M-4 CERTIFICATES AND THE CLASS M-5
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class M-6 Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
CUSIP: ___________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
EACH BENEFICIAL OWNER OF THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE REPRESENTED, BY VIRTUE OF ITS ACQUISITION
OR HOLDING OF THIS 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 PROHIBITED
TRANSACTION EXEMPTION 2002-41 AS
A-9-1
AMENDED ("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE
CERTAIN CONDITIONS TO THE AVAILABILITY OF THE EXEMPTION, INCLUDING
THAT THIS CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT
LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY FITCH, S&P OR ▇▇▇▇▇'▇, 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.
A-9-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-6 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-6 Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-9-3
The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
equal a rate per annum equal to the lesser of (i) One- Month LIBOR plus [__]%,
in the case of each Distribution Date through and including the Distribution
Date on which the aggregate principal balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to less than 10% of the aggregate principal balance of the Mortgage Loans as of
the Cut-off Date, or One- Month LIBOR plus [__]% per annum, in the case of any
Distribution Date thereafter and (ii) the Net WAC Pass-Through Rate for such
Distribution Date.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
Each beneficial owner of this Certificate or any interest
therein shall be deemed to have represented, by virtue of its acquisition or
holding of this 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 Fitch, S&P or ▇▇▇▇▇'▇, 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.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the
A-9-4
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-9-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:_________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-9-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-9-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
A-9-8
EXHIBIT A-10
------------
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE
CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3
CERTIFICATES, THE CLASS M-4 CERTIFICATES, THE CLASS M-5
CERTIFICATES AND THE CLASS M-6 CERTIFICATES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
A-10-1
Series 2003-B Aggregate Certificate Principal Balance of the
Class CE Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Aggregate Notional Amount of the Class Issue Date: November 14, 2003
CE Certificates as of the Issue Date: $_______
Notional Amount: $_________________
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
A-10-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class CE Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class CE Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Securities, Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-10-3
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of
A-10-4
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-10-5
A-10-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-10-7
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-10-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
A-10-9
EXHIBIT A-11
------------
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
Series 2003-B Aggregate Certificate Principal Balance of the
Class P Certificates as of the Issue Date:
Pass-Through Rate: Variable $____________
Cut-off Date and date of Pooling and Servicing Denomination: $______________
Agreement: November 1, 2003
Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003
Trustee: Deutsche Bank National Trust
No. __ Company
Issue Date: November 14, 2003
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
DENOMINATION OF THIS CERTIFICATE.
A-11-1
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class P Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class P Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among New Century
Mortgage Securities, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer, NC
Capital Corporation, New Century Mortgage Corporation (together with NC Capital
Corporation, the "Responsible Parties") and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
A-11-2
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of
A-11-3
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-11-4
A-11-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-11-6
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: ________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-11-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
A-11-8
EXHIBIT A-12
------------
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE
REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES DESCRIBED
HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT
TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE
TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION
DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR
A-12-1
(3) SHALL HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED
ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND
(B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Interest of the Class R
Certificates as of the Issue Date: 100.00%
Pass-Through Rate: Variable
Percentage Interest: 100.00%
Cut-off Date and date of Pooling and Servicing
Agreement: November 1, 2003 Master Servicer: EMC Mortgage Corporation
First Distribution Date: December 26, 2003 Trustee: Deutsche Bank National Trust
Company
No. __
Issue Date: November 14, 2003
A-12-2
ASSET BACKED PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family,
adjustable-rate and fixed-rate, first lien and second lien mortgage loans (the
"Mortgage Loans") formed and sold by
NEW CENTURY MORTGAGE SECURITIES, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
NEW CENTURY MORTGAGE SECURITIES, INC., THE MASTER SERVICER, THE
RESPONSIBLE PARTIES, THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that ___________ is the registered owner of the
Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in REMIC I created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among New Century Mortgage Securities, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer, NC Capital Corporation, New Century Mortgage Corporation
(together with NC Capital Corporation, the "Responsible Parties") and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Asset Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the
A-12-3
"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof equal to the denomination specified on
the face hereof divided by the aggregate Certificate Principal Balance of the
Class of Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. Neither the Depositor nor the Trustee is
obligated to register or qualify the Class of Certificates specified on the face
hereof under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without
A-12-4
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.
The Depositor, the Master Servicer, the Responsible Parties,
the Trustee and any agent of the Depositor, the Master Servicer, the Responsible
Parties or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Responsible Parties, the Trustee nor any such agent shall
be affected by notice to the contrary.
A-12-5
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the aggregate
principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-12-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: November __, 2003
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
as Trustee
By:__________________________________
Authorized Signatory
A-12-7
ABBREVIATIONS
-------------
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor) under
Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
if survivorship and not as _______________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Asset Backed Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: _________________________________________
______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
A-12-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
_______________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to ____________________________________________________
_______________________________________________________. Applicable statements
should be mailed to ___________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.
