EXHIBIT 4.1
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DEUTSCHE ALT-A SECURITIES, INC.
Depositor
and
[ ]
Master Servicer and Securities Administrator
and
[ ]
Trustee
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FORM OF
POOLING AND SERVICING AGREEMENT
Dated as of [ ], [ ]
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Mortgage Pass-Through Certificates
Series [ ]
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS...............................................
Section 1.1 Definitions...............................................
Section 1.2 Allocation of Certain Interest Shortfall..................
ARTICLE II CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF
CERTIFICATES..............................................
Section 2.1 Conveyance of Trust Fund..................................
Section 2.2 Acceptance by Trustee.....................................
Section 2.3 Repurchase or Substitution of Loans.......................
Section 2.4 Authentication and Delivery of Certificates; Designation
of Certificates as REMIC Regular Interests and
Residual Interests........................................
Section 2.5 Representations and Warranties of the Master Servicer.....
Section 2.6 Conveyance of Subsequent Loans............................
Section 2.7 Establishment of the Trust................................
Section 2.8 Purposes and Powers of the Trust..........................
ARTICLE III ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS.......
Section 3.1 Master Servicer...........................................
Section 3.2 REMIC-Related Covenants...................................
Section 3.3 Monitoring of Servicers...................................
Section 3.4 Fidelity Bond.............................................
Section 3.5 Power to Act; Procedures..................................
Section 3.6 Due-on-Sale Clauses; Assumption Agreements................
Section 3.7 Release of Mortgage Files.................................
Section 3.8 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee...........................
Section 3.9 Standard Hazard Insurance and Flood Insurance Policies....
Section 3.10 Presentment of Claims and Collection of Proceeds..........
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies....
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.............................................
Section 3.13 Realization Upon Defaulted Loans..........................
Section 3.14 Compensation for the Master Servicer......................
Section 3.15 REO Property..............................................
Section 3.16 Annual Statement as to Compliance.........................
Section 3.17 Assessments of Compliance and Attestation Reports.........
Section 3.18 Reserved..................................................
Section 3.19 Reserved..................................................
Section 3.20 Obligation of the Master Servicer in Respect of
Compensating Interest.....................................
Section 3.21 Reserved..................................................
Section 3.22 Protected Accounts........................................
Section 3.23 Distribution Account......................................
Section 3.24 Permitted Withdrawals and Transfers from the Distribution
Account...................................................
Section 3.25 Class [ ] Reserve Fund..............................
Section 3.26 Pre-Funding Account.......................................
Section 3.27 Capitalized Interest Account..............................
Section 3.28 Prepayment Penalty Verification...........................
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS....................................
Section 4.1 Distributions to Certificateholders.......................
Section 4.2 Allocation Realized Losses................................
Section 4.3 Reduction of Certificate Principal Balances on the
Certificates..............................................
Section 4.4 Compliance with Withholding Requirements..................
Section 4.5 Distributions on the REMIC I Regular Interests............
Section 4.6 monthly statements to Certificateholders..................
Section 4.7 Advances..................................................
ARTICLE V THE CERTIFICATES..........................................
Section 5.1 The Certificates..........................................
Section 5.2 Registration of Transfer and Exchange of Certificates.....
Section 5.3 Mutilated, Destroyed, Lost or Stolen Certificates.........
Section 5.4 Persons Deemed Owners.....................................
Section 5.5 Certain Available Information.............................
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER AND THE CREDIT RISK
MANAGER...................................................
Section 6.1 Liability of the Depositor and the Master Servicer........
Section 6.2 Merger or Consolidation of the Depositor or the Master
Servicer..................................................
Section 6.3 Limitation on Liability of the Depositor, the Master
Servicer, the Servicers, the Securities
Administrator and Others..................................
Section 6.4 Limitation on Resignation of the Master Servicer..........
Section 6.5 Assignment of Master Servicing............................
Section 6.6 Rights of the Depositor in Respect of the Master Servicer.
Section 6.7 Duties of the Credit Risk Manager.........................
Section 6.8 Limitation Upon Liability of the Credit Risk Manager......
Section 6.9 Removal of the Credit Risk Manager........................
Section 6.10 Transfer of Servicing by [ ] of Certain Loans
Serviced by [ ]......................................
ARTICLE VII DEFAULT...................................................
Section 7.1 Master Servicer Events of Default.........................
Section 7.2 Trustee to Act; Appointment of Successor..................
Section 7.3 Notification to Certificateholders........................
Section 7.4 Waiver of Master Servicer Events of Default...............
ARTICLE VIII CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR...
Section 8.1 Duties of Trustee and Securities Administrator............
Section 8.2 Certain Matters Affecting Trustee and Securities
Administrator.............................................
Section 8.3 Trustee and Securities Administrator not Liable for
Certificates or Loans.....................................
Section 8.4 Trustee, Master Servicer and Securities Administrator May
Own Certificates..........................................
Section 8.5 Fees and Expenses of Trustee and Securities Administrator.
Section 8.6 Eligibility Requirements for Trustee and Securities
Administrator.............................................
Section 8.7 Resignation and Removal of Trustee and Securities
Administrator.............................................
Section 8.8 Successor Trustee or Securities Administrator.............
Section 8.9 Merger or Consolidation of Trustee or Securities
Administrator.............................................
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............
Section 8.11 Appointment of Office or Agency...........................
Section 8.12 Representations and Warranties of the Trustee.............
Section 8.13 Reports Filed with Securities and Exchange Commission.....
Section 8.14 Intention of Parties and Interpretation...................
ARTICLE IX TERMINATION...............................................
Section 9.1 Termination Upon Purchase or Liquidation of the Loans.....
Section 9.2 Additional Termination Requirements.......................
ARTICLE X REMIC PROVISIONS..........................................
Section 10.1 REMIC Administration......................................
Section 10.2 Prohibited Transactions and Activities....................
Section 10.3 Indemnification...........................................
ARTICLE XI MISCELLANEOUS PROVISIONS..................................
Section 11.1 Amendment.................................................
Section 11.2 Recordation of Agreement; Counterparts....................
Section 11.3 Limitation on Rights of Certificateholders................
Section 11.4 Governing Law.............................................
Section 11.5 Notices...................................................
Section 11.6 Severability of Provisions................................
Section 11.7 Notice to Rating Agencies.................................
Section 11.8 Article and Section References............................
Section 11.9 Grant of Security Interest................................
EXHIBITS
Exhibit A-1 - Form of Class [ ] Certificates
Exhibit A-2 - Form of Class [ ] Certificates
Exhibit A-3 - Form of Class [ ] Certificates
Exhibit A-4 - Form of Class [ ] Certificates
Exhibit A-5 - Form of Class [ ] Certificates
Exhibit A-6 - Form of Class [ ] Certificates
Exhibit A-7 - Form of Class [ ] Certificates
Exhibit A-8 - Form of Class [ ] Certificates
Exhibit A-9 - Form of Class [ ] Certificates
Exhibit A-10 - Form of Class [ ] Certificates
Exhibit A-11 - Form of Class [ ] Certificates
Exhibit A-12 - Form of Class [ ] Certificates
Exhibit B-1 - Form of Rule 144A Investment Letter
Exhibit B-2 - Form of Investment Letter (Non-Rule 144A)
Exhibit B-3 - Form of Regulation S Transfer Certificate
Exhibit B-4 - Form of Clearing System Certificate
Exhibit C - Form of Transfer Affidavit
Exhibit D - Form of Addition Notice
Exhibit E - Form of Subsequent Transfer Instrument
Exhibit F - Servicing Criteria to Be Addressed in Assessment
of Compliance
Schedule One - Loan Schedule
Schedule Two - Prepayment Charge Schedule
Schedule Three - Identified Subsequent Loans
This Pooling and Servicing Agreement, dated and effective as of [ ],
20[ ] (this "Agreement"), is executed by and among Deutsche Alt-A Securities,
Inc., as depositor (the "Depositor"), [ ], as master servicer (the "Master
Servicer") and securities administrator (the "Securities Administrator"), and [
], [ ], as trustee (the "Trustee"). Capitalized terms used in this Agreement and
not otherwise defined have the meanings ascribed to such terms in Article I
hereof.
PRELIMINARY STATEMENT
The Depositor at the Closing Date is the owner of the Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
Fund. The Trust Fund will consist of a segregated pool of assets comprised of
the Loans, the Subsequent Loans and certain other assets. On the Closing Date,
the Depositor will acquire the Certificates from the Trust Fund as consideration
for its transfer to the Trust Fund of the Loans and certain other assets and
will be the owner of the Certificates. The Depositor has duly authorized the
execution and delivery of this Agreement to provide for the conveyance to the
Trustee of the Loans and the issuance to the Depositor of the Certificates
representing in the aggregate the entire beneficial ownership of the Trust Fund.
