NOMURA ASSET ACCEPTANCE CORPORATION,
Depositor
NOMURA CREDIT & CAPITAL, INC.,
Sponsor
[-----------------------],
Servicer
[---------------------],
Master Servicer and Securities Administrator
and
[---------------------]
Trustee
--------------------
FORM OF
POOLING AND SERVICING AGREEMENT
Dated as of [___________]
----------------------------------------
NOMURA ASSET ACCEPTANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES [_______]
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.01 DEFINED TERMS............................................................................
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Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS................................................
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ARTICLE II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.................................................................
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Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.........................................................
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Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER AND THE SPONSOR................
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Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR..........................................
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Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS AND REPURCHASES..........
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Section 2.06 ISSUANCE OF THE REMIC I REGULAR INTERESTS AND THE CLASS R-1 INTEREST.....................
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Section 2.07 CONVEYANCE OF THE REMIC I REGULAR INTERESTS; ACCEPTANCE OF REMIC II BY THE TRUSTEE.......
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Section 2.08 CONVEYANCE OF THE REMIC II REGULAR INTERESTS; ACCEPTANCE OF REMIC III BY THE TRUSTEE.....
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Section 2.09 ISSUANCE OF CLASS R CERTIFICATES.........................................................
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Section 2.10 ESTABLISHMENT OF TRUST...................................................................
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Section 2.11 PURPOSE AND POWERS OF THE TRUST..........................................................
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ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section 3.01 THE SERVICER TO ACT AS SERVICER OF THE MORTGAGE LOANS....................................
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Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS...............................................
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Section 3.03 SUBSERVICERS.............................................................................
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Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SERVICER TO BE HELD FOR TRUSTEE........
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Section 3.05 MAINTENANCE OF HAZARD INSURANCE..........................................................
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Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.........................................
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Section 3.07 MAINTENANCE OF INSURANCE POLICIES........................................................
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Section 3.08 RESERVED.................................................................................
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Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION OF EXCESS LIQUIDATION
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PROCEEDS AND REALIZED LOSSES; REPURCHASES OF CERTAIN MORTGAGE LOANS......................
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Section 3.10 SERVICING COMPENSATION...................................................................
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Section 3.11 REO PROPERTY.............................................................................
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Section 3.12 LIQUIDATION REPORTS......................................................................
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Section 3.13 ANNUAL STATEMENT AS TO COMPLIANCE........................................................
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Section 3.14 ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS........................................
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Section 3.15 BOOKS AND RECORDS........................................................................
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Section 3.16 THE TRUSTEE..............................................................................
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Section 3.17 REMIC-RELATED COVENANTS..................................................................
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Section 3.18 ANNUAL CERTIFICATION; ADDITIONAL INFORMATION.............................................
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Section 3.19 RELEASE OF MORTGAGE FILES................................................................
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Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SERVICER TO BE HELD FOR TRUSTEE........
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Section 3.21 POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS...................................
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Section 3.22 RESERVED.................................................................................
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Section 3.23 UCC......................................................................................
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Section 3.24 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS............................................
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Section 3.25 OBLIGATIONS OF THE SERVICER UNDER CREDIT RISK MANAGEMENT AGREEMENT.......................
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Section 3.26 COLLECTION OF MORTGAGE LOAN PAYMENTS; CUSTODIAL ACCOUNT..................................
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Section 3.27 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.........................................
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Section 3.28 REPORTS TO MASTER SERVICER...............................................................
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Section 3.29 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS......................
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Section 3.30 RESERVED.................................................................................
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Section 3.31 DISTRIBUTION ACCOUNT.....................................................................
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Section 3.32 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT........................
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Section 3.33 DUTIES OF THE CREDIT RISK MANAGER; TERMINATION...........................................
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Section 3.34 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.....................................
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ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
Section 4.01 THE MASTER SERVICER......................................................................
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Section 4.02 MONITORING OF SERVICER...................................................................
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Section 4.03 FIDELITY BOND............................................................................
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Section 4.04 POWER TO ACT; PROCEDURES.................................................................
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Section 4.05 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS...............................................
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Section 4.06 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR TRUSTEE.....
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Section 4.07 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES...................................
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Section 4.08 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.........................................
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Section 4.09 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES...................................
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Section 4.10 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS.................
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Section 4.11 REALIZATION UPON DEFAULTED LOANS.........................................................
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Section 4.12 COMPENSATION FOR THE MASTER SERVICER.....................................................
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Section 4.13 REO PROPERTY.............................................................................
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Section 4.14 MASTER SERVICER ANNUAL STATEMENT OF COMPLIANCE...........................................
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Section 4.15 MASTER SERVICER ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS........................
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Section 4.16 RESERVED.................................................................................
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Section 4.17 RESERVED.................................................................................
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Section 4.18 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT INTEREST SHORTFALLS...........
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ARTICLE V ADVANCES AND DISTRIBUTIONS
Section 5.01 ADVANCES; ADVANCE FACILITY...............................................................
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Section 5.02 COMPENSATING INTEREST PAYMENTS...........................................................
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Section 5.03 REMIC DISTRIBUTIONS......................................................................
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Section 5.04 DISTRIBUTIONS............................................................................
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Section 5.05 ALLOCATION OF REALIZED LOSSES............................................................
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Section 5.06 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.................................................
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Section 5.07 REMIC DESIGNATIONS AND REMIC I ALLOCATIONS...............................................
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Section 5.08 REMIC II ALLOCATIONS.....................................................................
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Section 5.09 CLASS P CERTIFICATE ACCOUNT..............................................................
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Section 5.10 NET WAC RESERVE FUND.....................................................................
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Section 5.11 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION....................................
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ARTICLE VI THE CERTIFICATES
Section 6.01 THE CERTIFICATES.........................................................................
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Section 6.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES..............
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Section 6.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES........................................
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Section 6.04 PERSONS DEEMED OWNERS....................................................................
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Section 6.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES................................
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Section 6.06 BOOK-ENTRY CERTIFICATES..................................................................
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Section 6.07 NOTICES TO DEPOSITORY....................................................................
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Section 6.08 DEFINITIVE CERTIFICATES..................................................................
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Section 6.09 MAINTENANCE OF OFFICE OR AGENCY..........................................................
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ARTICLE VII THE DEPOSITOR, SERVICER AND THE MASTER SERVICER
Section 7.01 LIABILITIES OF THE DEPOSITOR, SERVICER AND THE MASTER SERVICER...........................
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Section 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE SERVICER OR THE MASTER SERVICER............
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Section 7.03 INDEMNIFICATION OF DEPOSITOR AND THE SERVICER............................................
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Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, SECURITIES ADMINISTRATOR, MASTER SERVICER,
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SERVICER AND OTHERS......................................................................
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Section 7.05 SERVICER NOT TO RESIGN...................................................................
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Section 7.06 TERMINATION OF THE SERVICER WITHOUT CAUSE; APPOINTMENT OF SPECIAL SERVICER...............
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Section 7.07 LIMITATION ON RESIGNATION OF THE MASTER SERVICER.........................................
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Section 7.08 ASSIGNMENT OF MASTER SERVICING...........................................................
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Section 7.09 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER................................
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ARTICLE VIII DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER
Section 8.01 EVENTS OF DEFAULT........................................................................
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Section 8.02 MASTER SERVICER TO ACT; APPOINTMENT OF SUCCESSOR.........................................
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Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS.......................................................
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Section 8.04 WAIVER OF SERVICER DEFAULTS AND MASTER SERVICER DEFAULTS.................................
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ARTICLE IX CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section 9.01 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR...........................................
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Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND SECURITIES ADMINISTRATOR.......................
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Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.......
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Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES................................
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Section 9.05 FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR................................
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Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR........................
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Section 9.07 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES ADMINISTRATOR..........................
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Section 9.08 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR............................................
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Section 9.09 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR...........................
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Section 9.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE............................................
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Section 9.11 APPOINTMENT OF OFFICE OR AGENCY..........................................................
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Section 9.12 REPRESENTATIONS AND WARRANTIES...........................................................
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Section 9.13 TAX MATTERS..............................................................................
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ARTICLE X TERMINATION
Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE LOANS.........................
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Section 10.02 FINAL DISTRIBUTION ON THE CERTIFICATES...................................................
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Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS......................................................
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ARTICLE XI MISCELLANEOUS PROVISIONS
Section 11.01 AMENDMENT................................................................................
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Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS...................................................
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Section 11.03 GOVERNING LAW............................................................................
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Section 11.04 INTENTION OF PARTIES.....................................................................
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Section 11.05 NOTICES..................................................................................
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Section 11.06 SEVERABILITY OF PROVISIONS...............................................................
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Section 11.07 ASSIGNMENT...............................................................................
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Section 11.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...............................................
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Section 11.09 CERTIFICATES NONASSESSABLE AND FULLY PAID................................................
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Section 11.10 INTENTION OF THE PARTIES AND INTERPRETATION..............................................
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EXHIBITS
Exhibit A-1 Form of Class [___________] Certificates
Exhibit [___] Form of Class [___________] Certificates
Exhibit A-3 Form of Class [___________] Certificates
Exhibit A-4 Form of Class X Certificates
Exhibit A-5 Form of Class P Certificates
Exhibit A-6 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Master Servicer Certification
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Prepayment Charge Schedule
Exhibit L Form of Servicer's Certification
Exhibit M Form of Trustee's Certification
Exhibit N Appendix E of the Standard & Poor's Glossary For File
Format For LEVELS(R) Version 5.6 Revised
Exhibit O Servicing Criteria
Exhibit X-1 Standard File Layout - Delinquency Reporting
Exhibit X-2 Standard File Codes - Delinquency Reporting
POOLING AND SERVICING AGREEMENT, dated as of [____________], among
NOMURA ASSET ACCEPTANCE CORPORATION, a Delaware corporation, as depositor (the
"Depositor"), NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, as seller
(in such capacity, the "Sponsor"), [_____________________], a national banking
association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator"), [________________], a
[_________] corporation, as a servicer (the "Servicer") and
[_____________________], a national banking association, not in its individual
capacity, but solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets as set forth in the definition of REMIC I (and exclusive of the
Cap Contract and the Net WAC Reserve Fund) subject to this Agreement as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC I." The Class
R-1 Interest will represent the sole class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate, the Initial Uncertificated Principal
Balance, and for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests. None of the REMIC I Regular Interests will be certificated.
Initial Uncertificated Uncertificated REMIC I Assumed Final Maturity
Designation Principal Balance Pass-Through Rate Date(1)
----------- ----------------- ----------------- -------
LTI-1 $[__________] Variable(2) [_____________]
LTI-IO-A $[__________] Variable(2) [_____________]
LTI-IO-B $[__________] Variable(2) [_____________]
LTI-IO-C $[__________] Variable(2) [_____________]
LTI-IO-D $[__________] Variable(2) [_____________]
LTI-IO-E $[__________] Variable(2) [_____________]
LTI-IO-F $[__________] Variable(2) [_____________]
LTI-IO-G $[__________] Variable(2) [_____________]
LTI-IO-H $[__________] Variable(2) [_____________]
LTI-P $100.00 N/A [_____________]
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each Class of Certificates that
represents one or more of the "regular interests" in REMIC I.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
REMIC II
As provided herein, the Trustee will make an election 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-2 Interest will represent the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions (as
defined herein) under federal income tax law. The following table irrevocably
sets forth the designation, the Uncertificated REMIC II Pass-Through Rate, the
Initial Uncertificated Principal Balance, and for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for each of the REMIC II Regular Interests. None of the REMIC II Regular
Interests will be certificated.
Uncertificated
Initial Uncertificated REMIC II Assumed Final Maturity
Designation Principal Balance Pass-Through Rate Date(1)
----------- ----------------- ----------------- -------
LTII-AA $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-[___] $[__________] Variable(2) [_____________]
LTII-ZZ $[__________] Variable(2) [_____________]
LTII-IO N/A(3) [____]%(4) [_____________]
LTII-P $100.00 Variable(2) [_____________]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC II Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC II
Pass-Through Rate" herein. (3) REMIC II Regular Interest LTII-IO will
not have an Uncertificated Principal Balance, but will accrue
interest on its Uncertificated Notional Amount, as defined herein.
(4) REMIC II Regular Interest LTII-IO will accrue interest at a rate of
[___]%.
REMIC III
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC III". The Class R-3 Interest will represent the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions.
The following table irrevocably sets forth the Class designation, Pass-Through
Rate and Initial Certificate Principal Balance for each Class of Certificates
that represents one or more of the "regular interests" in REMIC III created
hereunder:
Initial Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
----------------- ----------------- ----------------- -------
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] N/A(2) Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class [___] $[__________] Class [___] Pass-Through Rate [_____________]
Class X $[__________] (3) Class X Pass-Through Rate [_____________]
Class P $100.00 N/A(4) [_____________]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.
(2) The Class [___] Certificates will accrue interest at the Class [___]
Pass-Through Rate on the Certificate Notional Balance of the Class
[___] Certificates calculated in accordance with the definition of
"Certificate Notional Balance" herein. The Class [___] Certificates
will not be entitled to distributions in respect of principal. For
federal income tax purposes, the Class [___] Certificates will not have
a Notional Amount, but will be entitled to 100% of amounts distributed
on REMIC II Regular Interest LTII-IO.
(3) The Class X Certificates will not accrue interest on their Certificate
Principal Balance, but will accrue interest at the Class X Pass-Through
Rate on the Certificate Notional Balance of the Class X Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests
(other than REMIC II Regular Interest LTII-IO and REMIC II Regular
Interest LTII-P).
(4) The Class P Certificates will not be entitled to distributions in
respect of interest. In consideration of the mutual agreements herein
contained, the Depositor, the Servicer, the Master Servicer, the
Securities Administrator, the Sponsor and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever used in
this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer), or (y) as
provided in Section 3.01, but in no event below the standard set forth in clause
(x).
ACCOUNT: Either the Distribution Account or the Custodial Account.
ACCRUAL PERIOD: With respect to the Certificates (other than the Class
[___], Class P and Class R Certificates) and any Distribution Date, the calendar
month immediately preceding the calendar month in which such Distribution Date
occurs. With respect to the Class [___] Certificates and any Distribution Date,
the period from and including the [__] day of the calendar month preceding the
calendar month in which such Distribution Date occurs (or with respect to the
first Accrual Period, the Closing Date) to and including the [__] day of the
calendar month in which such Distribution Date occurs.
ADVANCE: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Servicer or by the Master
Servicer pursuant to Section 5.01.
ADVANCE FACILITY: As defined in Section 5.01(b)(i).
ADVANCE FACILITY NOTICE: As defined in Section 5.01(b)(ii).
ADVANCE FINANCING PERSON: As defined in Section 5.01(b)(i).
ADVANCE REIMBURSEMENT AMOUNT: As defined in Section 5.01(b)(ii).
AGREEMENT: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution Date, the
aggregate amount held in the Servicer's Custodial Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Period and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period.
ANNUAL STATEMENT OF COMPLIANCE: As defined in Section 3.13.
APPRAISED VALUE: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
ASSESSMENT OF COMPLIANCE: As defined in Section 3.13.
AUTHORIZED SERVICER REPRESENTATIVE: Any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and facsimile signature appear on a list of servicing
officers furnished to the Trustee and the Master Servicer by the Servicer on the
Closing Date, as such list may from time to time be amended.
AVAILABLE DISTRIBUTION AMOUNT: The sum of the Interest Remittance
Amount and Principal Funds, exclusive of amounts pursuant to Section 5.09.
BANKRUPTCY CODE: Title 11 of the United States Code.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Publicly Offered Certificates constitutes a Class of
Book-Entry Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in The City of New York, New York, the state
of [___________], the state of [_____________], the city in which any Corporate
Trust Office of the Trustee is located or the States in which the Servicer's
servicing operations are located are authorized or obligated by law or executive
order to be closed.
CAP CONTRACT: The cap contract between the Trustee and the Cap
Provider, for the benefit of the Holders of the Class [ ] Certificates. -----
CAP PROVIDER: [_____________], or any successor thereto.
CERTIFICATE: Any one of the certificates of any Class executed and
authenticated by the Securities Administrator in substantially the forms
attached hereto as Exhibits [___] through A-6.
CERTIFICATE NOTIONAL BALANCE: With respect to the Class [___]
Certificates and any Distribution Date, the lesser of (a)(i) $[__________] for
each Distribution Date from and including the Distribution Date in [__________]
to and including the Distribution Date in [__________], (ii) $[__________] for
each Distribution Date from and including the Distribution Date in [__________]
to and including the Distribution Date in [__________], (iii) $[__________] for
each Distribution Date from and including the Distribution Date in [__________]
to and including the Distribution Date in [__________], (iv) $[__________] for
the Distribution Date in [__________] and the Distribution Date in [__________],
(v) $[__________] for each Distribution Date from and including the Distribution
Date in [__________] to and including the Distribution Date in [__________],
(vi) $[__________] for the Distribution Date in [__________] and the
Distribution Date in [__________], (vii) $[__________] for the Distribution Date
in [__________] and the Distribution Date in [__________], (viii) $[__________]
for the Distribution Date in [__________] and (ix) for each Distribution Date
thereafter, $0 for each Distribution Date thereafter and (b) the aggregate
Stated Principal Balance of the Mortgage Loans. For United States federal income
tax purposes, the Class [___] Certificates will not have a Certificate Notional
Balance, but will be entitled to 100% of amounts distributed on REMIC II Regular
Interest LTII-IO. With respect to the Class X Certificates and any Distribution
Date, the Uncertificated Principal Balance of the REMIC II Regular Interests
(other than REMIC I Regular Interest II-LTP) for such Distribution Date. As of
the Closing Date, the Certificate Notional Balance of the Class X Certificates
is equal to $[_________].
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Publicly Offered Certificate
(other than any Class [___] Certificates) and as of any Distribution Date, the
Initial Certificate Principal Balance of such Certificate plus any Subsequent
Recoveries added to the Certificate Principal Balance of such Certificate
pursuant to Section 5.05(f) less the sum of (i) all amounts distributed with
respect to such Certificate in reduction of the Certificate Principal Balance
thereof on previous Distribution Dates pursuant to Section 5.04, and (ii) with
respect to the Mezzanine Certificates, any reductions in the Certificate
Principal Balance of such Certificate deemed to have occurred in connection with
the allocations of Realized Losses, if any. References herein to the Certificate
Principal Balance of a Class of Certificates shall mean the Certificate
Principal Balances of all Certificates in such Class.
CERTIFICATE REGISTER: The register maintained pursuant to Section 6.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as set forth
in Section 6.01.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to the Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: With respect to any Distribution Date,
One-Month LIBOR plus [____]% per annum, subject to a cap equal to the Net WAC
Rate Cap for such Distribution Date.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: With respect to any Distribution Date,
[____]% per annum, subject to a cap equal to the Net WAC Rate Cap for such
Distribution Date.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: With respect to any Distribution Date,
[____]% per annum, subject to a cap equal to the Net WAC Rate Cap for such
Distribution Date.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) with respect to any
Distribution Date which occurs on or prior to the Optional Termination Date,
[____]% per annum and (ii) with respect to each Distribution Date which occurs
thereafter, [____]% per annum, in each case, subject to a cap equal to the Net
WAC Rate Cap for such Distribution Date.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) with respect to any
Distribution Date which occurs on or prior to the Optional Termination Date,
[____]% per annum and (ii) with respect to each Distribution Date which occurs
thereafter, [____]% per annum, in each case, subject to a cap equal to the Net
WAC Rate Cap for such Distribution Date.
CLASS [___] LOCKOUT PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date will be an amount equal to the lesser of (i) the Senior
Principal Distribution Amount for such Distribution Date and (ii) the Class
[___] Lockout Distribution Percentage for that Distribution Date multiplied by
the product of (x) a fraction, the numerator of which is the Certificate
Principal Balance of the Class [___] Certificates and the denominator of which
is the aggregate Certificate Principal Balance of all of the Senior Certificates
(other than the Class [___] Certificates), in each case immediately prior to
such Distribution Date and (y) the Senior Principal Distribution Amount for such
Distribution Date.
CLASS [___] LOCKOUT DISTRIBUTION PERCENTAGE: With respect to each
Distribution Date, the applicable percentage set forth below:
CLASS [___] LOCKOUT
DISTRIBUTION
DISTRIBUTION DATES PERCENTAGE
------------------ ----------
[__________] through and including [__________]..................................... [____]%
[__________] through and including [__________]..................................... [____]%
[__________] through and including [__________]..................................... [____]%
[__________] through and including [__________]..................................... [____]%
[__________] through and including [__________]..................................... [____]%
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) for the first twenty four
Distribution Dates, [____]% per annum, subject to a cap equal to the weighted
average of the Net Mortgage Rates on the Mortgage Loans and (ii) for any
Distribution Date thereafter, 0.00% per annum. For federal income tax purposes,
however, the Class [___] Certificates will not have a Class [___] Pass-Through
Rate, and the Interest Distribution Amount for the Class [___] Certificates and
any Distribution Date will be deemed to be 100% of the amount distributed on
REMIC II Regular Interest LTII-IO for such Distribution Date.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) with respect to each
Distribution Date which occurs on or prior to the Optional Termination Date,
[____]% per annum and (ii) with respect to each Distribution Date which occurs
thereafter, [____]% per annum, in each case subject to a cap equal to the Net
WAC Rate Cap for such Distribution Date.
CLASS [___] PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date which occurs (i) prior to the Stepdown Date or on or after the
Stepdown Date if a Trigger Event is in effect for that Distribution Date, the
Principal Distribution Amount for that Distribution Date remaining after
distribution of the Senior Principal Distribution Amount or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Senior Principal
Distribution Amount; and
o the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class [___] Certificates immediately prior to
that Distribution Date over (B) the positive difference
between (i) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the
related Prepayment Period) and (ii) the sum of (x) the
aggregate Certificate Principal Balance of the Senior
Certificates (after taking into account the payment of the
Senior Principal Distribution Amount for such Distribution
Date) and (y) the product of (a) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after reduction for Realized Losses
incurred during the related Prepayment Period) and (b) the sum
of [____]% and the Required Overcollateralization Percentage.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) with respect to each
Distribution Date which occurs on or prior to the Optional Termination Date,
[____]% per annum and (ii) with respect to each Distribution Date which occurs
thereafter, [____]% per annum, in each case subject to a cap equal to the Net
WAC Rate Cap for such Distribution Date.
CLASS [___] PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date which occurs (i) prior to the Stepdown Date or on or after the
Stepdown Date if a Trigger Event is in effect for that Distribution Date, the
Principal Distribution Amount for that Distribution Date remaining after
distribution of the Senior Principal Distribution Amount and the Class [___]
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Senior Principal
Distribution Amount and the Class [___] Principal Distribution
Amount; and
o the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class [___] Certificates immediately prior to
that Distribution Date over (B) the positive difference
between (i) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the
related Prepayment Period) and (ii) the sum of (x) the
aggregate Certificate Principal Balance of the Senior
Certificates and the Class [___] Certificates (after taking
into account the payment of the Senior Principal Distribution
Amount and the Class [___] Principal Distribution Amount for
such Distribution Date) and (y) the product of (a) the
aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after reduction for
Realized Losses incurred during the related Prepayment Period)
and (b) the sum of [____]% and the Required
Overcollateralization Percentage.
CLASS [___] CERTIFICATE: Any Certificate designated as a "Class [___]
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class [___] Certificates as set forth herein and evidencing a Regular
Interest in REMIC III.
CLASS [___] PASS-THROUGH RATE: Shall mean (i) with respect to each
Distribution Date which occurs on or prior to the Optional Termination Date,
[____]% per annum and (ii) with respect to each Distribution Date which occurs
thereafter, [____]% per annum, in each case subject to a cap equal to the Net
WAC Rate Cap for such Distribution Date.
CLASS [___] PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date which occurs (i) prior to the Stepdown Date or on or after the
Stepdown Date if a Trigger Event is in effect for that Distribution Date, the
Principal Distribution Amount for that Distribution Date remaining after
distribution of the Senior Principal Distribution Amount, the Class [___]
Principal Distribution Amount and the Class [___] Principal Distribution Amount
or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date
remaining after distribution of the Senior Principal
Distribution Amount, the Class [___] Principal Distribution
Amount and the Class [___] Principal Distribution Amount; and
o the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class [___] Certificates immediately prior to
that Distribution Date over (B) the positive difference
between (i) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the
related Prepayment Period) and (ii) the sum of (x) the
aggregate Certificate Principal Balance of the Senior
Certificates, the Class [___] Certificates and the Class [___]
Certificates (after taking into account the payment of the
Senior Principal Distribution Amount, the Class [___]
Principal Distribution Amount and the Class [___] Principal
Distribution Amount for such Distribution Date) and (y) the
product of (a) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the
related Prepayment Period) and (b) the sum of [___]% and the
Required Overcollateralization Percentage.
CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class P Certificates as set forth herein and evidencing a Regular Interest
in REMIC III.
CLASS P CERTIFICATE ACCOUNT: The Eligible Account established and
maintained by the Securities Administrator pursuant to Section 5.09.
CLASS R CERTIFICATE: Any Certificate designated a "Class R Certificate"
on the face thereof, in substantially the form set forth in Exhibit A-6 hereto,
evidencing the Class R-1 Interest, Class R-2 Interest and Class R-3 Interest.
CLASS R-1 INTEREST: The uncertificated residual interest in REMIC I.
CLASS R-2 INTEREST: The uncertificated residual interest in REMIC II.
CLASS R-3 INTEREST: The uncertificated residual interest in REMIC III.
CLASS X CERTIFICATE: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit [___] hereto,
representing the right to its Percentage Interest of distributions provided for
the Class X Certificates herein and evidencing a Regular Interest in REMIC III.
CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
sum of (i) the Excess Cap Payment, (ii) the Interest Distribution Amount for the
Class X Certificates for such Distribution Date and (iii) any
Overcollateralization Reduction Amount for such Distribution Date remaining
after payments pursuant to items 1 though 7 of clause THIRD of Section 5.04;
provided, however that on and after the Distribution Date on which the
Certificate Principal Balance of the Certificates has been reduced to zero, the
Class X Distribution Amount shall include the Overcollateralization Amount.
CLASS X PASS-THROUGH RATE: On any Distribution Date, a per annum rate
equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (A) through (K) below, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of the REMIC II Regular Interests (other than REMIC II Regular Interest LTII-IO
and REMIC II Regular Interest LTII-P). For purposes of calculating the
Pass-Through Rate for the Class X Certificates, the numerator is equal to the
sum of the following components:
(A) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-AA minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-AA;
(B) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(C) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(D) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(E) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(F) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(G) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(H) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
(I) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-[___] minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-[___];
and
(J) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest LTII-ZZ minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ.
CLEANUP CALL: As defined in Section 11.01.
CLOSING DATE: [___________].
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COMPENSATING INTEREST: With respect to any Distribution Date, an amount
to be deposited in the Distribution Account by the Servicer or the Master
Servicer to offset a Prepayment Interest Shortfall on a Mortgage Loan in
accordance with this Agreement; provided, however that the amount of
Compensating Interest required to be paid in respect of the Mortgage Loans shall
not exceed one-half of the Servicing Fee payable to the Servicer or, in the case
of the Master Servicer shall not exceed the Master Servicing Compensation
payable to the Master Servicer with respect to the related Prepayment Period.
CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee or the Securities Adminitsrtaor, as the case maybe, at which, at any
particular time its corporate business in connection with this agreement shall
be administered, which office at the date of the execution of this instrument is
located at (ii) in the case of the Trustee, [_____________________],
[_________________________], Attention: [_________] or at such other address as
the Trustee may designate from time to time by notice to the Certificateholders,
the Depositor, the Master Servicer, the Securities Administrator and the
Servicer, and (ii) with respect to the office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at.,
[_____________________], [_________________________], Attention: [_________],
and for all other purposes is located at [_____________________],
[_________________________], Attention: [_________], or at such other address as
the Securities Administrator may designate from time to time by notice to the
Certificiateholders, the Depositor, the Master Servicer, the Servicer and the
Trustee.
CORRESPONDING CERTIFICATE: With respect to:
(i) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates,
(ii) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(iii) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(iv) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(v) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(vi) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(vii) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates;
(viii) REMIC II Regular Interest LTII-[___], the Class [___]
Certificates; and
(ix) REMIC II Regular Interest LTII-P, the Class P Certificates.
CREDIT ENHANCEMENT PERCENTAGE: With respect to any Distribution Date
and any Class of Publicly Offered Certificates, the percentage obtained by
dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the
Class or Classes of Publicly Offered Certificates subordinate thereto and (ii)
the Overcollateralization Amount by (y) the aggregate Stated Principal Balance
of the Mortgage Loans, calculated after taking into account distributions of
principal on the Mortgage Loans and distribution of the Principal Distribution
Amount to the holders of the Certificates then entitled to distributions of
principal on such Distribution Date.
CREDIT RISK MANAGEMENT AGREEMENT: The agreement between the Credit Risk
Manager and the Servicer and/or Master Servicer, dated as of [_________].
CREDIT RISK MANAGEMENT FEE: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Credit Risk Management Fee
Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the
last day of the related Due Period. The Credit Risk Management Fee shall be
payable to the Credit Risk Manager and/or the Sponsor pursuant to Section
3.32(a)(vii) and 3.33(b).
CREDIT RISK MANAGEMENT FEE RATE: [____]% per annum.
CREDIT RISK MANAGER: [____________________], a [_______] corporation,
and its successors and assigns.
CUSTODIAL ACCOUNT: The account established and maintained by the
Servicer with respect to receipts on the Mortgage Loans and related REO
Properties in accordance with Section 3.26(b).
CUSTODIAL AGREEMENT: The Custodial Agreement dated as of [_________]
among [_________], the Servicer, as a servicer and the Trustee.
CUSTODIAN: [________________], or any successor thereto appointed
pursuant to the Custodial Agreement.
CUT-OFF DATE: [_________].
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: As defined in Section 6.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
DENOMINATION: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Principal Balance of this
Certificate".
DEPOSITOR: Nomura Asset Acceptance Corporation, a Delaware corporation,
or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.
The Depository shall initially be the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: With respect to any Distribution Date, the [__] day
of the month of such Distribution Date or, if such [__] day is not a Business
Day, the immediately preceding Business Day.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.31 for the
benefit of the Certificateholders and designated "[_____________________], in
trust for registered holders of Nomura Asset Acceptance Corp., Mortgage
Pass-Through Certificates, Series [_________]". Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
DISTRIBUTION DATE: The [_________] day of each calendar month after the
initial issuance of the Certificates, or if such [_________] day is not a
Business Day, the next succeeding Business Day, commencing in [---------].
DUE DATE: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
DUE PERIOD: For any Distribution Date, the period from the second day
of the calendar month preceding the calendar month in which such Distribution
Date occurs through the close of business on the first day of the calendar month
in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which are rated by each Rating Agency in one of its two highest long-term and
its highest short-term rating categories respectively, at the time any amounts
are held on deposit therein, or (ii) an account or accounts in a depository
institution or trust company in which such accounts are insured by the FDIC (to
the limits established by the FDIC) and the uninsured deposits in which accounts
are otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced in writing by
the Rating Agencies. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee
or Securities Administrator.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA RESTRICTED CERTIFICATE: Each of the Class X, Class P and Residual
Certificates.
ESCROW ACCOUNT: Shall mean an account maintained by the Servicer
pursuant to Section 3.29. The Escrow Account shall be an Eligible Account.
EXCESS CAP PAYMENT: With respect to any Distribution Date, the excess,
if any, of (1) the cap payments made by the Cap Provider under the Cap Contract
with respect to the Class [___] Certificates over (2) the amount of the unpaid
Net WAC Rate Carryover Amounts attributable to the Class [___] Certificates for
such Distribution Date.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law to be
paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal Balance of such
Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
EXCHANGE ACT: Securities and Exchange Act of 1934, as amended.
EXEMPTION: Prohibited Transaction Exemption 93-32, as amended from time
to time.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Net Monthly Excess Cashflow for such Distribution
Date and (y) the Overcollateralization Increase Amount for such Distribution
Date.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Sponsor, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03(c) or Section 10.01), a determination made by the
Servicer pursuant to this Agreement, that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records of each Final Recovery
Determination made thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended.
▇▇▇▇▇▇▇ MAC: Federal Home Loan Mortgage Corporation, or any successor
thereto.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Securities
Administrator, the Custodian, the Trust Fund and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect with respect to such Mortgage Loan, including any replacement policy
or policies for any Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Servicer or the trustee under the deed of trust and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the servicing standard set forth in Section 3.01
other than any amount included in such Insurance Proceeds in respect of Insured
Expenses.
INSURED EXPENSES: Expenses covered by any Insurance Policy with respect
to the Mortgage Loans.