A-12-9
EXHIBIT B
---------
Representations and Warranties Regarding the Mortgage Loans
The Responsible Parties hereby represent and warrant to the Depositor,
the Master Servicer and Trustee that, as to each Mortgage Loan, as of the
Closing Date:
(i) The information set forth in the related Mortgage Loan
Schedule is complete, true and correct as of the Cut-off Date;
(ii) [Reserved];
(iii) The Originator has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or
indirectly, for the payment of any amount required by the Mortgage Note
or Mortgage. Except with respect to ___% of the Group I Mortgage Loans,
___% of the Group II Mortgage Loans, and ___% of the Group III Mortgage
Loans, no Mortgage Loan will be delinquent as of the Cut-off Date;
(iv) Either (i) there are no delinquent taxes, ground rents,
water charges, sewer rents, assessments, insurance premiums, leasehold
payments or other outstanding charges affecting the related Mortgaged
Property or (ii) the Interim Servicer has complied with the provisions
of Section 3.09 of the Agreement;
(v) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments, recorded in the applicable public recording office
if necessary to maintain the lien priority of the Mortgage, and which
have been delivered to the Trustee; the substance of any such waiver,
alteration or modification has been approved by the title insurer, to
the extent required by the related policy, and is reflected on the
Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the related
policy, and which assumption agreement has been delivered to the
Trustee and the terms of which are reflected in the Mortgage Loan
Schedule;
(vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vii) All buildings upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, pursuant to insurance
B-1
policies conforming to the requirements of the Agreement. All such
insurance policies contain a standard mortgagee clause naming the
Originator, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified on a flood hazard map or
flood insurance rate map issued by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration is in
effect which policy conforms to the requirements of ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local
law including, without limitation, usury, recording, truth in lending,
real estate settlement procedures, consumer credit protection,
applicable predatory, anti-predatory and/or abusive lending laws, equal
credit opportunity or disclosure laws applicable to the origination and
servicing of the Mortgage Loan have been complied with and were
complied with at the time each Mortgage Loan was made. Any and all
statements or acknowledgments required to be made by the Mortgagor
relating to such requirements are and will remain in the Mortgage File;
(ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any
such satisfaction, cancellation, subordination, rescission or release;
(x) The Mortgage creates a first or second lien or a first or
second priority ownership interest in the related Mortgaged Property;
(xi) With respect to each Mortgage Loan the related Mortgage
is a valid, existing and enforceable first lien on the related
Mortgaged Property, including all improvements on the related Mortgaged
Property subject only to (a) the lien of current real property taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements, mineral right reservations and
other matters of the public record as of the date of recording of such
Mortgage being acceptable to mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the related Mortgage Loan and which do
not adversely affect the appraised value of the related Mortgaged
Property, (c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the related Mortgage or the use,
enjoyment, value (as determined by appraised value) or marketability of
the related Mortgaged Property and (d) with respect to a second lien
Mortgage Loan, the related first lien. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, subsisting,
enforceable and perfected first lien and first priority security
interest on the property described therein;
B-2
(xii) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms;
(xiii) All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage Note and
the Mortgage have been duly and properly executed by such parties. The
Mortgagor is a natural person who is a party to the Mortgage Note and
the Mortgage is in an individual capacity or family trust that is
guaranteed by a natural person;
(xiv) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no
obligation for the Mortgagee to advance additional funds thereunder and
any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage have been
paid, and the Mortgagor is not entitled to any refund of any amounts
paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xv) Immediately prior to the sale of the Mortgage Loans to
the Trust Fund as herein contemplated, the Depositor will be the owner
of, and have good and marketable title to, the related Mortgage and the
indebtedness evidenced by the related Mortgage Note subject to no
liens; the Depositor has full right and authority under all
governmental and regulatory bodies having jurisdiction over the
Depositor, subject to no interest or participation of, or agreement
with, any party, to sell and assign the same pursuant to this
Agreement; and immediately upon the transfers and assignments herein
contemplated, the Depositor shall have transferred all of its right,
title and interest in and to each Mortgage Loan to the Trust Fund and
the Trust Fund will hold good, marketable and indefeasible title to,
and be the sole owner of, each Mortgage Loan subject to no liens;
(xvi) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest,
were) in compliance with any and all applicable "doing business" and
licensing requirements of the laws of the state wherein the Mortgaged
Property is located;
(xvii) The Mortgage Loan is covered by an ALTA lender's title
insurance policy and, in the case of an Adjustable-Rate Mortgage Loan,
with an adjustable rate mortgage endorsement, such endorsement
substantially in the form of ALTA Form 6.0 or 6.1, acceptable to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae
and ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring (subject to the exceptions
contained in (xi)(b) and (c) above) the Originator, its successors and
assigns as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan and, with respect to an
Adjustable-Rate Mortgage Loan, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the Mortgage
Rate and Monthly Payment. Additionally, such lender's title insurance
policy affirmatively
B-3
insures ingress and egress to and from the Mortgaged Property, and
against encroachments by or upon the Mortgaged Property or any interest
therein. The Originator is the sole insured of such lender's title
insurance policy, and such lender's title insurance policy is in full