All covenants and agreements made by the Depositor, the Master Servicer, the
Securities Administrator and the Trustee herein with respect to the Loans and
the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates. The Depositor, the Master
Servicer, the Securities Administrator and the Trustee are entering into this
Agreement, and the Trustee is accepting the trust created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates issued hereunder, other than the [ ] Certificates and
Class [ ] Certificates, have been offered for sale pursuant to a Prospectus,
dated [ ], 20[ ], and a Prospectus Supplement, dated [ ], 20[ ] of the Depositor
(together, the "Prospectus"). The [ ] Certificates have been offered for sale
pursuant to a Private Placement Memorandum, dated [ ], 20[ ]. The Trust Fund
created hereunder is intended to be the "Trust" as described in the Prospectus
and the Certificates are intended to be the "Certificates" described therein.
REMIC I
As provided herein, the Trustee will make an election to treat the
segregated pool of assets described in the definition of REMIC I (as defined
herein), and 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 REMIC I Regular Interests will be
the "regular interests" in REMIC I and Component [ ] of the Class [ ]
Certificates will represent the sole Class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein) under the 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.
UNCERTIFICATED INITIAL
REMIC I REMIC I UNCERTIFICATED LATEST POSSIBLE
REGULAR INTEREST DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE(1)
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(1) [For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the latest
possible maturity date for the Loans has been designated as the "latest
possible maturity date" for each REMIC I Regular Interest.]
(2) [Calculated in accordance with the definition of "Uncertificated REMIC
I Pass-Through Rate" herein.]
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". Component [ ] of the Class [ ] Certificates shall
represent the sole Class of "residual interests" in REMIC II for purposes of the
REMIC Provisions under federal income tax law. The following table irrevocably
sets forth the designations, the Pass-Through Rate and initial aggregate
Certificate Principal Balance for each Class of Certificates which, together
with Component [ ], constitute the entire beneficial interests in REMIC II.
Determined for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each Class of
Certificates shall be the Distribution Date in the month following the maturity
date for the Loan with the latest maturity date:
INITIAL AGGREGATE
CERTIFICATE
PRINCIPAL BALANCE OR LATEST POSSIBLE
CLASS DESIGNATION NOTIONAL AMOUNT PASS-THROUGH RATE MATURITY DATE(1)
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(1) [The Distribution Date in the month after the maturity date for the
latest maturing Loan. 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 loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.]
(2) [Calculated in accordance with the definition of "Pass-Through Rate"
herein. The Pass-Through Rate for the first Interest Accrual Period for
the Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ] and Class [ ] Certificates
for the first Interest Accrual Period is [ ]%, [ ]%, [ ]%, [ ]%, [ ]%,
[ ]%, [ ]%, [ ]%, [ ]%, [ ]% and [ ]%, respectively.]
(3) [The Class [ ] Certificates will accrue interest at the Pass-Through
Rate (calculated in accordance with the definition of "Pass-Through
Rate" herein) on the Notional Amount of the Class [ ] Certificates
calculated in accordance with the definition of "Notional Amount"
herein. The Class [ ] Certificates will not be entitled to
distributions in respect of principal. ]
(4) [The Class [ ] Certificates will accrue interest at the Pass-Through
Rate (calculated in accordance with the definition of "Pass-Through
Rate" herein) on the Notional Amount of the Class [ ] Certificates
calculated in accordance with the definition of "Notional Amount"
herein. The Class [ ] Certificates will not be entitled to
distributions in respect of principal.]
(6) [The Class [ ] Certificates will accrue interest at the Pass-Through
Rate (calculated in accordance with the definition of "Pass-Through
Rate" herein) on the Notional Amount of the Class [ ] Certificates
calculated in accordance with the definition of "Notional Amount"
herein. The Class [ ] Certificates will not be entitled to
distributions in respect of principal. ]
(7) [The Class [ ] Certificates will accrue interest at a per annum rate
equal to [ ]%.]
(8) [Calculated in accordance with the definition of "Pass-Through Rate"
herein. The subordinate pass-through rate for the first Interest
Accrual Period is [ ]%.]
W I T N E S S E T H
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Loan, those
customary mortgage servicing practices of prudent mortgage servicing
institutions that master service mortgage loans of the same type and quality as
such 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 a Servicer).
ACCOUNT: The Distribution Account, the Pre-Funding Account, the
Capitalized Interest Account and any Protected Account as the context may
require.
ADDITION NOTICE: With respect to the transfer of Subsequent Loans to
the Trust Fund pursuant to Section 2.6, a notice of the Depositor's designation
of the Subsequent Loans to be sold to the Trust Fund and the aggregate principal
balance of such Subsequent Loans as of the Subsequent Cut-off Date. The Addition
Notice shall be given not later than [ ] Business Days prior to the related
Subsequent Transfer Date and shall be substantially in the form attached hereto
as Exhibit D.
ADJUSTABLE RATE CERTIFICATES: The Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates.
ADVANCE: Either (i) a Monthly Advance made by a Servicer as such term
is defined in and pursuant to the related Servicing Agreement or (ii) an advance
made by the Master Servicer or the Trustee pursuant to Section 4.7.
ADVERSE REMIC EVENT: As defined in Section 10.1(f).
AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of a Servicer or the Depositor to determine
whether any Person is an Affiliate of such party.
AGGREGATE SENIOR PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Senior Certificates (other than the Class [
], Class [ ], Class [ ], Class [ ] and Class [ ] Certificates) immediately prior
to that Distribution Date, and the denominator of which is the sum of the
Scheduled Principal Balances of the Loans as of the first day of the related Due
Period (exclusive of the Group I Discount Fraction of the Scheduled Principal
Balance of each Group I Discount Loan and the Group I Discount Fraction of the
Scheduled Principal Balance of each Group I Discount Loan).
AGGREGATE SUBORDINATE AMOUNT: With respect to any date of
determination, an amount equal to the excess of the aggregate Scheduled
Principal Balance of the Loans (exclusive of the Group I Discount Fraction of
the Scheduled Principal Balance of each Group I Discount Loan and the Group II
Discount Fraction of the Scheduled Principal Balance of each Group II Discount
Loan) over the aggregate Certificate Principal Balance of the Senior
Certificates (other than the Class [ ], Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates) then outstanding.
AGGREGATE SUBORDINATE PERCENTAGE: With respect to any Distribution
Date, [ ]% minus the Aggregate Senior Percentage for that Distribution Date.
AGREEMENT: This Pooling and Servicing Agreement and all amendments and
supplements hereto.
[ ] MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement dated as of [ ], 20[ ] between the Depositor and [ ].
[ ] HOME SERVICING AGREEMENT: Shall mean the Master Mortgage Loan
Purchase and Interim Servicing Agreement, dated as of [ ], 20[ ], among [ ], [ ]
and [ ], as amended (as modified pursuant to the related Assignment Agreement).
ANNIVERSARY: Each anniversary of the Cut-Off Date.
ANNUAL STATEMENT OF COMPLIANCE: As defined in Section 3.16.
APPRAISED VALUE: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Loan.
ASSESSMENT OF COMPLIANCE: As defined in Section 3.17.
ASSIGNMENT: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction where the related Mortgaged Property is located to reflect of
record the sale and assignment of the Loan to the Trustee, which assignment,
notice of transfer or equivalent instrument may, if permitted by law, be in the
form of one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county.
ASSIGNMENT AGREEMENTS: Shall mean (i) the Assignment, Assumption and
Recognition Agreement, dated as of [ ], 20[ ], among [ ], the Depositor and [ ],
pursuant to which the [ ] Servicing Agreement was assigned to the Depositor,
(ii) the Assignment, Assumption and Recognition Agreement, dated as of [ ], 20[
], among [ ], the Depositor and [ ], pursuant to which the [ ] Servicing
Agreement was assigned to the Depositor, (iii) the Assignment, Assumption and
Recognition Agreement, dated as of [ ], 200[], among [ ], the Depositor and [ ],
pursuant to which the [ ] Servicing Agreement was assigned to the Depositor,
(iv) the Assignment, Assumption and Recognition Agreement, dated as of [ ], 20[
], among [ ], the Depositor and [ ], pursuant to which the [ ] Servicing
Agreement was assigned to the Depositor, (v) the Assignment, Assumption and
Recognition Agreement, dated as of [ ], 200[], among DBSP, the Depositor and [
], pursuant to which the [ ] Servicing Agreement was assigned to the Depositor
and (vi) the Assignment, Assumption and Recognition Agreement (the "[ ]
Assignment Agreement"), dated as of [ ], 20[ ], between the Depositor and [ ],
pursuant to which the [ ] Servicing Agreement was assigned to the Depositor.
ATTESTATION REPORT: As defined in Section 3.17.
AUTHORIZED DENOMINATION: With respect to the Certificates (other than
the Class [ ] Certificates and Residual Certificates), a minimum initial
Certificate Principal Balance or Notional Amount of $[ ] each and integral
multiples of $[ ] in excess thereof as set forth on the face thereof. With
respect to the Class [ ] Certificates, a minimum initial Certificate Principal
Balance of $[ ] and integral multiples in excess thereof as set forth on the
face thereof. With respect to the Class [ ] Certificates, one Certificate with a
Percentage Interest equal to [ ]% as set forth on the face thereof.
AVAILABLE DISTRIBUTION AMOUNT: Any of the Group I Available
Distribution Amount or Group II Available Distribution Amount.