INTEREST CARRY FORWARD AMOUNT: With respect to any Class of
Certificates (other than the Class X, Class P and Class R Certificates) and any
Distribution Date, the amount, if any, by which the Interest Distribution Amount
for that Class of Certificates for the immediately preceding Distribution Date
exceeded the actual amount distributed on such Class in respect of interest on
the immediately preceding Distribution Date, together with any Interest Carry
Forward Amount with respect to such Class remaining unpaid from the previous
Distribution Date.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
INTEREST DISTRIBUTION AMOUNT: With respect to any Class of Certificates
(other than the Class P Certificates and Class R Certificates) and any
Distribution Date, an amount equal to the interest accrued during the related
Accrual Period at the applicable Pass-Through Rate on the Certificate Principal
Balance (or Certificate Notional Balance) of such Certificate immediately prior
to such Distribution Date less such Certificate's share of any Net Interest
Shortfall and the interest portion of any Realized Losses on the Mortgage Loans
allocated to such Certificate pursuant to Section 1.02. The Interest
Distribution Amount with respect to each class of Certificates (other than the
Class [___] Certificates) is calculated on the basis of a 360-day year
consisting of twelve 30-day months. The Interest Distribution Amount with
respect to the Class [___] Certificates is calculated on the basis of a 360-day
year and the actual number of days elapsed in the related Accrual Period. No
Interest Distribution Amount will be payable with respect to any Class of
Certificates after the Distribution Date on which the outstanding Certificate
Principal Balance (or Certificate Notional Balance) of such Certificate has been
reduced to zero.
INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date, that
portion of the Available Distribution Amount for such Distribution Date
generally equal to (i) the sum, without duplication, of (a) all scheduled
interest during the related Due Period with respect to the Mortgage Loans less
the Servicing Fee, the Credit Risk Management Fee and the fee payable to any
provider of lender-paid mortgage insurance, if any, (b) all Advances relating to
interest with respect to the Mortgage Loans made on or prior to the related
Remittance Date, (c) all Compensating Interest with respect to the Mortgage
Loans and required to be remitted by the Servicer or the Master Servicer
pursuant to this Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds and Subsequent Recoveries with respect to the Mortgage
Loans collected during the related Prepayment Period (to the extent such
Liquidation Proceeds and Subsequent Recoveries relate to interest), (e) all
amounts relating to interest with respect to each Mortgage Loan repurchased by
the Sponsor pursuant to Sections 2.02 and 2.03 and (f) all amounts in respect of
interest paid by the Master Servicer pursuant to Section 10.01 to the extent
remitted by the Master Servicer to the Distribution Account pursuant to this
Agreement or minus (ii) all amounts required to be reimbursed by the Trust
pursuant to Section 3.32 or as otherwise set forth in this Agreement or any
Custodial Agreement.
INTEREST SHORTFALL: With respect to any Distribution Date, the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act.
LAST SCHEDULED DISTRIBUTION DATE: With respect to the Certificates
(other than the Class [___] Certificates), the Distribution Date in [_________]
and with respect to the Class [___] Certificates, the Distribution Date in
[_________].
LATEST POSSIBLE MATURITY DATE: The Distribution Date following the
final scheduled maturity date of the Mortgage Loan in the Trust Fund having the
latest scheduled maturity date as of the Cut-off Date. For purposes of the
Treasury Regulations under Code section 860A through 860G, the latest possible
maturity date of each regular interest issued by REMIC I, REMIC II and REMIC III
shall be the Latest Possible Maturity Date.
LIBOR BUSINESS DAY: Shall mean any day other than a Saturday or a
Sunday or a day on which banking institutions in the State of New York or in the
city of London, England are required or authorized by law to be closed.
LIQUIDATED LOAN: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which Servicer has certified in the related Prepayment
Period in writing to the Securities Administrator that it has made a Final
Recovery Determination.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received
in connection with the partial or complete liquidation of a Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise, or in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received with respect to an REO Property, less the sum of related
unreimbursed Advances, Servicing Fees, Master Servicing Fees and Servicing
Advances and all expenses of liquidation, including property protection expenses
and foreclosure and sale costs, including court and reasonable attorneys fees.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the Mortgage Loan and
the denominator of which is the Appraised Value of the related Mortgaged
Property.
MAJORITY CLASS X CERTIFICATEHOLDER: The Holder of a 50.01% or greater
Percentage Interest in the Class X Certificates.
MARKER RATE: With respect to the Class X Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___] and REMIC II Regular Interest
LTII-ZZ, with the rate on REMIC II Regular Interest LTII-[___] subject to a cap
equal to the lesser of (x) One-Month LIBOR plus [____]% per annum and (y) the
Net WAC Rate Cap for the purpose of this calculation; with the rate on REMIC II
Regular Interest LTII-[___] subject to a cap equal to the lesser of (x) [____]%
per annum and (y) the Net WAC Rate Cap for the purpose of this calculation; with
the rate on REMIC II Regular Interest LTII-[___] subject to a cap equal to the
lesser of (x) [____]% per annum and (y) the Net WAC Rate Cap for the purpose of
this calculation; with the rate on REMIC II Regular Interest LTII-[___] subject
to a cap equal to the lesser of (A) in the case of any Distribution Date up to
and including the Optional Termination Date, the lesser of (x) [____]% per annum
and (y) the Net WAC Rate Cap and (B) in the case of any Distribution Date after
the Optional Termination Date, the lesser of (x) [____]% per annum and (y) the
Net WAC Rate Cap for the purpose of this calculation; with the rate on REMIC II
Regular Interest LTII-[___] subject to a cap equal to the lesser of (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) [____]% per annum and (y) the Net WAC Rate Cap and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) [____]% per annum and (y) the Net WAC Rate Cap for the purpose of this
calculation; with the rate on REMIC II Regular Interest LTII-[___] subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) [____]% per annum and (y) the Net
WAC Rate Cap and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) [____]% per annum and (y) the Net WAC Rate
Cap for the purpose of this calculation; with the rate on REMIC II Regular
Interest LTII-[___] subject to a cap equal to (A) in the case of any
Distribution Date up to and including the Optional Termination Date, the lesser
of (x) [____]% per annum and (y) the Net WAC Rate Cap and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) [____]%
per annum and (y) the Net WAC Rate Cap for the purpose of this calculation; with
the rate on REMIC II Regular Interest LTII-[___] subject to a cap equal to (A)
in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) [____]% per annum and (y) the Net WAC Rate
Cap and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) [____]% per annum and (y) the Net WAC Rate Cap for the
purpose of this calculation; provided, however, that for this purpose, the
calculation of the Uncertificated REMIC II Pass-Through Rate and the related cap
with respect to REMIC II Regular Interest LTII-[___] shall be multiplied by a
fraction, the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.
MASTER SERVICER: As of the Closing Date, [_________________] and
thereafter, its respective successors in interest who meet the qualifications of
this Agreement. The Master Servicer and the Securities Administrator shall at
all times be the same Person or Affiliates.
MASTER SERVICER ASSESSMENT OF COMPLIANCE: As defined in Section 4.14.
MASTER SERVICER ATTESTATION REPORT: As defined in Section 4.15.
MASTER SERVICER CERTIFICATION: A written certification signed by an
officer of the Master Servicer that complies with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, as amended from time to time, and (ii) the February 21, 2003 Statement by
the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules
13a-14 and 15d-14, as in effect from time to time; provided that if, after the
Closing Date (a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 is amended, (b) the Statement
referred to in clause (ii) is modified or superseded by any subsequent
statement, rule or regulation of the Securities and Exchange Commission or any
statement of a division thereof, or (c) any future releases, rules and
regulations are published by the Securities and Exchange Commission from time to
time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, which in any such case affects
the form or substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer, the Depositor and the Sponsor following a negotiation in good
faith to determine how to comply with any such new requirements.
MASTER SERVICER DEFAULT: One or more of the events described in Section
8.01(b).
MASTER SERVICING FEE RATE: [_____]% per annum.
MASTER SERVICING COMPENSATION: As defined in Section 4.12.
MASTER SERVICING FEE: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one twelfth of the product of the Master
Servicer Fee Rate multiplied by the Stated Principal Balance of the Mortgage
Loans as of the Due Date in the preceding calendar month.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MEZZANINE CERTIFICATES: Shall mean, collectively, the Class [___],
Class [___] and Class [___] Certificates.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
MOM LOAN: Any Mortgage Loan as to which MERS is acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 5.06.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
MORTGAGE FILE: The Mortgage Loan Documents pertaining to a particular
Mortgage Loan and any additional documents delivered to the Trustee to be added
to the Mortgage File pursuant to this Agreement.
MORTGAGE LOAN DOCUMENTS: As defined in Section 2.01.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and assigned to
the Trustee pursuant to the provisions hereof, as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of [_________], between the Sponsor, as seller, and the Depositor, as
purchaser, a form of which is attached hereto as Exhibit C.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the purchase of the Mortgage Loans
pursuant to Section 10.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to
time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the provisions of
this Agreement transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, the initial Mortgage Loan Schedule being
attached hereto as Exhibit B-1, setting forth the following information with
respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off
Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
(x) the property type;
(xi) with respect to each MOM Loan, the related MIN;
(xii) the Custodian; and
(xiii) a code indicating whether the Mortgage Loan is
subject to a Prepayment Charge, the term of such
Prepayment Charge and the amount of such Prepayment
Charge.
Such schedule shall also set forth the aggregate Cut-off Date Principal Balance
for all of the Mortgage Loans.
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note.
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of payments
by the Servicer or the Master Servicer in respect of Compensating Interest.
NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date, the
sum of (a) any Overcollateralization Reduction Amount and (b) the excess of (x)
the Available Distribution Amount for such Distribution Date over (y) the sum
for such Distribution Date of (A) the aggregate amount of Senior Interest
Distribution Amounts payable to the Senior Certificates and the Interest
Distribution Amounts payable to the Mezzanine Certificates and (B) the Principal
Remittance Amount.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate, (ii) the Credit Risk Management Fee Rate, the Master Servicer Fee Rate
and (iii) the rate at which the fee payable to any provider of lender-paid
mortgage insurance is calculated, if applicable.
NET WAC RATE CAP: With respect to the Senior Certificates (other than
the Class [___] Certificates) and the Mezzanine Certificates, (i) from and
including the Distribution Date in [_________] through and including the
Distribution Date in [_________], (a) the weighted average of the Net Mortgage
Rates of the 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 minus [____]% per annum times (b) a fraction, the
numerator of which is the Certificate Notional Balance of the Class [___]
Certificates and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the first day of the calendar month
preceding the month in which the Distribution Date occurs, and (ii) thereafter,
the weighted average of the Net Mortgage Rates of the 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; provided that
the Net WAC Rate Cap with respect to the Class [___] Certificates shall be
multiplied by a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the Accrual Period.
For federal income tax purposes, the Net WAC Rate Cap, with respect to
any Distribution Date, shall be expressed as the weighted average of the
Uncertificated REMIC II Pass-Through Rates on each REMIC II Regular Interest
(other than REMIC II Regular Interest LTII-IO) weighted on the basis of the
Uncertificated Principal Balance of the REMIC II Regular Interests and, with
respect to the Insured Certificates, minus the Insurer Premium Rate.
NET WAC RATE CARRYOVER AMOUNT: With respect to each class of Senior
Certificates (other than the Class [___] Certificates) and the Mezzanine
Certificates and any Distribution Date on which the related Pass-Through Rate is
reduced by the Net WAC Rate Cap, an amount equal to the sum of (i) the excess of
(x) the amount of interest such Class would have been entitled to receive on
such Distribution Date if the Pass-Through Rate applicable to such Class would
not have been reduced by the Net WAC Rate Cap on such Distribution Date over (y)
the amount of interest paid on such Distribution Date to such class plus (ii)
the related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously distributed to such class.
NET WAC RESERVE FUND: Shall mean the segregated non-interest bearing
trust account created and maintained by the Securities Administrator pursuant to
Section 5.10 hereof.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance or Servicing Advance
previously made or proposed to be made by the Servicer pursuant to this
Agreement or the Master Servicer as Successor Servicer, that, in the good faith
judgment of the Servicer or the Master Servicer as Successor Servicer, will not
or, in the case of a proposed Advance or Servicing Advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or otherwise.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Trustee (or any other officer customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with a particular subject) or (ii), if provided for
in this Agreement, signed by an Authorized Servicer Representative, as the case
may be, and delivered to the Depositor, the Sponsor, the Master Servicer, the
Securities Administrator and/or the Trustee, as the case may be, as required by
this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period (other than the
first Accrual Period), the rate determined by the Securities Administrator on
the related Interest Determination Date on the basis of the rate for U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date. If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Securities Administrator), One-Month LIBOR for the applicable Accrual Period
will be the Reference Bank Rate. If no such quotations can be obtained by the
Securities Administrator and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination Date by the
Securities Administrator and the Securities Administrator's calculation of the
rate of interest applicable to the Class [___] Certificates for the related
Accrual Period shall, in the absence of manifest error, be final and binding.
With respect to the first Accrual Period, One-Month LIBOR shall equal [____]%
per annum.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel
for the Sponsor, the Master Servicer, the Depositor or the Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 7.05 or 11.01, or the interpretation or application of the REMIC
Provisions, such counsel must (i) in fact be independent of the Sponsor, the
Master Servicer, the Depositor and the Servicer, (ii) not have any direct
financial interest in the Sponsor, the Depositor, the Master Servicer or the
Servicer or in any affiliate of any of them, and (iii) not be connected with the
Sponsor, the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund created
hereunder as a result of the purchase of all of the Mortgage Loans and any
related REO Property pursuant to Section 10.01.
OPTIONAL TERMINATION DATE: The first Distribution Date on which the
Master Servicer may purchase, at its option, the Mortgage Loans and related REO
Properties as described in Section 10.01.
OTS: The Office of Thrift Supervision or any successor thereto.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(b) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date,
the excess, if any, of (a) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period over (b) the
aggregate Certificate Principal Balance of the Senior Certificates (other than
the Class [___] Certificates) and the Mezzanine Certificates on such
Distribution Date (after taking into account the payment of 100% of the
Principal Remittance Amount on such Distribution Date).
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the Required Overcollateralization Amount over
(b) the Overcollateralization Amount on such Distribution Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the excess, if any, of (i) the Overcollateralization
Amount for such Distribution Date over (ii) the Required Overcollateralization
Amount for such Distribution Date.
OWNERSHIP INTEREST: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to each Class of Certificates, the
applicable Pass-Through Rate for each Class as set forth in the Preliminary
Statement.
PERCENTAGE INTEREST: With respect to any Certificate of a specified
Class, the Percentage Interest set forth on the face thereof or the percentage
obtained by dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of such Class.
PERMITTED INVESTMENTS: At any time, any one or more of the following
obligations and securities:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency thereof, provided such obligations are unconditionally
backed by the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities (including the Trustee or the Master
Servicer in its commercial banking capacity), provided that the
commercial paper and/or long term unsecured debt obligations of such
depository institution or trust company are then rated one of the two
highest long-term and the highest short-term ratings of each such
Rating Agency for such securities, or such lower ratings as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued
by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by any such Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
(ix) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Trustee, the Master Servicer or an affiliate of either, having a
rating by S&P of AAAm-G, AAA-m, or AA-m, and if rated by ▇▇▇▇▇'▇, rated
Aaa, Aa1 or Aa2;
(x) short term investment funds sponsored by any trust company
or banking association incorporated under the laws of the United States
or any state thereof (including any such fund managed or advised by the
Trustee, the Master Servicer or any affiliate thereof) which on the
date of acquisition has been rated by each Rating Agency in their
respective highest applicable rating category or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency; and
(xi) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to each Rating
Agency as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
PERMITTED TRANSFEREE: Any person other than (i) the United States, any
State or political subdivision thereof, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in Section 860E(c)(1) of the Code) with respect to any Residual
Certificate, (iv) rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person based upon an Opinion of Counsel (which
shall not be an expense of the Trustee) that states that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause any REMIC
to fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such government unit.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PREPAYMENT ASSUMPTION: The assumed rate of prepayment, as described in
the Prospectus Supplement relating to each Class of Publicly Offered
Certificates.
PREPAYMENT CHARGE: With respect to any Principal Prepayment, any
prepayment premium, penalty or charge payable by a Mortgagor in connection with
any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note (other than any Servicer Prepayment Charge Payment Amount) as
shown on the Prepayment Charge Schedule.
PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Mortgage Loans
providing for a Prepayment Charge included in the Trust Fund on such date,
attached hereto as Exhibit K (including the prepayment charge summary attached
thereto). The Depositor shall deliver or cause the delivery of the Prepayment
Charge Schedule to the Servicer, the Master Servicer and the Trustee on the
Closing Date. The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due on
the related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage Loan; and
(vi) the Stated Principal Balance of the related Mortgage Loan
as of the Cut-off Date.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the related Prepayment Period, (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
3.24 or 10.01 hereof), the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment exceeds (ii) the amount of
interest paid or collected in connection with such Principal Prepayment less the
sum of (a) the related Servicing Fee, (b) the related Master Servicing Fee, (c)
the Credit Risk Management Fee and (d) the fee payable to any provider of
lender-paid mortgage insurance, if any.
PREPAYMENT PERIOD: With respect to any Distribution Date, the calendar
month immediately preceding the month in which such Distribution Date occurs.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution Date,
the sum of (i) Principal Funds, plus (ii) the Extra Principal Distribution
Amount for such Distribution Date MINUS (iii) the amount of any
Overcollateralization Reduction Amount for such Distribution Date. In no event
will the Principal Distribution Amount with respect to any Distribution Date be
(x) less than zero or (y) greater than the then outstanding aggregate
Certificate Principal Balance of the Publicly Offered Certificates.
PRINCIPAL FUNDS: With respect to any Distribution Date, (i) the sum,
without duplication, of (a) all scheduled principal collected during the related
Due Period, (b) all Advances relating to principal made on or prior to the
Remittance Date or, with respect to the Trustee on the Distribution Date, (c)
Principal Prepayments exclusive of prepayment charges or penalties collected
during the related Prepayment Period, (iii) the Stated Principal Balance of each
Mortgage Loan that was repurchased by the Sponsor pursuant to Sections 2.02,
2.03 and 3.24, (d) the aggregate of all Substitution Adjustment Amounts for the
related Determination Date in connection with the substitution of Mortgage Loans
pursuant to Section 2.03(b), (e) amounts in respect of principal paid by the
Master Servicer pursuant to Section 10.01, (f) all Liquidation Proceeds and
Subsequent Recoveries collected during the related Prepayment Period (to the
extent such Liquidation Proceeds and Subsequent Recoveries relate to principal),
in each case to the extent remitted by the Servicer to the Distribution Account
pursuant to this Agreement and (g) all Subsequent Recoveries minus (ii) all
amounts required to be reimbursed by the Trust pursuant to Section 3.32 or as
otherwise set forth in this Agreement or any Custodial Agreement to the extent
not reimbursed from the Interest Remittance Amount.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.26 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any Due Date in any
month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Servicer in accordance with the terms of the
related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution Date, the
sum of the Principal Funds for such Distribution Date.
PRIVATE CERTIFICATE: Each of the Class X, Class P and Class R
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated [____________]
relating to the offering of the Publicly Offered Certificates.
PUBLICLY OFFERED CERTIFICATES: The Senior Certificates and the
Mezzanine Certificates.
PUD: A planned unit development.
PURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased by the Sponsor pursuant to Section 2.02 or 2.03 hereof and as
confirmed by an Officer's Certificate from the Sponsor to the Trustee, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) 30 days' accrued
interest thereon at the applicable Net Mortgage Rate, plus any portion of the
Servicing Fee, Master Servicing Fee Servicing Advances and Advances payable to
the Servicer or Master Servicer, as applicable, with respect to such Mortgage
Loan plus (iii) any costs and damages of the Trust Fund in connection with any
violation by such Mortgage Loan of any abusive or predatory lending law,
including any expenses incurred by the Trustee with respect to such Mortgage
Loan prior to the purchase thereof.
RATING AGENCY: Each of S&P and ▇▇▇▇▇'▇. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the Stated Principal Balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (iii) the proceeds, if
any, received in respect of such Mortgage Loan during the calendar month in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the Servicer pursuant to this Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (iii) the aggregate of
all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a
Debt Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
In addition, to the extent the Servicer receives Subsequent Recoveries
with respect to any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage Loan will be reduced to the extent such Subsequent Recoveries
are applied to reduce the Certificate Principal Balance of any Class of
Certificates on any Distribution Date.
RECORD DATE: With respect to the Certificates (other than the Class
[___] Certificates) and any Distribution Date, the close of business on the last
Business Day of the month preceding the month in which such Distribution Date
occurs. With respect to the Class [___] Certificates and any Distribution Date,
so long as the Class [___] Certificates are Book-Entry Certificates, the
Business Day preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
REFERENCE BANK RATE: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
0.3125%, of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Class [___] Certificates for such
Accrual Period, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.3125%, of the rates quoted by one or more major banks in New York
City, selected by the Securities Administrator, as of 11:00 a.m., New York City
time, on such date for loans in United States dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class [___] Certificates for such Accrual
Period.
REFERENCE BANKS: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Sponsor or the Servicer.
REGULAR CERTIFICATE: Any Certificate other than a Residual Certificate.
REGULATION AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission.
RELIEF ACT: The Servicemembers Civil Relief Act of 2003, as amended
from time to time or similar state or local laws.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC I: The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of (i) the Mortgage Loans and
all interest accruing and principal due with respect thereto after the Cut-off
Date to the extent not applied in computing the Cut-off Date Principal Balance
thereof and all related Prepayment Charges; (ii) the related Mortgage Files,
(iii) the Custodial Account (other than any amounts representing any Servicer
Prepayment Charge Payment Amount), the Distribution Account, the Class P
Certificate Account and such assets that are deposited therein from time to
time, together with any and all income, proceeds and payments with respect
thereto; (iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing, including proceeds of conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property. Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and other collections of
principal and interest due on the Mortgage Loans on or before the Cut-off Date,
(ii) all Prepayment Charges payable in connection with Principal Prepayments
made before the Cut-off Date, (iii) the Net WAC Reserve Fund and (iv) the Cap
Contract.
REMIC I REGULAR INTEREST LTI-1: 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 LTI-1 shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-A: 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 LTI-IO-A shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-B: 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 LTI-IO-B shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-C: 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 LTI-IO-C shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-D: 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 LTI-IO-D shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-E: 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 LTI-IO-E shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-F: 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 LTI-IO-F shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-G: 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 LTI-IO-G shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-IO-H: 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 LTI-IO-H shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST LTI-P: 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 LTI-P shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-1, REMIC I
Regular Interest LTI-IO-A, REMIC I Regular Interest LTI-IO-B, REMIC I Regular
Interest LTI-IO-C, REMIC I Regular Interest LTI-IO-D, REMIC I Regular Interest
LTI-IOE, REMIC I Regular Interest LTI-IO-F, REMIC I Regular Interest LTI-IO-G,
REMIC I Regular Interest LTI-IO-H and REMIC I Regular Interest LTI-▇.
▇▇▇▇▇ ▇▇: The segregated pool of assets consisting of all of the REMIC
I Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC
III, as holder of the REMIC II Regular Interests, and the Class R-2 Interest
pursuant to Section 2.07, and all amounts deposited therein, with respect to
which a separate REMIC election is to be made.
REMIC II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) the Uncertificated REMIC II Pass-Through Rate for REMIC II
Regular Interest II-LTAA minus the Marker Rate, divided by (b) 12.
REMIC II OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC II Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___] and REMIC II Regular Interest LTII-P, in each case as of
such date of determination.
REMIC II PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___] and REMIC II Regular Interest LTII-[___] and the denominator of which
is the aggregate of the Uncertificated Principal Balances of REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___] and REMIC II Regular
Interest LTII-ZZ.
REMIC II REGULAR INTERESTS: REMIC II Regular Interest LTII-AA, REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-IO, REMIC II Regular Interest LTII-ZZ and REMIC II Regular
Interest LTII-▇.
▇▇▇▇▇ ▇▇ REGULAR INTEREST LTII-AA: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-AA shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-IO: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-IO shall accrue
interest as provided herein and shall not be entitled to distributions of
principal.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-[___]: One of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a Regular Interest in REMIC II. REMIC II Regular Interest
LTII-[___] shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-P: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-P shall be entitled
to distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST LTII-ZZ: One of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
Regular Interest in REMIC II. REMIC II Regular Interest LTII-ZZ shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC II REGULAR INTEREST LTII-ZZ MAXIMUM INTEREST DEFERRAL AMOUNT:
With respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
Interest LTII-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ minus the
REMIC II Overcollateralization Amount, in each case for such Distribution Date,
over (ii) Uncertificated Accrued Interest on REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___] and REMIC II Regular Interest LTII-[___] for such Distribution Date,
with the rate on each such REMIC II Regular Interest subject to a cap equal to
the related Pass-Through Rate.
REMIC II REQUIRED OVERCOLLATERALIZATION AMOUNT: 1% of the Required
Overcollateralization Amount.
REMIC III: The segregated pool of assets consisting of all of the REMIC
II Regular Interests conveyed in trust to the Trustee, for the benefit of the
REMIC III Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be made.
REMIC III CERTIFICATE: Any Regular Certificate or Class R Certificate.
REMIC III CERTIFICATEHOLDER: The Holder of any REMIC III Certificate.
REMIC OPINION: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on any REMIC created hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC REGULAR INTEREST: A REMIC I Regular Interest, REMIC II Regular
Interest or a Regular Certificate.
REMITTANCE DATE: Shall mean the [_________] day of the month and if
such day is not a Business Day, the immediately preceding Business Day.
REO PROPERTY: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Sponsor for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a request for release in
accordance with the terms of the Custodial Agreement, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not less than
90% of, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a
fixed Mortgage Rate not less than or more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to maturity no greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (vi) not permit conversion of the
Mortgage Rate from a fixed rate to a variable rate; (vii) be secured by a first
lien on the related Mortgaged Property; (viii) constitute the same occupancy
type as the Deleted Mortgage Loan or be owner occupied; and (ix) comply with
each representation and warranty set forth in the Mortgage Loan Purchase
Agreement.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
REQUIRED OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date prior to the Stepdown Date, [___]% of the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, and with respect to any Distribution Date
thereafter, the greater of (i) [___]% of the 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, unscheduled collections of principal received
during the related Prepayment Period and after reduction for Realized Losses
incurred during the related Prepayment Period) and (ii) [___]% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
REQUIRED OVERCOLLATERALIZATION PERCENTAGE: With respect to any
Distribution Date, a percentage equal to (a) the Required Overcollateralization
Amount divided by (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, and after reduction for Realized Losses incurred
during the related Prepayment Period).
RESIDUAL CERTIFICATES: The Class R Certificates.
RESPONSIBLE OFFICER: With respect to the Trustee or Securities
Administrator, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, any Trust Officer, any other officer customarily
performing functions similar to those performed by any of the above designated
officers or other officers of the Trustee or Securities Administrator specified
by the Trustee or Securities Administrator having direct responsibility over
this Agreement and customarily performing functions similar to those performed
by any one of the designated officers, as to whom, with respect to a particular
matter, such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
or its successor in interest.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: As of the Closing Date, [_________________].
and thereafter, its respective successors in interest that meet the
qualifications of this Agreement. The Securities Administrator and the Master
Servicer shall at all times be the same Person or Affiliates.
SENIOR CERTIFICATES: The Class [___], Class [___], Class [___], Class
[___], Class [___] and Class [___] Certificates.
SENIOR INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date and any Class of Senior Certificates will be equal to the Interest
Distribution Amount for such Distribution Date for such Class and the Interest
Carry Forward Amount, if any, for such Distribution Date for such Class.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date which occurs (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect, the Principal Distribution Amount or (ii)
on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
o the Principal Distribution Amount for that Distribution Date;
and
o the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Senior Certificates immediately prior to that
Distribution Date over (B) the positive difference between (i)
the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period (after reduction
for Realized Losses incurred during the related Prepayment
Period) and (ii) the product of (x) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after reduction for Realized Losses
incurred during the related Prepayment Period) and (y) the sum
of 12.00% and the Required Overcollateralization Percentage.
SERVICER: Shall mean [______________] or any successor thereto
appointed hereunder in connection with the servicing and administration of the
Mortgage Loans.
SERVICER DEFAULT: As defined in Section 8.01.
SERVICER PREPAYMENT CHARGE PAYMENT AMOUNT: The amount payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Servicer of its servicing obligations hereunder, including,
but not limited to, the cost of (i) the preservation, restoration, inspection,
valuation and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, and including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered in the MERS(R) System, (iii) the management and liquidation of
any REO Property (including, without limitation, realtor's commissions), (iv)
compliance with any obligations under Section 3.07 hereof to cause insurance to
be maintained and (v) payment of taxes.
SERVICING FEE: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
same Stated Principal Balance of such Mortgage Loan used to calculate the
payment of interest on such Mortgage Loan.
SERVICING FEE RATE: [_____]% per annum.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and the servicing of Mortgage Loans, whose
name and specimen signature appear on a list of Servicing Officers furnished by
the Servicer to the Trustee, the Master Servicer and the Depositor on the
Closing Date, as such list may from time to time be amended.
SPONSOR: Nomura Credit & Capital, Inc., a Delaware corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
STARTUP DAY: The Startup Day for each REMIC formed hereunder shall be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Cut-off Date Principal Balance
thereof minus the sum of (i) the principal portion of the Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Servicer as recoveries of principal in accordance with
Section 3.09 of this Agreement, that were received by the Servicer as of the
close of business on the last day of the Prepayment Period related to such
Distribution Date and (iii) any Realized Losses on such Mortgage Loan incurred
during the related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero.
STEPDOWN DATE: The later to occur of (x) the Distribution Date in
[_________] and (y) the first Distribution Date on which the Credit Enhancement
Percentage of the Senior Certificates (calculated for this purpose only after
taking into account distributions of principal on the Mortgage Loans, but prior
to any distribution of the Principal Distribution Amount to the holders of the
Certificates then entitled to distributions of principal on the Distribution
Date) is greater than or equal to approximately [___]%.
SUBSEQUENT RECOVERIES: Shall mean all amounts in respect of principal
received by the Servicer on a Mortgage Loan for which a Realized Loss was
previously incurred.
SUBSERVICING AGREEMENT: Any agreement entered into between a servicer
and a subservicer with respect to the subservicing of any Mortgage Loan subject
to this Agreement by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03(d).
SUCCESSOR SERVICER: The Master Servicer or any successor to the
Servicer appointed pursuant to Section 8.02 of this Agreement after the
occurrence of a Servicer Default or upon the resignation of the Servicer
pursuant to this Agreement.
TAX MATTERS PERSON: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax Matters Person for
the related REMIC. The Securities Administrator, or any successor thereto or
assignee thereof shall serve as tax administrator hereunder and as agent for the
related Tax Matters Person.
TRANSFER AFFIDAVIT: As defined in Section 6.02(c).
TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
TRIGGER EVENT: With respect to any Distribution Date, a Trigger Event
is in effect if (x) the percentage obtained by dividing (i) the aggregate Stated
Principal Balance of Mortgage Loans delinquent sixty (60) days or more
(including Mortgage Loans in foreclosure or discharged in bankruptcy or any REO
Property) by (ii) the aggregate Stated Principal Balance of the Mortgage Loans,
in each case, as of the last day of the previous calendar month, exceeds [____]%
of the Credit Enhancement Percentage of the Senior Certificates for the prior
Distribution Date, or (y) the aggregate amount of Realized Losses incurred since
the Cut-off Date through the last day of the related Due Period divided by the
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 PERCENTAGE
----------------- ----------
[__________] to [__________]............................ [___]%
[__________] to [__________]............................ [___]%
[__________] to [__________]............................ [___]%
[__________] to [__________]............................ [___]%
*The cumulative loss percentages set forth above are applicable to the
first Distribution Date in the corresponding range of Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between the
percentage applicable to the first Distribution Date in that range and the
percentage applicable to the first Distribution Date in the succeeding range.
TRUST FUND: Collectively, the assets of REMIC I, REMIC II, REMIC III,
the Net WAC Reserve Fund and the Cap Contract.
TRUSTEE: [_____________________], a national banking association, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
UNCERTIFICATED ACCRUED INTEREST: With respect to each Uncertificated
REMIC Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC I Pass-Through Rate or
Uncertificated REMIC II Pass-Through Rate, as applicable, on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, of such
Uncertificated REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and shortfalls
resulting from application of the Relief Act (allocated to such REMIC Regular
Interests as set forth in Sections 1.02 and 5.07).