force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. Such
lender's title insurance policy has been duly and validly endorsed to
the Depositor or the assignment to the Depositor of the Originator's
interest therein does not require the consent of or notification to the
related insurer. No claims have been made under such lender's title
insurance policy, and no prior holder of the related Mortgage,
including the Responsible Parties, has done, by act or omission,
anything which would impair the coverage of such lender's title
insurance policy;
(xviii) Except as set forth in (iii), as of the Closing Date,
there is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event
of acceleration; and as of the Closing Date, neither of the Responsible
Parties has waived any default, breach, violation or event of
acceleration. For purposes of the foregoing, a delinquent payment of
less than 30 days on a Mortgage Loan in and of itself does not
constitute a default, breach, violation or event of acceleration with
respect to such Mortgage Loan;
(xix) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting the
related Mortgaged Property which are or may be liens prior to, or equal
or coordinate with, the lien of the related Mortgage;
(xx) All improvements which were considered in determining the
appraised value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property. Each appraisal has been performed in accordance with the
provisions of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended;
(xxi) The Mortgage Loan was (a) originated by the Originator
or by a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a
federal or state authority, or by a mortgagee approved as such by the
Secretary of HUD or (b) acquired by the Originator directly through
loan brokers or correspondents such that (A) the Mortgage Loan was
originated in conformity with the Originator's underwriting guidelines,
(B) the Originator approved the Mortgage Loan prior to funding and (C)
the Originator provided the funds used to originate the Mortgage Loan
and acquired the Mortgage Loan on the date of origination thereof;
(xxii) Principal payments on the Mortgage Loan are scheduled
to commence no more than sixty days after the proceeds of the Mortgage
Loan are disbursed. The Mortgage Loan bears interest at the Mortgage
Rate. The Mortgage Note is payable on the first day of each month in
Monthly Payments. Interest on the Mortgage Loan is calculated on the
basis
B-4
of a 360-day year consisting of twelve 30-day months. The Mortgage Note
does not permit negative amortization;
(xxiii) The origination and collection practices used by the
Originator with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage
origination and servicing industry. The Mortgage Loan has been serviced
by the Interim Servicer and any predecessor servicer in accordance with
the terms of the Mortgage Note and applicable law. With respect to
escrow deposits and Escrow Payments, if any, all such payments are in
the possession of, or under the control of, the Interim Servicer, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the
Interim Servicer have been capitalized under any Mortgage or the
related Mortgage Note;
(xxiv) Either (i) the Mortgaged Property is free of damage and
waste and there is no proceeding pending for the total or partial
condemnation thereof or (ii) the Mortgaged Property is covered by an
insurance policy as set forth in (vii);
(xxv) The Mortgage and related Mortgage Note contain customary
and enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including,
(a) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (b) otherwise by judicial foreclosure. Since the
date of origination of the Mortgage Loan, the Mortgaged Property has
not been subject to any bankruptcy proceeding or foreclosure proceeding
and the Mortgagor has not filed for protection under applicable
bankruptcy laws. There is no homestead or other exemption available to
the Mortgagor, which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Responsible Parties and
neither of the Responsible Parties has knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act;
(xxvi) The related Mortgaged Property is not a leasehold
estate or, if such Mortgaged Property is a leasehold estate, the
remaining term of such lease is at least ten (10) years greater than
the remaining term of the related Mortgage Note;
(xxvii) The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage on the
Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in paragraph (xi) above;
(xxviii) The Mortgage File contains an appraisal of the
related Mortgaged Property made and signed, prior to the approval of
the Mortgage Loan application, by a qualified appraiser who had no
interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, whose compensation is not affected by the
approval or disapproval of the Mortgage Loan and who met the minimum
qualifications of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac;
B-5
(xxix) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Depositor to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(xxx) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Responsible Parties, the
Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any source
other than the Mortgagor or (c) contains any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loan is not a
graduated payment mortgage loan and the Mortgage Loan does not have a
shared appreciation or other contingent interest feature;
(xxxi) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of a Refinanced Mortgage
Loan, and evidence of such receipt is and will remain in the Mortgage
File;
(xxxii) The Mortgage Note, the Mortgage, the Assignment and
any other documents required to be delivered with respect to each
Mortgage Loan pursuant to the Agreement, have been delivered to the
Trustee all in compliance with the specific requirements of the
Agreement;
(xxxiii) The Mortgaged Property is lawfully occupied under
applicable law; all inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been
made or obtained from the appropriate authorities;
(xxxiv) No error, omission, misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken
place on the part of any person, including, without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the application
of any insurance in relation to such Mortgage Loan;
(xxxv) The Assignment, is in recordable form and (other than
with respect to the blank assignee) is acceptable for recording under
the laws of the jurisdiction in which the Mortgaged Property is
located. When endorsed as provided for in this Agreement, the Mortgage
Notes will be duly endorsed under applicable law;
(xxxvi) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is
expressly insured as having first or second lien priority by a title
insurance policy, an
B-6
endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan;
(xxxvii) No Mortgage Loan has a balloon payment feature;