BANKRUPTCY COVERAGE: As of the Cut-Off Date, $[ ]. Bankruptcy Coverage
will be reduced, from time to time, by the amount of Bankruptcy Losses allocated
to the Certificates.
BANKRUPTCY LOSS: Any Debt Service Reduction or Deficient Valuation.
BASIS RISK CARRYOVER AMOUNT: With respect to the Class [ ]
Certificates, an amount equal to the sum of (i) the excess of (x) the amount of
interest the Class [ ] Certificates would have been entitled to receive on such
Distribution Date had the Pass-Through Rate applicable to the Class [ ]
Certificates for such Distribution Date been equal to One-Month LIBOR plus [ ]%
per annum over (y) the amount of interest paid on such Distribution Date at a
rate equal to [ ]% per annum and (ii) the Basis Risk Carryover Amount for the
previous Distribution Date not previously distributed, together with interest
thereon at a rate equal to the Pass-Through Rate applicable to the Class [ ]
Certificates for the most recently ended Interest Accrual Period determined
without taking into account the fixed rate set forth in clause (y) above.
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a Depository Participant or an Indirect
Depository Participant or a Person holding a beneficial interest in any
Definitive Certificate.
BOOK-ENTRY CERTIFICATES: The Senior Certificates (other than the Class
[ ] Certificates), Class [ ], Class [ ] and Class [ ] Certificates.
BUSINESS DAY: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Maryland, Minnesota or New York or the city in
which the Corporate Trust Office of the Trustee is located, are authorized or
obligated by law or executive order to be closed.
CAP CONTRACT: Shall mean the Cap Contract between the Trustee and The
Bank of New York, together with any successor thereto, for the benefit of the
Holders of the Class [ ] Certificates.
CAPITALIZED INTEREST ACCOUNT: The account established and maintained
pursuant to Section 3.27.
CAPITALIZED INTEREST REQUIREMENT: On the Closing Date, $[ ], and on any
date thereafter, [ ] interest accrued on the amount in the Pre-Funding Account
at the weighted average of the Net Mortgage Rates of the Loans.
CERTIFICATE: Any one of the Certificates issued pursuant to this
Agreement, executed and authenticated by or on behalf of the Securities
Administrator hereunder in substantially one of the forms set forth in Exhibits
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇ ▇▇▇ ▇-▇▇ hereto.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate or Global
Certificate, the Person who is the beneficial owner of such Certificate as
reflected on the books of the Depository or on the books of a Depository
Participant or on the books of an Indirect Depository Participant.
CERTIFICATE PRINCIPAL BALANCE: The Certificate Principal Balance with
respect to any Senior Certificate (other than the Class [ ], Class [ ] and Class
[ ] Certificates, which have no Certificate Principal Balance) and any
Subordinate Certificate outstanding at any time, represents the then maximum
amount that the holder of such Certificate is entitled to receive as
distributions allocable to principal from the cash flow on the Loans in the
related Loan Group and the other assets in the Trust Fund. The Certificate
Principal Balance of a Senior Certificate (other than the Class [ ], Class [ ]
and Class [ ] Certificates, which have no Certificate Principal Balance) and any
Subordinate Certificate, as of any date of determination is equal to the initial
Certificate Principal Balance of such Certificate reduced by the aggregate of
(i) all amounts allocable to principal previously distributed with respect to
that Certificate and (ii) any reductions in the Certificate Principal Balance of
such Certificate deemed to have occurred in connection with allocations of
Realized Losses, if any. The initial Certificate Principal Balance of each Class
of Certificates is set forth in the Preliminary Statement hereto. When used in
reference to a Class, the term Certificate Principal Balance means the aggregate
of the Certificate Principal Balances of all Certificates of such Class, and
when used in reference to a group of Certificates (such as the Group I Senior
Certificates and Subordinate Certificates) shall mean the aggregate Certificate
Principal Balances of all Classes of Certificates included in such group.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.2.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor, the Master Servicer, the Securities Administrator, the
Trustee or any Affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained. The Trustee or the Securities
Administrator may conclusively rely upon a certificate of the Depositor, [ ] or
the Master Servicer in determining whether a Certificate is held by an Affiliate
thereof. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee or the
Securities Administrator shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
CLASS: All Certificates having the same priority and rights to payments
from the related Available Distribution Amount, designated as a separate Class,
as set forth in the forms of Certificates attached hereto as Exhibits ▇-▇, ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇▇, ▇-▇▇ and A-12, as applicable.
CLASS [ ] CERTIFICATES: The Class [ ], Class [ ], Class [ ], Class [ ]
and Class [ ] Certificates.
CLASS [ ] CERTIFICATES: The Class [ ] Certificates and Class [ ]
Certificates.
CLASS [ ] RESERVE FUND: The separate trust account created and
maintained by the Securities Administrator pursuant to Section 3.25 of this
Agreement for the benefit of the Class [ ] Certificates.
CLASS [ ]/CLASS [ ] PRIORITY AMOUNT: For any Distribution Date shall
equal the lesser of (a) the Principal Distribution Amount for the Group I Loans
and (b) the product of (i) the sum of the Principal Distribution Amount and the
Principal Prepayment Amount for the Group I Mortgage loans (exclusive of the
Group I Discount Fractional Principal Amount), (ii) the Class [ ]/Class [ ]
Priority Percentage and (iii) the Shift Percentage.
CLASS [ ]/CLASS [ ] PRIORITY PERCENTAGE: For any Distribution Date
shall be the percentage equivalent of a fraction, the numerator of which is the
sum of the Certificate Principal Balances of the Class [ ] Certificates and
Class [ ] Certificates, and the denominator of which is the aggregate Scheduled
Principal Balance of the Group I Loans (exclusive of the applicable Group I
Discount Fraction of the Scheduled Principal Balance of each Group I Discount
Loan).
CLASS [ ]/CLASS [ ] PRIORITY AMOUNT: For any Distribution Date shall
equal the lesser of (a) the Principal Distribution Amount for the Group II Loans
and (b) the product of (i) the sum of the Principal Distribution Amount and the
Principal Prepayment Amount for the Group II Loans (exclusive of the Group II
Discount Fractional Principal Amount), (ii) the Class [ ]/Class [ ] Priority
Percentage and (iii) the Shift Percentage.
CLASS [ ]/CLASS [ ] PRIORITY PERCENTAGE: For any Distribution Date
shall be the percentage equivalent of a fraction, the numerator of which is the
sum of the Certificate Principal Balances of the Class [ ] Certificates and
Class [ ] Certificates, and the denominator of which is the aggregate Scheduled
Principal Balance of the Group II Loans (exclusive of the applicable Group II
Discount Fraction of the Scheduled Principal Balance of each Group II Discount
Loan). CLEARING AGENCY: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be the Depository.
CLEARING AGENCY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
CLEARSTREAM: Clearstream, Luxembourg, societe anonyme (formerly known
as Cedelbank), a corporation organized under the laws of the Duchy of
Luxembourg.
CLOSING DATE: [ ], 20[ ].
CODE: The Internal Revenue Code of 1986, as amended.
COLLATERAL DEFICIENCY AMOUNT: With respect to a Loan Group and any
Distribution Date prior to the Credit Support Depletion Date, the amount by
which (i) the aggregate Certificate Principal Balance of the related Senior
Certificates (other than the Class [ ], Class [ ] and Class [ ] Certificates),
after giving effect to payments of principal (other than the related Collateral
Deficiency Amount) on that Distribution Date exceeds (ii) the Scheduled
Principal Balance of the Loans in the related Loan Group as of the last day of
the related Due Period.
COMPENSATING INTEREST: For any Distribution Date (a) with respect to
the Loans serviced by [ ], [ ], [ ] and [ ] pursuant to the [ ] Servicing
Agreement, the lesser of (i) the aggregate Prepayment Interest Shortfalls and
Curtailment Shortfalls for such Loans made during the related Prepayment Period
and (ii) the aggregate Servicing Fee payable to such Servicer for the related
Due Period, (b) with respect to the Loans serviced by [ ], the lesser of (i) the
aggregate Prepayment Interest Shortfalls for such Loans made during the related
Prepayment Period with respect to prepayments in full or in part and (ii) the
aggregate Servicing Fee payable to [ ] for the related Due Period and (c) with
respect to the Loans serviced by [ ] pursuant to the [ ] Servicing Agreement,
the lesser of (i) the aggregate Prepayment Interest Shortfalls for such Loans
made during the portion of the related Prepayment Period occurring between the [
] day of the month preceding the month in which such Distribution Date occurs
and ending on the last day of the calendar month preceding the month in which
such Distribution Date occurs and (ii) the aggregate Servicing Fee payable to [
] for the related Due Period.
COMPONENT [ ]: The uncertificated residual interest in REMIC I.
COMPONENT [ ]: The uncertificated residual interest in REMIC II.
CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee or the Securities Administrator, as the case may be, at which at any
particular time its corporate trust business in connection with this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at (i) with respect to the Trustee, [ ] or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Securities
Administrator, or (ii) with respect to the Securities Administrator, (A) for
Certificate transfer and surrender purposes, [ ], Attention: [ ] and (B) for all
other purposes, [ ], Attention: [ ], or at such other address as the Securities
Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer and the Trustee.