UNCERTIFICATED NOTIONAL AMOUNT: With respect to REMIC II Regular
Interest LTII-IO and (i) each Distribution Date from and including the 1st
Distribution to and including the [__] Distribution Date, the aggregate
Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-A through
REMIC I Regular Interest LTI-IO-H, (ii) each Distribution Date from and
including the [__] Distribution to and including the [__] Distribution Date, the
aggregate Uncertificated Principal Balances of REMIC I Regular Interest LTI-IO-B
through REMIC I Regular Interest LTI-IO-H, (iii) each Distribution Date from and
including the [__] Distribution Date to and including the [__] Distribution
Date, the aggregate Uncertificated Principal Balances of REMIC I Regular
Interest LTI-IO-C through REMIC I Regular Interest LTI-IO-H, (iv) each
Distribution Date from and including the [__] Distribution Date to and including
the [__] Distribution Date, the aggregate Uncertificated Principal Balances of
REMIC I Regular Interest LTI-IO-D through REMIC I Regular Interest LTI-IO-H, (v)
each Distribution Date from and including the 16th Distribution to and including
the [__] Distribution Date, the aggregate Uncertificated Principal Balances of
REMIC I Regular Interest LTI-IO-E through REMIC I Regular Interest LTI-IO-H,
(vi) each Distribution Date from and including the [__] Distribution to and
including the [__] Distribution Date, the aggregate Uncertificated Principal
Balances of REMIC I Regular Interest LTI-IO-F through REMIC I Regular Interest
LTI-IO-H, (vii) each Distribution Date from and including the [__] Distribution
to and including the [__] Distribution Date, the aggregate Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IO-G and REMIC I Regular
Interest LTI-IO-H, and (viii) the [__] Distribution Date, the aggregate
Uncertificated Principal Balance of REMIC I Regular Interest LTI-IO-H, and (ix)
each Distribution Date thereafter, $0.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest (other than REMIC II Regular Interest LTII-IO), the principal amount of
such REMIC Regular Interest outstanding as of any date of determination. As of
the Closing Date, the Uncertificated Principal Balance of each REMIC Regular
Interest (other than REMIC II Regular Interest LTII-IO) shall equal the amount
set forth in the Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall be reduced by all distributions of
principal made on such REMIC Regular Interest on such Distribution Date pursuant
to Sections 5.07 and 5.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Sections 5.07 and 5.08. The Uncertificated Principal Balance of each
REMIC Regular Interest shall never be less than zero. REMIC I Regular Interest
LTII-IO will not have an Uncertificated Principal Balance.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: A per annum rate equal to the
average of the Net Mortgage Rates of the Mortgage Loans as of the first day of
the related Due Period, weighted on the basis of the Stated Principal Balances
as of the first day of the related Due Period. REMIC I Regular Interest LTI-P
will not accrue interest.
UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to REMIC II
Regular Interest LTII-AA, REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-A6, REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___] and REMIC II Regular
Interest LTII-ZZ, a per annum rate (but not less than zero) equal to the
weighted average of: (x) with respect to REMIC I Regular Interest LTI-1, the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest for
each such Distribution Date, and (y) with respect to REMIC I Regular Interest
LTI-IO-A through REMIC I Regular Interest LTI-IO-H for each Distribution Date
listed below, the weighted average of the rates listed below for each such REMIC
I Regular Interest listed below, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC I Regular Interest:
------------------------- -------------------------------------- -----------------------------------------------------
DISTRIBUTION DATE REMIC I REGULAR INTERESTS RATE
------------------------- -------------------------------------- -----------------------------------------------------
1 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
2 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
3 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
4 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
5 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
6 LTI-IO-A through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
7 LTI-IO-B through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
8 LTI-IO-B through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
9 LTI-IO-B through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
10 LTI-IO-B through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
11 LTI-IO-C through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A and LTI-IO-B Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
12 LTI-IO-C through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A and LTI-IO-B Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
13 LTI-IO-C through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A and LTI-IO-B Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
14 LTI-IO-D through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-C Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
15 LTI-IO-D through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-C Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
16 LTI-IO-E through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-D Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
17 LTI-IO-B5 through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-D Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
18 LTI-IO-E through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-D Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
19 LTI-IO-F through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-E Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
20 LTI-IO-F through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-E Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
21 LTI-IO-F through LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-E Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
22 LTI-IO-G and LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-F Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
23 LTI-IO-G and LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-F Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
24 LTI-IO-H (a) Uncertificated REMIC I Pass-Through Rate over
(b) [____]%
------------------------- -------------------------------------- -----------------------------------------------------
LTI-IO-A through LTI-IO-G Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
25 and thereafter LTI-IO-A through LTI-IO-H Uncertificated REMIC I Pass-Through Rate
------------------------- -------------------------------------- -----------------------------------------------------
With respect to REMIC II Regular Interest LTII-IO, (i) for the first twenty-four
distribution dates, [____]% and (ii) thereafter, [____]%. REMIC II Regular
Interest LTII-P will not accrue interest.
UNCERTIFICATED REMIC REGULAR INTEREST: The REMIC I Regular Interests
and the REMIC II Regular Interests.
VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. Voting Rights shall be allocated (i) 93% to the Certificates (other
than the Class [___], Class X, Class P and the Residual Certificates), (ii) 3%
to the Class X Certificates, (iii) 1% to the Class P Certificates, (iv) 1% to
the Class R Certificates and (v) 2% to the Class [___] Certificates until the
Distribution Date in [________] and thereafter such percentage of voting rights
shall be allocated to the remaining Classes of Publicly Offered Certificates.
The allocation among the Certificates other than the Class [___], Class X, Class
P and Class R Certificates shall be in proportion to the Certificate Principal
Balance of each Class relative to the Certificate Principal Balance of all other
such Classes. Voting Rights will be allocated among the Certificates of the
Class [___], Class X, Class P and Class R Certificates shall be in accordance
with their respective Percentage Interests.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
-----------------------------------------
For purposes of calculating the amount of the Interest Distribution
Amount for the Senior Certificates, Mezzanine Certificates and Class X
Certificates for any Distribution Date, (1) the aggregate amount of any Net
Interest Shortfalls in respect of the Mortgage Loans for any Distribution Date
shall first reduce the Interest Distribution Amount payable to the Class [___]
Certificates, second, reduce the Interest Distribution Amount payable to the
Class [___] Certificates, third, reduce the Interest Distribution Amount payable
to the Class [___] Certificates, and fourth, reduce the Interest Distribution
Amount payable to the Senior 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 Balance or Certificate
Notional Balance, as applicable of each such Certificate and (2) the aggregate
amount of any Realized Losses allocated to the Mezzanine Certificates and Net
WAC Rate Carryover Amount paid to the Senior Certificates (other than the Class
[___] Certificates) and the Mezzanine Certificates incurred for any Distribution
Date shall be allocated to the Class X Certificates based on, and to the extent
of, one month's interest at the then applicable Pass-Through Rate on the
Certificate Notional Balance thereof on any Distribution Date.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Net Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated first, to REMIC I
Regular Interest LTI-1, to the extent of one month's interest at the then
applicable respective Uncertificated REMIC I Pass-Through Rate on the
Uncertificated Principal Balance of each such REMIC I Regular Interest; and
then, to REMIC I Regular Interest LTI-IO-A, REMIC I Regular Interest LTI-IO-B,
REMIC I Regular Interest LTI-IO-C, REMIC I Regular Interest LTI-IO-D, REMIC I
Regular Interest LTI-IO-E, REMIC I Regular Interest LTI-IO-F, REMIC I Regular
Interest LTI-IO-G and REMIC I Regular Interest LTI-IO-H, in each case to the
extent of one month's interest at the then applicable respective Uncertificated
REMIC I Pass-Through Rate on the respective Uncertificated Principal Balance of
each such REMIC I Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, the
aggregate amount of any Net Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated among REMIC II
Regular Interest LTII-AA, REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___] and REMIC II Regular Interest LTII-ZZ, pro rata based on,
and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC II Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC II Regular Interest.
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
The Sponsor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Sponsor in and to the assets in the Trust Fund.
The Sponsor has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the use and benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Purchase Agreement, to the extent of the Mortgage Loans sold
under the Mortgage Loan Purchase Agreement. The Trustee hereby accepts such
assignment, and shall be entitled to exercise all rights of the Depositor under
the Mortgage Loan Purchase Agreement as if, for such purpose, it were the
Depositor. The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in creation or assumption by
the Trustee of any obligation of the Depositor, the Sponsor or any other Person
in connection with the Mortgage Loans.
In connection with such sale, the Depositor does hereby deliver to, and
deposit with the Custodian pursuant to the Custodial Agreement the documents
with respect to each Mortgage Loan as described under Section 2 of the Custodial
Agreement (the "Mortgage Loan Documents"). In connection with such delivery and
as further described in the Custodial Agreement, the Custodian will be required
to review such Mortgage Loan Documents and deliver to the Trustee, the
Depositor, the Servicer and the Sponsor certifications (in the forms attached to
the Custodial Agreement) with respect to such review with exceptions noted
thereon. In addition, under the Custodial Agreement the Depositor will be
required to cure certain defects with respect to the Mortgage Loan Documents for
the related Mortgage Loans after the delivery thereof by the Depositor to the
Custodian as more particularly set forth therein.
Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files and
preparation and delivery of the certifications shall be performed by the
Custodian pursuant to the terms and conditions of the Custodial Agreement.
The Mortgage Loans permitted by the terms of this Agreement to be
included in the Trust are limited to (i) Mortgage Loans (which the Depositor
acquired pursuant to the Mortgage Loan Purchase Agreement, which contains, among
other representations and warranties, a representation and warranty of the
Sponsor that no Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003, as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004) as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices Act,
effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9) and
(ii) Qualified Substitute Mortgage Loans (which, by definition as set forth
herein and referred to in the Mortgage Loan Purchase Agreement, are required to
conform to, among other representations and warranties, the representation and
warranty of the Sponsor that no Qualified Substitute Mortgage Loan is a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003, as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. ▇▇▇. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind.
Code ▇▇▇. Sections 24-9-1 through 24-9-9). The Depositor and the Trustee on
behalf of the Trust understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003, as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004, as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1
through 24-9-9).
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the initial trust receipt received by it from the
Custodian pursuant to the Custodial Agreement, the Trustee acknowledges receipt,
subject to the provisions of Section 2.01 hereof and Section 2 of the Custodial
Agreement, of the Mortgage Loan Documents and all other assets included in the
definition of "REMIC I" under clauses (i), (ii) (iii), (v) and (vi) (to the
extent of amounts deposited into the Distribution Account) and declares that it
holds (or the Custodian on its behalf holds) and will hold such documents and
the other documents delivered to it constituting a Mortgage Loan Document, and
that it holds (or the Custodian on its behalf holds) or will hold all such
assets and such other assets included in the definition of "REMIC I" in trust
for the exclusive use and benefit of all present and future Certificateholders.
(b) In conducting the review of the Mortgage Files in accordance with
the Custodial Agreement, the Custodian on the Trustee's behalf will ascertain
whether all required documents have been executed and received and whether those
documents relate to the Mortgage Loans identified in Exhibit B to this
Agreement, as supplemented. If the Custodian finds any document constituting
part of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B, the Sponsor shall
correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Sponsor may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of the
Certificateholders in such Mortgage Loan within sixty (60) days from the date of
notice from the Custodian of the defect and if the Sponsor fails to correct or
cure the defect or deliver such opinion within such period, the Sponsor will,
subject to Section 2.03, within ninety (90) days from the notification of the
Custodian purchase such Mortgage Loan at the Purchase Price; provided, however,
that if such defect relates solely to the inability of the Sponsor to deliver
the Mortgage, assignment thereof to the Custodian, or intervening assignments
thereof with evidence of recording thereon because such documents have been
submitted for recording and have not been returned by the applicable
jurisdiction, the Sponsor shall not be required to purchase such Mortgage Loan
if the Sponsor delivers such documents promptly upon receipt, but in no event
later than 360 days after the Closing Date.
(c) No later than 180 days after the Closing Date, the Custodian on the
Trustee's behalf will review, for the benefit of the Certificateholders, the
Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Sponsor and the Trustee, a final trust receipt substantially in
the form annexed to the Custodial Agreement. In conducting such review, the
Custodian on the Trustee's behalf and in accordance with the terms of the
Custodial Agreement will ascertain whether each document required to be recorded
has been returned from the recording office with evidence of recording thereon
and the Custodian on the Trustee's behalf has received either an original or a
copy thereof, as required in the Custodial Agreement. If the Custodian finds
that any document with respect to a Mortgage Loan has not been received, or is
unrelated to the Mortgage Loans identified in Exhibit B or appears to be
defective on its face, the Custodian shall note such defect in the exception
report attached the final trust receipt issued pursuant to the Custodial
Agreement and the Sponsor shall correct or cure any such defect or, if prior to
the end of the second anniversary of the Closing Date, the Sponsor may
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03 or shall deliver to the Trustee an Opinion of Counsel
to the effect that such defect does not materially or adversely affect the
interests of Certificateholders in such Mortgage Loan within 60 days from the
date of notice from the Trustee of the defect and if the Sponsor is unable
within such period to correct or cure such defect, or to substitute the related
Mortgage Loan with a Replacement Mortgage Loan or to deliver such opinion, the
Sponsor shall, subject to Section 2.03, within 90 days from the notification of
the Trustee, purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Sponsor to
deliver the Mortgage, assignment thereof to the Trustee or intervening
assignments thereof with evidence of recording thereon, because such documents
have not been returned by the applicable jurisdiction, the Sponsor shall not be
required to purchase such Mortgage Loan, if the Sponsor delivers such documents
promptly upon receipt, but in no event later than 360 days after the Closing
Date.
(d) In the event that a Mortgage Loan is purchased by the Sponsor in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Sponsor
shall remit the applicable Purchase Price to the Servicer for deposit in the
Custodial Account and shall provide written notice to the Securities
Administrator detailing the components of the Purchase Price, signed by an
authorized officer. Upon deposit of the Purchase Price in the Custodial Account
and upon receipt of a request for release (in the form attached to the Custodial
Agreement) with respect to such Mortgage Loan, the Custodian, on behalf of the
Trustee, will release to the Sponsor the related Mortgage File and the Trustee
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Sponsor, as are necessary to vest in the
Sponsor title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the deposit into the Custodial
Account was made. The Trustee shall promptly notify the Rating Agencies of such
repurchase. The obligation of the Sponsor to cure, repurchase or substitute for
any Mortgage Loan as to which a defect in a constituent document exists shall be
the sole remedies respecting such defect available to the Certificateholders or
to the Trustee on their behalf. The Sponsor shall promptly reimburse the Trustee
for any expenses incurred by the Trustee in respect of enforcing the remedies
for such breach.
(e) The Sponsor shall deliver to the Custodian the Mortgage Note and
other documents constituting the Mortgage File with respect to any Replacement
Mortgage Loan, which the Custodian will review as provided in the Custodial
Agreement, provided, that the Closing Date referred to therein shall instead be
the date of delivery of the Mortgage File with respect to each Replacement
Mortgage Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER
AND THE SPONSOR.
(a) The Servicer hereby represents and warrants to, and covenants with,
the Sponsor, the Depositor, the Master Servicer, the Securities Administrator
and the Trustee as follows, as of the Closing Date:
(i) It is duly organized and is validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with
the doing business laws of any such state, to the extent necessary to
ensure its ability to service the Mortgage Loans in accordance with the
terms of this Agreement and to perform any of its other obligations
under this Agreement in accordance with the terms hereof.
(ii) It has the full corporate power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought and further subject to public policy
with respect to indemnity and contribution under applicable securities
law.
(iii) The execution and delivery of this Agreement by it, the servicing of
the Mortgage Loans by it under this Agreement, the consummation of any
other of the transactions contemplated by this Agreement, and the
fulfillment of or compliance with the terms hereof are in its ordinary
course of business and will not (A) result in a material breach of any
term or provision of its charter or by-laws or (B) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which it is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it;
and it is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order
or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage loans for ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of its knowledge, threatened
in writing, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability
to service the Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, it has obtained the same.
(vii) The Servicer has accurately and fully reported, and will continue to
accurately and fully report its borrower credit files to each of the
credit repositories in a timely manner materially in accordance with
the Fair Credit Reporting Act and its implementing legislation.
(viii) The Servicer is a member of MERS in good standing, and will comply in
all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered
with MERS.
(ix) The Servicer will not waive any Prepayment Charge with respect to a
Mortgage Loan unless it is waived in accordance with the standard set
forth in Section 3.01.
If the covenant of the Servicer set forth in Section 2.03(a)(ix) above
is breached by the Servicer, the Servicer will pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Custodial Account within 90 days of the
earlier of discovery by the Servicer or receipt of notice by the Servicer of
such breach. Notwithstanding the foregoing, or anything to the contrary
contained in this Agreement, the Servicer shall have no liability for a waiver
of any Prepayment Charge in the event that the Servicer's determination to make
such a waiver was made by the Servicer in reliance on information properly
received by the Servicer from any Person in accordance with the terms of this
Agreement.
(b) The Sponsor hereby represents and warrants to and covenants with,
the Depositor, the Servicer, the Master Servicer, the Securities Administrator
and the Trustee as follows, as of the Closing Date:
(i) The Sponsor is duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this
Agreement to be conducted by the Sponsor in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to sell the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Sponsor has the full corporate power and authority to sell each
Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on the part of the
Sponsor the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Sponsor, enforceable against the Sponsor in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought and further subject to public policy with respect to indemnity
and contribution under applicable securities law.
(iii) The execution and delivery of this Agreement by the Sponsor, the sale
of the Mortgage Loans by the Sponsor under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Sponsor and will not (A)
result in a material breach of any term or provision of the charter or
by-laws of the Sponsor or (B) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which the Sponsor is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or regulation
applicable to the Sponsor of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Sponsor; and
the Sponsor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Sponsor's ability to perform or
meet any of its obligations under this Agreement.
(iv) The Sponsor is an approved seller of conventional mortgage loans for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act.
(v) No litigation is pending or, to the best of the Sponsor's knowledge,
threatened, against the Sponsor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
the ability of the Sponsor to sell the Mortgage Loans or to perform any
of its other obligations under this Agreement in accordance with the
terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Sponsor of, or compliance by the Sponsor with, this
Agreement or the consummation of the transactions contemplated hereby,
or if any such consent, approval, authorization or order is required,
the Sponsor has obtained the same.
(vii) The representations and warranties set forth in Section 8 of the
Mortgage Loan Purchase Agreement are true and correct as of the Closing
Date.
(viii) No Mortgage Loan is subject to the Home Ownership and Equity Protection
Act of 1994 or any comparable law and no Mortgage Loan is classified
and/or defined as a "high cost", "covered", "high risk home" or
"predatory" loan under any other state, federal or local law or
regulation or ordinance (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees).
(ix) No loan is a High Cost Loan or Covered Loan, as applicable (as such
terms are defined in Appendix E of the Standard & Poor's Glossary For
File Format For LEVELS(R) Version 5.6 Revised (attached hereto as
Exhibit N) and no mortgage loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act.
(x) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair
housing, predatory, abusive lending or disclosure laws applicable to
the origination and servicing of the Mortgage Loans have been complied
with in all material respects.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice thereof to the other
parties. The Sponsor hereby covenants with respect to the representations and
warranties set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the
Mortgage Loan Purchase Agreement, that within 90 days of the discovery of a
breach of any representation or warranty set forth therein that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects and, if such breach is not so
cured, (i) prior to the second anniversary of the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute in
its place a Replacement Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner set
forth below; provided that any such substitution pursuant to (i) above or
repurchase pursuant to (ii) above shall not be effected prior to the delivery to
the Trustee of an Opinion of Counsel if required by Section 2.05 and any such
substitution pursuant to (i) above shall not be effected prior to the additional
delivery to the Custodian of a request for release in accordance with the
Custodial Agreement. The Sponsor shall promptly reimburse the Trustee for any
expenses reasonably incurred by the Trustee in respect of enforcing the remedies
for such breach. To enable the Servicer to amend the Mortgage Loan Schedule, the
Sponsor shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Trustee whether it intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties in Section 8 of the Mortgage
Loan Purchase Agreement that are made to the best of the Sponsor's knowledge, if
it is discovered by any of the Depositor, the Sponsor or the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan,
notwithstanding the Sponsor's lack of knowledge with respect to the substance of
such representation or warranty, the Sponsor shall nevertheless be required to
cure, substitute for or repurchase the affected Mortgage Loan in accordance with
the foregoing. Notwithstanding the foregoing, any breach of a representation or
warranty contained in clauses (xxxvii), (xxxviii), (xxxix), (xl) and/or (xlv) of
Section 8 of the Mortgage Loan Purchase Agreement shall be automatically deemed
to materially and adversely affect the interests of the Certificateholders.
With respect to any Replacement Mortgage Loan or Loans, the Sponsor
shall deliver to the Custodian for the benefit of the Certificateholders such
documents and agreements as are required by Section 2 of the Custodial
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due Period related to the Distribution Date on
which such proceeds are to be distributed shall not be part of the Trust Fund
and will be retained by the Sponsor. For the month of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for the related Due Period and thereafter the Sponsor
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans and
shall deliver the amended Mortgage Loan Schedule to the Trustee, the Master
Servicer and the Securities Administrator. Upon such substitution, the
Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Sponsor shall be deemed to have made with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 8 of the
Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any
such substitution and the deposit into the Custodial Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Custodian of a request
for release for such Mortgage Loan in accordance with the Custodial Agreement,
the Custodian on behalf of the Trustee shall release to the Sponsor the Mortgage
File relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the Trustee shall execute and deliver at the Sponsor's
direction such instruments of transfer or assignment as have been prepared by
the Sponsor, in each case without recourse, as shall be necessary to vest in the
Sponsor, or its respective designee, title to the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03. Neither the
Trustee nor the Custodian shall have any further responsibility with regard to
such Mortgage File.
For any month in which the Sponsor substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Securities Administrator will
determine the amount (if any) by which the aggregate principal balance of all
the Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be remitted to the Servicer for deposit in the
Custodial Account by the Sponsor delivering such Replacement Mortgage Loan on or
before the Determination Date for the Distribution Date relating to the
Prepayment Period during which the related Mortgage Loan was required to be
purchased or replaced hereunder.
In the event that the Sponsor shall be required to repurchase a
Mortgage Loan, the Purchase Price therefor shall be remitted to the Servicer for
deposit in the Custodial Account on or before the Determination Date immediately
following the date on which the Sponsor was required to repurchase such Mortgage
Loan. The Purchase Price shall be remitted by the Servicer to the Securities
Administrator on the Remittance Date occurring in the month immediately
following the month in which the Purchase Price was deposited in the Custodial
Account. In addition, upon such deposit of the Purchase Price, the delivery of
an Officer's Certificate by the Servicer to the Trustee certifying that the
Purchase Price has been deposited in the Custodial Account, the delivery of an
Opinion of Counsel if required by Section 2.05 and the receipt of a Request for
Release, the Trustee shall release the related Mortgage File held for the
benefit of the related Certificateholders to the Sponsor, and the Trustee shall
execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by the Sponsor, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to the Sponsor to any
Mortgage Loan purchased pursuant to this Section 2.03.
(d) The Master Servicer hereby represents, warrants and covenants with
the Servicer, Depositor and the Trustee as follows, as of the Closing Date:
(i) The Master Servicer is a national banking association duly formed,
validly existing and in good standing under the laws of the United
States of America and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the
Master Servicer;
(ii) The Master Servicer has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly authorized
the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the Master Servicer,
the consummation by the Master Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Master Servicer and will not (A) result in a breach of any term or
provision of charter and by-laws of the Master Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which the Master Servicer is a party or by which it may be bound, or
any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer
is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition,
properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant made
by it and contained in this Agreement;
(v) No litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to perform any of its other obligations hereunder in accordance with
the terms hereof,
(vi) There are no actions or proceedings against, or investigations known to
it of, the Master Servicer before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the consummation of the transactions contemplated by
this Agreement or (C) that might prohibit or materially and adversely
affect the performance by the Master Servicer of its obligations under,
or validity or enforceability of, this Agreement; and
(vii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date.
(e) The representations and warranties set forth in Section 2.03 shall
survive delivery of the respective Mortgage Loans and Mortgage Files to
the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to, and covenants, with
the Servicer, the Sponsor, the Master Servicer, the Securities Administrator and
the Trustee as follows, as of the date hereof and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by, this Agreement and has duly authorized, by all
necessary corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
moratorium receivership and other similar laws relating to creditors'
rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought and further subject to public policy
with respect to indemnity and contribution under applicable securities
law.
(iii) The execution and delivery of this Agreement by the Depositor, the
consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of the Depositor and will not (A) result in
a material breach of any term or provision of the charter or by-laws of
the Depositor or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
the Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's knowledge,
threatened, against the Depositor that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
the ability of the Depositor to perform its obligations under this
Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with,
this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of the
Closing Date, following the transfer of the Mortgage Loans to it by the Sponsor,
the Depositor had good title to the Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee or the Custodian for the benefit of the Certificateholders. Upon
discovery by the Depositor, the Servicer, the Master Servicer or the Trustee of
a breach of such representations and warranties, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Sponsor delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of REMIC I, REMIC II or REMIC III or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion of Counsel to the effect that such repurchase or
substitution, as applicable, will not result in the events described in clause
(i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor or the Sponsor that any Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of section
860G(a)(3) of the Code, the party discovering such fact shall promptly (and in
any event within five (5) Business Days of discovery) give written notice
thereof to the other parties and the Trustee. In connection therewith, the
Sponsor, at its option, shall either (i) substitute, if the conditions in
Section 2.03(c) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within ninety (90) days of such discovery in the same manner as it
would a Mortgage Loan for a breach of representation or warranty contained in
Section 2.03. The Trustee shall reconvey to the Sponsor the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 ISSUANCE OF THE REMIC I REGULAR INTERESTS AND THE CLASS
R-1 INTEREST.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the Custodian on its behalf of the related Mortgage Files,
subject to the provisions of Section 2.01 and Section 2.02, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-1 Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-1
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-1 Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-1 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-2 Interest and
REMIC II (as holder of the REMIC I Regular Interests). The Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of all present and
future Holders of the Class R-2 Interest and REMIC II (as holder of the REMIC I
Regular Interests). The rights of the Holders of the Class R-2 Interest and
REMIC II (as holder of the REMIC I Regular Interests) to receive distributions
from the proceeds of REMIC II in respect of the Class R-2 Interest and REMIC II
Regular Interests, respectively, and all ownership interests evidenced or
constituted by the Class R-2 Interest and the REMIC II Regular Interests, shall
be as set forth in this Agreement.
Section 2.08 CONVEYANCE OF THE REMIC II REGULAR INTERESTS; ACCEPTANCE
OF REMIC III 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 II Regular Interests for the benefit of the Class R-3 Interest and
REMIC III (as holder of the REMIC II Regular Interests). The Trustee
acknowledges receipt of the REMIC II Regular Interests and declares that it
holds and will hold the same in trust for the exclusive use and benefit of all
present and future Holders of the Class R-3 Interest and REMIC III (as holder of
the REMIC II Regular Interests). The rights of the Holder of the Class R-3
Interest and REMIC III (as holder of the REMIC II Regular Interests) to receive
distributions from the proceeds of REMIC III in respect of the Class R-3
Interest and REMIC III Regular Interests, respectively, and all ownership
interests evidenced or constituted by the Class R-3 Interest and the REMIC III
Regular Interests, shall be as set forth in this Agreement. The Class R-3
Interest and the REMIC III Regular Interests shall constitute the entire
beneficial ownership interest in REMIC III.
Section 2.09 ISSUANCE OF CLASS R CERTIFICATES.
The Trustee acknowledges the assignment to it of the REMIC I Regular
Interests and the REMIC II Regular Interests and, concurrently therewith and in
exchange therefor, pursuant to the written request of the Depositor executed by
an officer of the Depositor, the Securities Administrator has executed and
authenticated and the Trustee has delivered to or upon the order of the
Depositor, the Class R Certificates in authorized denominations. The Class R
Certificates evidence ownership in the Class R-1 Interest, the Class R-2
Interest and the Class R-3 Interest.
Section 2.10 ESTABLISHMENT OF TRUST.
The Depositor does hereby establish, pursuant to the further provisions
of this Agreement and the laws of the State of New York, an express trust to be
known, for convenience, as "Nomura Asset Acceptance Corporation, Alternative
Loan Trust, Series [________]" and does hereby appoint [_____________________],
as Trustee in accordance with the provisions of this Agreement.
Section 2.11 PURPOSE AND POWERS OF THE TRUST.
The purpose of the common law trust, as created hereunder, is to engage
in the following activities:
(a) acquire and hold the Mortgage Loans and the other assets of the
Trust Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for the
Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities.
The Trustee shall not cause the trust to engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement while any Certificate is outstanding, and this Section
2.10 may not be amended, without the consent of the Certificateholders
evidencing 51% or more of the aggregate voting rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section 3.01 THE SERVICER TO ACT AS SERVICER OF THE MORTGAGE LOANS.
The Servicer shall service and administer the Mortgage Loans on behalf
of the Trust and in the best interest of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loans and to the
extent consistent with such terms and in accordance with and exercising the same
care in performing those practices that the Servicer customarily employs and
exercises in servicing and administering mortgage loans for its own account
(including, compliance with all applicable federal, state and local laws).
To the extent consistent with the foregoing, the Servicer shall seek
the timely and complete recovery of principal and interest on the Mortgage Notes
related to the Mortgage Loans and shall waive a Prepayment Charge only under the
following circumstances: (i) such waiver is standard and customary in servicing
similar mortgage loans and (ii) either (A) such waiver is related to a default
or reasonably foreseeable default and would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan and, if such waiver is made
in connection with a refinancing of the related Mortgage Loan, such refinancing
is related to a default or a reasonably foreseeable default or (B) such waiver
is made in connection with a refinancing of the related Mortgage Loan unrelated
to a default or a reasonably foreseeable default where (x) the related Mortgagor
has stated to the Servicer an intention to refinance the related Mortgage Loan
and (y) the Servicer has concluded in its reasonable judgment that the waiver of
such Prepayment Charge would induce such Mortgagor to refinance with the
Servicer or (iii) the Servicer reasonably believes such Prepayment Charge is
unenforceable in accordance with applicable law or the collection of such
related Prepayment Charge would otherwise violate applicable law. If a
Prepayment Charge is waived as permitted by meeting both of the standards
described in clauses (i) and (ii)(B) above, then the Servicer is required to pay
the amount of such waived Prepayment Charge (the "Servicer Prepayment Charge
Payment Amount"), for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the Custodial Account within 90 days of notice or
discovery of such waiver meeting the standard set forth in both clauses (i) and
(ii)(B) above; provided, however, that the Servicer shall not waive more than 5%
of the Prepayment Charges (by number of Prepayment Charges) set forth on the
Prepayment Charge Schedule in accordance with clauses (i) and (ii)(B) above.
Notwithstanding any other provisions of this Agreement, any payments made by the
Servicer in respect of any waived Prepayment Charges pursuant to clauses (i) and
(ii)(B) above and the preceding sentence shall be deemed to be paid outside of
the Trust Fund.
Subject only to the above-described applicable servicing standards (the
"Accepted Servicing Practices") and the terms of this Agreement and of the
respective Mortgage Loans, the Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.03, to do or
cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited to,
the power and authority, subject to the terms hereof (i) to execute and deliver,
on behalf of the Certificateholders and the Trustee, customary consents or
waivers and other instruments and documents, (ii) to consent to transfers of any
related Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided herein), (iii) to collect any
Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to Section
3.09, to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan.
Without limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Trust, the Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the Mortgage Loans, and with respect to the related Mortgaged Properties held
for the benefit of the Certificateholders. The Servicer shall prepare and
deliver to the Depositor and/or the Trustee such documents requiring execution
and delivery by any or all of them as are necessary or appropriate to enable the
Servicer to service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. In addition, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer any special or
limited powers of attorney agreeable to the Trustee and its counsel for each
county in which a Mortgaged Property related to Mortgage Loan is located and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder, provided such limited powers of
attorney or other documents shall be prepared by the Servicer and submitted to
the Trustee for review prior to execution.
In accordance with the standards of the first paragraph of this Section
3.01, the Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans in order to preserve the lien on the
Mortgaged Property, which advances shall be reimbursable in the first instance
from related collections from the Mortgagors pursuant to Section 3.27, and
further as provided in Section 3.32. All costs incurred by the Servicer, if any,
in effecting the payments of such taxes and assessments on the related Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02, when any
Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Servicer shall to the extent that it has
knowledge of such conveyance, enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable law and
governmental regulations, but only to the extent that such enforcement will not
adversely affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer shall not be required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Servicer is authorized, subject to Section 3.02(b), to
take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law, the Mortgagor remains liable thereon, provided that the
related Mortgage Loan shall continue to be covered (if so covered before the
Servicer enters such agreement) by the applicable Required Insurance Policies.
The Servicer, subject to Section 3.02(b), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
3.02(a) by reason of any transfer or assumption that the Servicer reasonably
believes it is restricted by law from preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to
the extent set forth in Section 3.02(a), in any case in which a Mortgaged
Property related to a Mortgage Loan has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed by
the Trustee is required releasing the Mortgagor from liability on the related
Mortgage Loan, the Servicer shall prepare and deliver or cause to be prepared
and delivered to the Trustee for signature and shall direct, in writing, the
Trustee to execute the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note (including, but not limited
to, the Mortgage Rate, the amount of the Scheduled Payment and any other term
affecting the amount or timing of payment on the related Mortgage Loan) may be
changed. In addition, the substitute Mortgagor and the Mortgaged Property must
be acceptable to the Servicer in accordance with the servicing standard set
forth in Section 3.01. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Custodian the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
Section 3.03 SUBSERVICERS.