(xxxviii) If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development
(other than a de minimis planned unit development) such condominium or
planned unit development project meets ▇▇▇▇▇▇ Mae's eligibility
requirements;
(xxxix) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(xl) No Mortgage Loan has an Loan-to-Value Ratio or combined
Loan-to-Value Ratio, as applicable, of more than 100%;
(xli) No Mortgage Loan is a "high cost" mortgage loan or
Section 32 mortgage loan, as defined in the applicable predatory and
abusive lending laws;
(xlii) (a) No Mortgage Loan is subject to the Home Ownership
and Equity Protection Act of 1994 ("HOEPA") or in violation of any
comparable federal, state or local law; (b) no Mortgage Loan is subject
to the Georgia Fair Lending Act, as amended; (c) no Mortgage Loan will
impose a Prepayment Charge for a term in excess of five years, (d) no
proceeds from any Mortgage Loan were used to finance single-premium
credit insurance policies; and (e) the Interim Servicer has and will
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company, on a monthly
basis;
(xliii) No Mortgage Loan is without a FICO score as evidenced
by the Mortgage File;
(xliv) No Mortgage Loan has a debt ratio exceeding 55%;
(xlv) None of the Mortgage Loans having Mortgaged Properties
in the state of Georgia were originated on or after October 1, 2002 to
and including ▇▇▇▇▇ ▇, ▇▇▇▇. ▇▇▇▇ of the Loans having mortgaged
properties in New York City were originated on or after February 1,
2003. None of the Loans having mortgaged properties in New York State
were originated on or after April 1, 2003. None of the Mortgage Loans
having Mortgaged Properties in the state of Kentucky were originated on
or after June 23, 2003. None of the Mortgage Loans having Mortgaged
Properties in the state of Arkansas were originated on or after July 1,
2003. None of the Mortgage Loans having Mortgaged Properties in the
state of North Carolina were originated on or after July 1, 2000;
B-7
(xlvi) No Mortgage Loan is a "high-cost home loan" as defined
in the Georgia Fair Lending Act, as amended; the New York Predatory
Lending Law, codified as N.Y. Banking Lawss.6-I, N.Y. Gen. Bus.
Lawss.771-a, and N.Y. Real Prop. Acts Lawss.1302; the Arkansas Home
Loan Protection Act, as amended; Kentucky Revised Statutesss.360.100,
or North Carolina Predatory Lending Act, codified as N.C. Gen.
Stat.ss.24-1.1E., as amended;
(xlvii) No Mortgage Loan having undisclosed finance charges
greater than $35 but less than or equal to $100 shall be subject to
rescission, equitable rescission, recoupment or a material delay in
foreclosure. No Mortgage Loan has undisclosed finance charges greater
than $100;
(xlviii) No Mortgage Loan provides for the accrual of interest
on a simple interest basis;
(xlix) None of the Mortgage Loans have been brought current
through a modification and capitalization of past due interest or are
operating under a forebearance plan;
(l) None of the Mortgaged Properties securing any of the
Mortgage Loans constitutes mobile homes or manufactured homes (as
defined in the ▇▇▇▇▇▇ ▇▇▇ Seller-Servicer's Guide);
(li) Each Mortgaged Property securing a Mortgage Loan is
improved by a Residential Dwelling and no Residential Dwelling shall be
comprised of five or more units;
(lii) For any Mortgage Loan (a) with a first Due Date of
August 1, 2003 or September 1, 2003, no Mortgagor will fail to make its
first and/or second Monthly Payment by the end of the calendar month
for which each such Monthly Payment will be due and (b) with a first
Due Date of October 1, 2003, no Mortgagor will fail to make its first
Monthly Payment by the end of the calendar month for which such Monthly
Payment will be due;
(liii) All Mortgage Loans have a first Due Date of August 1,
2003, September 1, 2003 or October 1, 2003;
(liv) The information set forth in the Prepayment Charge
Schedule (including the prepayment charge summary attached thereto) is
complete, true and correct in all material respects on the date or
dates when such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms (except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditor's rights generally or the collectability thereof may be
limited due to acceleration in connection with a foreclosure) under
applicable federal, state and local law;
(lv) No Mortgage Loan provides for primary mortgage insurance;
B-8
(lvi) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a customary provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee, at the
option of the Mortgagee;
(lvii) There is only one executed original of each Mortgage
Note, which original has been delivered to the Trustee on or before the
Closing Date;
(lviii) No obligor on a Mortgage Loan is the United States
government or any agency, authority, instrumentality or other political
subdivision of the United States government;
(lix) No improvement located on or part of any Mortgaged
Property is in violation of any applicable zoning law or regulation,
and all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the property and, with
respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities and such
property is lawfully occupied under the applicable law;
(lx) To the best of the Responsible Parties' knowledge, there
does not exist on any of the Mortgaged Properties any hazardous
substances, hazard wastes or solid wastes, as such terms are defined in
the Comprehensive Environmental Response Compensation and Liability
Act, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, or other federal, state or local environmental legislation, on
any real property described in each Mortgage Loan;
(lxi) No Adjustable-Rate Mortgage Loan shall contain a
provision whereby the borrower can convert its Mortgage Loan to a fixed
rate instrument;
(lxii) Each Group I Mortgage Loan is in compliance with the
anti-predatory lending eligibility for purchase requirements of ▇▇▇▇▇▇
Mae's Selling Guide;
(lxiii) All points and fees related to each Group I Mortgage
Loan were disclosed in writing to the borrower in accordance with
applicable state and federal law and regulation. Except in the case of
a Group I Mortgage Loan in an original principal amount of less than
$60,000 which would have resulted in an unprofitable origination, no
borrower of a Group I Mortgage Loan was charged "points and fees"
(whether or not financed) in an amount greater than 5% of the principal
amount of such loan, such 5% limitation is calculated in accordance
with ▇▇▇▇▇▇ Mae's anti-predatory lending requirements as set forth in
the ▇▇▇▇▇▇ Mae Selling Guide; and
(lxiv) The Master Servicer will transmit full-file credit
reporting data for each Group I Mortgage Loan pursuant to ▇▇▇▇▇▇ ▇▇▇
Guide Announcement 95-19 and that for each Group I Mortgage Loan, the
Master Servicer agrees it shall report one of the following statuses
each month as follows: new origination, current, delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.