CORRESPONDING CERTIFICATE: With respect to each REMIC I Regular
Interest listed below, the corresponding Class of Regular Certificates listed
below:
REMIC I Regular Interest Class
------------------------ -----
[ ] [ ]
CREDIT RISK MANAGEMENT AGREEMENT OR CREDIT RISK MANAGEMENT AGREEMENTS:
Each agreement between the Credit Risk Manager and a Servicer or the Master
Servicer, regarding the loss mitigation and advisory services to be provided by
the Credit Risk Manager.
CREDIT RISK MANAGEMENT FEE: The amount payable to the Credit Risk
Manager on each Distribution Date as compensation for all services rendered by
it in the exercise and performance of any and all powers and duties of the
Credit Risk Manager under any Credit Risk Management Agreement, which amount
shall equal [ ] of the product of (i) the Credit Risk Management Fee Rate
multiplied by (ii) the Scheduled Principal Balance of the Loans and any related
REO Properties as of the first day of the related Due Period.
CREDIT RISK MANAGEMENT FEE RATE: [ ] per annum.
CREDIT RISK MANAGER: [ ] formerly known as [ ], a [ ] corporation, and
its successors and assigns.
CREDIT SUPPORT DEPLETION DATE: The Distribution Date on which the
aggregate Certificate Principal Balance of the Subordinate Certificates has been
reduced to [ ], prior to giving effect to principal distributions thereon and
the allocation of Realized Losses on such Distribution Date.
CROSS PAYMENT TRIGGER DATE: Any Distribution Date on which (i) the
aggregate Certificate Principal Balance of the Senior Certificates related to a
Loan Group (other than the Class [ ], Class [ ] and Class [ ] Certificates) have
been reduced to [ ] and (ii) either (a) the Subordinate Percentage of a Loan
Group is less than [ ]% times the related Subordinate Percentage as of the
Closing Date, or (b) the aggregate Principal Balance of the Loans (including
Loans in bankruptcy, foreclosure and REO) which are [ ] or more days delinquent
(averaged over the preceding [ ]-month period), as a percentage of the
Subordinate Amount of a Loan Group, is equal to or greater than [ ]% as of such
Distribution Date.
CURTAILMENT: Any voluntary payment of principal on a Loan, made by or
on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid
Monthly Payment or a Payoff, which is applied to reduce the outstanding
Principal Balance of the Loan.
CURTAILMENT SHORTFALL: With respect to any Distribution Date and any
Curtailment received during the related Prepayment Period, an amount equal to
one month's interest on such Curtailment at the applicable Net Mortgage Rate on
such Loan.
CUSTODIAL AGREEMENT: Either of the [ ] Custodial Agreement or the [ ]
Custodial Agreement, or any other custodial agreement entered into after the
date hereof with respect to any Loan subject to this Agreement.
CUSTODIAN: Either [ ] or [ ] or any other custodian appointed under any
custodial agreement entered into after the date of this Agreement.
CUT-OFF DATE: [ ], 20 [ ]; except that with respect to each Substitute
Loan, the Cut-Off Date shall be the date of substitution.
[ ] Custodial Agreement: The Custodial Agreement dated as of [ ], 20 [
], among the Trustee, [ ] and [ ], as may be amended or supplemented from time
to time.
[ ] MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement dated as of [ ], 20 [ ] between the Depositor and [ ].
DEBT SERVICE REDUCTION: Any reduction of the amount of the monthly
payment on a Loan made by a bankruptcy court in connection with a personal
bankruptcy of a Mortgagor.
DEFICIENT VALUATION: In connection with a personal bankruptcy of a
Mortgagor on a Loan, the positive difference, if any, resulting from the
outstanding principal balance on a Loan less a bankruptcy court's valuation of
the related Mortgaged Property.
DEFINITIVE CERTIFICATES: As defined in Section 5.1.
DELETED LOAN: A Loan replaced or to be replaced by a Substitute Loan.
DEPOSITOR: Deutsche Alt-A Securities, Inc., a Delaware corporation, or
its successor-in-interest.
DEPOSITORY: [ ], or any successor Depository hereafter named. The
nominee of the initial Depository, for purposes of registering those
Certificates that are to be Book-Entry Certificates, is [ ]. The Depository
shall at all times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform Commercial Code of the State of New York and a Clearing Agency.
DEPOSITORY PARTICIPANT: A broker, dealer, bank, other financial
institution or other Person for whom the Depository effects book-entry transfers
and pledges of securities deposited with the Depository.
DETERMINATION DATE: With respect to each Servicer, the day of the month
set forth as the Determination Date in the related Servicing Agreement. With
respect to Article IX hereto, the [ ] day of the month or if such day is not a
Business Day, the Business Day immediately following such [ ] day.
DISQUALIFIED ORGANIZATION: A "disqualified organization" as defined in
Section 860E(e)(5) of the Code, and, for purposes of Article V herein, any
Person which is not a Permitted Transferee; provided, that a Disqualified
Organization does not include any Pass-Through Entity which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary.
DISTRIBUTION ACCOUNT: The separate trust account or accounts created
and maintained by the Securities Administrator pursuant to Section 3.23, for the
benefit of the Certificateholders and designated [ ], in trust for registered
holders of Deutsche Alt-A Securities, Inc. Mortgage Loan Trust, Series [ ]."
Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement. Each
Distribution Account must be an Eligible Account.
DISTRIBUTION ACCOUNT DEPOSIT DATE: With respect to each Distribution
Date, the Business Day prior to such Distribution Date.
DISTRIBUTION DATE: The [ ] day (or, if such [ ] day is not a Business
Day, the Business Day immediately succeeding such [ ] day) of each month, with
the first such date being [ ], 20 [ ].
DUE DATE: The first day of each calendar month, which is the day on
which the Monthly Payment for each Loan is due, exclusive of any days of grace.
The "related Due Date" for any Distribution Date is the Due Date immediately
preceding such Distribution Date.
DUE PERIOD: With respect to any Distribution Date and the Loans, the
period commencing on the second day of the month immediately preceding the month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any account or accounts held and established by the
Securities Administrator in trust for the Certificateholders at any Eligible
Institution.
ELIGIBLE INSTITUTION: An institution having (i) the highest short-term
debt rating, and one of the two highest long-term debt ratings of each Rating
Agency, (ii) with respect to the Distribution Account, an unsecured long-term
debt rating of at least one of the two highest unsecured long-term debt ratings
of each Rating Agency, or (iii) the approval of each Rating Agency.
ELIGIBLE INVESTMENTS: Any one or more of the following obligations or
securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date (or, with respect to the
Distribution Account maintained with the Securities Administrator, having a
scheduled maturity on or before the following Distribution Date; provided that,
such Eligible Investments shall be managed by, or an obligation of, the
institution that maintains the Distribution Account if such Eligible Investments
mature on the Distribution Date), regardless of whether any such obligation is
issued by the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or any of their respective Affiliates and having at the time of
purchase, or at such other time as may be specified, the required ratings, if
any, provided for in this definition:
(a) direct obligations of, or guaranteed as to full and timely payment
of principal and interest by, the United States or any agency or instrumentality
thereof, provided, that such obligations are backed by the full faith and credit
of the United States of America;
(b) direct obligations of, or guaranteed as to timely payment of
principal and interest by, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or the Federal Farm Credit
System, provided, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof, is qualified by each
Rating Agency as an investment of funds backing securities rated "[AAA]" and
"[Aaa]" in the case of S&P and ▇▇▇▇▇'▇ (the initial rating of the Senior
Certificates (other than the Class [ ] Certificates, which are rated "[Aa1]" by
▇▇▇▇▇'▇));
(c) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, provided, that the short-term deposit ratings
and/or long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institutions in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company) have, in the case of commercial paper, the
highest rating available for such securities by each Rating Agency and, in the
case of long-term unsecured debt obligations, one of the two highest ratings
available for such securities by each Rating Agency, or in each case such lower
rating as will not result in the downgrading or withdrawal of the rating or
ratings then assigned to any Class of Certificates by any Rating Agency but in
no event less than the initial rating of the Senior Certificates;
(d) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving one of the two highest
long-term debt ratings available for such securities by each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating or ratings then assigned to any Class of Certificates by any Rating
Agency;
(e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment or
contractual commitment providing for such investment, and is issued by a
corporation the outstanding senior long-term debt obligations of which are then
rated by each Rating Agency in one of its two highest long-term unsecured rating
categories, or such lower rating as will not result in the downgrading or
withdrawal of the rating or ratings then assigned to any Class of Certificates
by any Rating Agency but in no event less than the initial rating of the Senior
Certificates;
(f) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation rated in one of the two highest rating levels
available to such issuers by each Rating Agency at the time of such investment,
provided, that any such agreement must by its terms provide that it is
terminable by the purchaser without penalty in the event any such rating is at
any time lower than such level;
(g) repurchase obligations with respect to any security described in
clause (a) or (b) above entered into with a depository institution or trust
company (acting as principal) meeting the rating standards described in (c)
above;
(h) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of America
or any State thereof and rated by each Rating Agency in one of its two highest
long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of the
Distribution Account to exceed [ ]% of the aggregate principal amount of all
Eligible Investments then held in the Distribution Account;
(i) units of taxable money market funds (including those for which the
Trustee, the Securities Administrator, the Master Servicer or any affiliate
thereof receives compensation with respect to such investment) which funds have
been rated by each Rating Agency rating such fund in its highest rating category
or which have been designated in writing by each Rating Agency as Eligible
Investments with respect to this definition;
(j) if previously confirmed in writing to the Trustee and the
Securities Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to each Rating
Agency as a permitted investment of funds backing securities having ratings
equivalent to the initial rating of the Senior Certificates; and
(k) such other obligations as are acceptable as Eligible Investments to
each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of [ ]% of the yield to maturity at par of such
underlying investment.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
EUROCLEAR: Euroclear Bank SA/NV, Brussels office, as operator of the
Euroclear system.