The Servicer shall perform all of its servicing responsibilities
hereunder or may cause a subservicer to perform any such servicing
responsibilities on its behalf, but the use by the Servicer of a subservicer
shall not release the Servicer from any of its obligations hereunder with
respect to the related Mortgage Loans. Any subservicing arrangement and the
terms of the related subservicing Agreement must provide for the servicing of
such Mortgage Loans in a manner consistent with the servicing arrangements
contemplated hereunder and the Servicer shall cause any subservicer to comply
with the provisions of this Agreement (including, without limitation, to provide
the information required to be delivered under Sections 3.3, 3.14 and 3.18
hereof), to the same extent as if such Sub-Servicer were the related Servicer.
The related Servicer shall be responsible for obtaining from each Sub-Servicer
and delivering to the Master Servicer any annual statement of compliance,
assessment of compliance, attestation report and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ related
certification as and when required to be delivered. The Servicer shall pay all
fees of each of its subservicers from its own funds.
Notwithstanding the foregoing, with respect to the Mortgage Loans, the
Servicer shall be entitled to outsource one or separate servicing functions to a
Person (each, an "Subcontractor") that does not meet the eligibility
requirements for a Subservicer, so long as such outsourcing does not constitute
the delegation of the Servicer's obligation to perform all or substantially all
of the servicing of the related Mortgage Loans to such Subcontractor. The
Servicer shall promptly, upon request, provide to the Master Servicer, the
Trustee and the Depositor a written description (in form and substance
satisfactory to the Master Servicer, the Trustee and the Depositor) of the role
and function of each Subcontractor utilized by the Servicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this subsection. In such event, the use by the
Servicer of any such Subcontractor shall not release the Servicer from any of
its obligations hereunder and the Servicer shall remain responsible hereunder
for all acts and omissions of such Subcontractor as fully as if such acts and
omissions were those of the Servicer, and the Servicer shall pay all fees and
expenses of the Subcontractor from the Servicer's own funds.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by it for
the benefit of the Master Servicer, the Trustee and the Depositor to comply with
the provisions of Sections 3.3, 3.14 and 3.18 of this Agreement to the same
extent as if such Subcontractor were the Servicer. The Servicer shall be
responsible for obtaining from each Subcontractor and delivering to the Master
Servicer, the Trustee and any Depositor any assessment of compliance,
attestation report and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ related certification required to be
delivered by such Subcontractor under Section 3.3, 3.14 and 3.18, in each case
as and when required to be delivered.
At the cost and expense of the Servicer, without any right of
reimbursement from its Custodial Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange for any
servicing responsibilities to be performed by a successor subservicer; provided,
however, that nothing contained herein shall be deemed to prevent or prohibit
the Servicer, at its option, from electing to service the Mortgage Loans itself.
In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 8.01, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
with respect to the Mortgage Loans effective as of the date of the Servicer's
termination. The Servicer shall pay all fees, expenses or penalties necessary in
order to terminate the rights and responsibilities of each subservicer from the
Servicer's own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Servicer shall not be relieved of
its obligations hereunder with respect to the Mortgage Loans and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Servicer alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities with respect
to such subservicer including any obligation, duty or liability of Master
Servicer or the Trustee to pay such subservicer's fees and expenses or any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any successor servicer to act as successor servicer under
this Agreement and the transactions provided for in this Agreement. For purposes
of remittances to the Securities Administrator pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SERVICER
TO BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Securities
Administrator for any funds received by the Servicer or that otherwise are
collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any such Mortgage Loan. All Mortgage Files and funds collected or
held by, or under the control of, the Servicer in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Custodial Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. The Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Custodial Account, the Distribution Account or in any
Escrow Account, or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to the
Servicer under this Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance with extended coverage on the Mortgaged Property in an amount
which is at least equal to the lesser of (i) the Stated Principal Balance of
such Mortgage Loan and (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
hazard insurance with extended coverage on each REO Property in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such REO Property and (ii) the Stated Principal
Balance of the related Mortgage Loan at the time it became an REO Property. The
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the property subject to the related
Mortgage or amounts to be released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and in accordance with the servicing standard set forth in Section
3.01) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.27. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the Stated Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If a Mortgaged Property or REO Property is at any time in
an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer shall cause to be maintained a flood insurance policy in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the Stated Principal Balance of the related Mortgage Loan and (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of B:VI or better in
Best's Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.05, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.05, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Custodial Account 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 Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the 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 Servicer has obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. The Servicer shall provide the Master Servicer, upon request, with
copies of such insurance policies and fidelity bond (or waiver thereof). The
Servicer shall also maintain a fidelity bond in the form and amount that would
meet the requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Servicer has
obtained a waiver of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The
Servicer shall be deemed to have complied with this provision if an Affiliate of
the 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 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 Master Servicer. The Servicer shall also cause its
subservicers to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The Servicer shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies and take such actions
(including the negotiation, settlement, compromise or enforcement of the
insured's claim) as shall be necessary to realize recovery under such Insurance
Policies. Any proceeds disbursed to the Servicer in respect of such Insurance
Policies shall, within two Business Days of its receipt, be deposited in the
Custodial Account upon receipt, except that any amounts realized that are to be
applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted).
Section 3.07 MAINTENANCE OF INSURANCE POLICIES.
The Servicer shall not take any action that would result in noncoverage
under any applicable Insurance Policy of any loss which, but for the actions of
the Servicer would have been covered thereunder. The Servicer shall use its best
efforts to keep in force and effect (to the extent that the related Mortgage
Loan requires the Mortgagor to maintain such insurance), any applicable
Insurance Policy. The Servicer shall not cancel or refuse to renew any Insurance
Policy that is in effect at the date of the initial issuance of the Mortgage
Note and is required to be kept in force hereunder.
Section 3.08 RESERVED.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS; DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES;
REPURCHASES OF CERTAIN MORTGAGE LOANS.
(a) The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Servicer shall not be required to expend its own funds in connection with
any foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account). If the Servicer reasonably
believes that Liquidation Proceeds with respect to any such Mortgage Loan would
not be increased as a result of such foreclosure or other action, such Mortgage
Loan will be charged-off and will become a Liquidated Loan. The Servicer will
give notice of any such charge-off to the Master Servicer. The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 3.27.
If the Servicer has knowledge that a Mortgaged Property that the Servicer is
contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Servicer, the Servicer shall, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Servicer shall ensure that the
title to such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Servicer and the Certificateholders for the period prior to the sale of such
REO Property. The Servicer shall prepare for and deliver to the Master Servicer
a statement with respect to each REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable the Securities Administrator to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Custodial Account no later than
the close of business on each Determination Date. The Servicer shall perform the
tax reporting and withholding related to foreclosures, abandonments and
cancellation of indebtedness income as specified by Sections 6050H, 6050J and
6050P of the Code by preparing and filing such tax and information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
three years after its acquisition by the Trust Fund or, at the expense of the
Trust Fund, request from the Internal Revenue Service more than 60 days prior to
the day on which such three-year period would otherwise expire, an extension of
the three-year grace period. The Trustee and the Securities Administrator shall
be supplied with an Opinion of Counsel (such opinion not to be an expense of the
Trustee, the Securities Administrator or the Trust Fund) to the effect that the
holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of REMIC I, REMIC II or REMIC III as defined in section 860F of
the Code or cause either REMIC I, REMIC II or REMIC III to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject any of REMIC I, REMIC II or REMIC III to the imposition of any
federal, state or local income taxes on the income earned from such Mortgaged
Property under section 860G(c) of the Code or otherwise, unless the Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
unreimbursed Master Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for all
purposes in the Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Custodial Account.
To the extent the income received during a Prepayment Period is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the respective Mortgage Loan, such excess shall be considered
to be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Servicer as provided above, shall be deposited in the
Custodial Account on the next succeeding Determination Date following receipt
thereof for distribution on the related Distribution Date, except that any
Excess Liquidation Proceeds shall be retained by the Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, shall be applied in the following order of priority: first, to
reimburse itself for any related unreimbursed Servicing Advances and Servicing
Fees, pursuant to Section 3.27 or this Section 3.09; second, to reimburse itself
for any unreimbursed Advances, pursuant to Section 3.27 or this Section 3.09;
third, to accrued and unpaid interest (to the extent no Advance has been made
for such amount) on the Mortgage Loan or related REO Property, at the Net
Mortgage Rate to the first day of the month in which such amounts are required
to be distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine the
respective aggregate amounts of Excess Liquidation Proceeds and Realized Losses,
if any, with respect to any Mortgage Loan for the related Prepayment Period and
report such amounts to the Master Servicer pursuant to Section 3.28.
(c) The Servicer has no intent to foreclose on any Mortgage Loan based
on the delinquency characteristics as of the Closing Date; provided, however,
that the foregoing does not prevent the Servicer from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Servicer's
discretion so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Custodial Account out of each payment of
interest on each Mortgage Loan included in the Trust Fund an amount equal to the
Servicing Fee. In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of Liquidation Proceeds, Insurance Proceeds or condemnation
proceeds to the extent permitted by Section 3.27.
Additional servicing compensation with respect to Mortgage Loans in the
form of any Excess Liquidation Proceeds, assumption fees, late payment charges,
insufficient funds charges and ancillary income to the extent such fees or
charges are received by the Servicer, all income and gain net of any losses
realized from Permitted Investments with respect to funds in or credited to the
Custodial Account shall be retained by the Servicer to the extent not required
to be deposited in the Custodial Account pursuant to Section 3.27. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.05 and maintenance of the other forms of
insurance coverage required by Section 3.07 and shall not be entitled to
reimbursement therefor except as specifically provided in Section 3.27.
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Servicer shall sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Pursuant to
its efforts to sell such REO Property, the Servicer shall protect and conserve
such REO Property in the manner and to the extent required herein, in accordance
with the REMIC Provisions.
(b) The Servicer shall deposit all funds collected and received in
connection with the operation of any REO Property into the Custodial Account.
(c) The Servicer, upon the final disposition of any REO Property, shall
be entitled to reimbursement for any related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Advances or Servicing Fees as well as any unpaid Servicing
Fees may be reimbursed or paid, as the case may be, prior to final disposition,
out of any net rental income or other net amounts derived from such REO
Property.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property or the acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of foreclosure, the
Servicer shall submit a liquidation report to the Trustee containing such
information as shall be mutually acceptable to the Servicer and the Trustee with
respect to such Mortgaged Property.
Section 3.13 ANNUAL STATEMENT AS TO COMPLIANCE.
(a) Not later than March 1st of each calendar year beginning in
[________], the Servicer will deliver to the Trustee, the Master Servicer and
the Depositor an Officers' Certificate (an "Annual Statement of Compliance")
(upon which the Master Servicer can conclusively rely in connection with its
obligations under Section 5.06) stating, as to each signatory thereof, that (i)
a review of the activities of the Servicer during the preceding calendar year
and of performance under this Agreement has been made under such Servicing
Officers' supervision and (ii) to the best of such Servicing Officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement in all material respects throughout such year,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such Servicing Officer and the
nature and status of cure provisions thereof. Such Annual Statement of
Compliance shall contain no restrictions or limitations on its use. In the event
that the Servicer has delegated any servicing responsibilities with respect to
the Mortgage Loans to a subservicer, the Servicer shall deliver an Officer's
Certificate of each subservicer as described above as and when required with
respect to the Servicer.
(b) If the Servicer cannot deliver the related Annual Statement of
Compliance by March 1st of such year, the Master Servicer, at its sole option,
may permit a cure period for the Servicer to deliver such Annual Statement of
Compliance, but in no event later than March 10th of such year.
(c) Failure of the Servicer to comply timely with this Section 3.13
shall be deemed a Servicer Event of Default as to the Servicer, automatically,
without notice and without any cure period, and the Master Servicer may, in
addition to whatever rights the Master Servicer may have under this Agreement
and at law or in equity or to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
Section 3.14 ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS.
(a) On and after [___________], the Servicer shall service and
administer the Mortgage Loans in accordance with all applicable requirements of
the Servicing Criteria. The Servicer shall deliver to the Master Servicer on or
before March 1st of each calendar year beginning in [________], a report (an
"Assessment of Compliance") reasonably satisfactory to the Master Servicer
regarding the Servicer's assessment of compliance with the Servicing Criteria
during the preceding calendar year as required by Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB, which as of the date hereof,
require a report by an authorized officer of the Servicer that contains the
following:
(i) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Servicer;
(ii) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to
the Servicer;
(iii) An assessment by such officer of the Servicer's compliance with the
applicable Servicing Criteria for the period consisting of the
preceding calendar year, including disclosure of any material instance
of noncompliance with respect thereto during such period, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving the
Servicer, that are backed by the same asset type as the Mortgage Loans;
(iv) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's Assessment of Compliance for the
period consisting of the preceding calendar year; and
(v) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer, which statement shall be based on the
activities it performs with respect to asset-backed securities
transactions taken as a whole involving the Master Servicer, that are
backed by the same asset type as the Mortgage Loans.
(b) Such report at a minimum shall address each of the Servicing
Criteria specified on a certification substantially in the form of EXHIBIT O
hereto delivered to the Master Servicer concurrently with the execution of this
Agreement.
(c) On or before March 1st of each calendar year beginning in
[________], the Servicer shall furnish to the Master Servicer a report (an
"Attestation Report") by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance made by the Company, as required by
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB,
which Attestation Report must be made in accordance with standards for
attestation reports issued or adopted by the Public Company Accounting Oversight
Board.
(d) The Servicer shall cause any subservicer, any Subcontractor and
each subcontractor determined by the Servicer to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Master Servicer, the Trustee and the Depositor an assessment of
compliance and accountant's attestation report.
(e) If the Servicer cannot deliver the related Assessment of Compliance
or Attestation Report by March 1st of such year, the Master Servicer, at its
sole option, may permit a cure period for the Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than March
10th of such year.
(f) Failure of the Servicer to comply timely with this Section 3.18
shall be deemed a Servicer Event of Default as to the Servicer, automatically,
without notice and without any cure period, and the Master Servicer may, in
addition to whatever rights the Master Servicer may have under this Agreement
and at law or in equity or to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
Section 3.15 BOOKS AND RECORDS.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loans by the Trust. In particular, the Servicer
shall maintain in its possession, available for inspection by the Trustee and
the Master Servicer and shall deliver to the Trustee or the Master Servicer upon
reasonable prior request and during normal business hours, evidence of
compliance with all federal, state and local laws, rules and regulations. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including, but not limited to, optical imagery
techniques so long as the Servicer complies with the requirements of Accepted
Servicing Practices.
The Servicer shall maintain with respect to each Mortgage Loan and
shall upon reasonable prior request and during normal business hours make
available for inspection by the Trustee and the Master Servicer the related
servicing file during the time such Mortgage Loan is subject to this Agreement
and thereafter in accordance with applicable law.
Section 3.16 THE TRUSTEE.
The Trustee shall furnish the Servicer with any powers of attorney and
other documents prepared and submitted by the Servicer to the Trustee in a form
as mutually agreed upon and necessary or appropriate to enable the Servicer to
service and administer the related Mortgage Loans and REO Properties.
The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.
The Trustee shall execute and deliver as directed in writing by the
Servicer any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or otherwise available at law or equity.
Section 3.17 REMIC-RELATED COVENANTS.
For as long as each REMIC shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to treat each REMIC as a REMIC,
and the Trustee and the Securities Administrator shall comply with any
directions of the Sponsor, the Servicer or the Master Servicer with respect to
such treatment. In particular, the Trustee shall not (a) knowingly sell or
permit the sale of all or any portion of the Mortgage Loans or of any investment
of deposits in an Account unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.18 ANNUAL CERTIFICATION; ADDITIONAL INFORMATION.
(a) If requested by the Master Servicer or the Depositor, the Servicer
shall deliver no later than March 1st of each year in which the Trust is
required to file an execute and Annual Report on Form 10-K, to the Master
Servicer, the Depositor and any other Person that will be responsible for
signing the Master Servicer Certification, a certification in the form attached
hereto as Exhibit [__] signed by the appropriate officer of the Servicer. The
Servicer acknowledges that the Master Servicer, the Depositor and any other
Person that will be responsible for signing a Master Servicer Certification may
rely on the certification provided by the Servicer in signing a Master Servicer
Certification and filing such with the Commission. Such certification shall be
signed by the senior officer in charge of servicing of the Servicer.
(b) The Servicer shall indemnify and hold harmless the Master Servicer,
the Securities Administrator, the Trustee, the Depositor and their respective
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 3.18 or the Servicer's negligence, bad faith or
willful misconduct in connection therewith. Such indemnity shall survive the
termination or resignation of the parties hereto or the termination of this
Agreement. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, the Securities Administrator,
the Trustee and the Depositor, then the Servicer agrees that it shall contribute
to the amount paid or payable by the Master Servicer, the Securities
Administrator, the Trustee and the Depositor as a result of the losses, claims,
damages or liabilities of the Master Servicer, the Securities Administrator, the
Trustee and the Depositor in such proportion as is appropriate to reflect the
relative fault of the Master Servicer, the Securities Administrator, the Trustee
and the Depositor on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under this Section 3.18.
(c) The Servicer shall provide to the Master Servicer prompt notice of
the occurrence of any of the following:
(i) any Servicer Event of Default under the terms of this Agreement, any
merger, consolidation or sale of substantially all of the assets of the
Servicer, the Servicer's engagement of any subservicer to perform or
assist in the performance of any of the Servicer's obligations under
this Agreement, any material litigation involving the Servicer, and any
affiliation or other significant relationship between the Servicer and
other transaction parties.
(ii) If the Servicer has knowledge of the occurrence of any of the events
described in this clause (ii), then no later than ten days prior to the
deadline for the filing of any Distribution Report on Form 10-D in
respect of any Trust that includes any of the Mortgage Loans serviced
by the Servicer, the Servicer shall provide to the Master Servicer
notice of the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to
be included in the related Distribution Report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool
asset terms, fees, penalties or payments during the
distribution period or that have cumulatively become material
over time (Item 1121(a)(11) of Regulation AB);
(B) material breaches of pool asset representations or warranties
or transaction covenants (Item 1121(a)(12) of Regulation AB);
and
(C) information regarding new asset-backed securities issuances
backed by the same pool assets, any pool asset changes (such
as, additions, substitutions or repurchases), and any material
changes in origination, underwriting or other criteria for
acquisition or selection of pool assets (Item 1121(a)(14) of
Regulation AB).
(d) The Servicer shall provide to the Master Servicer such additional
information as the Master Servicer may reasonably request, including evidence of
the authorization of the person signing any certification or statement,
financial information and reports and of the fidelity bond and errors and
omissions insurance policy required to be maintained by the Servicer pursuant to
this Agreement, and such other information related to the Servicer or its
performance hereunder.
Section 3.19 RELEASE OF MORTGAGE FILES.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by the Servicer of a notification that payment in full has been
escrowed in a manner customary for such purposes for payment to
Certificateholders on the next Distribution Date, the Servicer will (or if the
Servicer does not, the Master Servicer may) promptly furnish to the Trustee and
the Custodian, on behalf of the Trustee, two copies of a request for release
substantially in the form attached to the Custodial Agreement signed by an
Authorized Servicer Representative or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from an Authorized
Servicer Representative (which certification shall include a statement to the
effect that all amounts received in connection with such payment that are
required to be deposited in the Custodial Account pursuant to Article V have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Servicer the related Mortgage File. Within five (5)
Business Days of receipt of such certification and request, the Custodian, on
behalf of the Trustee, shall release the related Mortgage File to the Servicer
and the Trustee and the Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, the Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the related Mortgage Loan, an instrument of satisfaction
(or assignment of mortgage without recourse) regarding the Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or assignment, as the
case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of such payment, it being understood and agreed that no
expenses incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Custodial Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with this Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by the Servicer (in form reasonably acceptable to the Trustee) and as
are necessary to the prosecution of any such proceedings. The Custodian, on
behalf of the Trustee, shall, upon the written request of the Servicer, and
delivery to the Custodian, on behalf of the Trustee, of two copies of a request
for release signed by an Authorized Servicer Representative substantially in the
form attached to the Custodial Agreement (or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from an
Authorized Servicer Representative), release the related Mortgage File held in
its possession or control to the Servicer. Such request for release shall
obligate the Servicer to return the Mortgage File to the Custodian on behalf of
the Trustee, when the need therefor by such Person no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of an Authorized Servicer Representative similar to that hereinabove specified,
the Mortgage File shall be released by the Custodian, on behalf of the Trustee,
to the Servicer.
Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SERVICER
TO BE HELD FOR TRUSTEE.
The Servicer (to the extent required by this Agreement) shall transmit
to the Trustee or to Custodian such documents and instruments coming into the
possession of such Person from time to time as are required by the terms hereof
to be delivered to the Trustee or the Custodian. Any funds received by the
Servicer in respect of any Mortgage Loan or which otherwise are collected by the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the right of the Servicer to retain its Servicing
Fee and other amounts as provided in this Agreement.
Section 3.21 POSSESSION OF CERTAIN INSURANCE POLICIES AND DOCUMENTS.
The Servicer shall retain possession and custody of the originals (to
the extent available) of any Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be issued
from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Certificates have been distributed in full, the
Trustee (or the Custodian, as directed by the Trustee) shall retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions of this Agreement.
Section 3.22 RESERVED.
Section 3.23 UCC.
The Sponsor agrees to execute and file continuation statements for any
Uniform Commercial Code financing statements which the Sponsor has informed the
Trustee were filed on the Closing Date in connection with the Trust. The Sponsor
shall file any financing statements or amendments and continuation statements
thereto required by any change in the Uniform Commercial Code.
Section 3.24 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
With respect to any Mortgage Loan which is delinquent in payment by
ninety-one (91) days or more or is an REO Property, the Sponsor shall have the
right to purchase such Mortgage Loan or REO Property from the Trust at a price
equal to the Purchase Price. The Purchase Price shall be remitted to the
Servicer for deposit in the Custodial Account and remitted by the Servicer to
the Securities Administrator on the Servicer Remittance Date in the month
immediately following the month in which the Purchase Price was deposited in the
Custodial Account.
If at any time the Sponsor remits to the Servicer a payment for deposit
in the Custodial Account covering the amount of the Purchase Price for such a
Mortgage Loan and the Servicer delivers an Officer's Certificate to the Trustee
certifying that the Purchase Price has been deposited in the Custodial Account,
the Trustee shall execute the assignment of such Mortgage Loan at the request of
the Sponsor without recourse to the Sponsor which shall succeed to all the
Trustee's, right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Sponsor will thereupon own such Mortgage, and
all such security and documents, free of any further obligation to the Trustee
or the Certificateholders with respect thereto. The Sponsor shall be responsible
for any transfer costs incurred with respect to a Mortgage Loan purchased
pursuant to this Section 3.24.
Section 3.25 OBLIGATIONS OF THE SERVICER UNDER CREDIT RISK MANAGEMENT
AGREEMENT.
(a) Notwithstanding anything in this Agreement or the Credit Risk
Management Agreements to the contrary, the Trustee shall not have any duty or
obligation to enforce any Credit Risk Management Agreement or to supervise,
monitor or oversee the activities of the Credit Risk Manager or the Servicer
under the Credit Risk Management Agreements or this Agreement with respect to
any action taken or not taken by the Servicer pursuant to a recommendation of
the Credit Risk Manager or otherwise in connection with obligations of the
Servicer under the related Credit Risk Management Agreement.
Section 3.26 COLLECTION OF MORTGAGE LOAN PAYMENTS; CUSTODIAL ACCOUNT.
(a) The Servicer shall make reasonable efforts in accordance with
Accepted Servicing Practices to collect all payments called for under the terms
and provisions of the Mortgage Loans to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any related
Required Insurance Policy. Consistent with the foregoing, the Servicer may in
its discretion (i) waive any late payment charge and (ii) extend the due dates
for payments due on a Mortgage Note for a Mortgage Loan for a period not greater
than 180 days; provided, however no such extension shall be materially adverse
to the Certificateholders. In the event of any such arrangement, the Servicer
shall make Advances on the Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 5.01. The Servicer shall not
be required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Servicer delivers to the Trustee and the Securities
Administrator a REMIC Opinion, the Servicer may, (A) amend the related Mortgage
Note to reduce the Mortgage Rate applicable thereto, provided that such reduced
Mortgage Rate shall in no event be lower than 4.50% with respect to any Mortgage
Loan and (B) amend any Mortgage Note for a Mortgage Loan to extend the maturity
thereof.
(b) The Servicer shall establish and maintain a segregated Custodial
Account (which shall at all times be an Eligible Account) with a depository
institution in the name of the Servicer for the benefit of the Trustee on behalf
of the Certificateholders and designated "[___________________], as trustee for
registered holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through
Certificates, Series [_________]." On behalf of the Trust Fund, the Servicer
shall deposit or cause to be deposited in the clearing account in which it
customarily deposits payments and collection on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Custodial Account, in no event more than two Business
Days after the Servicer's receipt thereof, except as otherwise specifically
provided herein, the following payments and collections remitted by subservicers
or received by it in respect of the Mortgage Loans subsequent to the Cut-off
Date (other than in respect of principal and interest due on the Mortgage Loans
on or before the Cut-off Date) and the following amounts required to be
deposited hereunder:
(i) all payments on account of principal, including Principal Prepayments
and Subsequent Recoveries, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans net of the
related Servicing Fee permitted under Section 3.10;
(iii) all Liquidation Proceeds, Insurance Proceeds and condemnation proceeds
with respect to the Mortgage Loans, other than proceeds to be applied
to the restoration or repair of the related Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal
servicing procedures;
(iv) any amount required to be deposited by the Servicer pursuant to Section
3.26(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.05;
(vi) any amounts paid by an Advance Financing Person in respect of Advances
or Servicing Advances;
(vii) any Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans and any Servicer
Prepayment Charge Payment Amounts;
(viii) the Purchase Price with respect to any Mortgage Loans purchased by the
Sponsor pursuant to Section 2.02 or 2.03, any amounts which are to be
treated pursuant to Section 2.04 of this Agreement as the payment of
such a Purchase Price and the Purchase Price with respect to any
Mortgage Loans purchased by the Sponsor pursuant to Section 3.24; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposit by the Servicer into the
Custodial Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be deposited by the
Servicer. In the event that the Servicer shall deposit any amount not required
to be deposited and not otherwise subject to withdrawal pursuant to Section
3.27, it may at any time withdraw or direct the institution maintaining the
Custodial Account, to withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the institution
maintaining the Custodial Account, that describes the amounts deposited in error
in the Custodial Account. The Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited in
the Custodial Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.27.
(c) The institution that maintains the Custodial Account with respect
to the Mortgage Loans, or other authorized entity shall invest the funds in the
Custodial Account, in the manner directed by the Servicer, in Permitted
Investments which shall mature not later than the next succeeding Remittance
Date and shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the benefit
of the Certificateholders. All income and gain net of any losses realized from
any such investment shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any losses incurred in the Servicer's Custodial Account in respect of any
such investments shall be deposited by the Servicer into the Custodial Account,
immediately as realized, out of its own funds.
(d) The Servicer shall give at least 30 days advance notice to the
Trustee, the Sponsor, the Master Servicer, the Securities Administrator, each
Rating Agency and the Depositor of any proposed change of location of the
Custodial Account relating to the Mortgage Loans prior to any change thereof.
Section 3.27 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
(a) The Servicer may from time to time make withdrawals from the
Custodial Account for the following purposes:
(i) to pay itself (to the extent not previously paid to or withheld by the
Servicer), as servicing compensation in accordance with Section 3.10,
that portion of any payment of interest that equals the Servicing Fee
for the period with respect to which such interest payment was made,
and, as additional servicing compensation, those other amounts set
forth in Section 3.10;
(ii) to reimburse itself or an Advance Financing Person for (A) any
unreimbursed Advances to the extent of amounts received which represent
late recoveries of payments of principal and/or interest (net of the
related Servicing Fees), Liquidation Proceeds and Insurance Proceeds on
the Mortgage Loans with respect to which such Advances were made in
accordance with the provisions of Section 5.01; and (B) any
unreimbursed Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the extent
that late recoveries of payments of principal and/or interest,
Liquidation Proceeds and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse itself or an Advance
Financing Person for such unreimbursed Advances or (C) subject to
Section 3.27(b), any unreimbursed Advances to the extent of Amounts
Held For Future Distribution funds held in the Custodial Account
relating to the Mortgage Loans that were not included in the Available
Distribution Amount for the preceding Distribution Date;
(iii) to reimburse itself or an Advance Financing Person for any
Nonrecoverable Advances;
(iv) to reimburse itself from Insurance Proceeds for Insured Expenses
covered by the related Insurance Policy;
(v) to pay the Servicer any unpaid Servicing Fees and to reimburse it or
any Advance Financing Person for any unreimbursed Servicing Advances,
provided, however, that the Servicer's or such Advance Financing
Person's right to reimbursement for Servicing Advances pursuant to this
subclause (v) with respect to any Mortgage Loan shall be limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, late recoveries of payments of principal and/or interest,
Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and
purchase and repurchase proceeds) that represent late recoveries of the
payments for which such Servicing Advances were made;
(vi) to pay to the Sponsor or the Depositor with respect to each Mortgage
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.24, all amounts received thereon
and not taken into account in determining the related Stated Principal
Balance of such repurchased Mortgage Loan;
(vii) to pay any expenses recoverable by the Servicer pursuant to Section
7.04;
(viii) to withdraw any amount deposited in the Custodial Account relating to
the Mortgage Loans and not required to be deposited therein; and
(ix) to clear and terminate the Custodial Account relating to the Mortgage
Loans upon termination of this Agreement pursuant to Section 10.01
hereof.
In addition, no later than Noon Eastern time on the Remittance Date,
the Servicer shall withdraw from the Custodial Account and remit to the
Securities Administrator (a) all amounts deposited in the Custodial Account as
of the close of business on the last day of the related Due Period (net of
charges against or withdrawals from the Custodial Account pursuant to this
Section 3.27(a)), plus (b) all Advances, if any, which the Servicer is obligated
to make pursuant to Section 5.01, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds or condemnation
proceeds received after the applicable Prepayment Period, which amounts shall be
remitted on the following Remittance Date, together with any Compensating
Interest required to be deposited in the Custodial Account in connection with
such Principal Prepayment in accordance with Section 5.02, and minus (d) any
amounts attributable to Scheduled Payments collected but due on a Due Date or
Due Dates subsequent to the first day of the month in which such Remittance Date
occurs, which amounts shall be remitted on the Remittance Date next succeeding
the Due Date related to such Scheduled Payment.
With respect to any remittance received by the Securities Administrator
after the Business Day on which such payment was due, the Securities
Administrator shall send written notice thereof to the Servicer. The Servicer
shall pay to the Securities Administrator interest on any such late payment by
the Servicer at an annual rate equal to Prime Rate (as defined in The Wall
Street Journal) plus one percentage point, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be paid by the
Servicer to the Securities Administrator on the date such late payment is made
and shall cover the period commencing with the day following the Business Day on
which such payment was due and ending with the Business Day on which such
payment is made, both inclusive. The payment by the Servicer of any such
interest, or the failure of the Securities Administrator to notify the Servicer
of such interest, shall not be deemed an extension of time for payment or a
waiver of any Servicer Default by the Servicer.
The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from the Custodial Account relating to the
Mortgage Loans pursuant to subclause (iii), the Servicer shall deliver to the
Master Servicer an Officer's Certificate of an Authorized Servicer
Representative indicating the amount of any previous Advance or Servicing
Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loan(s), and their respective portions of such
Nonrecoverable Advance.
(b) Notwithstanding the foregoing, any Amounts Held For Future
Distribution withdrawn by the Servicer as permitted in Section 3.27(a)(ii) in
reimbursement of Advances previously made by the Servicer shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Custodial Account, no later than the close of business on any future
Remittance Date on which the funds on deposit in the Custodial Account shall be
less than the amount required to be remitted to the Trust on such Remittance
Date; provided, however that if the rating of the Servicer (including any
Successor Servicer) is less than "BBB", the Servicer shall be required to
replace such funds by deposit to the Distribution Account, no later than the
close of business on the Remittance Date immediately following the Due Period or
Prepayment Period for which such amounts relate.
Section 3.28 REPORTS TO MASTER SERVICER.