B-9
B-10
EXHIBIT C-1
-----------
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
New Century Mortgage Securities, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EMC Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of November 1,
2003, among New Century Mortgage Securities, Inc., EMC
Mortgage Corporation, New Century Mortgage Corporation, NC
Capital Corporation and Deutsche Bank National Trust
Company, Asset Backed Pass-Through Certificates, Series
2003-B
----------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing
Agreement, dated as of November 1, 2003 (the "Agreement"), among New Century
Mortgage Securities, Inc. as Depositor, EMC Mortgage Corporation, as master
servicer, New Century Mortgage Corporation, as a responsible party, NC Capital
Corporation, as a responsible party, and Deutsche Bank National Trust Company as
trustee, we hereby acknowledge that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full, any Delayed
Delivery Group I Mortgage Loan or any Mortgage Loan specifically identified in
the exception report annexed thereto as not being covered by such certification)
(i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(v)) required to be delivered to it pursuant
to the Agreement are in its possession, (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan and
(iii) based on its examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (i) through (iii),
(vi),(xi), (xii), (xv), (xvii), (xviii), (xx) through (xxiii) and (xxv) of the
definition of "Mortgage Loan Schedule" accurately reflects information set forth
in the Mortgage File.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement.
The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan, or (iii) whether any Mortgage File
included any of the documents specified in clause (v) of Section 2.01 of the
Agreement.
C-1-1
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:______________________________
Name:
Title:
C-1-2
EXHIBIT C-2
-----------
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
New Century Mortgage Securities, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EMC Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of November 1,
2003, among New Century Mortgage Securities, Inc., EMC
Mortgage Corporation, New Century Mortgage Corporation, NC
Capital Corporation and Deutsche Bank National Trust
Company, Asset Backed Pass-Through Certificates, Series
2003-B
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received:
(i) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the
public recording office retains the original or where the original has
been lost; and
(ii) an original Assignment in ______________ or a recorded
Assignment to the Trustee together with the original recorded
Assignment or Assignments showing a complete chain of assignment from
the originator, or a certified copy of such Assignments in those
instances where the public recording retains the original or where
original has been lost; and
(iii) the original lender's title insurance policy.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in the Mortgage
File
C-2-3
of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii)
the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY
By:________________________________
Name:
Title:
C-2-4
EXHIBIT D
---------
FORM OF UNDERLYING SECURITY AGREEMENT
D-1
EXHIBIT E
---------
REQUEST FOR RELEASE
(for Trustee)
LOAN INFORMATION
Name of Mortgagor: ______________________________
Master Servicer
Loan No.: ______________________________
TRUSTEE
Name: ______________________________
Address: ______________________________
______________________________
Trustee Mortgage
File No.: ______________________________
DEPOSITOR
Name: NEW CENTURY MORTGAGE SECURITIES, INC.
Address: ______________________________
Certificates: Asset-Backed Pass-Through
Certificates, Series 2003-B.
The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Asset-Backed Pass-Through Certificates, Series 2003-B, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of November 1, 2003, among the Trustee, the
Responsible Parties, the Depositor and the Master Servicer (the "Pooling and
Servicing Agreement").
( ) Promissory Note dated _______________, 20__, in the original principal
sum of $__________, made by _____________________, payable to, or
endorsed to the order of, the Trustee.
E-1
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_______________, State of __________________ in
book/reel/docket_________________ of official records at page/image
_____________.
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
__________________ as instrument no. _________ in the County Recorder's
Office of the County of _______________, State of
_______________________ in book/reel/docket ____________ of official
records at page/image ____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
( ) _____________________________________________
E-2
The undersigned Master Servicer hereby acknowledges
and agrees as follows:
(1) The Master Servicer shall hold and retain
possession of the Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.