EXCESS LOSS: A Special Hazard Loss incurred on a Loan in a Loan Group
in excess of the Special Hazard Coverage, a Fraud Loss incurred on a Loan in a
Loan Group in excess of the Fraud Coverage and a Bankruptcy Loss incurred on a
Loan in a Loan Group in excess of the Bankruptcy Coverage.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ MAE: ▇▇▇▇▇▇ ▇▇▇, formerly known as the Federal National Mortgage
Association, or any successor thereto.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FITCH: Fitch Ratings or any successor thereto.
FRAUD COVERAGE: As of the Cut-Off Date, will be [ ]. As of any date of
determination after the Cut-Off Date, the Fraud Coverage will generally be equal
to:
(1) on and after the first Anniversary, an amount equal to:
(a) [ ]% of the aggregate Principal Balance of the Loans
as of the Cut-Off Date, minus
(b) the aggregate amounts allocated to the Certificates
with respect to Fraud Losses on the Loans up to such
date of determination;
(2) from the second to and including the [ ] Anniversary, an amount
equal to:
(a) [ ]% of the aggregate Principal Balance of the Loans
as of the Cut-Off Date, minus
(b) the aggregate amounts allocated to the Certificates
with respect to Fraud Losses on the Loans up to such
date of determination;
(3) after the [ ] Anniversary, the Fraud Coverage will be [ ].
FRAUD LOSS: The occurrence of a loss on a Loan, as reported by the
related Servicer, arising from any action, event or state of facts with respect
to such Loan which, because it involved or arose out of any dishonest,
fraudulent, criminal, negligent or knowingly wrongful act, error or omission by
the Mortgagor, originator (or assignee thereof) of such Loan, or the related
Servicer, would result in an exclusion from, denial of, or defense to coverage
which otherwise would be provided by an insurance policy previously issued with
respect to such Loan.
▇▇▇▇▇▇▇ MAC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
GLOBAL CERTIFICATE: A Regulation S Temporary Global Certificate or a
Regulation S Permanent Global Certificate.
[ ] SERVICING AGREEMENT: The Servicing Agreement, dated as of [ ], 20[
], between [ ] and [ ] (as modified pursuant to the related Assignment
Agreement).
[ ] 20[ ] SERVICING AGREEMENT: The Servicing Agreement, dated as of [ ]
5, 20[ ], between [ ] and [ ] (as modified pursuant to the related Assignment
Agreement).
[ ] SERVICING AGREEMENT: Shall mean the Amended and Restated Master
Mortgage Loan Purchase and Servicing Agreement, dated as of [ ] 1, 20[ ],
between [ ] and [ ], as amended (as modified pursuant to the related Assignment
Agreement).
GROUP I AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts that are related to the Group I Loans:
(1) the total amount of all cash received by or on behalf of each
Servicer with respect to the Group I Loans by the
Determination Date for such Distribution Date and not
previously distributed (including Liquidation Proceeds,
Insurance Proceeds, condemnation proceeds and Subsequent
Recoveries) and with respect to any Distribution Date during
the Pre-Funding Period, any related Capitalized Interest
Requirement for such Distribution Date, and with respect to
any Distribution Date immediately following the termination of
the Pre-Funding Period, any Remaining Pre-Funded Amount
(exclusive of any investment income therein), except:
(a) all scheduled payments of principal and interest
collected on the Group I Loans but due on a date
after the related Due Date;
(b) all Curtailments received with respect to the Group I
Loans after the related Prepayment Period, together
with all interest paid by the Mortgagors in
connection with such Curtailments;
(c) all Payoffs received with respect to the Group I
Loans after the related Prepayment Period, together
with all interest paid by the Mortgagors in
connection with such Payoffs;
(d) Liquidation Proceeds, Insurance Proceeds,
condemnation proceeds and Subsequent Recoveries
received on the Group I Loans after the related
Prepayment Period;
(e) all amounts reimbursable to the related Servicer
pursuant to the terms of the related Servicing
Agreement or to the Master Servicer, the Securities
Administrator, the Trustee or the Custodians pursuant
to the terms of this Agreement or the Custodial
Agreements;
(f) reinvestment income on the balance of funds, if any,
in the Protected Accounts, the Distribution Account
or the Pre-Funding Account;
(g) any fees payable to the Master Servicer (including
any Master Servicing Fees), the Servicers and the
Credit Risk Manager with respect to the Group I
Loans, and any premiums payable in connection with
any lender paid primary mortgage insurance policies
maintained on the Group I Loans; and
(h) all Prepayment Charges received in connection with
the Group I Loans;
(2) all Advances made by a Servicer and/or the Master Servicer or
the Trustee with respect to the Group I Loans for that
Distribution Date;
(3) any amounts paid as Compensating Interest on the Group I Loans
by a Servicer and/or the Master Servicer for that Distribution
Date;
(4) the total amount of any cash related to the Group I Loans
deposited in the Distribution Account in connection with the
repurchase of any Group I Loan by the Depositor, [ ] or [ ];
and
(5) the total amount of any cash related to the Group I Loans
deposited in the Distribution Account in connection with an
optional termination of the Trust Fund.
GROUP I DISCOUNT FRACTION: With respect to any Distribution Date and a
Group I Discount Loan, will be a fraction, the numerator of which is [ ]% minus
the Net Mortgage Rate as of the Cut-Off Date of such Group I Discount Loan, and
the denominator of which is [ ]%.
GROUP I DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: For any Distribution Date
and the Group I Loans will be the aggregate of the following with respect to
each Group I Discount Loan: the Group I Discount Fraction of the amounts
described in the definition of Principal Distribution Amount, Principal
Prepayment Amount and Liquidation Principal.
GROUP I DISCOUNT FRACTIONAL PRINCIPAL SHORTFALL: For any Distribution
Date (i) prior to the Credit Support Depletion Date, an amount generally equal
to the sum of:
(1) the aggregate of the following with respect to each
Group I Discount Loan: the Group I Discount Fraction
of any loss (meaning a Fraud Loss, Special Hazard
Loss, Bankruptcy Loss or the amount by which the
outstanding Principal Balance thereof exceeded the
Liquidation Principal and Insurance Proceeds received
in respect thereof) on such Group I Discount Loan,
other than a Special Hazard Loss in excess of the
Special Hazard Coverage, a Fraud Loss in excess of
the Fraud Coverage or a Bankruptcy Loss in excess of
the Bankruptcy Coverage; and
(2) the amounts described in clause (1) above for all
prior Distribution Dates to the extent not previously
distributed, and
(ii) for any Distribution Date on or after the Credit
Support Depletion Date, zero.
GROUP I DISCOUNT LOAN: Any Group I Loan with a Net Mortgage Rate as of
the Cut-Off Date of less than [ ]% per annum.
GROUP I LOANS: Those Loans having original terms to maturity not
greater than [ ] years and identified on the Loan Schedule as Group I Loans.
GROUP I NON-DISCOUNT LOAN: Any Group I Loan with a Net Mortgage Rate as
of the Cut-Off Date greater than or equal to [ ]% per annum.
GROUP I SENIOR CERTIFICATES: The Class [ ], Class [ ], Class [ ], Class
[ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ] and Class
[ ] Certificates.