Not later than the tenth (10th) calendar day of each month (or if such
tenth calendar day is not a Business Day, the immediately succeeding Business
Day), the Servicer shall furnish to the Master Servicer (i) (a) monthly loan
data in a mutually agreed-upon format, (b) default loan data in the format set
forth in Exhibit X-1 hereto (or in such other format mutually agreed-upon
between the Servicer and the Master Servicer) and (c) information regarding
realized losses and gains in the format set forth in Exhibit X-2 hereto (or in
such other format mutually agreed between the Servicer and the Master Servicer),
in each case relating to the period ending on the last day of the preceding
calendar month, (ii) all such information required pursuant to clause (i)(a)
above on a magnetic tape, electronic mail, or other similar media reasonably
acceptable to the Master Servicer and (iii) all supporting documentation with
respect to the information required pursuant to clause (i)(c) above.
Section 3.29 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS; ESCROW
ACCOUNTS.
To the extent required by the Mortgage Note related to a Mortgage Loan,
the Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Servicer to compel a Mortgagor to establish an
Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
itself out of related collections for any payments made with respect to each
Mortgage Loan pursuant to Section 3.01 (with respect to taxes and assessments
and insurance premiums) and Section 3.05 (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to such Mortgagors on balances in the Escrow Account, to remove amounts
deposited in error or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 10.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
Section 3.30 RESERVED.
Section 3.31 DISTRIBUTION ACCOUNT.
(a) The Securities Administrator shall establish and maintain in the
name of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated non-interest bearing trust account or accounts. The
Securities Administrator will deposit in the Distribution Account as identified
by the Securities Administrator and as received by the Securities Administrator,
the following amounts:
(i) All payments and recoveries in respect of principal on the Mortgage
Loans, including, without limitation, Principal Prepayments, Subsequent
Recoveries, Liquidation Proceeds, Insurance Proceeds, condemnation
proceeds and all payments and recoveries in respect of interest on the
Mortgage Loans withdrawn by the Servicer from the Custodial Account and
remitted by Servicer to the Securities Administrator;
(ii) Any Advance and any Compensating Interest Payments;
(iii) Any Prepayment Charges collected by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans (including any
Servicer Prepayment Charge Payment Amounts);
(iv) Any Insurance Proceeds or Liquidation Proceeds received by or on behalf
of the Securities Administrator or which were not deposited in a
Custodial Account;
(v) The Repurchase Price with respect to any Mortgage Loan purchased by the
Sponsor or Section 2.02 or 2.03, any amounts which are to be treated
pursuant to Section 2.04 of this Agreement as the payment of such a
Repurchase Price, the Repurchase Price with respect to any Mortgage
Loan purchased by the Depositor pursuant to Section 3.26, and all
proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by the Master Servicer pursuant to Section 10.01;
(vi) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vii) Any other amounts received by or on behalf of the Securities
Administrator and required to be deposited in the Distribution Account
pursuant to this Agreement.
(b) All amounts deposited to the Distribution Account shall be held by
the Securities Administrator in the name of the Trustee in trust for the benefit
of the Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Securities
Administrator to the Distribution Account.
(c) The amount at any time credited to the Distribution Account may be
invested by the Securities Administrator in Permitted Investments as directed by
the Master Servicer. All such investment income shall be for the benefit of the
Master Servicer, and any losses incurred shall be deposited by the Master
Servicer in the Distribution Account immediately as realized.
Section 3.32 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.
(a) The Securities Administrator will, from time to time, make or cause
to be made such withdrawals or transfers from the Distribution Account pursuant
to this Agreement for the following purposes:
(i) to pay to the Trustee any expenses recoverable by the Trustee pursuant
to this Agreement.
(ii) to reimburse the Master Servicer as Successor Servicer or the Servicer
for any Advance or Servicing Advance of its own funds, the right of the
Master Servicer as Successor Servicer or the Servicer to reimbursement
pursuant to this subclause (ii) being limited to amounts received on a
particular Mortgage Loan (including, for this purpose, the Purchase
Price therefor, Insurance Proceeds, Liquidation Proceeds and
condemnation proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Advance or Servicing Advance was made;
(iii) to reimburse the Master Servicer or the Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan
for amounts expended by the Master Servicer as Successor Servicer or
the Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged by an uninsured cause or
in connection with the liquidation of such Mortgage Loan;
(iv) to reimburse the Master Servicer as Successor Servicer or the Servicer
from Insurance Proceeds relating to a particular Mortgage Loan for
insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer as Successor Servicer or the Servicer
from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan;
(v) to reimburse the Master Servicer as Successor Servicer or the Servicer
for advances of funds pursuant to this Agreement and the right to
reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Purchase Price therefor, Insurance Proceeds, Liquidation Proceeds and
condemnation proceeds) which represent late recoveries of the payments
for which such advances were made;
(vi) to reimburse the Master Servicer as Successor Servicer or the Servicer
for any Advance or advance, after a Realized Loss has been allocated
with respect to the related Mortgage Loan if the Advance or advance has
not been reimbursed pursuant to clauses (ii) and (v);
(vii) to pay the Credit Risk Management Fee to the Credit Risk Manager;
provided, however, that upon the termination of the Credit Risk Manager
pursuant to Section 3.33 hereof, the amount of the Credit Risk
Management Fee (or any portion thereof) previously payable to the
Credit Risk Manager as described herein shall be paid to the Sponsor;
(viii) to reimburse the Trustee or the Securities Administrator for expenses,
costs and liabilities incurred by and reimbursable to it pursuant to
this Agreement (including the expenses of the Trustee or the Securities
Administrator in connection with a tax audit in connection with the
performance of its obligations pursuant to Section 9.13);
(ix) to pay to the Trust Fund, as additional servicing compensation, any
Excess Liquidation Proceeds to the extent not retained by the Servicer;
(x) to reimburse or pay the Servicer any such amounts as are due thereto
under this Agreement and have not been retained by or paid to the
Servicer, to the extent provided herein or therein;
(xi) to reimburse the Trustee for expenses incurred in the transfer of
servicing responsibilities of the terminated Servicer after the
occurrence and continuance of a Servicer Default to the extent not paid
by the terminated Servicer;
(xii) to reimburse the Master Servicer for any costs and expenses
reimbursable to the Master Servicer pursuant to this Agreement;
(xiii) to reimburse the Custodian for expenses, costs and liabilities incurred
or reimbursable to it pursuant to this Agreement or the Custodial
Agreement;
(xiv) to remove amounts deposited in error; and
(xv) to clear and terminate the Distribution Account pursuant to Section
10.01.
(b) The Securities Administrator shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (ii) through (v), inclusive, and (vii) or with respect to any such
amounts which would have been covered by such subclauses had the amounts not
been retained by the Securities Administrator without being deposited in the
Distribution Account under Section 3.31.
(c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount, to the extent of funds on deposit
in the Distribution Account, to the holders of the Certificates in accordance
with Section 5.04.
Section 3.33 DUTIES OF THE CREDIT RISK MANAGER; TERMINATION.
(a) The Depositor appoints [__________________] as Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager will provide reports
and recommendations concerning the Mortgage Loans that are past due, as to which
there has been commencement of foreclosure, as to which there has been
forbearance in exercise of remedies which are in default, as to which a
Mortgagor is the subject of bankruptcy, receivership, or an arrangement of
creditors, or as to which have become REO Properties. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the related Credit Risk Management Agreement and the Credit
Risk Manager shall look solely to the Servicer and/or Master Servicer for all
information and data (including loss and delinquency information and data) and
loan level information and data relating to the servicing of the related
Mortgage Loans. If the Credit Risk Manager is no longer able to perform its
duties hereunder, the Credit Risk Manager may be terminated by the Depositor at
the direction of Certificateholders evidencing not less than 66 2/3% of the
Voting Rights. The Depositor may, at its option, cause the appointment of a
successor Credit Risk Manager. Upon any termination of the Credit Risk Manager
or the appointment of a successor Credit Risk Manager, the Depositor shall give
written notice thereof to the Servicer, the Trustee, each Rating Agency and the
Credit Risk Manager. Notwithstanding the foregoing, the termination of the
Credit Risk Manager pursuant to this Section 3.33(b) shall not become effective
until the appointment of a successor Credit Risk Manager. The Trustee is hereby
authorized to enter into any Credit Risk Management Agreement necessary to
effect the foregoing.
(b) Within six months of the Closing Date, the Sponsor may, at its
option, terminate the Credit Risk Manager if, in its reasonable judgment, (i)
the value of the servicing rights with respect to the Mortgage Loans is
adversely affected as a result of the presence of the Credit Risk Manager or
(ii) the presence of the Credit Risk Manager impairs the ability of the Sponsor
to transfer the servicing rights with respect to the Mortgage Loans as permitted
by this Agreement. Upon the termination of the Credit Risk Manager, the Sponsor
may, at its option, cause the Depositor to appoint a successor Credit Risk
Manager. Notice of such termination shall be provided by the Sponsor to the
Rating Agencies, the Trustee, the Securities Administrator, the Depositor, the
Servicer and the Credit Risk Manager. Upon the appointment of a successor Credit
Risk Manager, the Depositor shall provide written notice thereof to each Rating
Agency, the Trustee, the Servicer, the Securities Administrator and the Credit
Risk Manager.
If the Credit Risk Manager is terminated pursuant to this Section
3.33(b), the Credit Risk Manager shall only be entitled to a fee equal to
[______]% with respect to each Mortgage Loan for the one year period following
such termination. After the expiration of such one year period, the Credit Risk
Manager shall not be entitled to the Credit Risk Management Fee or any portion
thereof with respect to any Mortgage Loan. The excess of the Credit Risk
Management Fee with respect to each Mortgage Loan over the amount payable to the
Credit Risk Manager as described in this paragraph shall be paid to the Sponsor
pursuant to Section 5.04(a).
Section 3.34 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Servicer, the Master Servicer, the Securities Administrator, the Trustee,
the Certificateholders or the Depositor for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicer and/or Master Servicer under
the related Credit Risk Management Agreement or of errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, bad faith or gross negligence in its performance of its
duties under this Agreement or the Credit Risk Management Agreement. The Credit
Risk Manager and any director, officer, employee or agent of the Credit Risk
Manager may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder,
and may rely in good faith upon the accuracy of information furnished by the
Servicer and/or Master Servicer pursuant to the related Credit Risk Management
Agreement in the performance of its duties thereunder and hereunder.
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF THE MORTGAGE LOANS
Section 4.01 THE MASTER SERVICER.
The Master Servicer shall supervise, monitor and oversee the obligation
of the Servicer to service and administer the Mortgage Loans in accordance with
the terms of this Agreement and shall have full power and authority to do any
and all things which it may deem necessary or desirable in connection with such
master servicing and administration. In performing its obligations hereunder,
the Master Servicer shall act in a manner consistent with Accepted Master
Servicing Practices. Furthermore, the Master Servicer shall oversee and consult
with the Servicer as necessary from time-to-time to carry out the Master
Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Servicer and shall cause the Servicer to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
this Agreement. The Master Servicer shall independently and separately monitor
the servicing activities of the Servicer with respect to each Mortgage Loan,
reconcile the results of such monitoring with such information provided in the
previous sentence on a monthly basis and coordinate corrective adjustments to
the Servicer's and Master Servicer's records, and based on such reconciled and
corrected information, provide such information relating to the Mortgage Loans
to the Securities Administrator as shall be necessary to enable it to prepare
the statements specified in Section 5.06 and any other information and
statements required to be provided by the Securities Administrator hereunder.
The Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicer to the Distribution Account.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not have any duty or obligation to enforce any Credit Risk
Management Agreement that the Servicer is a party to (the "Servicer Credit Risk
Management Agreement") or to supervise, monitor or oversee the activities of the
Credit Risk Manager under the Servicer Credit Risk Management Agreement with
respect to any action taken or not taken by the Servicer pursuant to a
recommendation of the Credit Risk Manager.
The Trustee shall furnish the Servicer and the Master Servicer with any
limited powers of attorney and other documents in form as provided to it
necessary or appropriate to enable the Servicer and the Master Servicer to
service or master service and administer the Mortgage Loans and REO Property.
The Trustee shall have no responsibility for any action of the Master Servicer
or the Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or the Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or the Servicer.
The Trustee, the Custodian and the Securities Administrator shall
provide access to the records and documentation in possession of the Trustee,
the Custodian or the Securities Administrator regarding the Mortgage Loans and
REO Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours at
the office of the Trustee, the Custodian or the Securities Administrator;
provided, however, that, unless otherwise required by law, none of the Trustee,
the Custodian or the Securities Administrator shall be required to provide
access to such records and documentation if the provision thereof would violate
the legal right to privacy of any Mortgagor. The Trustee, the Custodian and the
Securities Administrator shall allow representatives of the above entities to
photocopy any of the records and documentation and shall provide equipment for
that purpose at a charge that covers the Trustee's, the Custodian's or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the Servicer or the Master
Servicer upon request any court pleadings, requests for trustee's sale or other
documents necessary or desirable and, in each case, provided to the Trustee by
the Servicer or the Master Servicer to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Loan Document;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or any other Mortgage
Loan Document or otherwise available at law or equity.
Section 4.02 MONITORING OF SERVICER.
The Master Servicer shall be responsible for monitoring the compliance
by the Servicer with its respective duties under this Agreement. In the review
of the Servicer' activities, the Master Servicer may rely upon an officer's
certificate of the Servicer with regard to the Servicer's compliance with the
terms of this Agreement. In the event that the Master Servicer, in its judgment,
determines that the Servicer should be terminated in accordance with this
Agreement, or that a notice should be sent pursuant to this Agreement with
respect to the occurrence of an event that, unless cured, would constitute
grounds for such termination, the Master Servicer shall notify the Sponsor and
the Trustee thereof and the Master Servicer shall issue such notice or take such
other action as it deems appropriate.
The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under this
Agreement, and shall, in the event that the Servicer fails to perform its
obligations in accordance with this Agreement, subject to this Section and
Article VIII, terminate the rights and obligations of the Servicer hereunder in
accordance with the provisions of Article VIII. The Master Servicer shall act as
servicer of the Mortgage Loans or enter in to a new servicing agreement with a
successor servicer selected by the Master Servicer; provided, however, it is
understood and acknowledged by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the actual servicing functions can be
fully transferred to the Master Servicer or such successor servicer. Such
enforcement, including, without limitation, the legal prosecution of claims and
the pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received indemnity reasonably acceptable to it for its costs and expenses in
pursuing such action.
To the extent that the costs and expenses related to the termination of
the Servicer, appointment of a successor servicer or the transfer and assumption
of servicing by the Master Servicer (including, without limitation, (i) all
legal costs and expenses and all due diligence costs and expenses associated
with an evaluation of the potential termination of the Servicer as a result of
an event of default by the Servicer and (ii) all costs and expenses associated
with the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
servicer to service the Mortgage Loans in accordance with this Agreement) are
not fully and timely reimbursed by the terminated Servicer, the Master Servicer
shall be entitled to reimbursement of such costs and expenses from the
Distribution Account.
The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in this Agreement.
If the Master Servicer acts as Servicer, it shall not assume liability
for the representations and warranties of the Servicer that it replaces.
Section 4.03 FIDELITY BOND.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy that shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
Any such errors and omissions policy and fidelity bond may not be cancelable
without thirty (30) days' prior written notice to the Trustee.
Section 4.04 POWER TO ACT; PROCEDURES.
The Master Servicer shall master service the Mortgage Loans and shall
have full power and authority, subject to the REMIC Provisions and the
provisions of Section 9.13 hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of the Mortgage Loans, including but not limited to the power and
authority (i) to execute and deliver, on behalf of the Certificateholders and
the Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages, (iii) to collect any Insurance Proceeds
and Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Loan, in each case, in
accordance with the provisions of this Agreement; provided, however, that the
Master Servicer shall not (and, consistent with its responsibilities under
Section 4.02, shall not permit the Servicer to) knowingly or intentionally take
any action, or fail to take (or fail to cause to be taken) any action reasonably
within its control and the scope of duties more specifically set forth herein,
that, under the REMIC Provisions, if taken or not taken, as the case may be,
would cause any REMIC to fail to qualify as a REMIC or result in the imposition
of a tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the
Master Servicer has received an Opinion of Counsel (but not at the expense of
the Master Servicer) to the effect that the contemplated action will not cause
any REMIC to fail to qualify as a REMIC or result in the imposition of a tax
upon any REMIC. The Trustee shall furnish the Master Servicer, upon written
request from a Servicing Officer or an Authorized Servicer Representative, with
any powers of attorney empowering the Master Servicer, or the Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with
this Agreement, and the Trustee shall execute and deliver such other documents,
as the Master Servicer or the Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for the misuse of any such
powers of attorney by the Master Servicer or the Servicer and shall be
indemnified by the Master Servicer or the Servicer, as applicable, for any
costs, liabilities or expenses incurred by the Trustee in connection with such
misuse). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.10 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action
authorized pursuant to this Agreement to be taken by it in the name of the
Trustee, be deemed to be the agent of the Trustee.
Section 4.05 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
To the extent Mortgage Loans contain enforceable due-on-sale clauses,
the Master Servicer shall cause the Servicer to enforce such clauses in
accordance with this Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
this Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with this Agreement.
Section 4.06 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.
The Master Servicer shall transmit to the Trustee or Custodian such
documents and instruments coming into the possession of the Master Servicer from
time to time as are required by the terms hereof to be delivered to the Trustee
or Custodian. Any funds received by the Master Servicer in respect of any
Mortgage Loan or which otherwise are collected by the Master Servicer as
Liquidation Proceeds, Insurance Proceeds or Subsequent Recoveries in respect of
any Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer's right to retain or withdraw
from the Distribution Account the Master Servicing Compensation and other
amounts provided in this Agreement. The Master Servicer, to the extent required
by Article III, shall cause the Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the OTS, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal or
state banking or insurance regulatory authority if so required by applicable
regulations of the OTS or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.
All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer
and the Servicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer or
the Servicer under this Agreement.
Section 4.07 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under this Agreement to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of this Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in this Agreement and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Pursuant to Section 3.31, any amounts collected by the Master Servicer,
under any insurance policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with this Agreement) shall be deposited
into the Distribution Account, subject to withdrawal pursuant to Section 3.32.
Section 4.08 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS.
The Master Servicer shall enforce the Servicer' obligations to, prepare
and present on behalf of the Trustee and the Certificateholders all claims under
any insurance policies and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such policies. Any proceeds disbursed to the
Master Servicer (or disbursed to the Servicer and remitted to the Master
Servicer) in respect of such policies, bonds or contracts shall be promptly
deposited in the Distribution Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable insurance policy need
not be so deposited (or remitted).
Section 4.09 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
The Master Servicer shall not take, or (to the extent within its
control) permit the Servicer (to the extent such action is prohibited under this
Agreement or the related Servicing Agreement, as applicable) to take, any action
that would result in noncoverage under any primary mortgage insurance policy or
any loss which, but for the actions of such Master Servicer or the Servicer,
would have been covered thereunder. The Master Servicer shall use its best
reasonable efforts to cause the Servicer to keep in force and effect (to the
extent that the Mortgage Loan requires the Mortgagor to maintain such
insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement. The Master Servicer shall not,
and (to the extent within its control) shall not permit the Servicer to, cancel
or refuse to renew any primary mortgage insurance policy that is in effect at
the date of the initial issuance of the Mortgage Note and is required to be kept
in force hereunder except in accordance with the provisions of this Agreement.
The Master Servicer agrees to cause the Servicer to present, on behalf
of the Trustee and the Certificateholders, claims to the insurer under any
primary mortgage insurance policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any primary mortgage
insurance policies respecting defaulted Mortgage Loans. Pursuant to Section
3.31, any amounts collected by the Master Servicer or the Servicer under any
primary mortgage insurance policies shall be deposited by the Servicer or by the
Master Servicer in the Distribution Account, subject to withdrawal pursuant to
Section 3.32.
Section 4.10 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.
The Trustee or the Custodian, shall retain possession and custody of
the originals (to the extent available) of any primary mortgage insurance
policies, or certificate of insurance if applicable, and any certificates of
renewal as to the foregoing as may be issued from time to time as contemplated
by this Agreement. Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer and the
Servicer otherwise have fulfilled their respective obligations under this
Agreement, the Trustee or the Custodian shall also retain possession and custody
of each Mortgage File in accordance with and subject to the terms and conditions
of this Agreement and the Custodial Agreements. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the Custodian, upon
the execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.
Section 4.11 REALIZATION UPON DEFAULTED LOANS.
The Master Servicer shall cause the Servicer to foreclose upon,
repossess or otherwise comparably convert the ownership of Mortgaged Properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments, all in accordance with this Agreement.
Section 4.12 COMPENSATION FOR THE MASTER SERVICER.
As compensation for its services hereunder, the Master Servicer shall
be entitled to retain all income and gain realized from any investment of funds
in the Distribution Account and the Master Servicing Fee (together, the "Master
Servicing Compensation"). The Master Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and shall
not be entitled to reimbursement therefor except as provided in this Agreement.
The amount of the Master Servicing Compensation payable to the Master
Servicer in respect of any Distribution Date shall be reduced in accordance with
Section 4.18.
Section 4.13 REO PROPERTY.
In the event the Trust Fund acquires ownership of any REO Property in
respect of any Mortgage Loan, the deed or certificate of sale shall be issued to
the Trustee, or to its nominee, on behalf of the Certificateholders. The Master
Servicer shall cause the Servicer to sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Further, the
Master Servicer shall cause the Servicer to sell, and the Servicer agrees
pursuant to this Agreement to sell any REO Property prior to three years after
the end of the calendar year of its acquisition by REMIC I, unless (i) the
Trustee and the Securities Administrator shall have been supplied with an
Opinion of Counsel to the effect that the holding by the Trust Fund of such REO
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of any REMIC hereunder as defined in
Section 860F of the Code or cause any REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel) or (ii) the Servicer shall have applied
for, prior to the expiration of such three-year period, an extension of such
three-year period in the manner contemplated by Section 856(e)(3) of the Code,
in which case the three-year period shall be extended by the applicable
extension period. The Master Servicer shall cause the Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement, in accordance with the REMIC Provisions and in a manner that does not
result in a tax on "net income from foreclosure property" or cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code.
The Master Servicer shall cause the Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Custodial Account.
The Master Servicer and the Servicer upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Advances and other unreimbursed advances as well as any unpaid Servicing Fees
and Master Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Master Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
Section 4.14 MASTER SERVICER ANNUAL STATEMENT OF COMPLIANCE.
(a) The Master Servicer will deliver to the Trustee, not later than
March 1st of each calendar year beginning in [________], an Officers'
Certificate (a "Master Servicer Annual Statement of Compliance") stating, as to
each signatory thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of performance under this
Agreement has been made under such Servicing Officers' supervision and (ii) to
the best of such Servicing Officers' knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under this Agreement in all
material respects throughout such year, or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such Servicing Officer and the nature and status of cure
provisions thereof. Such Master Servicer Annual Statement of Compliance shall
contain no restrictions or limitations on its use. In the event that the Master
Servicer has delegated any responsibilities with respect to the Mortgage Loans
to a servicer, the Master Servicer shall deliver an Officer's Certificate of the
servicer as described above as to each servicer as and when required with
respect to the Master Servicer.
(b) If the Master Servicer cannot deliver the related Master Servicer
Annual Statement of Compliance by March 1st of such year, the Trustee, at its
sole option, may permit a cure period for the Master Servicer to deliver such
Master Servicer Annual Statement of Compliance, but in no event later than March
10th of such year.
(c) Failure of the Master Servicer to comply timely with this Section
4.15 shall be deemed a Master Servicer Event of Default, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or in equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Master
Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
(d) Copies of such Master Servicer Annual Statements of Compliance
shall be provided to any Certificateholder upon request, by the Master Servicer
or by the Trustee at the Master Servicer's expense if the Master Servicer failed
to provide such copies (unless (i) the Master Servicer shall have failed to
provide the Trustee with such statement or (ii) the Trustee shall be unaware of
the Master Servicer's failure to provide such statement).
Section 4.15 MASTER SERVICER ASSESSMENTS OF COMPLIANCE AND ATTESTATION
REPORTS.
(a) On and after [____________], the Master Servicer shall supervise,
monitor and oversee the obligations of the servicing and administration of the
Mortgage Loans by the Servicer under this Agreement in accordance with all
applicable requirements of the Servicing Criteria. The Master Servicer shall
deliver to the Trustee on or before March 1st of each calendar year beginning in
[________], a report (a "Master Servicer Assessment of Compliance") reasonably
satisfactory to the Trustee regarding the Master Servicer's assessment of
compliance with the Servicing Criteria during the preceding calendar year as
required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB, which as of the date hereof, require a report by an authorized
officer of the Master Servicer that contains the following:
(i) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Master
Servicer;
(ii) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to
the Master Servicer;
(iii) An assessment by such officer of the Master Servicer's compliance with
the applicable Servicing Criteria for the period consisting of the
preceding calendar year, including disclosure of any material instance
of noncompliance with respect thereto during such period, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving the
Master Servicer, that are backed by the same asset type as the Mortgage
Loans;
(iv) A statement that a registered public accounting firm has issued an
attestation report on the Master Servicer's Assessment of Compliance
for the period consisting of the preceding calendar year; and
(v) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Master Servicer, which statement shall be based on
the activities it performs with respect to asset-backed securities
transactions taken as a whole involving the Master Servicer, that are
backed by the same asset type as the Mortgage Loans.
(b) Such report at a minimum shall address each of the Servicing
Criteria specified on a certification substantially in the form of EXHIBIT E
hereto delivered to the Trustee concurrently with the execution of this
Agreement.
(c) On or before March 1st of each calendar year beginning in
[________], the Master Servicer shall furnish to the Trustee a report (a "Master
Servicer Attestation Report") by a registered public accounting firm that
attests to, and reports on, the Master Servicer Assessment of Compliance made by
the Master Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1122(b) of Regulation AB, which Master Servicer Attestation Report must
be made in accordance with standards for attestation reports issued or adopted
by the Public Company Accounting Oversight Board.
(d) The Master Servicer shall cause any subservicer, and each
subcontractor determined by the Master Servicer to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Trustee and the Depositor an assessment of compliance and accountants'
attestation.
(e) If the Master Servicer cannot deliver the related Master Servicer
Assessment of Compliance or Master Servicer Attestation Report by March 1st of
such year, the Trustee, at its sole option, may permit a cure period for the
Master Servicer to deliver such Master Servicer Assessment of Compliance or
Master Servicer Attestation Report, but in no event later than March 10th of
such year.
(f) Failure of the Master Servicer to comply timely with this Section
4.15 shall be deemed a Master Servicer Event of Default, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or in equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Master
Servicer for the same. This paragraph shall supersede any other provision in
this Agreement or any other agreement to the contrary.
Section 4.16 RESERVED.
Section 4.17 RESERVED.
Section 4.18 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS.
The Master Servicer shall deposit in the Distribution Account not later
than each Distribution Date an amount equal to the lesser of (i) the aggregate
amounts required to be paid by the Servicer under this Agreement with respect to
Prepayment Interest Shortfalls on the Mortgage Loans for the related
Distribution Date, and not so paid by the Servicer and (ii) the Master Servicing
Fee for such Distribution Date without reimbursement therefor.
ARTICLE V
ADVANCES AND DISTRIBUTIONS
Section 5.01 ADVANCES; ADVANCE FACILITY.
(a) The Servicer shall make an Advance with respect to any Mortgage
Loan and deposit such Advance in the Distribution Account no later than noon
Eastern time on the Remittance Date in immediately available funds. The Servicer
shall be obligated to make any such Advance only to the extent that such advance
would not be a Nonrecoverable Advance. If the Servicer shall have determined
that it has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Servicer
shall deliver (i) to the Securities Administrator for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency and the Master
Servicer an Officer's Certificate setting forth the basis for such
determination.
In lieu of making all or a portion of such Advance from its own funds,
the Servicer may (i) cause to be made an appropriate entry in its records
relating to the Custodial Account that any Amounts Held for Future Distribution
has been used by the Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Custodial Account to the
Distribution Account. Any funds so applied and transferred shall be replaced by
the Servicer by deposit in the Distribution Account, no later than the close of
business on any future Remittance Date on which the funds on deposit in the
Custodial Account shall be less than the amount required to be remitted to the
Securities Administrator on such Remittance Date; provided, however that if the
rating of the Servicer (including any Successor Servicer) is less than "BBB",
the Servicer shall be required to replace such funds by deposit to the
Distribution Account, no later than the close of business on the Remittance Date
immediately following the Due Period or Prepayment Period for which such amounts
relate.
The Servicer shall be entitled to be reimbursed from the Custodial
Account for all Advances of its own funds made pursuant to this Section as
provided in Section 3.27. The obligation to make Advances with respect to any
Mortgage Loan shall continue until such Mortgage Loan is paid in full or the
related Mortgaged Property or related REO Property has been liquidated or until
the purchase or repurchase thereof (or substitution therefor) from the Trust
Fund pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 5.01.
Subject to and in accordance with the provisions of Article VIII
hereof, in the event that the Servicer fails to make such Advance, then the
Master Servicer, as a Successor Servicer, shall be obligated to make such
Advance only to the extent such Advance, if made, would not constitute a
Nonrecoverable Advance, subject to the provisions of Sections 5.01 and 8.02.
(b) (i) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 5.01(b)(v) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders, the Securities Administrator, the Master
Servicer or any other party shall be required before the Servicer may enter into
an Advance Facility nor shall the Trustee, the Securities Administrator, the
Master Servicer or the Certificateholders be a third party beneficiary of any
obligation of an Advance Financing Person to the Servicer. Notwithstanding the
existence of any Advance Facility under which an Advance Financing Person agrees
to fund Advances and/or Servicing Advances, (A) the Servicer (i) shall remain
obligated pursuant to this Agreement to make Advances and/or Servicing Advances
pursuant to and as required by this Agreement and (ii) shall not be relieved of
such obligations by virtue of such Advance Facility and (B) neither the Advance
Financing Person nor any Servicer Assignee (as hereinafter defined) shall have
any right to proceed against or otherwise contact any Mortgagor for the purpose
of collecting any payment that may be due with respect to any related Mortgage
Loan or enforcing any covenant of such Mortgagor under the related Mortgage Loan
documents.
(ii) If the Servicer enters into an Advance Facility, the
Servicer and the related Advance Financing Person shall deliver to the
Master Servicer and the Securities Administrator at the address set
forth in Section 11.05 hereof no later than the Remittance Date
immediately following the effective date of such Advance Facility a
written notice (an "Advance Facility Notice"), stating (a) the identity
of the Advance Financing Person and (b) the identity of the Person
("Servicer's Assignee") that will, subject to Section 5.01(b)(iii)
hereof, have the right to make withdrawals from the Custodial Account
pursuant to Section 3.27 hereof to reimburse previously unreimbursed
Advances and/or Servicing Advances ("Advance Reimbursement Amounts").
Advance Reimbursement Amounts (i) shall consist solely of amounts in
respect of Advances and/or Servicing Advances for which the Servicer
would be permitted to reimburse itself in accordance with Section 3.27
hereof, assuming the Servicer had made the related Advance(s) and/or
Servicing Advance(s) and (ii) shall not consist of amounts payable to a
successor Servicer in accordance with Section 3.27 hereof to the extent
permitted under Section 5.01(b)(v) below.
(iii) Notwithstanding the existence of an Advance Facility,
the Servicer, on behalf of the Advance Financing Person and the
Servicer's Assignee, shall be entitled to receive reimbursements of
Advances and/or Servicing Advances in accordance with Section 3.27
hereof, which entitlement may be terminated by the Advance Financing
Person pursuant to a written notice to the Master Servicer and the
Securities Administrator in the manner set forth in Section 11.05
hereof. Upon receipt of such written notice, the Servicer shall no
longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately
have the right to receive from the Custodial Account all Advance
Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee
shall only be entitled to reimbursement of Advance Reimbursement
Amounts hereunder from withdrawals from the Custodial Account pursuant
to Section 3.27 of this Agreement and shall not otherwise be entitled
to make withdrawals or receive amounts that shall be deposited in the
Distribution Account pursuant to Section 3.31 hereof, and (ii) none of
the Trustee or the Certificateholders shall have any right to, or
otherwise be entitled to, receive any Advance Reimbursement Amounts to
which the Servicer or the Servicer's Assignee, as applicable, shall be
entitled pursuant to Section 3.27 hereof. An Advance Facility may be
terminated by the joint written direction of the Servicer and the
related Advance Financing Person. Written notice of such termination
shall be delivered to the Trustee in the manner set forth in Section
11.05 hereof. None of the Depositor, the Master Servicer, the
Securities Administrator or the Trustee shall, as a result of the
existence of any Advance Facility, have any additional duty or
liability with respect to the calculation or payment of any Advance
Reimbursement Amount, nor, as a result of the existence of any Advance
Facility, shall the Depositor, the Master Servicer, the Securities
Administrator or the Trustee have any additional responsibility to
track or monitor the administration of the Advance Facility or the
payment of Advance Reimbursement Amounts to the Servicer's Assignee.