Dated:
[MASTER SERVICER]
By: ______________________________
Name:
Title:
E-3
EXHIBIT F-1
-----------
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: New Century Home Equity Loan Trust, Series 2003-B, Asset
Backed Pass-Through Certificates, Class ___, representing a
___% Class ___ Percentage Interest
-----------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
November 1, 2003, among New Century Mortgage Securities, Inc. as depositor, EMC
Mortgage Corporation as master servicer, New Century Mortgage Corporation as a
responsible party, NC Capital Corporation as a responsible party and Deutsche
Bank National Trust Company as trustee (the "Pooling and Servicing Agreement"),
pursuant to which Pooling and Servicing Agreement the Certificates were issued.
F-1-1
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:___________________________
Name:
Title:
F-1-2
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: New Century Home Equity Loan Trust, Series 2003-B,
Asset Backed Pass-Through Certificates, Class ___,
representing a ___% Percentage Interest
--------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that the
sale to it is being made in reliance on Rule 144A. The Transferee is acquiring
the Certificates for its own account or for the account of a qualified
institutional buyer, and understands that such Certificate may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism associated
with the Certificates, that it has requested.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of November 1, 2003, among New Century Mortgage Securities,
Inc. as depositor, EMC Mortgage Corporation as master servicer, New Century
Mortgage Corporation as a responsible party, NC Capital Corporation as a
responsible party and Deutsche Bank National Trust Company as trustee (the
"Pooling and Servicing Agreement"), pursuant to which the Certificates were
issued.
F-1-3
[TRANSFEREE]
By:__________________________
Name:
Title:
F-1-4
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company as
trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a foreign
bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of
which is attached hereto.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least
___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
---------------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities. $25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
F-1-5
___ INSURANCE COMPANY. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule
F-1-6
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
____________________________________
Print Name of Transferee
By:_________________________________
Name:
Title:
F-1-7
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company as
trustee, with respect to the mortgage pass- through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities
(other than the excluded securities referred to below) as
of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule
144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $_____________________ in
securities (other than the excluded securities referred to
below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
F-1-8
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
___________________________________
Print Name of Transferee or Advisor
By:________________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Transferee
F-1-9
FORM OF TRANSFEREE REPRESENTATION LETTER
----------------------------------------
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as
amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser
_______________________________
By:____________________________
Name:
Title:
Date of this certificate:
Date of information provided in paragraph 3
F-1-10
EXHIBIT F-2
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF _____________)
COUNTY _______________)
______________________, being duly sworn, deposes, represents
and warrants as follows:
1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly organized and
existing under the laws of ______________, the record owner of New Century Home
Equity Loan Trust, Series 2003-B, Asset Backed Mortgage Pass-Through
Certificates, Series 2003-B, Class R Certificates, (the "Class R Certificates"),
on behalf of whom I make this affidavit and agreement. Capitalized terms used
but not defined herein have the respective meanings assigned thereto in the
Pooling and Servicing Agreement pursuant to which the Class R Certificates were
issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________, 20__ and (ii) is acquiring the Class R Certificates for its own
account or for the account of another Owner which is a permitted transferee from
which it has received an affidavit in substantially the same form as this
affidavit. A "Permitted Transferee" is any person other than a "disqualified
organization" or a possession of the United States. For this purpose, a
"disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality
of such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such organization is subject
to the tax on unrelated business taxable income. The Owner will endeavor to
remain a Permitted Transferee for so long as it retains its Ownership Interest
in a Residual Certificate
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.
F-2-1
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is ____________.
8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.
10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes
F-2-2
owed by the holder of such Class R Certificates, or that may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remain outstanding.
14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included 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.
17. The Owner of the Class R Certificate, hereby agrees that
in the event that the Trust Fund created by the Pooling and Servicing Agreement
is terminated pursuant to Section 9.01 thereof, the undersigned shall assign and
transfer to the Holders of the Class CE Certificates any amounts in excess of
par received in connection with such termination. Accordingly, in the event of
such termination, the Trustee is hereby authorized to withhold any such amounts
in excess of par and to pay such amounts directly to the Holders of the Class CE
Certificates. This agreement shall bind and be enforceable against any
successor, transferee or assigned of the undersigned in the Class R Certificate.
In connection with any transfer of the Class R Certificate, the Owner shall
obtain an agreement substantially similar to this clause from any subsequent
owner.
F-2-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.
[OWNER]
By:_____________________________
Name:
Title: [Vice] President
ATTEST:
By:_________________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ___ day of _______, 20___.
____________________________
Notary Public
County of __________________
State of ___________________
My Commission expires:
F-2-4
FORM OF TRANSFEROR AFFIDAVIT
----------------------------
STATE OF ______________)
COUNTY OF ____________)
__________________________, being duly sworn, deposes,
represents and warrants as follows:
1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
F-2-5
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.
[OWNER]
By:_____________________________
Name:
Title: [Vice] President
ATTEST:
By:______________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
20___.