GROUP II AVAILABLE DISTRIBUTION AMOUNT: With respect to a Distribution
Date, the sum of the following amounts that are related to the Group II Loans:
(1) the total amount of all cash received by or on behalf
of each Servicer with respect to the Group II Loans
by the Determination Date for such Distribution Date
and not previously distributed (including Liquidation
Proceeds, Insurance Proceeds, condemnation proceeds
and Subsequent Recoveries), except:
(a) all scheduled payments of principal and
interest collected on the Group II Loans but
due on a date after the related Due Date;
(b) all Curtailments received with respect to
the Group II Loans after the related
Prepayment Period, together with all
interest paid by the Mortgagors in
connection with such Curtailments;
(c) all Payoffs received with respect to the
Group II Loans after the related Prepayment
Period, together with interest paid by the
Mortgagors in connection with such Payoffs;
(d) Liquidation Proceeds, Insurance Proceeds,
condemnation proceeds and Subsequent
Recoveries received on the Group II Loans
after the related Prepayment Period;
(e) all amounts reimbursable to the related
Servicer pursuant to the terms of the
related Servicing Agreement or to the Master
Servicer, the Securities Administrator, the
Trustee or the Custodians pursuant to the
terms of this Agreement or the Custodial
Agreements;
(f) reinvestment income on the balance of funds,
if any, in the Protected Accounts or the
Distribution Account;
(g) any fees payable to the Master Servicer
(including any Master Servicing Fees), the
Servicers and the Credit Risk Manager with
respect to the Group II Loans, and any
premiums payable in connection with any
lender paid primary mortgage insurance
policies maintained on the Group II Loans;
and
(h) all Prepayment Charges received in
connection with the Group II Loans;
(2) All Advances made by a Servicer and/or the Master Servicer or
the Trustee with respect to the Group II Loans for that
Distribution Date;
(3) Any amounts paid as Compensating Interest on the Group II
Loans by a Servicer and/or the Master Servicer for that
Distribution Date;
(4) The total amount of any cash related to the Group II Loans
deposited in the Distribution Account in connection with the
repurchase of any Group II Loan by the Depositor, [ ] or [ ];
and
(5) the total amount of any cash related to the Group II Loans
deposited in the Distribution Account in connection with an
optional termination of the Trust Fund.
GROUP II DISCOUNT FRACTION: With respect to any Distribution Date and a
Group II Discount Loan, will be a fraction, the numerator of which is [ ]% minus
the Net Mortgage Rate as of the Cut-Off Date of such Group II Discount Loan, and
the denominator of which is [ ]%.
GROUP II DISCOUNT FRACTIONAL PRINCIPAL AMOUNT: For any Distribution
Date and the Group II Loans will be the aggregate of the following with respect
to each Group II Discount Loan: the Group II Discount Fraction of the amounts
described in the definition of Principal Distribution Amount, Principal
Prepayment Amount and Liquidation Principal.
GROUP II DISCOUNT FRACTIONAL PRINCIPAL SHORTFALL: For any Distribution
Date (i) prior to the Credit Support Depletion Date, an amount generally equal
to the sum of:
(1) the aggregate of the following with respect to each
Group II Discount Loan: the Group II Discount
Fraction of any loss (meaning a Fraud Loss, Special
Hazard Loss, Bankruptcy Loss or the amount by which
the outstanding Principal Balance thereof exceeded
the Liquidation Principal and Insurance Proceeds
received in respect thereof) on such Group II
Discount Loan, other than a Special Hazard Loss in
excess of the Special Hazard Coverage, a Fraud Loss
in excess of the Fraud Coverage or a Bankruptcy Loss
in excess of the Bankruptcy Coverage; and
(2) the amounts described in clause (1) above for all
prior Distribution Dates to the extent not previously
distributed, and
(ii) for any Distribution Date on or after the Credit
Support Depletion Date, [ ].
GROUP II DISCOUNT LOAN: Any Group II Loan with a Net Mortgage Rate as
of the Cut-Off Date of less than [ ]% per annum.
GROUP II LOANS: Those Loans having original terms to maturity not
greater than [ ] years and identified on the Loan Schedule as Group II Loans.
The aggregate principal balance of the Group II Loans as of the Cut-Off Date is
equal to approximately $[ ].
GROUP II NON-DISCOUNT LOAN: Any Group II Loan with a Net Mortgage Rate
as of the Cut-Off Date greater than or equal to [ ]% per annum.
GROUP II SENIOR CERTIFICATES: The Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ] and Class [ ] Certificates.
INDEPENDENT: When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Depositor, any Servicer, the Master
Servicer and the Securities Administrator, (ii) does not have any direct
financial interest or any material indirect financial interest in the Depositor,
any Servicer, the Master Servicer or the Securities Administrator or any
Affiliate of the aforementioned and (iii) is not connected with the Depositor,
any Servicer, the Master Servicer or the Securities Administrator as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
INDIRECT DEPOSITORY PARTICIPANTS: Entities such as banks, brokers,
dealers or trust companies that clear through or maintain a custodial
relationship with a Depository Participant, either directly or indirectly.
INITIAL GROUP I LOAN: Any of the Group I Loans included in the Trust
Fund as of the Closing Date. The aggregate principal balance of the Initial
Group I Loans as of the Cut-Off Date is equal to $[ ].
INSURANCE PROCEEDS: Proceeds of any title policy, hazard policy or
other insurance policy covering a Loan, to the extent such proceeds are not to
be applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the applicable Servicing Agreement.
INTEREST ACCRUAL PERIOD: For the Certificates other than the Adjustable
Rate Certificates will be the calendar month preceding the month in which that
Distribution Date occurs. The Interest Accrual Period for the Adjustable Rate
Certificates will be (a) as to the Distribution Date in [ ], the period
commencing on [ ], 20[ ], and ending on the day preceding the Distribution Date
in [ ], and (b) as to any Distribution Date after the Distribution Date in [ ],
the period commencing on the Distribution Date in the month immediately
preceding the month in which that Distribution Date occurs and ending on the day
preceding that Distribution Date. Interest on the Certificates will be
calculated based on a 360-day year consisting of twelve 30-day months regardless
of the actual number of days in the related Interest Accrual Period.
INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, for any Class
of Certificates (other than the Class [ ], Class [ ], Class [ ] and Class [ ]
Certificates), the sum of (i) interest accrued on the related Certificate which
shall be equal to (a) the product of (1) [ ] of the Pass-Through Rate for such
Class and (2) the aggregate Certificate Principal Balance or Notional Amount, as
applicable, for such Class before giving effect to allocations of Realized
Losses in connection with such Distribution Date or distributions to be made on
such Distribution Date, reduced by (b) Net Interest Shortfalls allocated to such
Class pursuant to the definition of "Net Interest Shortfall", including the
interest portion of Realized Losses allocated to such Class pursuant to Section
4.2 and (ii) the amount of interest accrued but unpaid to such Class from prior
Distribution Dates.
INVESTMENT WITHDRAWAL DISTRIBUTION DATE: As defined in Section 3.23(c).
JUNIOR SUBORDINATE CERTIFICATES: The Class [ ], Class [ ] and Class [ ]
Certificates, collectively.
LAST SCHEDULED DISTRIBUTION DATE: The Distribution Date in [ ], which
is the Distribution Date immediately following the maturity date for the Loan
with the latest maturity date.
LIBOR: For the initial Interest Accrual Period, the Securities
Administrator will determine One-Month LIBOR for such Interest Accrual Period
based on information available on the second Business Day preceding the Closing
Date with respect to the Adjustable Rate Certificates, and for any Interest
Accrual Period thereafter, on the second Business Day preceding the related
Interest Accrual Period, the one-month rate which appears on the Dow ▇▇▇▇▇
Telerate System, page 3750, as of 11:00 a.m., London time on the LIBOR
Determination Date. If such rate is not provided, LIBOR shall mean the rate
determined by the Securities Administrator (or a calculation agent on its
behalf) in accordance with the following procedure:
(i) The Securities Administrator on the LIBOR Determination Date will
request the principal London offices of each of four major Reference Banks in
the London interbank market, as selected by the Securities Administrator, to
provide the Securities Administrator with its offered quotation for deposits in
United States dollars for the upcoming one-month period, commencing on the
second LIBOR Business Day immediately following such LIBOR Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m. London
time on such LIBOR Determination Date and in a principal amount that is
representative for a single transaction in United States dollars in such market
at such time. If at least two such quotations are provided, LIBOR determined on
such LIBOR Determination Date will be the arithmetic mean of such quotations.
(ii) If fewer than two quotations are provided, LIBOR determined on
such LIBOR Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 a.m. in New York City on such LIBOR Determination Date by
three major banks in New York City selected by the Securities Administrator for
one-month United States dollar loans to lending European banks, in a principal
amount that is representative for a single transaction in United States dollars
in such market at such time; provided, however, that if the banks so selected by
the Securities Administrator are not quoting as mentioned in this sentence,
LIBOR determined on such LIBOR Determination Date will continue to be LIBOR as
then currently in effect on such LIBOR Determination Date.
The establishment of LIBOR and each Pass-Through Rate for the
Adjustable Rate Certificates by the Securities Administrator shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
an Adjustable Rate Certificate and the Securities Administrator.
LIBOR BUSINESS DAY: Any day on which dealings in United States dollars
are transacted in the London interbank market.
LIBOR DETERMINATION DATE: The second LIBOR Business Day before the
first day of the related Interest Accrual Period.
LIQUIDATED LOAN: A Loan as to which the related Servicer has determined
in accordance with its customary servicing practices that all amounts which it
expects to recover from or on account of such Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust Fund shall
not constitute final liquidation of the related Loan.
LIQUIDATION PRINCIPAL: With respect to any Distribution Date and any
Loan Group, the principal portion of net Liquidation Proceeds received with
respect to each such Loan which became a Liquidated Loan (but not in excess of
the Principal Balance thereof) during the related Prepayment Period.
LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the related Servicer pursuant to the related Servicing
Agreement in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Loan through a trustee's sale, foreclosure sale or
otherwise, or (iii) the repurchase, substitution or sale of a Loan or an REO
Property pursuant to or as contemplated by Section 2.3 or Section 9.1, in each
case net of any portion thereof that represents a recovery of principal or
interest for which an Advance was made by a Servicer or the Master Servicer.