The Servicer shall indemnify the Master Servicer, the Securities
Administrator, Depositor, the Trustee, any successor Servicer and the
Trust Fund for any claim, loss, liability or damage resulting from any
claim by the related Advancing Financing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out
of gross negligence, recklessness or willful misconduct on the part of
the Master Servicer, the Securities Administrator, Depositor, the
Trustee or any successor Servicer, as the case may be. The Servicer
shall maintain and provide to any successor Servicer and, upon request,
the Trustee a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing
Financing Person. The successor Servicer shall be entitled to rely on
any such information provided by the Servicer, and the successor
Servicer shall not be liable for any errors in such information.
(iv) An Advance Financing Person who receives an assignment or
pledge of rights to receive Advance Reimbursement Amounts and/or whose
obligations are limited to the funding of Advances and/or Servicing
Advances pursuant to an Advance Facility shall not be required to meet
the criteria for qualification as the Servicer.
(v) As between the Servicer and its Advance Financing Person,
on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an
Advance and/or Servicing Advance shall have been made and be
outstanding shall be allocated on a "first-in, first out" basis. In the
event the Servicer's Assignee shall have received some or all of an
Advance Reimbursement Amount related to Advances and/or Servicing
Advances that were made by a Person other than the Servicer or its
related Advance Financing Person in error, then the Servicer's Assignee
shall be required to remit any portion of such Advance Reimbursement
Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing,
the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances and/or Servicing Advances funded by
the Servicer to the extent the related Advance Reimbursement Amounts
have not been assigned or pledged to such Advance Financing Person or
the Servicer's Assignee.
(vi) For purposes of any Officer's Certificate of the Servicer
delivered pursuant to Section 5.01(a), any Nonrecoverable Advance
referred to therein may have been made by the Servicer. In making its
determination that any Advance or Servicing Advance theretofore made
has become a Nonrecoverable Advance, the Servicer shall apply the same
criteria in making such determination regardless of whether such
Advance or Servicing Advance shall have been made by the Servicer.
(vii) Any amendment to this Section 5.01(b) or to any other
provision of this Agreement that may be necessary or appropriate to
effect the terms of an Advance Facility as described generally in this
Section 5.01(b), including amendments to add provisions relating to a
successor Servicer, may be entered into by the Master Servicer, the
Securities Administrator, the Trustee, the Depositor and the Servicer
without the consent of any Certificateholder, provided such amendment
complies with Section 11.01 hereof. All reasonable costs and expenses
(including attorneys' fees) of each party hereto of any such amendment
shall be borne solely by the Servicer. The parties hereto hereby
acknowledge and agree that: (a) the Advances and/or Servicing Advances
financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from
the cash flows and proceeds received under this Agreement for
reimbursement of Advances and/or Servicing Advances only to the extent
provided herein, and none of, the Master Servicer, the Securities
Administrator, the Trustee nor the Trust are not, as a result of the
existence of any Advance Facility, obligated or liable to repay any
Advances and/or Servicing Advances financed by the Advance Financing
Person; (b) the Servicer will be responsible for remitting to the
Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement;
and (c) none of the Master Servicer, the Securities Administrator nor
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and
any Advance Financing Person.
Section 5.02 COMPENSATING INTEREST PAYMENTS.
In the event that there is a Prepayment Interest Shortfall arising from
a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Mortgage Loan, the Servicer shall, to the extent of half of the
Servicing Fee for such Distribution Date, deposit into the Custodial Account, as
a reduction of and to the extent of, the Servicing Fee for such Distribution
Date, no later than the close of business on the Remittance Date immediately
preceding such Distribution Date, an amount equal to the Prepayment Interest
Shortfall; and in case of such deposit, the Servicer shall not be entitled to
any recovery or reimbursement from the Depositor, the Trustee, the Sponsor, the
Trust Fund, the Master Servicer or the Certificateholders.
Section 5.03 REMIC DISTRIBUTIONS.
On each Distribution Date the Securities Administrator, shall be deemed
to allocate distributions to the REMIC I Regular Interests and the REMIC II
Regular Interests in accordance with Sections 5.07 and 5.08 hereof.
Section 5.04 DISTRIBUTIONS.
(a) On each Distribution Date, the Available Distribution Amount for
such Distribution Date shall be withdrawn by the Securities Administrator to the
extent of funds on deposit in the Distribution Account and distributed as
directed in accordance with the Remittance Report for such Distribution Date, in
the following order of priority:
FIRST, in the following order of priority:
1. from the Interest Remittance Amount to the holders of
the Senior Certificates on a pro rata basis, based on
the entitlement of each such Class, the Senior
Interest Distribution Amount for each such Class and
for such Distribution Date;
2. to the extent of the Interest Remittance Amount
remaining after distribution of the Senior Interest
Distribution Amount to the Holders of the Senior
Certificates, to the Holders of the Class [___]
Certificates, the Interest Distribution Amount for
such Class for such Distribution Date;
3. to the extent of the Interest Remittance Amount
remaining after distribution of the Senior Interest
Distribution Amount to the Holders of the Senior
Certificates and the Interest Distribution Amount to
Holders of the Class [___] Certificates, to the
Holders of the Class [___] Certificates, the Interest
Distribution Amount for such Class for such
Distribution Date;
4. to the extent of the Interest Remittance Amount
remaining after distribution of the Senior Interest
Distribution Amount to the Holders of the Senior
Certificates, the Interest Distribution Amount to the
Holders of the Class [___] Certificates and the
Interest Distribution Amount to the Holders of the
Class [___] Certificates, to the Holders of the Class
[___] Certificates, the Interest Distribution Amount
for such Class for such Distribution Date;
SECOND, to pay principal on the Certificates (other than the Class
[___] Certificates), to the extent of the Principal Distribution Amount for each
Distribution Date, in the following amount and order of priority:
1. The Senior Principal Distribution Amount for such
Distribution Date will be distributed to the Senior
Certificates (other than the Class [___]
Certificates) as follows:
FIRST, to the Class [___] Certificates, in an amount
up to the Class [___] Lockout Principal Distribution
Amount for such Distribution Date, until the
Certificate Principal Balance thereof has been
reduced to zero; and
SECOND, any remaining Senior Principal Distribution
Amount after the distribution described in clause
first above, sequentially:
o to the Class [___] Certificates, until the
Certificate Principal Balance thereof has
been reduced to zero;
o to the Class [___] Certificates, until the
Certificate Principal Balance thereof has
been reduced to zero;
o to the Class [___] Certificates, until the
Certificate Principal Balance thereof has
been reduced to zero;
o to the Class [___] Certificates, until the
Certificate Principal Balance thereof has
been reduced to zero; and
o to the Class [___] until the Certificate
Principal Balance thereof has been reduced
to zero.
provided, however, on any Distribution Date after the Certificate
Principal Balances of the Mezzanine Certificates have been reduced to
zero, distributions of principal to the Senior Certificates (other than
the Class [___] Certificates) will be allocated among such Senior
Certificates concurrently on a pro rata basis, based on the Certificate
Principal Balances thereof.
2. To the extent of any Principal Distribution Amount
remaining after distribution of the Senior Principal
Distribution Amount to the Holders of the Senior
Certificates (other than the Class [___]
Certificates) on such Distribution Date, to the Class
[___] Certificates, in an amount equal to the Class
[___] Principal Distribution Amount for such
Distribution Date, until the Certificate Principal
Balance thereof has been reduced to zero.
3. To the extent of any Principal Distribution Amount
remaining after distribution of the Senior Principal
Distribution Amount to the Holders of the Senior
Certificates (other than the Class [___]
Certificates) on such Distribution Date and the
distribution of the Class [___] Principal
Distribution Amount to the Holders of the Class [___]
Certificates on such Distribution Date, to the Class
[___] Certificates, in an amount equal to the Class
[___] Principal Distribution Amount for such
Distribution Date, until the Certificate Principal
Balance thereof has been reduced to zero.
4. To the extent of any Principal Distribution Amount
remaining after distribution of the Senior Principal
Distribution Amount to the Holders of the Senior
Certificates (other than the Class [___]
Certificates) on such Distribution Date, the
distribution of the Class [___] Principal
Distribution Amount to the Holders of the Class [___]
Certificates on such Distribution Date and the
distribution of the Class [___] Principal
Distribution Amount to the Holders of the Class [___]
Certificates on such Distribution Date, to the Class
[___] Certificates in an amount equal to the Class
[___] Principal Distribution Amount for such
Distribution Date, until the Certificate Principal
Balance thereof has been reduced to zero.
THIRD, after the payment of interest and principal to the Certificates
as described in clauses FIRST and SECOND above, any Net Monthly Excess Cashflow
for such Distribution Date will be distributed as follows:
1. To the Holders of the Publicly Offered Certificates
(other than the Class [___] Certificates) in an
amount equal to any Extra Principal Distribution
Amount for such Distribution Date, payable to such
Holders as part of the Principal Distribution Amount
in accordance with clause SECOND above;
2. To the Holders of the Class [___] Certificates, then
to the Holders of the Class [___] Certificates and
then to the Holders of the Class [___] Certificates,
the related Interest Carry Forward Amount for each
such Class and such Distribution Date;
3. To the Net WAC Reserve Fund, in respect of the Senior
Certificates (other than the Class [___]
Certificates), an amount equal to (i) with respect to
the Senior Certificates (other than the Class [___]
Certificates and Class [___] Certificates), the sum
of the related Net WAC Rate Carryover Amounts, if
any, for each such Class for such Distribution Date
or any prior Distribution Dates and (ii) with respect
to the Class [___] Certificates, the amount by which
the sum of the Net WAC Rate Carryover Amounts with
respect to the Class [___] Certificates exceeds the
amount received by the Securities Administrator with
respect to the Cap Contract for such Distribution
Date or any prior Distribution Date;
4. To the Net WAC Reserve Fund, in respect of the Class
[___] Certificates, the Net WAC Rate Carryover Amount
for such Class for such Distribution Date or any
prior Distribution Dates to the extent unpaid;
5. To the Net WAC Reserve Fund, in respect of the Class
[___] Certificates, the Net WAC Rate Carryover Amount
for such Class for such Distribution Date or any
prior Distribution Dates to the extent unpaid;
6. To the Net WAC Reserve Fund, in respect of the Class
[___] Certificates, the Net WAC Rate Carryover Amount
for such Class for such Distribution Date or any
prior Distribution Dates to the extent unpaid;
7. To the Holders of the Class X Certificates, the Class
X Distribution Amount; and
8. To the Holders of the Class R Certificates, in
respect of the Class R-3 Interest, any remaining
amounts.
On each Distribution Date, the Securities Administrator, after making
the required distributions of interest and principal to the Certificates as
described in clauses FIRST and SECOND above and after the distribution of the
Net Monthly Excess Cashflow as described in clause THIRD above, will withdraw
from the Net WAC Reserve Fund the amounts on deposit therein and distribute such
amounts to the Senior Certificates (other than the Class [___] Certificates) and
the Mezzanine Certificates in respect of any Net WAC Rate Carryover Amounts due
to each such Class in the following manner and order of priority: first,
concurrently to the Senior Certificates, other than the Class [___]
Certificates, on a pro rata basis, based on the entitlement of each such Class,
the related Net WAC Rate Carryover Amount (after taking into account payments
made pursuant to the Cap Contract with respect to the Class [___] Certificates)
for such Distribution Date for each such Class; second, to the Class [___]
Certificates, the related Net WAC Rate Carryover Amount for such Distribution
Date for such Class; third, to the Class [___] Certificates, the related Net WAC
Rate Carryover Amount for such Distribution Date for such Class; and fourth, to
the Class [___] Certificates, the related Net WAC Rate Carryover Amount for such
Distribution Date for such Class.
(b) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and deposited in the Distribution Account will be withdrawn from the
Distribution Account and distributed by the Securities Administrator to the
Class P Certificates and shall not be available for distribution to the Holders
of any other Class of Certificates. The payment of such Prepayment Charges shall
not reduce the Certificate Principal Balance of the Class P Certificates.
(c) Subject to Section 10.02 hereof respecting the final distribution,
on each Distribution Date the Securities Administrator shall make distributions
to each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Securities Administrator at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
aggregate principal denominations of not less than $1,000,000 or evidencing a
Percentage Interest aggregating ten percent (10%) or more with respect to such
Class or, if not, by check mailed by first class mail to such Certificateholder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 10.02 hereof respecting
the final distribution, distributions with respect to Certificates registered in
the name of a Depository shall be made to such Depository in immediately
available funds.
Section 5.05 ALLOCATION OF REALIZED LOSSES.
(a) On or prior to each Determination Date, the Securities
Administrator shall determine the amount of any Realized Loss in respect of each
Mortgage Loan that occurred during the immediately preceding calendar month,
based solely on the reports delivered by the Servicer pursuant to this
Agreement.
(b) The interest portion of Realized Losses shall be allocated to the
Certificates as described in Section 1.02 hereof.
(c) The principal portion of all Realized Losses on the Mortgage Loans
allocated to any REMIC I Regular Interest pursuant to Section 5.05 (d) shall be
allocated on each Distribution Date as follows: first, in reduction of the Net
Monthly Excess Cashflow; second, to the Class X Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class [___] Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; fourth, to the Class [___] Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and fifth, to
the Class [___] Certificates, until the Certificate Principal Balance thereof
has been reduced to zero. All such Realized Losses to be allocated to the
Certificate Principal Balances of 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 the principal portion 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; any allocation
of Realized Losses to a Class X Certificates shall be made by reducing the
amount otherwise payable in respect thereof pursuant to Section 5.04(a) clause
THIRD. No allocations of any Realized Losses shall be made to the Certificate
Principal Balances of the Senior Certificates or Class P Certificates.
All such Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(d) The principal portion of all Realized Losses on the Mortgage Loans
shall be allocated on each Distribution Date first, to REMIC I Regular Interest
LTI-1 and REMIC I Regular Interest LTI-P, until the Uncertificated Principal
Balances have been reduced to zero and then to REMIC I Regular Interest
LTI-IO-A, REMIC I Regular Interest LTI-IO-B, REMIC I Regular Interest LTI-IO-C,
REMIC I Regular Interest LTI-IO-D, REMIC I Regular Interest LTI-IO-E, REMIC I
Regular Interest LTI-IO-F, REMIC I Regular Interest LTI-IO-G and REMIC I Regular
Interest LTI-IO-H, until the Uncertificated Principal Balances have been reduced
to zero.
(e) All Realized Losses on the REMIC I Regular Interests shall be
allocated on each Distribution Date to the following REMIC II Regular Interests
in the specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to the REMIC II Regular Interest LTII-AA and REMIC II Regular
Interest LTII-ZZ up to an aggregate amount equal to the REMIC II Interest Loss
Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Principal Balances of the REMIC II Regular Interest LTII-AA and REMIC II Regular
Interest LTII-ZZ up to an aggregate amount equal to the REMIC II Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-[___] and REMIC II Regular Interest LTII-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-[___] has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-[___] and REMIC II Regular Interest LTII-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-[___] has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC II Regular Interest LTII-AA, REMIC II Regular
Interest LTII-[___] and REMIC II Regular Interest LTII-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-[___] has been reduced to zero.
(f) Notwithstanding anything to the contrary contained herein, if on
any Distribution Date the Securities Administrator discovers, based solely on
the reports delivered by the Servicer under this Agreement, that any Subsequent
Recoveries have been collected by the Servicer with respect to a Mortgage Loan,
the amount of such Subsequent Recoveries will be applied to increase the
Certificate Principal Balance of the Class of Mezzanine Certificates with the
highest payment priority to which Realized Losses have been allocated, but not
by more than the amount of Realized Losses previously allocated to that Class of
Mezzanine Certificates pursuant to this Section 5.05. The amount of any
remaining Subsequent Recoveries will be applied to sequentially increase the
Certificate Principal Balance of the Mezzanine Certificates, beginning with the
Class of Mezzanine Certificates with the next highest payment priority, up to
the amount of such Realized Losses previously allocated to such Class of
Certificates pursuant to this Section 5.05. Holders of such Certificates will
not be entitled to any payment in respect of current interest on the amount of
such increases for any Accrual Period preceding the Distribution Date on which
such increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Mezzanine Certificate of such Class in accordance with
its respective Percentage Interest.
Section 5.06 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
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(a) Not later than each Distribution Date, the Securities Administrator
shall prepare and make available to each Holder of Certificates, the Depositor
and the Credit Risk Manager via its website a statement setting forth the
following information for the Certificates:
(i) the Record Date, Accrual Period and Determination Date for
each Class of Certificates for each Due Period;
(ii) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(iii) with respect to each loan group, the total cash flows
received and the general sources thereof;
(iv) the amount of the related distribution to Holders of each
Class allocable to principal, separately identifying (A) the aggregate
amount of any Principal Prepayments included therein, (B) the aggregate
of all scheduled payments of principal included therein, (C) the
Monthly Excess Interest with respect to the Certificates (if any) and
(D) the amount of Prepayment Charges distributed to the Class P
Certificates;
(v) the amount distributed to Holders of each Class on such
Distribution Date allocable to interest;
(vi) the Certificate Principal Balance of each Class of
Certificates, if applicable, after giving effect (i) to all
distributions allocable to principal on such Distribution Date and (ii)
the allocation of any Realized Losses for such Distribution Date;
(vii) the aggregate amount of Advances included in the
distributions on the Distribution Date (including the general purpose
of such Advances);
(viii) the aggregate amount of Relief Act Interest Shortfalls
for such Distribution Date;
(ix) the aggregate amount of any Prepayment Interest Shortfall
for such Distribution Date, to the extent not covered by payments by
the Servicer pursuant to Section 3.27 of this Agreement or the Master
Servicer pursuant to Section 4.14 of this Agreement;
(x) the cumulative amount of Realized Losses to date and, in
addition, if the Certificate Principal Balance of any Class of
Certificates have been reduced to zero, the cumulative amount of any
Realized Losses that have not been allocated to any Class of
Certificates;
(xi) the Overcollateralization Amount and the Senior
Enhancement Percentage, any Overcollateralization Deficiency Amount and
any Overcollateralization Release Amount for such Distribution Date
(xii) with respect to each loan group, the amount of any
Prepayment Charges remitted by the Servicer;
(xiii) the number, aggregate principal balance, weighted
average remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Loans as of the related Due Date;
(xiv) with respect to each loan group, the number and
Scheduled Principal Balance of all the Mortgage Loans for the following
Distribution Date;
(xv) the number and aggregate principal balance of any
Mortgage Loans that were (A) delinquent (exclusive of Mortgage Loans in
foreclosure) using the "OTS" method (1) one scheduled payment is
delinquent, (2) two scheduled payments are delinquent, (3) three
scheduled payments are delinquent and (4) foreclosure proceedings have
been commenced, and loss information for the period; the number and
aggregate principal balance of any Mortgage Loans in respect of which
(A) one scheduled payment is delinquent, (B) two scheduled payments are
delinquent, (C) three scheduled payments are delinquent and (D)
foreclosure proceedings have been commenced, and loss information for
the period;
(xvi) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month, the loan number and the Stated
Principal Balance of, and Realized Loss on, such Mortgage Loan as of
the close of business on the Determination Date preceding such
Distribution Date;
(xvii) the total number and principal balance of any real
estate owned or REO Properties in each Loan Group and the Mortgage
Loans in the aggregate as of the close of business on the Determination
Date preceding such Distribution Date;
(xviii) the three month rolling average of the percent
equivalent of a fraction, the numerator of which is the Aggregate Loan
Group Balance of the Mortgage Loans in a Loan Group that are sixty (60)
days or more delinquent or are in bankruptcy or foreclosure or are REO
Properties, and the denominator of which is the Aggregate Loan Group
Balance of all of the Mortgage Loans in such Loan Group as of the last
day of such Distribution Date;
(xix) any material modifications, extensions or waivers to the
terms, fees, penalties or payments of any Mortgage Loans during the Due
Period or that are material in the aggregate;
(xx) the aggregate Servicing Fee received by the Servicer, and
the master servicing fees, if any, received by the Master Servicer
during the related Due Period;
(xxi) the amount of the Credit Risk Management Fees paid to
the Credit Risk Manager and/or the Sponsor for such Distribution Date;
(xxii) the amount, if any, of other fees or expenses accrued
and paid, with an identification of the payee and the general purpose
of such fees;
(xxiii) the amount of any Net WAC Rate Carryover Amount and
the amount in the Net WAC Reserve Fund after all deposits and
withdrawals on such Distribution Date;
(xxiv) amounts payable in respect of the Cap Contract;
(xxv) with respect to each loan group, whether the Stepdown
Date has occurred and whether Trigger Event is in effect; and
(xxvi) any legal proceedings pending against the Sponsor, the
Depositor or the Trustee, or their respective property, that is
material to Certificateholders, including proceedings known to be
contemplated by governmental authorities.
The Securities Administrator may make the foregoing monthly statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders via the
Securities Administrator's internet website. The Securities Administrator's
internet website shall initially be located at [_________________]. Assistance
in using the website can be obtained by calling the Securities Administrator's
customer service desk at [(___) ___-____]. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator may change the way monthly statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
The Securities Administrator shall be entitled to rely on but shall not
be responsible for the content or accuracy of any information provided by third
parties for purposes of preparing such statement and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
(b) The Securities Administrator's responsibility for making the above
information available to the Certificateholders is limited to the availability,
timeliness and accuracy of the information provided by Servicer and the Cap
Provider. The Securities Administrator will make available a copy of each
statement provided pursuant to this Section 5.06 to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Securities Administrator shall cause to be furnished upon written
request to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in clauses
(a)(i) and (a)(ii) of this Section 5.06 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Securities Administrator pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Residual Certificates the
applicable Form 1066 and each applicable Form 1066Q and shall respond promptly
to written requests made not more frequently than quarterly by any Holder of a
Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows
on the Closing Date on each Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each Class of
regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of a
REMIC with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of a
REMIC; and
(vii) Any taxes (including penalties and interest) imposed on
the REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 9.13.
Section 5.07 REMIC DESIGNATIONS AND REMIC I ALLOCATIONS.
(a) The Trustee shall elect that each of REMIC I, REMIC II and REMIC
III and shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of such
REMIC elections. The REMIC I Regular Interests shall constitute the assets of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.
(b) On each Distribution Date, the Available Distribution Amount, in
the following order of priority and in accordance with the Remittance Report,
shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R Certificates, as the case may be:
(i) first, to the Holders of REMIC I Regular Interest
LTI-IO-A, REMIC I Regular Interest LTI-IO-B, REMIC I Regular Interest
LTI-IO-C, REMIC I Regular Interest LTI-IO-D, REMIC I Regular Interest
LTI-IO-E, REMIC I Regular Interest LTI-IO-F, REMIC I Regular Interest
LTI-IO-G and REMIC I Regular Interest LTI-IO-H in an amount equal to
(A) the Uncertificated Accrued Interest for such Distribution Date,
plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates and second, to the Holders of REMIC I Regular
Interest LTI-1, in an amount equal to (A) the Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;
(ii) to the Holders of the REMIC I Regular Interest LTI-P, on
the Distribution Date in [________] or any Distribution Date thereafter
until $100 has been distributed pursuant to this clause;
(iii) on each Distribution Date, the remainder of the
Available Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) and clause (ii) above, first,
to the Holders of REMIC I Regular Interest LTI-1 until the
Uncertificated Principal Balance of such REMIC I Regular Interest is
reduced to zero, and second, to the Holders of REMIC I Regular Interest
LTI-IO-A, REMIC I Regular Interest LTI-IO-B, REMIC I Regular Interest
LTI-IO-C, REMIC I Regular Interest LTI-IO-D, REMIC I Regular Interest
LTI-IO-E, REMIC I Regular Interest LTI-IO-F, REMIC I Regular Interest
LTI-IO-G and REMIC I Regular Interest LTI-IO-H, sequentially, until the
Uncertificated Principal Balance of each such REMIC I Regular Interest
is reduced to zero; and
(iv) to the Holders of the Class R Certificates, any amounts
remaining after the distributions pursuant to clauses (i) through (iii)
above.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest LTI-P.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
LTI-P shall not reduce the Uncertificated Principal Balance thereof.
Section 5.08 REMIC II ALLOCATIONS.
(a) On each Distribution Date, the Available Distribution Amount, in
the following order of priority and in accordance with the Remittance Report,
shall be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests or withdrawn from the Distribution Account and distributed to the
Holders of the Class R Certificates, as the case may be:
(i) first, to the Holders of REMIC II Regular Interest
LTII-IO, in an amount equal to (A) the Uncertificated Accrued Interest
for such REMIC II Regular Interest for such Distribution Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution Dates and then to Holders of REMIC II Regular Interest
LTII-AA, REMIC Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___],
REMIC II Regular Interest LTII-[___] and REMIC II Regular Interest
LTII-ZZ, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for each such REMIC II Regular Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued
Interest in respect of REMIC II Regular Interest LTII-ZZ shall be
reduced and deferred when the REMIC II Overcollateralization Amount is
less than the REMIC II Required Overcollateralization Amount, by the
lesser of (x) the amount of such difference and (y) the REMIC II
Regular Interest LTII-ZZ Maximum Interest Deferral Amount and such
amount will be payable to the Holders of REMIC Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II Regular
Interest LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest LTII-[___],
REMIC II Regular Interest LTII-[___] and REMIC II Regular Interest
LTII-[___] in the same proportion as the Overcollateralization Increase
Amount is allocated to the Corresponding Certificates and the
Uncertificated Principal Balance of REMIC II Regular Interest LTII-ZZ
shall be increased by such amount;
(ii) second, to the Holders of REMIC II Regular Interests, in
an amount equal to the remainder of the Available Distribution Amount
for such Distribution Date after the distributions made pursuant to
clause (i) above, allocated as follows:
(A) 98.00% of such remainder (other than amounts
payable under clause (c) below) to the Holders of REMIC II
Regular Interest LTII-AA and REMIC II Regular Interest LTII-P,
until the Uncertificated Principal Balance of such REMIC II
Regular Interest is reduced to zero, provided, however, that
the Uncertificated Principal Balance of REMIC II Regular
Interest LTII-P shall not be reduced until the Distribution
Date in [________] or any Distribution Date thereafter, at
which point such amount shall be distributed to REMIC II
Regular Interest LTII-P, until $100 has been distributed
pursuant to this clause;
(B) 2.00% of such remainder (other than amounts
payable under clause (c) below, first, to the Holders of REMIC
Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___], REMIC II Regular Interest
LTII-[___], REMIC II Regular Interest LTII-[___], REMIC II
Regular Interest LTII-[___] and REMIC II Regular Interest
LTII-[___], 1.00%, in the same proportion as principal
payments are allocated to the Corresponding Certificates,
until the Uncertificated Principal Balances of such REMIC II
Regular Interests are reduced to zero and second, to the
Holders of REMIC II Regular Interest LTII-ZZ until the
Uncertificated Principal Balance of such REMIC II Regular
Interest is reduced to zero; then
(C) any remaining amount to the Holders of the Class
R Certificates; and
(iii) third, to REMIC II Regular Interest LTII-P, 100% of the
amount paid in respect of REMIC I Regular Interest LTI-P;
provided, however, that (i) 98.00% and (ii) 2.00% of any principal
payments that are attributable to an Overcollateralization Reduction Amount
shall be allocated to Holders of (i) REMIC II Regular Interest LTII-AA and REMIC
II Regular Interest LTII-P, in that order and (ii) REMIC II Regular Interest
LTII-ZZ, respectively; provided that REMIC II Regular Interest LTII-P shall not
be reduced until the Distribution Date in [________], at which point such amount
shall be distributed to REMIC II Regular Interest LTII-P, until $100 has been
distributed pursuant to this clause.
Section 5.09 CLASS P CERTIFICATE ACCOUNT.
The Securities Administrator shall establish and maintain with itself a
separate, segregated trust account titled "[_____________________], for the
benefit of Nomura Asset Acceptance Corporation, Alternative Loan Trust
[_________] Class P Certificate Account". On the Closing Date, the Depositor
will deposit, or cause to be deposited in the Class P Certificate Account
$100.00. The amount on deposit in the Class P Certificate Account shall be held
uninvested. On the Distribution Date in [_________], the Securities
Administrator shall withdraw the amount on deposit in the Class P Certificate
Account and remit such amount to the Holders of the Class P Certificates, in
reduction of the Certificate Principal Balance thereof.
Section 5.10 NET WAC RESERVE FUND.
(a) The Securities Administrator shall establish a Net WAC Reserve Fund
on behalf of the holders of the Publicly Offered Certificates (other than the
Class [___] Certificates). The Net WAC Reserve Fund must be an Eligible Account.
The Net WAC Reserve Fund shall be entitled "Net WAC Reserve Fund,
[_____________________] for the benefit of holders of Nomura Asset Acceptance
Corporation, Mortgage Pass-Through Certificates, Series [_________], Class
[___], Class [___], Class [___], Class [___], Class [___], Class [___], Class
[___] and Class [___]". Any payments received by the Securities Administrator
under the Cap Contract shall be deposited into the Net WAC Reserve Fund for the
benefit of the Class [___] Certificates; provided that the amount of any Excess
Cap Payments shall be held for the benefit of the Class X Certificates and
payable as part of the Class X Distribution Amount for the related Distribution
Date. On the Closing Date, the Depositor will deposit, or cause to be deposited,
into the Net WAC Reserve Fund $[_________]. On each Distribution Date as to
which there is a Net WAC Rate Carryover Amount payable to any Class of
Certificates, the Securities Administrator shall deposit the amounts pursuant to
paragraphs 3, 4, 5, 6 and 7 of clause THIRD of Section 5.04(a) into the Net WAC
Reserve Fund and the Securities Administrator has been directed by the Class X
Certificateholder to distribute such amounts to the Holders of the Publicly
Offered Certificates (other than the Class [___] Certificates) in the amounts
and priorities set forth in clause THIRD of Section 5.04(a).
(b) The Net WAC Reserve Fund is an "outside reserve fund" within the
meaning of Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust
Fund but not an asset of any REMIC. The Securities Administrator on behalf of
the Trust shall be the nominal owner of the Net WAC Reserve Fund. The Class X
Certificateholders shall be the beneficial owners of the Net WAC Reserve Fund,
subject to the power of the Securities Administrator to transfer amounts under
Section 5.04(a). Amounts in the Net WAC Reserve Fund shall be held either
uninvested in a trust or deposit account of the Securities Administrator with no
liability for interest or other compensation thereof or, at the written
direction of the Majority Class X Certificateholder, be invested in Permitted
Investments that mature no later than the Business Day prior to the next
succeeding Distribution Date. All net income and gain from such investments
shall be distributed to the Majority Class X Certificateholder, not as a
distribution in respect of any interest in any REMIC (pursuant to Section
5.10(d)). All amounts earned on amounts on deposit in the Net WAC Reserve Fund
shall be taxable to the Majority Class X Certificateholder. Any losses on such
investments shall be deposited in the Net WAC Reserve Fund by the Majority Class
X Certificateholder out of its own funds immediately as realized. In the event
that the Majority Class X Certificateholder shall fail to provide investment
instructions to the Securities Administrator, the amounts on deposit in the Net
WAC Reserve Fund shall be held uninvested.
(c) For federal tax return and information reporting, the value of the
right of the holder of the Class [___] Certificates to receive payments from the
Net WAC Reserve Fund shall be $[_________] and the amount allocated to the right
of the holders of the Publicly Offered Certificates (other than the Class [___]
Certificates and the Class [___] Certificates) to receive payments from the Net
WAC Reserve Fund in respect of any Net WAC Rate Carryover Amount shall be zero.
(d) On the Distribution Date immediately after the Distribution Date on
which the aggregate Certificate Principal Balance of the Class [___]
Certificates equals zero, any amounts on deposit in the Net WAC Reserve Fund not
payable on the Class [___] Certificates shall be deposited into the Distribution
Account and distributed to the Holders of the Class X Certificates pursuant to
this Section 5.10(d)).
Section 5.11 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
(a) Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, file with the
Securities and Exchange Commission via the Electronic Data Gathering and
Retrieval System ("▇▇▇▇▇"), a Distribution Report on Form 10-D with a copy of
the monthly statement to be furnished by the Trustee to the Certificateholders
for such Distribution Date and detailing all data elements specified in Item
1121(a) of Regulation AB as an exhibit thereto; provided that the Trustee shall
have received no later than 10 days prior to the date such Distribution Report
on Form 10-D is required to be filed, the following information:
(i) Notice of any material modifications, extensions or
waivers to Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material over time
from the Master Servicer;
(ii) Notice of any material breaches of Mortgage Loan
representations or warranties or transaction covenants from the Master
Servicer;
(iii) Notice of any new issuance of asset-backed securities
backed by the same asset pool, any pool asset changes, such as Mortgage
Loan substitutions and repurchases, and cash flows available for future
purchases, if applicable from the Master Servicer.