____________________________
Notary Public
County of __________________
State of ___________________
My Commission expires:
F-2-6
EXHIBIT G
---------
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 20__
New Century Mortgage Securities, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
EMC Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: New Century Home Equity Loan Trust, Series 2003-B, Asset
Backed Pass-Through Certificates, Class ___
--------------------------------------------------------
Dear Sirs:
_______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of New Century Home Equity Loan Trust, Series 2003-B, Asset
Backed Pass-Through Certificates, Class [CE] [P] [R] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of November 1, 2003 among New Century Mortgage Securities,
Inc. as depositor (the "Depositor"), EMC Mortgage Corporation as master servicer
(the "Master Servicer"), New Century Mortgage Corporation as a responsible
party, NC Capital Corporation as a responsible party (together with New Century
Mortgage Corporation, the "Responsible Parties") and Deutsche Bank National
Trust Company as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer the
following:
The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, ▇▇▇▇▇ plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101.
G-1
Very truly yours,
_______________________________
By:____________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF REPORT PURSUANT TO SECTION 4.06
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For fiscal year ended ________________
Commission file number: 333-_______
NEW CENTURY MORTGAGE SECURITIES, INC.
(as depositor under the Pooling and Servicing Agreement,
dated as of November 1, 2003, providing for the issuance of
Asset Backed Pass-Through Certificates, Series 2003-B)
New Century Mortgage Securities, Inc.
-------------------------------------
(Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------
Delaware ▇▇-▇▇▇▇▇▇▇
---------------------------- ----------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification Number)
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
--------------------------------------------------------------------------------
H-1
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate whether the Registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
X YES No
Item 1. Business: --- ---
Not applicable
Item 2. Properties:
Not applicable
Item 3. Legal Proceedings:
None
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
To the best knowledge of the registrant there is no established public trading
market for the certificates.
There are approximately _____ holders of record as of the end of the reporting
year.
Item 6. Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Not applicable
H-2
Item 8. Financial Statements and Supplementary Data.
Not applicable.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None
Item 10.
Not applicable
Item 11. Executive Compensation
Not applicable
Item 12. Security Ownership of Certain Beneficial Owners and Management
Not applicable
Item 13. Certain Relationships and Related Transactions
Not applicable
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
a) The company filed on Form 8-K, separately for each
distribution date, the distribution of funds related to the
trust for each of the following distribution dates:
Distribution Date Form 8-K Filing Date
----------------- --------------------
_________________ ________________
_________________ ________________
_________________ ________________
b) 99.1 Annual Report of Independent Public Accountants' as
to master servicing activities or servicing activities,
as applicable, of:
(a) EMC Mortgage Corporation, as master servicer
99.2 Annual Statement of Compliance with obligations under
the Pooling and Servicing Agreement or servicing
agreement, as applicable, of:
(a) EMC Mortgage Corporation, as master servicer
H-3
Such document (i) is not filed herewith since such document was not received by
the Reporting Person at least three business days prior to the due date of this
report; and (ii) will be included in an amendment to this report on Form 10-K/A
to be filed within 30 days of the Reporting Person's receipt of such document.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
Date: ___________
New Century Mortgage Securities, Inc., by
Deutsche Bank National Trust Company as
Trustee for New Century Home Equity Loan
Trust, Series 2003-B, Asset Backed
Pass-Through Certificates.
By: ___________________________________
Name:
Title:
Company:
H-4
EXHIBIT I
FORM OF LOST NOTE AFFIDAVIT
Loan #: ____________
Borrower: _____________
LOST NOTE AFFIDAVIT
I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of New Century Mortgage Securities, Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:
1. The Seller's address is: _____________________
_____________________
_____________________
2. The Seller previously delivered to the Purchaser a signed
Initial Certification with respect to such Mortgage and/or
Assignment of Mortgage.
3. Such Mortgage Note and/or Assignment of Mortgage was assigned
or sold to the Purchaser by ________________________, a
____________ corporation pursuant to the terms and provisions
of a Mortgage Loan Purchase Agreement dated as of __________
__, _____.
4. Such Mortgage Note and/or Assignment of Mortgage is not
outstanding pursuant to a request for release of Documents.
5. Aforesaid Mortgage Note and/or Assignment of Mortgage (the
"Original") has been lost.
6. Deponent has made or caused to be made a diligent search for
the Original and has been unable to find or recover same.
7. The Seller was the Seller of the Original at the time of the
loss.
8. Deponent agrees that, if said Original should ever come into
Seller's possession, custody or power, Seller will immediately
and without consideration surrender the Original to the
Purchaser.
9. Attached hereto is a true and correct copy of (i) the Note,
endorsed in blank by the Mortgagee and (ii) the Mortgage or
Deed of Trust (strike one) which secures the
I-1
Note, which Mortgage or Deed of Trust is recorded in the
county where the property is located.