LOAN DOCUMENTS: The documents evidencing or relating to each Loan
delivered to the Custodian under the Custodial Agreement on behalf of the
Trustee.
LOAN GROUP: The Group I Loans and Group II Loans, as applicable.
LOAN SCHEDULE: The schedule, as amended from time to time, of Loans,
attached hereto as Schedule One, which shall set forth as to each Loan the
following, among other things:
(i) the loan number of the Loan and name of the related Mortgagor;
(ii) the street address of the Mortgaged Property including city,
state and zip code;
(iii) the Mortgage Interest Rate as of the Cut-Off Date;
(iv) the original term and maturity date of the related Mortgage
Note;
(v) the original Principal Balance;
(vi) the first payment date;
(vii) the Monthly Payment in effect as of the Cut-Off Date;
(viii) the date of the last paid installment of interest;
(ix) the unpaid Principal Balance as of the close of business on
the Cut-Off Date;
(x) the Loan-to-Value ratio at origination;
(xi) the type of property and the Original Value of the Mortgaged
Property;
(xii) whether a primary mortgage insurance policy is in effect as of
the Cut-Off Date;
(xiii) the nature of occupancy at origination;
(xiv) the related Loan Group;
(xv) the applicable Servicer; and
(xvi) the applicable Custodian.
LOANS: The Mortgages and the related Mortgage Notes, each transferred
and assigned to the Trustee pursuant to the provisions hereof as from time to
time are held as part of the Trust Fund, as so identified in the Loan Schedule.
Each of the Loans is referred to individually in this Agreement as a "Loan".
After each Subsequent Transfer Date, Loans shall include any Subsequent Loans
transferred to the Trust on such Subsequent Transfer Date.
LOAN-TO-VALUE RATIO: The original principal amount of a Loan divided by
the Original Value; however, references to "current Loan-to-Value Ratio" shall
mean the then current Principal Balance of a Loan divided by the Original Value.
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 EVENT OF DEFAULT: One or more of the events described
in Section 7.1 hereof.
MASTER SERVICING COMPENSATION: As defined in Section 3.14(a).
MASTER SERVICING FEE: As to each Loan and any Distribution Date, an
amount equal to one twelfth of the product of the Master Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date.
MASTER SERVICING FEE RATE: [ ]% per annum.
MONTHLY ADVANCE: As to any Loan or REO Property, any advance made by a
Servicer in respect of any Determination Date or in respect of any Distribution
Date by a successor Servicer or by the Master Servicer or the Trustee pursuant
to Section 4.7 of this Agreement (which advances shall not include principal or
interest shortfalls due to bankruptcy proceedings or application of the Relief
Act or similar state or local laws.)
MONTHLY PAYMENT: The scheduled payment of principal and interest on a
Loan which is due on any Due Date for such Loan after giving effect to any
reduction in the amount of interest collectible from any Mortgagor pursuant to
the Relief Act.
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 security interest in, a Mortgaged Property
securing a Mortgage Note.
MORTGAGE FILE: The Loan Documents pertaining to a particular Loan.
MORTGAGE INTEREST RATE: For any Loan, the per annum rate at which
interest accrues on such Loan pursuant to the terms of the related Mortgage Note
without regard to any reduction thereof as a result of the Relief Act.
MORTGAGE LOAN PURCHASE AGREEMENT: The [ ] Mortgage Loan Purchase
Agreement or the [ ] Mortgage Loan Purchase Agreement, as applicable.
MORTGAGE NOTE: The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Loan.
MORTGAGE POOL: All of the Loans.
MORTGAGED PROPERTY: With respect to any Loan, the real property,
together with improvements thereto, securing the indebtedness of the Mortgagor
under the related Loan.
MORTGAGOR: The obligor on a Mortgage Note.
[ ] SERVICING AGREEMENT: The Master Seller's Warranties and Servicing
Agreement, dated as of [ ], 20[ ], between [ ] and [ ], as amended (as modified
pursuant to the related Assignment Agreement).
NET INTEREST SHORTFALL: For any Distribution Date, the sum of (i) any
Prepayment Interest Shortfall for such Distribution Date, (ii) any Relief Act
Interest Shortfall for such Distribution Date and (iii) the portion of Realized
Losses attributable to interest allocated to the Certificates.
NET MORTGAGE RATE: For each Loan and for any date of determination, a
per annum rate equal to the Mortgage Interest Rate for such Loan less the
related Servicing Fee Rate, the Master Servicing Fee Rate, the Credit Risk
Management Fee Rate and the rate at which any lender paid mortgage insurance is
calculated.
NONRECOVERABLE ADVANCE: With respect to any Loan, any Advance or
Servicing Advance which the related Servicer shall have determined to be a
Nonrecoverable Advance as defined in and pursuant to the related Servicing
Agreement, or which the Master Servicer shall have determined to be
nonrecoverable pursuant to Section 4.7, respectively, and which was, or is
proposed to be, made by such Servicer or the Master Servicer.
NON-U.S. PERSON: A Person that is not a U.S. Person.
NOTIONAL AMOUNT: With respect to the Class [ ] Certificates and any
Distribution Date, an amount equal to the Certificate Principal Balance of the
Class [ ] Certificates. For federal income tax purposes the Notional Amount of
the Class [ ] Certificates will equal the Uncertificated Principal Balance of
REMIC I Regular Interest [ ].
With respect to the Class [ ] Certificates and any Distribution Date,
an amount equal to the aggregate Principal Balance of the Group I Loans.
With respect to the Class [ ] Certificates and any Distribution Date,
an amount equal to the aggregate Principal Balance of the Group II Loans.
OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President or a Vice-President, however
denominated, of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities), and
delivered to the Trustee.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor, a Servicer, the Securities
Administrator or the Master Servicer, acceptable to the Trustee, except that any
opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.
ORIGINAL CAPITALIZED INTEREST AMOUNT: The amount deposited by the
Depositor in the Capitalized Interest Account on the Closing Date, which amount
is $[ ].
ORIGINAL PRE-FUNDED AMOUNT: The amount deposited by the Depositor in
the Pre-Funding Account on the Closing Date, which amount is $[ ].
ORIGINAL VALUE: With respect to any Loan other than a Loan originated
for the purpose of refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the time the Loan was
originated or (b) the purchase price paid for the Mortgaged Property by the
Mortgagor. With respect to a Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the lesser of (a)
the Appraised Value of the Mortgaged Property at the time the Loan was
originated or (b) the appraised value at the time the refinanced mortgage debt
was incurred.
OTS: The Office of Thrift Supervision, or any successor thereto.
OWNERSHIP INTEREST: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as owner or as pledge.
PASS-THROUGH ENTITY: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.
PASS-THROUGH RATE: With respect to the Class [ ] Certificates and the
Distribution Date in [ ] 2005, [ ]% per annum, and with respect to any
Distribution Date thereafter, a per annum rate equal to the least of (a)
One-Month LIBOR plus [ ]% and (b) [ ]%.
With respect to the Class [ ] Certificates and the Distribution Date in
[ ], [ ]% per annum, and with respect to any Distribution Date thereafter, a per
annum rate equal to the lesser of (i) the excess, if any, of [ ]% over the
Pass-Through Rate applicable to the Class [ ] Certificates and (ii) [ ]%, but
such rate will not be less than [ ] for any Distribution Date. For federal
income tax purposes, the Pass-Through Rate on the Class [ ] Certificates will be
a per annum rate equal the Uncertificated REMIC I Pass-Through Rate on REMIC I
Regular Interest [ ] minus the applicable Pass-Through Rate for the Class [ ]
Certificates for such Distribution Date, but will not be less than [ ] for any
Distribution Date.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and the Distribution Date in
[ ], [ ]% per annum, and with respect to any Distribution Date thereafter, a per
annum rate equal to the lesser of (a) One-Month LIBOR plus [ ]% and (b) [ ]%.
With respect to the Class [ ] Certificates and the Distribution Date in
[ ] , [ ]% per annum, and with respect to any Distribution Date thereafter, a
rate per annum equal to the excess of (a) [ ]% over (b) the product of (i)
One-Month LIBOR and (ii) [ ], but such rate will not be less than [ ] for any
Distribution Date.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and the Distribution Date in
[ ], [ ]% per annum, and with respect to any Distribution Date thereafter, a per
annum rate equal to the excess of (i) the weighted average of the Net Mortgage
Rates of the Group II Loans over (b) [ ]%, but will not be less than [ ] on any
Distribution Date. For purpose of this calculation, the Group I Discount Loans
are assumed to have a Net Mortgage Rate of [ ]%. For federal income tax purposes
the Class [ ] Certificates will not have a Pass-Through Rate but will be
entitled to [ ]% of the amounts distributed on REMIC I Regular Interest [ ].