(iv) A brief description of any legal proceedings pending,
including proceedings known to be contemplated by governmental
authorities, against the Depositor, the Sponsor and the Master Servicer
or of which any property of the foregoing is the subject, that is
material to Certificateholders from each of the Depositor, the Sponsor
and the Master Servicer if applicable;
(v) The information required by Item 2 of Part II of Form 10-Q
regarding any sale of securities that are either backed by the same
asset pool or are otherwise issued by the issuer, regardless of whether
the transaction was registered under the Securities Act during the
period covered by the report, from the Depositor;
(vi) The information required by Item 3 of Part II of Form
10-Q with respect to defaults upon the senior securities during the
period covered by the report, from the Master Servicer;
(vii) The information required by Item 4 of Part II of Form
10-Q with respect to submission of matters to a vote of
Certificateholders during the period covered by the report, from the
Master Servicer;
(viii) Any information required to be disclosed in a report on
Form 8-K during the period covered by the report on the Form 10-D, but
not reported, whether or not otherwise required by the Form 10-D from
the Master Servicer; and
(ix) Any exhibits to the Form 10-D from the Depositor.
(b) The Securities Administrator will prepare and file Current Reports
on Form 8-K in respect of the Trust at the direction and expense of the
Depositor, provided, that, the Depositor, the Sponsor, the Trustee or the Master
Servicer shall have timely notified the Securities Administrator of an item
reportable on a Current Report on Form 8-K and shall have delivered to the
Securities Administrator no later than two Business Days prior to the filing
deadline for such Current Report, all information, data, and exhibits required
to be provided or filed with such Current Report with respect to:
(i) Any entry into a material definitive agreement, any
termination of a material definitive agreement;
(ii) any bankruptcy or receivership of the Depositor, the
Sponsor or the Master Servicer (including any servicer that does not
sign the pooling and servicing agreement and any subservicer that signs
a subservicing agreement) from the Depositor, the Sponsor or the Master
Servicer as applicable;
(iii) A description of any triggering events that accelerate
or increase a direct financial obligation or an obligation under an
off-balance sheet arrangement from the Master Servicer;
(iv) Any material modification to the rights of
Certificateholders;
(v) Any amendments of the articles of incorporation or bylaws
or a change of the fiscal year of any transaction party from each of
the Depositor, the Sponsor or the Master Servicer, as applicable;
(vi) Any change in servicer, trustee, credit enhancement or
other external support or failure to make a required distribution from
the Master Servicer or Trustee as applicable; and
(vii) Any Securities Act update provided by the Depositor.
(c) Prior to January 30 in each year commencing in [________], the
Securities Administrator shall, in accordance with industry standards, file a
Form 15 Suspension Notice with respect to the Trust Fund, if applicable. Prior
to (x) March 15, [________] and (y) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Trustee with a Master Servicer Annual Statement of
Compliance, together with a copy of the Master Servicer Assessment of Compliance
and Master Servicer Attestation Report to be delivered by the Master Servicer
pursuant to Sections 4.14 and 4.15. Prior to (x) March 31, [________] and (y)
unless and until a Form 15 Suspension Notice shall have been filed, March 31 of
each year thereafter, the Master Servicer shall, subject to subsection (d)
below, file a Form 10-K, in substance conforming to industry standards, with
respect to the Trust Fund. Such Form 10-K shall include the Master Servicer
Assessment of Compliance, Master Servicer Attestation Report, Master Servicer
Annual Statement of Compliance and other documentation provided by the Master
Servicer pursuant to Sections 4.14 and 4.15 and the Form 10-K certification
signed by the Depositor. The Depositor, the Sponsor and Master Servicer shall
provide the following information, as applicable, no later than March 1 of each
calendar year prior to the filing deadline for the Form 10-K:
(i) Any exhibits or financial statement schedules required by
Item 15 of Form 10-K from each of the Depositor, the Sponsor and Master
Servicer;
(ii) A description of any legal proceedings pending, including
proceedings known to be contemplated by governmental authorities,
against the Depositor, the Sponsor and the Master Servicer or of which
any property of the foregoing is the subject, that is material to
Certificateholders from each of the Depositor, the Sponsor and the
Master Servicer if applicable;
(iii) A description of any affiliations between the
transaction parties pursuant to Item 1119 of Regulation AB from the
Sponsor; and
(iv) The Master Servicer Assessment of Compliance, Master
Servicer Attestation Report, Master Servicer Annual Statements of
Compliance and other documentation provided by the Master Servicer
pursuant to Sections 4.14 and 4.15.
(d) The Depositor hereby grants to the Securities Administrator a
limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(x) receipt by the Securities Administrator from the Depositor of written
termination of such power of attorney and (y) the termination of the Trust Fund.
The Depositor, the Master Servicer and the Trustee each agree to promptly
furnish to the Securities Administrator, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement, the Mortgage Loans as the Securities Administrator reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Securities Administrator shall have no responsibility to file any items
other than those specified in this Section 5.11; provided, however, the
Securities Administrator will cooperate with the Depositor in connection with
any additional filings with respect to the Trust Fund as the Depositor deems
necessary under the Exchange Act. Copies of all reports filed by the Securities
Administrator under the Exchange Act shall be sent to the Depositor. Fees and
expenses incurred by the Securities Administrator in connection with this
Section 5.11 shall not be reimbursable from the Trust Fund.
(e) In connection with the filing of any 10-K hereunder, the Securities
Administrator shall sign a certification (in the form attached hereto as Exhibit
[___]) for the Depositor regarding certain aspects of the Form 10-K
certification signed by the Depositor, provided, however, that the Securities
Administrator shall not be required to undertake an analysis of any accountant's
report attached as an exhibit to the Form 10-K.
(f) The Securities Administrator shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Master Servicer's
obligations under this Section 5.11 or the Master Servicer's negligence, bad
faith or willful misconduct in connection therewith.
Notwithstanding the provisions of Section 11.01, this Section 5.11 may
be amended without the consent of the Certificateholders.
ARTICLE VI
THE CERTIFICATES
Section 6.01 THE CERTIFICATES.
(a) The Certificates shall be substantially in the forms attached hereto as
Exhibits [___] through A-6. The Certificates shall be issuable in registered
form, in the minimum dollar denominations, integral dollar multiples in excess
thereof (except that one Certificate of each Class may be issued in a different
amount which must be in excess of the applicable minimum dollar denomination)
and aggregate dollar denominations as set forth in the following table:
MINIMUM INTEGRAL MULTIPLE IN ORIGINAL CERTIFICATE
CLASS DENOMINATION EXCESS OF MINIMUM PRINCIPAL BALANCE PASS-THROUGH RATE
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 N/A Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
[___] $25,000 $1 $[____________] Class [___] Pass-Through Rate
Upon original issue, the Certificates shall be executed and
authenticated by the Securities Administrator and delivered by the Trustee to
and upon the written order of the Depositor. The Certificates shall be executed
by manual or facsimile signature on behalf of the Trust by the Securities
Administrator by an authorized signatory. Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Securities Administrator shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
The Depositor shall provide, or cause to be provided, to the Securities
Administrator on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
(b) The Class X Certificates and Class P Certificates offered and sold
to Qualified Institutional Buyers in reliance on Rule 144A under the Securities
Act ("Rule 144A") will be issued in the form of Definitive Certificates.
Section 6.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Securities Administrator shall maintain, or cause to be
maintained in accordance with the provisions of Section 6.09, a Certificate
Register for the Certificates in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Securities Administrator shall provide for the registration of Certificates and
of Transfers and exchanges of Certificates as herein provided. Upon surrender
for registration of Transfer of any Certificate, the Securities Administrator
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange, the Securities Administrator shall
execute, authenticate, and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Securities Administrator in
accordance with the Securities Administrator's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Securities Administrator in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit E (the "Transferor Certificate")
and (x) deliver a letter in substantially the form of either Exhibit F (the
"Investment Letter") or Exhibit G (the "Rule 144A Letter") or (y) there shall be
delivered to the Securities Administrator an Opinion of Counsel, at the expense
of the transferor, that such Transfer may be made pursuant to an exemption from
the Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Sponsor, the Securities Administrator, the Trustee or the Trust
Fund. The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for Transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Securities Administrator shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
Transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Depositor and the Sponsor against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
No Transfer of an ERISA Restricted Certificate shall be made unless the
Securities Administrator shall have received either (i) a representation from
the transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA and/or a plan
subject to Section 4975 of the Code, or a Person acting on behalf of any such
plan or using the assets of any such plan, or (ii) in the case of any such ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or a plan subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Securities Administrator for the benefit of the
Securities Administrator, the Depositor and the Servicer and on which they may
rely to the effect that the purchase and holding of such ERISA Restricted
Certificate is permissible under applicable law, will not result in any
prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Securities Administrator, the Depositor or any Servicer to any
obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Securities Administrator, the
Depositor or any Servicer. Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA Restricted Certificate to or on behalf of an
employee benefit plan subject to Section 406 of ERISA and/or a plan subject to
Section 4975 of the Code other than in compliance with the foregoing shall be
void and of no effect; provided that the restriction set forth in this sentence
shall not be applicable if there has been delivered to the Securities
Administrator an Opinion of Counsel meeting the requirements of clause (ii) of
the first sentence of this paragraph. The Securities Administrator shall not be
under any liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 6.02(b) or
for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement. The Securities Administrator shall be entitled, but not obligated, to
recover from any Holder of any ERISA Restricted Certificate that was in fact an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such ERISA
Restricted Certificate at and after either such time. Any such payments so
recovered by the Securities Administrator shall be paid and delivered by the
Securities Administrator to the last preceding Holder of such Certificate that
is not such a plan or Person acting on behalf of a plan.
Each beneficial owner of a Class [___], Class [___] or Class [___]
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 or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on the Exemption, and that
it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P or ▇▇▇▇▇'▇, 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.
(c) (i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Securities Administrator of any change or impending
change in its status as a Permitted Transferee.
o In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate, the
Trustee shall require delivery to it, and shall not
register the Transfer of any Residual Certificate
until its receipt of, an affidavit and agreement (a
"Transfer Affidavit and Agreement," in the form
attached hereto as Exhibit B-3) from the proposed
Transferee, in form and substance satisfactory to the
Securities Administrator, representing and
warranting, among other things, that such Transferee
is a Permitted Transferee, that it is not acquiring
its Ownership Interest in the Residual Certificate
that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not
a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Residual
Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions
of this Section 6.02(d) and agrees to be bound by
them.
o Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause
(B) above, if an authorized officer of the Securities
Administrator who is assigned to this transaction has
actual knowledge that the proposed Transferee is not
a Permitted Transferee, no Transfer of an Ownership
Interest in a Residual Certificate to such proposed
Transferee shall be effected.
o Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall agree (x) to
require a Transfer Affidavit and Agreement from any
other Person to whom such Person attempts to transfer
its Ownership Interest in a Residual Certificate and
(Y) not to transfer its Ownership Interest unless it
provides a Transferor Affidavit (in the form attached
hereto as Exhibit B-2) to the Securities
Administrator stating that, among other things, it
has no actual knowledge that such other Person is not
a Permitted Transferee.
o Each Person holding or acquiring an Ownership
Interest in a Residual Certificate, by purchasing an
Ownership Interest in such Certificate, agrees to
give the Securities Administrator written notice that
it is a "pass-through interest holder" within the
meaning of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it
is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest
holder."
(ii) The Securities Administrator will register the Transfer
of any Residual Certificate only if it shall have received the Transfer
Affidavit and Agreement and all of such other documents as shall have
been reasonably required by the Securities Administrator as a condition
to such registration. In addition, no Transfer of a Residual
Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such
Certificate to the effect that such Transferee is a Permitted
Transferee.
(iii) (A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
6.02(d), then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights as holder
thereof retroactive to the date of registration of such Transfer of
such Residual Certificate. The Securities Administrator shall be under
no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section
6.02(d) or for making any payments due on such Certificate to the
holder thereof or for taking any other action with respect to such
holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a holder
of a Residual Certificate in violation of the restrictions in
this Section 6.02(d) and to the extent that the retroactive
restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Securities
Administrator shall have the right, without notice to the
holder or any prior holder of such Residual Certificate, to
sell such Residual Certificate to a purchaser selected by the
Securities Administrator on such terms as the Securities
Administrator may choose. Such purported Transferee shall
promptly endorse and deliver each Residual Certificate in
accordance with the instructions of the Securities
Administrator. Such purchaser may be the Securities
Administrator itself or any Affiliate of the Securities
Administrator. The proceeds of such sale, net of the
commissions (which may include commissions payable to the
Securities Administrator or its Affiliates), expenses and
taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Securities
Administrator, and the Securities Administrator shall not be
liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
(iv) The Securities Administrator shall make available to the
Internal Revenue Service and those Persons specified by the REMIC
Provisions all information necessary to compute any tax imposed (A) as
a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is a Disqualified Organization, including
the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Residual
Certificate having as among its record holders at any time any Person
which is a Disqualified Organization. Reasonable compensation for
providing such information may be charged or collected by the
Securities Administrator.
(v) The provisions of this Section 6.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided
that there shall have been delivered to the Securities Administrator at
the expense of the party seeking to modify, add to or eliminate any
such provision the following:
(A) written notification from each Rating Agency to
the effect that the modification, addition to or elimination
of such provisions will not cause such Rating Agency to
downgrade its then-current ratings of any Class of
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Securities Administrator, to the effect
that such modification of, addition to or elimination of such
provisions will not cause any Trust REMIC to cease to qualify
as a REMIC and will not cause any Trust REMIC, as the case may
be, to be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person that is not a
Permitted Transferee or a Person other than the prospective
transferee to be subject to a REMIC-tax caused by the Transfer
of a Residual Certificate to a Person that is not a Permitted
Transferee.
(d) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Securities Administrator maintained for such purpose pursuant to Section 9.11,
the Securities Administrator shall execute, authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(e) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-1, Class R-2 and Class R-3 Interest, respectively, in each case that
was evidenced by the Class R Certificate being exchanged.
(f) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(g) The preparation and delivery of all certificates and opinions
referred to above in this Section 6.02 shall not be an expense of the Trust
Fund, the Securities Administrator, the Depositor or the Sponsor.
(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Securities Administrator in accordance with its
customary procedures.
Section 6.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Securities
Administrator, or the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Securities Administrator
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Securities Administrator that
such Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 6.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
6.03 shall constitute complete and indefeasible evidence of ownership in the
Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time. All Certificates surrendered
to the Securities Administrator under the terms of this Section 6.03 shall be
canceled and destroyed by the Securities Administrator in accordance with its
standard procedures without liability on its part.
Section 6.04 PERSONS DEEMED OWNERS.
The Depositor, the Servicer, the Trustee, the Master Servicer, the
Securities Administrator and any of their agents may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and none of the Depositor, the Servicer, the Trustee,
the Master Servicer, the Securities Administrator nor any of their agents shall
be affected by any notice to the contrary.
Section 6.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the Depositor shall request such information in writing from the
Securities Administrator, then the Securities Administrator shall, within ten
Business Days after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator, if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 6.06 BOOK-ENTRY CERTIFICATES.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book- Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
6.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor and the Securities Administrator may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Securities Administrator except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Depositor, the Servicer, the Trustee, the Master Servicer and
the Securities Administrator may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 6.07 NOTICES TO DEPOSITORY.
Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Securities Administrator shall give all such
notices and communications to the Depository.
Section 6.08 DEFINITIVE CERTIFICATES.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Securities
Administrator that the Depository is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Certificates and the Securities Administrator or the Depositor is unable to
locate a qualified successor, (b) the Depositor, at its sole option, advises the
Securities Administrator that it elects to terminate the book-entry system with
respect to such Certificates through the Depository or (c) after the occurrence
and continuation of either of the events in clauses (a) or (b) above,
Certificate Owners of such Book-Entry Certificates having not less than fifty
one percent (51%) of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Securities Administrator and the Depository in writing
through the Depository Participants that the continuation of a book-entry system
with respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of such
Class, then the Securities Administrator shall notify all Certificate Owners of
such Certificates, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to applicable Certificate
Owners requesting the same. The Depositor shall provide the Securities
Administrator with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the
Securities Administrator of any such Certificates by the Depository, accompanied
by registration instructions from the Depository for registration, the
Securities Administrator shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Securities Administrator, to the extent applicable
with respect to such Definitive Certificates and the Securities Administrator
shall recognize the Holders of such Definitive Certificates as
Certificateholders hereunder.
Section 6.09 MAINTENANCE OF OFFICE OR AGENCY.
Certificates may be surrendered for registration of transfer or
exchange at the applicable Corporate Trust Office of the Securities
Administrator. The Securities Administrator will give prompt written notice to
the Certificateholders of any change in such location of any such office or
agency.
ARTICLE VII
THE DEPOSITOR, SERVICER AND THE MASTER SERVICER
Section 7.01 LIABILITIES OF THE DEPOSITOR, SERVICER AND THE MASTER
SERVICER.
Each of the Depositor, the Servicer and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.
Section 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE SERVICER OR THE
MASTER SERVICER.
(a) Each of the Depositor and the Servicer will keep in full force and
effect its rights and franchises as a corporation under the laws of the state of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its duties under
this Agreement. The Master Servicer will keep in full force and effect its
existence, rights and franchises as a national banking association, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its duties under this Agreement.
(b) The Depositor, the Servicer or the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Depositor, the Servicer or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor, the Servicer or the
Master Servicer shall be the successor of the Depositor, the Servicer or the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, provided that any successor servicer shall have
represented that it meets the eligibility criteria set forth in Section 8.02.
Section 7.03 INDEMNIFICATION OF DEPOSITOR AND THE SERVICER.
(a) The Depositor agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement or the Certificates (i) related to the Depositor's
failure to perform its duties in compliance with this Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or (ii) incurred by reason of the Depositor's willful misfeasance,
bad faith or gross negligence in the performance of duties hereunder or by
reason of reckless disregard of obligations and duties hereunder. This indemnity
shall survive the resignation and the termination of this Agreement.
(b) The Servicer agrees to indemnify the Indemnified Persons for, and
to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to the Servicer's gross negligence in the performance of its duties
under this Agreement or failure to service the Mortgage Loans in material
compliance with the terms of this Agreement and for a material breach of any
representation, warranty or covenant of the Servicer contained herein. The
Servicer shall immediately notify the Trustee if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
consent of the Trustee and with counsel reasonably satisfactory to the Trustee)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly appeal or pay, discharge and satisfy any
judgment or decree which may be entered against it or any Indemnified Person in
respect of such claim, but failure to so notify the Servicer shall not limit its
obligations hereunder. The Servicer agrees that it will not enter into any
settlement of any such claim without the consent of the Indemnified Persons
unless such settlement includes an unconditional release of such Indemnified
Persons from all liability that is the subject matter of such claim. The
provisions of this Section 7.03(b) shall survive termination of this Agreement.
Section 7.04 LIMITATIONS ON LIABILITY OF THE DEPOSITOR, SECURITIES
ADMINISTRATOR, MASTER SERVICER, SERVICER AND OTHERS.
Subject to the obligation of the Depositor and the Servicer to
indemnify the Indemnified Persons pursuant to Section 7.03:
(a) Neither the Depositor, the Securities Administrator, the Master
Servicer nor any of the directors, officers, employees or agents of the
Depositor, the Securities Administrator and the Master Servicer shall be under
any liability to the Indemnified Persons, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Securities Administrator, the Master Servicer or any such Person against any
breach of warranties, representations or covenants made herein or against any
specific liability imposed on any such Person pursuant hereto or against any
liability which would otherwise be imposed by reason of such Person's willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.
(b) The Depositor, the Securities Administrator, the Master Servicer
and any director, officer, employee or agent of the Depositor, the Securities
Administrator and the Master Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
(c) The Depositor, the Securities Administrator, the Master Servicer,
the Servicer, the Trustee, the Custodian and any director, officer, employee or
agent of the Depositor, the Securities Administrator, the Master Servicer, the
Servicer, the Trustee or the Custodian shall be indemnified by the Trust Fund
and held harmless thereby against any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or related to, this
Agreement, the Custodial Agreement or the Certificates (including any pending or
threatened claim or legal action), other than (i) with respect to the Servicer,
such loss, liability or expense related to the Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or, with
respect to the Custodian, to the Custodian's failure to perform its duties
hereunder, (ii) with respect to the Servicer, any such loss, liability or
expense incurred by reason of the Servicer's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or (iii) with
respect to the Custodian, any such loss, liability or expense incurred by reason
of the Custodian's willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder.
(d) The Depositor, the Securities Administrator or the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties under this Agreement and that in its
opinion may involve it in any expense or liability; provided, however, that each
of the Depositor, the Securities Administrator and the Master Servicer may in
its discretion, undertake any such action which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom (except any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Securities Administrator and the Master Servicer shall be
entitled to be reimbursed therefor out of the Distribution Account as provided
by Section 3.32. Nothing in this Subsection 7.04(d) shall affect the Master
Servicer's obligation to take such actions as are necessary to ensure the
servicing and administration of the Mortgage Loans pursuant to this Agreement.
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Trustee shall not be required to investigate or make recommendations concerning
potential liabilities which the Trust might incur as a result of such course of
action by reason of the condition of the Mortgaged Properties.
(f) The Trustee shall not be liable for any acts or omissions of the
Servicer, the Depositor or the Custodian.
Section 7.05 SERVICER NOT TO RESIGN.
(a) The Servicer shall not resign from the obligations and duties
hereby imposed on it except upon the determination that its duties hereunder are
no longer permissible under applicable law or the performance of such duties are
no longer possible in order to comply with applicable law and such incapacity or
impossibility cannot be cured by the Servicer. Any determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Master Servicer which Opinion of Counsel shall be in
form and substance acceptable to the Master Servicer. No appointment of a
successor to the Servicer shall be effective hereunder unless (a) the Rating
Agencies have confirmed in writing that such appointment will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in Section 8.02 and (c) such successor has agreed
in writing to assume the obligations of the Servicer hereunder. The Servicer
shall provide a copy of the written confirmation of the Rating Agencies and the
agreement executed by such successor to the Master Servicer. No such resignation
shall become effective until a Successor Servicer or the Master Servicer shall
have assumed the Servicer's responsibilities and obligations hereunder. The
Servicer shall notify the Master Servicer and the Rating Agencies of its
resignation.
(b) Except as expressly provided herein, the 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 Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Servicer hereunder; provided, however,
that as provided in Section 3.03, 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.
Section 7.06 TERMINATION OF THE SERVICER WITHOUT CAUSE; APPOINTMENT OF
SPECIAL SERVICER.
(a) The Sponsor may, at its option, terminate the servicing
responsibilities of the Servicer as Servicer hereunder with respect to the
Mortgage Loans without cause. No such termination shall become effective unless
and until a successor to the Servicer shall have been appointed to service and
administer the Mortgage Loans pursuant to the terms and conditions of this
Agreement. No appointment shall be effective unless (i) such successor to the
Servicer meets the eligibility criteria contained in Section 8.02, (ii) the
Master Servicer shall have consented to such appointment, (iii) the Rating
Agencies have confirmed in writing that such appointment will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates (provided that no such letter shall be required from the Rating
Agencies in the event that the servicing rights are sold to a signatory of this
Agreement and such signatory has, at the time of such appointment, at least an
"average" rating from the Rating Agencies), (iv) such successor has agreed to
assume the obligations of the Servicer hereunder to the extent of the Mortgage
Loans and (v) all amounts reimbursable to the Servicer pursuant to the terms of
this Agreement shall have been paid to the Servicer by the successor appointed
pursuant to the terms of this Section 7.06 or by the Sponsor including without
limitation, all unreimbursed Advances and Servicing Advances made by the
Servicer and all out-of-pocket expenses of the Servicer incurred in connection
with the transfer of servicing to such successor. The Sponsor shall provide a
copy of the written confirmation of the Rating Agencies and the agreement
executed by such successor to the Trustee and the Master Servicer.
(b) In addition, the Sponsor may, at its option, appoint a special
servicer as subservicer with respect to certain of the Mortgage Loans. The
Sponsor and the Servicer shall negotiate in good faith with any proposed special
servicer with respect to the duties and obligations of such special servicer
with respect to any such Mortgage Loan. Any subservicing agreement shall contain
terms and provisions not inconsistent with this Agreement and shall obligate the
special servicer to subservice such Mortgage Loans in accordance with accepted
servicing practices. The fee payable to the special servicer for the performance
of such duties and obligations will be paid from the Servicing Fee collected by
the Servicer with respect to each such Mortgage Loan and will be remitted to
such special servicer by the Servicer.
Section 7.07 LIMITATION ON RESIGNATION OF THE MASTER SERVICER.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor Master Servicer meeting the criteria specified in Section 7.08 shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
Section 7.08 ASSIGNMENT OF MASTER SERVICING.
The Master Servicer may sell and assign its rights and delegate its
duties and obligations in its entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation and assuming the obligations of the Master Servicer
hereunder (a) shall have a net worth of not less than $15,000,000 (unless
otherwise approved by each Rating Agency pursuant to clause (ii) below); (b)
shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee); and (c) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement, any custodial agreement from and after the
effective date of such agreement; (ii) each Rating Agency shall be given prior
written notice of the identity of the proposed successor to the Master Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced by a
letter to such effect delivered to the Master Servicer and the Trustee; and
(iii) the Master Servicer assigning the master servicing shall deliver to the
Trustee an officer's certificate and an Opinion of Independent counsel, each
stating that all conditions precedent to such action under this Agreement have
been completed and such action is permitted by and complies with the terms of
this Agreement. No such assignment or delegation shall affect any liability of
the Master Servicer arising out of acts or omissions prior to the effective date
thereof.
Section 7.09 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER.
Each of the Master Servicer and the Servicer shall afford (and any
Subservicing Agreement shall provide that each subservicer shall afford) the
Depositor and the Trustee, upon reasonable notice, during normal business hours,
access to all records maintained by the Master Servicer or the Servicer (and any
subservicer) in respect of the Master Servicer's or Servicer's rights and
obligations hereunder and access to officers of the Master Servicer or Servicer
(and those of any subservicer) responsible for such obligations and the Master
Servicer shall have access to all records maintained by the Servicer and any
subservicers. Upon request, each of the Master Servicer and the Servicer shall
furnish to the Depositor and the Trustee its (and any subservicer's) most recent
financial statements and such other information relating to the Master
Servicer's or the Servicer's capacity to perform its obligations under this
Agreement as it possesses (and that any subservicer possesses). To the extent
such information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's or Servicer's written consent,
except as required pursuant to this Agreement or to the extent that it is
appropriate to do so (i) to its legal counsel, auditors, taxing authorities or
other governmental agencies and the Certificateholders, (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor, the
Servicer or the Master Servicer, (iv) disclosure as required pursuant to this
Agreement or (v) disclosure of any and all information (A) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Agreement approved in advance
by the Depositor, the Servicer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Trustee
having a need to know the same, provided that the Trustee advises such recipient
of the confidential nature of the information being disclosed, shall use its
best efforts to assure the confidentiality of any such disseminated non-public
information. Nothing in this Section 7.09 shall limit the obligation of the
Master Servicer or Servicer to comply with any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the Master
Servicer or the Servicer to provide access as provided in this Section 7.09 as a
result of such obligation shall not constitute a breach of this Section. Nothing
in this Section 7.09 shall require the Master Servicer or the Servicer to
collect, create, collate or otherwise generate any information that it does not
generate in its usual course of business. The Master Servicer and the Servicer
shall not be required to make copies of or ship documents to any party unless
provisions have been made for the reimbursement of the costs thereof. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer or the Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer or the Servicer under this Agreement or exercise the rights of the
Master Servicer or the Servicer under this Agreement; provided that neither the
Master Servicer nor the Servicer shall be relieved of any of its obligations
under this Agreement by virtue of such performance by the Depositor or its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer or the Servicer and is not
obligated to supervise the performance of the Master Servicer or the Servicer
under this Agreement or otherwise.
ARTICLE VIII
DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER
Section 8.01 EVENTS OF DEFAULT.
(a) In case one or more of the following events of default by the
Servicer (or any successor thereto) (each, a "Servicer Default") shall occur and
be continuing, that is to say:
(i) any failure by the Servicer (or any successor thereto) to
remit to the Securities Administrator any payment required to be made
under the terms of this Agreement which continues unremedied for a
period of two Business Days; or
(ii) failure on the part of the Servicer (or any successor
thereto) to duly observe or perform in any material respect any other
of the covenants or agreements on the part of the Servicer (or any
successor thereto) set forth in this Agreement (other than those
described in clauses (viii) and (ix) below), the breach of which has a
material adverse effect and which continue unremedied for a period of
thirty days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Servicer (or any successor thereto) by the Master Servicer or to the
Servicer (or any successor thereto) and the Master Servicer by the
holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshaling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer (or any successor thereto) and such decree
or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Servicer (or any successor thereto) shall consent to
the appointment of a conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer (or
any successor thereto) or of or relating to all or substantially all of
its property; or
(v) the Servicer (or any successor thereto) shall admit in
writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer (or any successor thereto) attempts to
assign its right to servicing compensation hereunder (other than any
payment by the Servicer (or any successor thereto) to the Sponsor of
any portion of the Servicing Fee payable to the Servicer (or any
successor thereto) as provided in a separate side letter between the
Sponsor and the Servicer (or any successor thereto)) or the Servicer
(or any successor thereto) attempts to sell or otherwise dispose of all
or substantially all of its property or assets or to assign this
Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof except, in each case as
otherwise permitted herein;
(vii) the Servicer (or any successor thereto) ceases to be
qualified to transact business in any jurisdiction where it is
currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Servicer's (or any successor
thereto) ability to perform its obligations hereunder;
(viii) failure by the Servicer to duly perform, within the
required time period, its obligations under Sections 3.13, 3.14 or
3.18; or
(ix) any failure by the Servicer (or any successor thereto) to
provide, within the required time period set forth in Section 4.03
hereof, any required reports or data pertaining to the Mortgage Loans,
which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the
same to be remedied, has been given to the Servicer (or any successor
thereto) by the Master Servicer.
then, and in each and every such case, so long as the Servicer Default shall not
have been remedied, the Master Servicer, by notice in writing to the Servicer
shall with respect to a payment default by the Servicer pursuant to Section
8.01(i) of this Agreement, and, upon the occurrence and continuance of any other
Servicer Default, may, and, at the written direction of Certificateholders
evidencing not less than 25% of the Voting Rights shall, in addition to whatever
rights the Trustee on behalf of the Certificateholders may have under Section
7.03 and at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same with respect to a default by the
Servicer. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the related Mortgage Loans or otherwise, shall pass to and be vested in the
Master Servicer. Upon written request from the Master Servicer, the Servicer
shall prepare, execute and deliver, any and all documents and other instruments,
place in the Trustee's possession all Mortgage Files relating to the Mortgage
Loans, and do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the related Mortgage Loans and related
documents, or otherwise, at the Servicer's sole expense. The Servicer shall
cooperate with the Master Servicer in effecting the termination of the
Servicer's responsibilities and rights hereunder including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the defaulting Servicer to the Custodial
Account or Escrow Account or thereafter received with respect to the related
Mortgage Loans or any related REO Property (provided, however, that the
defaulting Servicer shall continue to be entitled to receive all amounts accrued
or owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Advances, Servicing Advances, accrued and unpaid Servicing
Fees or otherwise, and shall continue to be entitled to the benefits of Section
7.04, notwithstanding any such termination, with respect to events occurring
prior to such termination). The Master Servicer shall not have knowledge of a
Servicer Default unless a Responsible Officer of the Master Servicer has actual
knowledge or unless written notice of any Servicer Default is received by the
Master Servicer at its address for notice and such notice references the
Certificates, the Trust Fund or this Agreement.
(b) In case one or more of the following events of default by the
Master Servicer (each, a "Master Servicer Default") shall occur and be
continuing, that is to say:
(i) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation
and warranty contained in Section 2.03, which continues unremedied for
a period of thirty (30) days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor or the Trustee or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least twenty-five percent (25%) of the Voting Rights; or
(ii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of ninety (90) days; or
(iii) the Master Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to it or of or relating to all or substantially all of
its property;
(iv) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(v) failure by the Master Servicer to duly perform, within the
required time period, its obligations under Sections 4.14 or 4.15.
If a Master Servicer Default shall occur, then, and in each and every
such case, so long as such Master Servicer Default shall not have been remedied,
the Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Master Servicer (and to the Depositor if given by the
Trustee or to the Trustee if given by the Depositor) with a copy to each Rating
Agency, terminate all of the rights and obligations of the Master Servicer in
its capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise including, without limitation, the compensation payable to the
Master Servicer under this Agreement, shall pass to and be vested in the Trustee
pursuant to and under this Section, and, without limitation, the Trustee is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Master Servicer, any and all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the date of such termination and
shall continue to be entitled to the benefits of Section 7.03, notwithstanding
any such termination, with respect to events occurring prior to such
termination). For purposes of this Section 8.01, the Trustee shall not be deemed
to have knowledge of a Master Servicer Default unless a Responsible Officer of
the Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Event of Default is received by the Trustee and such
notice references the Certificates, the Trust or this Agreement. The Trustee
shall promptly notify the Rating Agencies of the occurrence of a Master Servicer
Default of which it has knowledge as provided above.