10. Deponent hereby agrees that the Seller (a) shall indemnify and
hold harmless the Purchaser, its successors and assigns,
against any loss, liability or damage, including reasonable
attorney's fees, resulting from the unavailability of any
Notes, including but not limited to any loss, liability or
damage arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that has already
purchased a mortgage loan evidenced by the Lost Note or any
interest in such mortgage loan, (iii) any claim of any
borrower with respect to the existence of terms of a mortgage
loan evidenced by the Lost Note on the related property to the
fact that the mortgage loan is not evidenced by an original
note and (iv) the issuance of a new instrument in lieu thereof
(items (i) through (iv) above hereinafter referred to as the
"Losses") and (b) if required by any Rating Agency in
connection with placing such Lost Note into a Pass-Through
Transfer, shall obtain a surety from an insurer acceptable to
the applicable Rating Agency to cover any Losses with respect
to such Lost Note.
11. This Affidavit is intended to be relied upon by the Purchaser,
its successors and assigns. _____________________, a
______________ corporation represents and warrants that is has
the authority to perform its obligations under this Affidavit
of Lost Note.
Executed this ____ day, of ___________ ______.
SELLER
By:______________________
Name:
Title:
On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.
Signature:
[Seal]
I-2
EXHIBIT J-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: New Century Mortgage Securities, Inc., Series 2003-B
Asset-Backed Certificates, Series 2003-B
I, [identify the certifying individual], the senior officer of
New Century Mortgage Securities, Inc. (the "Registrant") in charge of
securitizations, certify that:
l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Registrant;
2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information, and
the servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement for inclusion in these
reports, is included in these reports;
4. Based on my knowledge and upon the annual compliance
statements included in the report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the reports, the Master Servicer has fulfilled its obligations
under the Pooling and Servicing Agreement; and
5. The reports disclose all significant deficiencies relating
to the Master Servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied
on information provided to me by the Trustee and the Master Servicer.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated November
1, 2003 (the "Pooling and Servicing Agreement"), among the Registrant as
depositor, EMC Mortgage Corporation as master servicer, New Century Mortgage
Corporation, as a responsible party, NC Capital Corporation as a responsible
party and Deutsche Bank National Trust Company as trustee.
J-1-1
NEW CENTURY MORTGAGE SECURITIES, INC.
By:_________________________________
Name:
Title:
Date:
J-2
EXHIBIT J-2
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: New Century Mortgage Securities, Inc., Series 2003-B
Asset-Backed Certificates, Series 2003-B
I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee, hereby certify to New Century Mortgage
Securities, Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these distribution reports.
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated November
1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, EMC Mortgage Corporation as master servicer, New Century Mortgage
Corporation as a responsible party, NC Capital Corporation as a responsible
party and Deutsche Bank National Trust Company as trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:__________________________________
Name:
Title:
Date:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM CERTIFICATION TO BE PROVIDED TO THE DEPOSITOR
BY THE MASTER SERVICER
Re: New Century Mortgage Securities, Inc., Series 2003-B
Asset-Backed Certificates, Series 2003-B
I, [identify the certifying individual], a [title] of EMC
Mortgage Corporation, as Master Servicer, hereby certify to New Century Mortgage
Securities, Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:
l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Depositor;
2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information, and
the servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement for inclusion in these
reports, is included in these reports;
4. I am responsible for reviewing the activities performed by
the Master Servicer under the Pooling and Servicing and based upon my knowledge
and the annual compliance review required under that agreement, and except as
disclosed in the reports, the Master Servicer has fulfilled its obligations
under that agreement; and
5. The reports disclose all significant deficiencies relating
to the Master Servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: [the
Trustee, the Subservicer and the Interim Servicer].
Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated November
1, 2003 (the "Pooling and Servicing Agreement"), among the Depositor as
depositor, EMC Mortgage Corporation as master servicer, New Century Mortgage
Corporation as a responsible party, NC Capital Corporation as a responsible
party and Deutsche Bank National Trust Company as trustee.
J-3-1
J-3-2
EMC MORTGAGE CORPORATION
By:__________________________________
Name:
Title:
Date:
J-3-3
EXHIBIT K
---------
[RESERVED]
K-1
EXHIBIT L
---------
OFFICER'S CERTIFICATE
REGARDING ANNUAL STATEMENT OF COMPLIANCE
___________________ Trust, Series 200_-___
_______________ Pass-Through Certificates
I, _____________________, hereby certify that I am a duly
appointed __________________________ of _______________________________ (the
"[Master Servicer]"), and further certify as follows:
1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of ____________, _____ (the
"Agreement"), among ______________________, as depositor, the [Master Servicer],
as [master servicer], ______________, as [responsible party] and
________________, as trustee.
2. I have reviewed the activities of the [Master Servicer]
during the preceding year and the [Master Servicer's] performance under the
Agreement and to the best of my knowledge, based on such review, the [Master
Servicer] has fulfilled all of its obligations under the Agreement throughout
the year.
Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreements.
Dated: _________________
L-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.
By: _____________________________
Name:
Title:
I, _________________________, a (an) __________________ of the
[Master Servicer], hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the [Master Servicer] and that
the signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.
By: ______________________________
Name:
Title:
L-2
Schedule 1
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
Schedule 1-1
Schedule 2
SCHEDULE OF PREPAYMENT CHARGES
[AVAILABLE UPON REQUEST]
Schedule 2-1