To the extent that the costs and expenses of the Trustee related to the
termination of the Master Servicer, appointment of a successor Master Servicer
or the transfer and assumption of the master servicing by the Trustee
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Master Servicer as a result of a Master Servicer Default and
(ii) all costs and expenses associated with the complete transfer of the master
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Section 8.02 MASTER SERVICER TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01, the Master Servicer shall become the successor to the
Servicer with respect to the transactions set forth or provided for herein and
after a transition period (not to exceed 90 days), shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and applicable law including the obligation
to make Advances pursuant to Article VI hereof, except as otherwise provided
herein; provided, however, that the Master Servicer's obligation to make
Advances in its capacity as Successor Servicer shall not be subject to such 90
day transition period and the Master Servicer will make any Advance required to
be made by the terminated Servicer on the Distribution Date on which the
terminated Servicer was required to make such Advance. Effective on the date of
such notice of termination, as compensation therefor, the Master Servicer shall
be entitled to all fees, costs and expenses relating to the Mortgage Loans that
the terminated Servicer would have been entitled to if it had continued to act
hereunder, provided, however, that the Master Servicer shall not be (i) liable
for any acts or omissions of the terminated Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law or determines
that such Advance, if made, would constitute a Nonrecoverable Advance, (iii)
responsible for expenses of the terminated Servicer pursuant to Section 2.03 or
(iv) obligated to deposit losses on any Permitted Investment directed by the
terminated Servicer. Notwithstanding the foregoing, the Master Servicer may, if
it shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making Advances pursuant to Article VI of this Agreement or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Any Successor Servicer shall (i) be an institution
that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing,
that has a net worth of at least $15,000,000 and (ii) be willing to act as
successor servicer of the Mortgage Loans under this Agreement, and shall have
executed and delivered to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
terminated Servicer (other than any liabilities of the terminated Servicer
hereof incurred prior to termination of the Servicer under Section 8.01), with
like effect as if originally named as a party to this Agreement, provided that
each Rating Agency shall have acknowledged in writing that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. If
the Master Servicer assumes the duties and responsibilities of the terminated
Servicer in accordance with this Section 8.02, the Master Servicer shall not
resign as servicer until a Successor Servicer has been appointed and has
accepted such appointment. Pending appointment of a successor to the terminated
Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Master
Servicer may make such arrangements for the compensation of such successor out
of payments on the Mortgage Loans or otherwise as it and such successor shall
agree; provided that no such compensation shall be in excess of that permitted
the terminated Servicer hereunder. The Master Servicer and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer or the Trustee, as
applicable, nor any other Successor Servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
The costs and expenses of the Master Servicer in connection with the
termination of the Servicer, appointment of a Successor Servicer and, if
applicable, any transfer of servicing, including, without limitation, all costs
and expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Master Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Master Servicer or the Successor Servicer to
service the related Mortgage Loans properly and effectively, to the extent not
paid by the terminated Servicer as may be required herein, shall be payable to
the Master Servicer from the Distribution Account pursuant to Section 3.32. Any
successor to the terminated Servicer as successor servicer under this Agreement
shall give notice to the applicable Mortgagors of such change of servicer and
shall, during the term of its service as successor servicer maintain in force
the policy or policies that the terminated Servicer is required to maintain
pursuant to Section 3.05(b).
Section 8.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to the
Servicer or the Master Servicer, the Trustee shall give prompt written notice
thereof to Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Servicer Default or
Master Servicer Default, the Trustee shall transmit by mail to all
Certificateholders notice of each such Servicer Default or Master Servicer
Default hereunder known to the Trustee, unless such default shall have been
cured or waived.
Section 8.04 WAIVER OF SERVICER DEFAULTS AND MASTER SERVICER DEFAULTS.
The Trustee may waive only by written notice from Certificateholders
evidencing 66-2/3 of the Voting Rights (unless such default materially and
adversely affects all Certificateholders, in which case the written direction
shall be from all of the Certificateholders) any default by the Servicer or
Master Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Default or Master Servicer Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived in writing.
ARTICLE IX
CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section 9.01 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
(a) The Trustee, prior to the occurrence of a Master Servicer Default,
and after the curing or waiver of all Master Servicer Defaults, which may have
occurred, and the Securities Administrator each undertake to perform such duties
and only such duties as are specifically set forth in this Agreement as duties
of the Trustee and the Securities Administrator, respectively. If a Master
Servicer Default has occurred and has not been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such Person's
own affairs. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty.
(b) Each of the Trustee and the Securities Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to it, which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
(c) The Trustee shall promptly remit to the Servicer any complaint,
claim, demand, notice or other document (collectively, the "Notices") delivered
to the Trustee as a consequence of the assignment of any Mortgage Loan hereunder
and relating to the servicing of the Mortgage Loans; provided than any such
notice (i) is delivered to the Trustee at its Corporate Trust Office, (ii)
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
The Trustee shall have no duty hereunder with respect to any Notice it may
receive or which may be alleged to have been delivered to or served upon it
unless such Notice is delivered to it or served upon it at its Corporate Trust
Office and such Notice contains the information required pursuant to clause (ii)
of the preceding sentence.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) Prior to the occurrence of a Master Servicer Default and
after the curing or waiver of all such Master Servicer Defaults which
may have occurred with respect to the Trustee and at all times with
respect to the Securities Administrator, the duties and obligations of
the Trustee and the Securities Administrator shall be determined solely
by the express provisions of this Agreement, neither the Trustee nor
the Securities Administrator shall be liable except for the performance
of its duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Securities Administrator and, in
the absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely and shall be fully
protected in acting or refraining from acting, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee or the Securities
Administrator, respectively, that conform to the requirements of this
Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee or an officer or officers of the Securities Administrator,
respectively, unless it shall be proved that the Trustee or Securities
Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith and believed by it to be authorized or
within the rights or powers conferred upon it by this Agreement or in
accordance with the directions of the Holders of Certificates
evidencing not less than 25% of the aggregate Voting Rights of the
Certificates, if such action or non-action relates to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee or the Securities Administrator or exercising any trust or
other power conferred upon the Trustee or the Securities Administrator
under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Master Servicer
Default unless a Responsible Officer of the Trustee shall have actual
knowledge thereof. In the absence of such notice, the Trustee may
conclusively assume there is no such default or Master Servicer
Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action
and whether or not any such damages were foreseeable or contemplated;
and
(vii) None of the Sponsor, the Depositor or the Trustee shall
be responsible for the acts or omissions of the other, it being
understood that this Agreement shall not be construed to render them
partners, joint venturers or agents of one another.
Neither the Trustee nor the Securities Administrator shall not be required to
expend or risk its own funds or otherwise incur liability, financial or
otherwise, in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the terminated Servicer hereunder.
(e) All funds received by the Securities Administrator and required to
be deposited in the Distribution Account pursuant to this Agreement will be
promptly so deposited by the Securities Administrator.
Section 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE AND SECURITIES
ADMINISTRATOR.
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may
conclusively rely and shall be fully protected in acting or refraining
from acting in reliance on any resolution or certificate of the
Sponsor, the Depositor or the Servicer, any certificates of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel and any advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel:
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee or the Securities Administrator, as the case may be,
reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby.
Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of a Master Servicer Default of which a
Responsible Officer of the Trustee has actual knowledge (which has not
been cured or waived), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs;
(iv) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Default
hereunder and after the curing or waiver of all Master Servicer
Defaults which may have occurred with respect to the Trustee and at all
times with respect to the Securities Administrator, neither the Trustee
nor the Securities Administrator shall be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing not
less than 25% of the aggregate Voting Rights of the Certificates and
provided that the payment within a reasonable time to the Trustee or
the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee or the Securities Administrator, as
applicable, not reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the
terms of this Agreement, the Trustee or the Securities Administrator,
as applicable, may require reasonable indemnity against such expense or
liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
Affiliates, nominees, custodians, agents or attorneys. The Trustee
shall not be liable or responsible for the misconduct or negligence of
any of the Trustee's agents or attorneys or paying agent appointed
hereunder by the Trustee with due care;
(vii) Should the Trustee deem the nature of any action
required on its part to be unclear, the Trustee may require prior to
such action that it be provided by the Depositor with reasonable
further instructions; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be accountable for other than its
gross negligence or willful misconduct in the performance of any such
act;
(viii) The Trustee shall not be required to give any bond or
surety with respect to the execution of the trust created hereby or the
powers granted hereunder;
(ix) The Trustee shall not have any duty to conduct any
affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Mortgage Loan by any Person pursuant to
this Agreement, or the eligibility of any Mortgage Loan for purposes of
this Agreement;
(x) The Trustee shall have no duty hereunder with respect to
any complaint, claim, demand, notice or other document it may receive
or which may be alleged to have been delivered or served upon it by the
parties as a consequence of the assignment of any Mortgage Loan
hereunder; provided, however that the Trustee shall promptly remit to
the Servicer upon receipt any such complaint, claim, demand, notice or
other document (i) which is delivered to the Trustee at is Corporate
Trust Office, (ii) of which a Responsible Officer has actual knowledge
or (iii) which contains information sufficient to permit the Trustee to
make a determination that the real property to which such document
relates is a Mortgaged Property; and
(xi) The Trustee is hereby directed by the Depositor to
execute the Cap Contract on behalf of the Trust Fund in the form
presented to it by the Depositor and shall have no responsibility for
the contents of the Cap Contract, including, without limitation, the
representations and warranties contained therein. Any funds payable by
the Trustee under the Cap Contract at closing shall be paid by the
Depositor. Notwithstanding anything to the contrary contained herein or
in the Cap Contract, the Trustee shall not be required to make any
payments to the counterparty under the Cap Contract.
(xii) None of the Securities Administrator, the Master
Servicer, the Servicer, the Sponsor, the Depositor, the Custodian or
the Trustee shall be responsible for the acts or omissions of the
others, it being understood that this Agreement shall not be construed
to render them partners, joint venturers or agents of one another.
Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgements of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
9.12) shall be taken as the statements of the Depositor, and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency (other than as
specifically set forth in Section 9.12) of the Cap Contract, the Certificates
(other than the signature of the Securities Administrator and authentication of
the Securities Administrator on the Certificates) or of any Mortgage Loan except
as expressly provided in Section 2.02. The Securities Administrator's signature
and authentication (or authentication of its agent) on the Certificates shall be
solely in its capacity as Securities Administrator and shall not constitute the
Certificates an obligation of the Securities Administrator in any other
capacity. The Trustee and the Securities Administrator shall not be accountable
for the use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans.
Section 9.04 TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.
Each of the Trustee and the Securities Administrator in its individual
capacity or in any other capacity other than as Trustee or the Securities
Administrator hereunder may become the owner or pledgee of any Certificates and
may transact business with other interested parties and their Affiliates with
the same rights it would have if it were not the Trustee or the Securities
Administrator.
Section 9.05 FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
The fees of the Trustee and the Securities Administrator hereunder
shall be paid in accordance with a side letter agreement with the Master
Servicer and at the sole expense of the Master Servicer. In addition, the
Trustee, the Securities Administrator, the Custodian and any director, officer,
employee or agent of the Trustee, the Securities Administrator and the Custodian
shall be indemnified by the Trust and held harmless against any loss, liability
or expense (including reasonable attorney's fees and expenses) incurred by the
Trustee, the Custodian or the Securities Administrator arising out of or in
connection with the acceptance or administration of its respective obligations
and duties under this Agreement, including the Cap Contracts and any and all
other agreements related hereto (including any pending or threatened claim or
legal action), including other than any loss, liability or expense (i) for which
the Trustee is indemnified by the Master Servicer or the Servicer, (ii) that
constitutes a specific liability of the Trustee or the Securities Administrator
pursuant to this Agreement or (iii) any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder by the Trustee or the Securities Administrator or by reason of
reckless disregard of obligations and duties hereunder. In no event shall the
Trustee or the Securities Administrator be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if it has been advised of the likelihood of such loss or
damage and regardless of the form of action. The Master Servicer agrees to
indemnify the Trustee, from, and hold the Trustee harmless against, any loss,
liability or expense (including reasonable attorney's fees and expenses)
incurred by the Trustee by reason of the Master Servicer's willful misfeasance,
bad faith or gross negligence in the performance of its duties under this
Agreement or by reason of the Master Servicer's reckless disregard of its
obligations and duties under this Agreement. The indemnities in this Section
9.05 shall survive the termination or discharge of this Agreement and the
resignation or removal of the Master Servicer, the Trustee, the Securities
Administrator or the Custodian. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from REMIC I therefor.
Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR.
The Trustee and the Securities Administrator shall at all times be a
corporation or an association (other than the Depositor, the Sponsor or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 (or a member of a bank holding company whose capital and surplus is
at least $50,000,000) and subject to supervision or examination by federal or
state authority. If such corporation or association publishes reports of
conditions at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of conditions so published. In case at any time the Trustee or the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.
Section 9.07 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
The Trustee and the Securities Administrator may at any time resign
(including, without limitation in the case of the Securities Administrator, upon
the resignation or removal of the Master Servicer) and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, to the
Master Servicer, to the Securities Administrator (or the Trustee, if the
Securities Administrator resigns) and to the Certificateholders. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
trustee or successor securities administrator by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and to the successor trustee or
successor securities administrator, as applicable. A copy of such instrument
shall be delivered to the Certificateholders, the Trustee, the Securities
Administrator and the Master Servicer by the Depositor. If no successor trustee
or successor securities administrator shall have been so appointed and have
accepted appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee or successor securities
administrator, as applicable.
If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall fail
to resign after written request therefor by the Depositor, or if at any time the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Trustee or the
Securities Administrator, as applicable and appoint a successor trustee or
successor securities administrator, as applicable, by written instrument, in
duplicate, which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee or the Securities Administrator and
appoint a successor trustee or successor securities administrator by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Securities
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the
Trustee (in the case of the removal of the Securities Administrator), the
Securities Administrator (in the case of the removal of the Trustee) and the
Master Servicer by the Depositor.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor trustee or successor securities
administrator pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in Section 9.08.
Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.
Section 9.08 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.
Any successor trustee or successor securities administrator appointed
as provided in Section 9.07 hereof shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee or predecessor securities administrator
instrument accepting such appointment hereunder and thereupon the resignation or
removal of the predecessor trustee or predecessor securities administrator shall
become effective and such successor trustee or successor securities
administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or securities
administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all monies, held by it hereunder,
and the Depositor and the predecessor trustee or predecessor securities
administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee or successor securities administrator all
such rights, powers, duties and obligations.
No successor trustee or successor securities administrator shall accept
appointment as provided in this Section 9.08 unless at the time of such
acceptance such successor trustee or successor securities administrator shall be
eligible under the provisions of Section 9.07 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section 9.08, the successor trustee
or successor securities administrator shall mail notice of the succession of
such trustee or securities administrator hereunder to all Holders of
Certificates. If the successor trustee or successor securities administrator
fails to mail such notice within ten days after acceptance of appointment, the
Depositor shall cause such notice to be mailed at the expense of the Trust Fund.
Section 9.09 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any corporation, state bank or national banking association into which
the Trustee or Securities Administrator may be merged or converted or with which
it may be consolidated or any corporation, state bank or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee or the Securities Administrator shall be a party, or any corporation,
state bank or national banking association succeeding to substantially all of
the corporate trust business of the Trustee or Securities Administrator or shall
be the successor of the Trustee or Securities Administrator hereunder, provided
that such corporation shall be eligible under the provisions of Section 9.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 9.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the REMIC I or property securing the same may at the time be located, the
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of REMIC I, and to vest in such Person or Persons, in such
capacity, and for the benefit of the Holders of the Certificates, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 9.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to a defaulting Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to REMIC I or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trust conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee, or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.
Section 9.11 APPOINTMENT OF OFFICE OR AGENCY.
The Certificates may be surrendered for registration of transfer or
exchange at the Securities Administrator's office initially located at
[___________________________], and presented for final distribution at the
Corporate Trust Office of the Securities Administrator where notices and demands
to or upon the Securities Administrator in respect of the Certificates and this
Agreement may be served.
Section 9.12 REPRESENTATIONS AND WARRANTIES.
The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator, the Servicer and the Depositor as applicable, as of
the Closing Date, that:
(i) It is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
which violation, in its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement or its financial condition.
No litigation is pending or, to the best of its knowledge, threatened
against it, which would prohibit it from entering into this Agreement or, in its
good faith reasonable judgment, is likely to materially and adversely affect
either the ability of it to perform its obligations under this Agreement or its
financial condition.
Section 9.13 TAX MATTERS.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC formed hereunder
qualifies as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
the Trust Fund. The Securities Administrator, as agent on behalf of the Trust
Fund, shall do or refrain from doing, as applicable, the following: (a) the
Securities Administrator shall prepare and file, or cause to be prepared and
filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each such REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Securities Administrator shall apply for an employer identification number
with the Internal Revenue Service via a Form SS-4 or other comparable method for
each REMIC that is or becomes a taxable entity, and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at the
time or times in the manner required by the Code for the Trust Fund; (c) the
Securities Administrator shall make or cause to be made elections, on behalf of
each REMIC formed hereunder to be treated as a REMIC on the federal tax return
of such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) the Securities Administrator shall prepare and forward, or cause
to be prepared and forwarded, to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including without limitation, the calculation of any
original issue discount using the Prepayment Assumption; (e) the Securities
Administrator shall provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Person that is not a Permitted Transferee, or a pass-through
entity in which a Person that is not a Permitted Transferee is the record holder
of an interest (the reasonable cost of computing and furnishing such information
may be charged to the Person liable for such tax); (f) the Securities
Administrator shall, to the extent under its control, conduct the affairs of the
Trust Fund at all times that any Certificates are outstanding so as to maintain
the status of each REMIC formed hereunder as a REMIC under the REMIC Provisions;
(g) the Securities Administrator shall not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC formed hereunder; (h) the Securities Administrator shall
pay, from the sources specified in the last paragraph of this Section 9.12, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC formed hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (i) the
Trustee shall sign or cause to be signed federal, state or local income tax or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 9.13 requiring a signature thereon by the
Trustee; (j) the Securities Administrator shall maintain records relating to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and adjusted basis of the Trust Fund
property determined at such intervals as may be required by the Code, as may be
necessary to prepare the foregoing returns, schedules, statements or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) the Securities Administrator shall not enter
into any arrangement not otherwise provided for in this Agreement by which the
REMICs will receive a fee or other compensation for services nor permit the
REMICs to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code; and (m) as and when necessary and
appropriate, the Securities Administrator shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Securities Administrator to perform its duties
as set forth herein, the Depositor shall provide, or cause to be provided, to
the Securities Administrator within 10 days after the Closing Date all
information or data that the Securities Administrator requests in writing and
determines to be relevant for tax purposes to the valuations and offering prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor, any such additional information or data that the
Securities Administrator may, from time to time, request in order to enable the
Securities Administrator to perform its duties as set forth herein. The
Depositor hereby indemnifies the Securities Administrator for any losses,
liabilities, damages, claims or expenses of the Securities Administrator arising
from any errors or miscalculations of the Securities Administrator that result
from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Securities Administrator on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of
any of REMIC I, REMIC II or REMIC III as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of the Trust Fund as defined
in Section 860G(c) of the Code, on any contribution to any of REMIC I, REMIC II
or REMIC III after the startup day pursuant to Section 860G(d) of the Code, or
any other tax is imposed, including, without limitation, any federal, state or
local tax or minimum tax imposed upon any of REMIC I, REMIC II or REMIC III, and
is not paid as otherwise provided for herein, such tax shall be paid by (i) the
Securities Administrator, if any such other tax arises out of or results from a
breach by the Securities Administrator of any of its obligations under this
Section, (ii) any party hereto (other than the Securities Administrator) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party hereto fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the following order of priority: first, to the Class
[___] Certificates, second, to the Class [___] Certificates, third, to the Class
[___] Certificates, and fourth, to the Senior Certificates (pro rata based on
the amounts to be distributed). Notwithstanding anything to the contrary
contained herein, to the extent that such tax is payable by the Holder of any
Certificates, the Securities Administrator is hereby authorized to retain on any
Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Securities Administrator
shall include in its monthly report to Certificateholders distributions to such
parties taking into account the priorities described in the second preceding
sentence. The Securities Administrator agrees to promptly notify in writing the
party liable for any such tax of the amount thereof and the due date for the
payment thereof. Notwithstanding the foregoing, however, in no event shall the
Securities Administrator have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of this Agreement, (2) for any losses
other than arising out of a grossly negligent performance by the Securities
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
ARTICLE X
TERMINATION
Section 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE
LOANS.
Subject to Section 10.03, the obligations and responsibilities of the
Depositor, the Sponsor, the Securities Administrator, the Master Servicer and
the Trustee created hereby with respect to the Trust Fund shall terminate (other
than the obligations of the Master Servicer to the Trustee pursuant to Section
9.05 and of the Securities Administrator to make payments in respect of the
REMIC I Regular Interests or the Classes of Certificates as hereinafter set
forth) upon the earlier of (a) the Master Servicer's exercise of its optional
right to purchase the Mortgage Loans and related REO Properties (the "Clean-up
Call") and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of twenty-one (21) years from
the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
Ambassador of the United States to the Court of St. ▇▇▇▇▇, living on the date
hereof and (ii) the Latest Possible Maturity Date.
The Cleanup Call shall be exercisable at a price (the "Termination
Price") equal to the sum of (i) 100% of the Stated Principal Balance of Mortgage
Loan, (ii) accrued interest thereon at the applicable Mortgage Rate to, but not
including, the first day of the month of such purchase, (iii) the appraised
value of any related REO Property (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Master Servicer and the Trustee, (iv) unreimbursed
out-of-pocket costs of the Securities Administrator, the Master Servicer, the
Servicer or the Trustee, including unreimbursed servicing advances and the
principal portion of any unreimbursed Advances, made on the related Mortgage
Loans prior to the exercise of such repurchase right and (v) any other amounts
due and owing to the Trustee, the Securities Administrator, the Master Servicer
and the Custodian payable pursuant to this Agreement or the Custodial
Agreements.
The right to exercise the Cleanup Call pursuant to the preceding
paragraph shall be exercisable if the Stated Principal Balance of all of the
Mortgage Loans at the time of any such repurchase, is less than or equal to ten
percent (10%) of the aggregate Cut-off Date Principal Balance of the Mortgage
Loans.
Section 10.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, (i) the Securities Administrator
determines based on the reports delivered by the Master Servicer under this
Agreement that there are no Outstanding Mortgage Loans, and no other funds or
assets in the Trust Fund other than the funds in the Distribution Account, the
Securities Administrator shall notify the Trustee and send a final distribution
notice promptly to each related Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Trustee and the Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the office of the Securities Administrator set forth herein. If the Master
Servicer elects to terminate the Trust Fund pursuant to Section 10.01, at least
twenty (20) days prior to the date notice is to be mailed to the
Certificateholders, the Master Servicer shall notify the Securities
Administrator and the Trustee of the date the Master Servicer intends to
terminate the Trust Fund. The Master Servicer shall remit the Termination Price
to the Securities Administrator on behalf of the Trust Fund on the Business Day
prior to the Distribution Date for such Optional Termination by the Master
Servicer.
Notice of the exercise of the Cleanup Call, specifying the Distribution
Date on which the Certificateholders may surrender their Certificates for
payment of the final distribution and cancellation, shall be given promptly by
the Securities Administrator by letter to the Certificateholders mailed no later
than the fifteenth (15th) day of the month of such final distribution. Any such
notice shall specify (a) the Distribution Date upon which final distribution on
the Certificates will be made upon presentation and surrender of the
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such notice to each Rating
Agency at the time such notice is given to the Certificateholders.
In the event such notice is given, the Master Servicer shall deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon certification to the Trustee by the Securities Administrator
of the making of such final deposit, the Trustee shall promptly release or cause
to be released to the Master Servicer the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments delivered to it and necessary to effectuate such transfer.
Upon presentation and surrender of the related Certificates, the
Securities Administrator shall cause to be distributed to Certificateholders of
each Class the amounts allocable to such Certificates held in the Distribution
Account in the order and priority set forth in Section 5.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six (6) months after the date specified in
the above mentioned written notice, the Securities Administrator shall give a
second written notice to the remaining affected Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six (6) months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining affected Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within two (2) years after the second notice all affected Certificates shall not
have been surrendered for cancellation, the related Residual Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund that
remain subject hereto and the Securities Administrator shall release such funds
upon written direction.
Section 10.03 ADDITIONAL TERMINATION REQUIREMENTS.
In the event of (i) the exercise by the Master Servicer of the Cleanup
Call pursuant to the terms of this Agreement, or (ii) the final payment on or
other liquidation of the last Mortgage Loan or REO Property in REMIC I pursuant
to Section 10.01, the following additional requirements, unless the Trustee has
been supplied with an Opinion of Counsel, at the expense of the Master Servicer
(in the case of the exercise of the Cleanup Call) or the Depositor, to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 10.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
(1) The Master Servicer (in the case of the exercise of
the Cleanup Call) or the Depositor (in all other
cases) shall establish a ninety-day liquidation period
and notify the Trustee thereof, and the Trustee shall
in turn specify the first day of such period in a
statement attached to the tax return for each of REMIC
I, REMIC II and REMIC III pursuant to Treasury
Regulation Section 1.860F-1. The Master Servicer or
the Depositor, as applicable, shall satisfy all the
requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer or the Depositor, as
applicable;
(2) During such ninety-day liquidation period, and at or
prior to the time of making the final payment on the
Certificates, the Master Servicer (in the case of the
exercise of the Cleanup Call) or the Depositor (in all
other cases) shall sell all of the assets of REMIC I
for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit,
or cause to be distributed or credited, to the Holders
of the related Residual Certificates all cash on hand
in the Trust Fund (other than cash retained to meet
claims), and the Trust Fund shall terminate at that
time.
By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer (in the case of the exercise of the Cleanup Call)
or the Depositor (in all other cases) to specify the ninety-day liquidation
period for REMIC I, REMIC II and REMIC III, which authorization shall be binding
upon all successor Certificateholders.
The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer or the Depositor, as applicable, and the receipt of the Opinion of
Counsel referred to in Section 10.03(1) and to take such other action in
connection therewith as may be reasonably requested by the Master Servicer or
the Depositor, as applicable.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 AMENDMENT.
This Agreement may be amended from time to time by parties hereto,
without the consent of any of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein, to change the manner in which the
Distribution Account maintained by the Securities Administrator or the Custodial
Account maintained by the Servicer is maintained or to make such other
provisions with respect to matters or questions arising under this Agreement as
shall not be inconsistent with any other provisions herein if such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder; provided that any such amendment
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II and REMIC III as a REMIC under the Code or to avoid
or minimize the risk of the imposition of any tax on any of REMIC I, REMIC II or
REMIC III pursuant to the Code that would be a claim against any of REMIC I,
REMIC II or REMIC III at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the parties
hereto and the Holders of each Class of Certificates affected thereby evidencing
over 50% of the Voting Rights of such Class or Classes for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) cause
any of REMIC I, REMIC II or REMIC III to cease to qualify as a REMIC or (iii)
reduce the aforesaid percentages of Certificates of each Class the Holders of
which are required to consent to any such amendment without the consent of the
Holders of all Certificates of such Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not (other than an amendment
pursuant to clause (ii) of, and in accordance with, the preceding paragraph)
cause the imposition of any tax on REMIC I, REMIC II or REMIC III or the
Certificateholders or cause REMIC I, REMIC II or REMIC III to cease to qualify
as a REMIC at any time that any Certificates are outstanding. Further, nothing
in this Agreement shall require the Trustee to enter into an amendment without
receiving an Opinion of Counsel, satisfactory to the Trustee that (i) such
amendment is permitted and is not prohibited by this Agreement and (ii) that all
requirements for amending this Agreement (including any consent of the
applicable Certificateholders) have been complied with.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Sponsor or the Depositor shall effect such recordation
at the Trust's expense upon the request in writing of a Certificateholder, but
only if such direction is accompanied by an Opinion of Counsel (provided at the
expense of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF OTHER THAN THE PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
Section 11.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the conveyance of
the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Sponsor to the Depositor, and by the Depositor to the Trust Fund be, and be
construed as, an absolute sale thereof to the Depositor or the Trust Fund, as
applicable. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Sponsor to the Depositor, or by the
Depositor to the Trust Fund. However, in the event that, notwithstanding the
intent of the parties, such assets are held to be the property of the Sponsor or
the Depositor, as applicable, or if for any other reason this Agreement is held
or deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) each conveyance provided for
in this Agreement shall be deemed to be an assignment and a grant by the Sponsor
or the Depositor, as applicable, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
Section 11.05 NOTICES.
(a) The Securities Administrator shall use its best efforts to promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Servicer Default or Master Servicer
Default that has not been cured;
(iii) The resignation or termination of the Servicer, the
Master Servicer or the Trustee and the appointment of any successor;
(iv) The final payment to Certificateholders;
(v) Each annual statement as to compliance described in
Section 4.14; and
(vi) Each attestation report described in Section 4.15.
In addition, the Servicer shall promptly furnish to each Rating Agency
copies of the following:
(i) Each Annual Statement of Compliance described in Section
3.13 of this Agreement; and
(ii) Each Assessment of Compliance and Attestation Report
described in Section 3.14.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Nomura Asset Acceptance Corp., 2 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Nomura Asset Acceptance
Corporation, Alternative Loan Trust, [___________]; (ii) in the case of the
Sponsor, Nomura Credit & Capital, Inc., 2 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Nomura Asset Acceptance Corporation,
Alternative Loan Trust, Series [___________] or such other address as may be
hereafter furnished to the other parties hereto by the Sponsor in writing; (iii)
in the case of the Servicer, [______________], [____________________________],
Attention: [__________]; (iv) in the case of the Trustee, at each Corporate
Trust Office or such other address as the Trustee may hereafter furnish to the
other parties hereto; (v) in the case of the Custodian, [______________],
[____________________________], Attention: [__________] as applicable, (vi) in
the case of the Securities Administrator, its Corporate Trust Office; (vii) in
the case of the Master Servicer, [______________],
[____________________________], Attention: [__________]) and (viii) in the case
of the Rating Agencies, (x) Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Group and (y) ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Home Equity Monitoring. Any notice delivered to the Sponsor or the Trustee under
this Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise provided herein,
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register; any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Section 11.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 7.02, this Agreement may not be assigned by the
Sponsor or the Depositor.
Section 11.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee, a written notice
of the Servicer Default and of the continuance thereof, as hereinbefore
provided, the Holders of Certificates evidencing not less than twenty five
percent (25%) of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or proceeding
in its own name as Trustee, hereunder and shall have offered to the Trustee such
indemnity satisfactory to it as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee or for sixty (60)
days after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 11.08, each
and every Certificateholder or the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 11.09 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 11.10 INTENTION OF THE PARTIES AND INTERPRETATION.
Each of the parties acknowledges and agrees that the purpose of
Sections 3.13, 3.14, 3.18, 4.14, 4.15 and 5.11 of this Agreement is to
facilitate compliance by the Sponsor and the Depositor with the provisions of
Regulation AB promulgated by the SEC under the Exchange Act (17 C.F.R. ▇▇.▇▇.
229.1100 - 229.1123), as such may be amended from time to time and subject to
clarification and interpretive advice as may be issued by the staff of the SEC
from time to time. Therefore, each of the parties agrees that (a) the
obligations of the parties hereunder shall be interpreted in such a manner as to
accomplish that purpose, (b) the parties' obligations hereunder will be
supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB, (c) the parties
shall comply with requests made by the Sponsor or the Depositor for delivery of
additional or different information as the Sponsor or the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation
AB, and (d) no amendment of this Agreement shall be required to effect any such
changes in the parties' obligations as are necessary to accommodate evolving
interpretations of the provisions of Regulation AB.
IN WITNESS WHEREOF, the Depositor, the Sponsor, the Servicer, the
Master Servicer, the Securities Administrator and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
NOMURA ASSET ACCEPTANCE CORPORATION,
as Depositor
By:__________________________________________
Name:
Title:
NOMURA CREDIT & CAPITAL, INC.,
as Sponsor
By:__________________________________________
Name:
Title:
[_____________________],
as Master Servicer and Securities Administrator
By:__________________________________________
Name:
Title:
[_____________________],
as Trustee
By:__________________________________________
Name:
Title:
[____________________],
as Servicer
By:__________________________________________
Name:
Title:
With respect to Sections 3.33 and 3.34
[_________________________], as Credit Risk Manager
By:__________________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of [___________], before me, a notary public
in and for said State, appeared _____________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Nomura
Asset Acceptance 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
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of [___________] before me, a notary public
in and for said State, appeared _____________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Nomura
Credit & Capital, Inc., that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _________________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[______________], one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[_____________________] that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of [___________], before me, a notary public
in and for said State, appeared _______________, personally known to me on the
basis of satisfactory evidence to be an authorized representative of
[_____________________] that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]