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Class [ ] Certificates and the Distribution Date in
[ ], [ ]% per annum, and with respect to any Distribution Date thereafter, a per
annum rate equal to the excess of (i) the weighted average of the Net Mortgage
Rates of the Group II Loans over (b) [ ]%, but will not be less than [ ] on any
Distribution Date. For the purpose of this calculation, the Group II Discount
Loans are assumed to have a Net Mortgage Rate of [ ]%. For federal income tax
purposes the Class [ ] Certificates will not have a Pass-Through Rate but will
be entitled to [ ]% of the amounts distributed on REMIC I Regular Interest [ ].
With respect to the Class [ ] Certificates and any Distribution Date, [
]% per annum.
With respect to the Subordinate Certificates and any Distribution Date,
[ ]% per annum.
PAYOFF: Any voluntary payment of principal on a Loan by a Mortgagor
equal to the entire outstanding Principal Balance of such Loan, if received in
advance of the last scheduled Due Date for such Loan and is not accompanied by
scheduled interest due on any date or dates in any month or months subsequent to
the month of such payment-in-full.
PERCENTAGE INTEREST: With respect to any Class of Certificates (other
than the Residual Certificates) and any date of determination, the undivided
percentage ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
or Notional Amount represented by such Certificate and the denominator of which
is the aggregate initial Certificate Principal Balance or Notional Amount of all
of the Certificates of such Class. Each Certificate is issuable only in minimum
Percentage Interests corresponding to the Authorized Denomination of the related
Class of Certificates; provided, however, that a single Certificate of each such
Class of Certificates may be issued having a Percentage Interest corresponding
to the remainder of the aggregate initial Certificate Principal Balance or
Notional Amount of such Class or to an otherwise Authorized Denomination for
such Class plus such remainder. With respect to any Residual Certificate, the
undivided percentage ownership in such Class evidenced by such Certificate, is
as set forth on the face of such Certificate.
PERMITTED TRANSFEREE: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any political subdivision thereof, or any agency or instrumentality of any of
the foregoing, (ii) a foreign government or International Organization, or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from whom the Trustee or the Securities
Administrator has not received an affidavit to the effect that it is not a
"disqualified organization" within the meaning of Section 860E(e)(5) of the
Code, and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel (which shall not be an expense of the Securities
Administrator or the Trustee) that the transfer of an Ownership Interest in a
Residual Certificate to such Person may cause any REMIC hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in Code Section 7701 or successor provisions. A corporation
shall not be treated as an instrumentality of the United States or of any State
or political subdivision thereof 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 governmental unit.
PERSON: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN ASSETS: As defined in Section 5.2.
PRE-FUNDING ACCOUNT: The account established and maintained pursuant to
Section 3.26.
PRE-FUNDING PERIOD: The period from the Closing Date until the earlier
of (i) the date on which the amounts on deposit in the Pre-Funding Account
(exclusive of investment income) is reduced to zero or (ii) [ ], 20[ ].
PREPAID MONTHLY PAYMENT: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Loan on its scheduled
Due Date and held in the related Protected Account until the related Servicer
Remittance Date following its scheduled Due Date.
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 Loan pursuant to the terms of the related Mortgage
Note, as set forth on the Prepayment Charge Schedule.
PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Loans providing
for a Prepayment Charge included in the Trust Fund on such date, attached hereto
as Schedule Two (including the prepayment charge summary attached thereto). The
Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule
to the Master Servicer, the Trustee and the Credit Risk Manager on the Closing
Date. The Prepayment Charge Schedule shall set forth the following information
with respect to each Prepayment Charge:
(i) the 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 Mortgaged Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Principal Balance of the related Loan; and
(vi) the Principal Balance of the related Loan as of the Cut-Off
Date.
PREPAYMENT INTEREST SHORTFALL: For any Distribution Date and any Loan
on which a Payoff was made by a Mortgagor during the related Prepayment Period,
an amount equal to one month's interest at the applicable Net Mortgage Rate on
such Loan less the amount of interest actually paid by the Mortgagor with
respect to such Payoff.
PREPAYMENT PERIOD: For any Distribution Date is (i) with respect to the
Loans serviced by National City, the period commencing on the second day of the
month preceding the month in which such Distribution Date occurs and ending on
the first day of the month in which such Distribution Date occurs, (ii) with
respect to the Loans serviced by [ ], the Loans serviced by [ ] , the Loans
serviced by [ ] and the Loans serviced by [ ] pursuant to the [ ] Servicing
Agreement, the calendar month immediately preceding the month in which such
Distribution Date occurs and (iii) with respect to the Loans serviced by [ ]
pursuant to the [ ] Servicing Agreement, the period commencing on the [ ] of the
month preceding the month in which such Distribution Date occurs and ending on
the [ ] of the month in which such Distribution Date occurs.
PRINCIPAL BALANCE: For any Loan and at the time of any determination,
the principal balance of such Loan remaining to be paid at the close of business
on the Cut-Off Date or Subsequent Cut-Off Date, as applicable, after deduction
of all principal payments due on or before the Cut-Off Date or Subsequent
Cut-Off Date, as applicable, whether or not received, reduced by the principal
portion of all amounts received with respect to such Loan after the Cut-Off Date
or Subsequent Cut-Off Date, as applicable, and distributed or to be distributed
to Certificateholders through the Distribution Date in the month of such
determination. In the case of a Substitute Loan, "Principal Balance" shall mean,
at the time of any determination, the principal balance of such Substitute Loan
on the related Cut-Off Date or Subsequent Cut-Off Date, as applicable, reduced
by the principal portion of all amounts received with respect to such Loan after
the Cut-Off Date or Subsequent Cut-Off Date, as applicable, and distributed or
to be distributed to Certificateholders through the Distribution Date in the
month of determination. The Principal Balance of a Liquidated Loan shall be [ ].
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date
and a Loan Group, the sum of:
(1) scheduled principal payments on the Loans in the related Loan Group due
during the related Due Period;
(2) the principal portion of repurchase proceeds received with respect to
the Loans in the related Loan Group which were repurchased as permitted
or required by this Agreement during the related Prepayment Period; and
(3) any other unscheduled payments of principal which were received on the
Loans in the related Loan Group during the related Prepayment Period,
other than Payoffs, Curtailments or Liquidation Principal.
PRINCIPAL PREPAYMENT: Any payment of principal on a Loan which
constitutes a Payoff or a Curtailment.
PRINCIPAL PREPAYMENT AMOUNT: On any Distribution Date and for any Loan
Group, the sum of (i) Curtailments received during the related Prepayment
Period, (ii) Payoffs received during the related Prepayment Period and (iii)
Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received
during the related Prepayment Period.
PRO RATA ALLOCATION: On any Distribution Date with respect to (a) the
allocation of the principal portion of certain losses relating to a Loan to the
related Senior Certificates (other than the Class [ ], Class [ ], Class [ ],
Class [ ] and Class [ ] Certificates) and/or to the Subordinate Certificates, as
applicable, pro rata according to their respective aggregate Certificate
Principal Balances on such date of allocation (except that if the loss is
incurred with respect to a Group I Discount Loan, the Group I Discount Fraction
of such loss will be allocated to the Class [ ] Certificates, and the remainder
of such loss will be allocated as described above in this definition without
regard to this parenthetical and if the loss is incurred with respect to a Group
II Discount Loan, the Group II Discount Fraction of such loss will be allocated
to the Class [ ] Certificates, and the remainder of such loss will be allocated
as described above in this definition without regard to this parenthetical);
provided that (i) the Pro Rata Allocation of any such loss allocable to the
Class [ ] Certificates and Class [ ] Certificates will be allocated first to the
Class [ ] Certificates, up to a maximum amount of $[ ] with respect to the Class
[ ] Certificates, and up to a maximum amount of $[ ] with respect to the Class [
] Certificates, until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates and
Class [ ] Certificates, respectively, until the Certificate Principal Balance of
each such Class has been reduced to [ ], and (ii) the Pro Rata Allocation of any
such loss allocable to the Class [ ] Certificates will be allocated first to the
Class [ ] Certificates until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates
until the Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ], and (b) the allocation of interest portion of certain losses
relating to a Loan to the related Senior Certificates (other than the Class [ ]
Certificates and Class [ ] Certificates) and/or to the Subordinate Certificates,
as applicable, pro rata, first according to the Interest Distribution Amounts
due to such Classes on such date of allocation, in reduction thereof until the
amount of interest accrued but unpaid on such Distribution Date has been reduced
to zero and then pro rata, according to their outstanding Certificate Principal
Balances in reduction thereof until the Certificate Principal Balances thereof
have been reduced to zero; provided that (i) the Pro Rata Allocation of any such
loss allocable to the Class [ ] Certificates and Class [ ] Certificates will be
allocated first to the Class [ ] Certificates up to a maximum amount of $[ ]
with respect to the Class [ ] Certificates, and up to a maximum amount of $[ ]
with respect to the Class [ ] Certificates, until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to zero, and then to the
Class [ ] Certificates and Class [ ] Certificates until the Certificate
Principal Balance of each such Class has been reduced to [ ], and (ii) the Pro
Rata Allocation of any such loss allocable to the Class [ ] Certificates will be
allocated first to the Class [ ] Certificates, until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to zero, and then to the
Class [ ] Certificates, until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ] .
PROTECTED ACCOUNT: An account or accounts established and maintained
for the benefit of the Certificateholders by each Servicer with respect to the
related Loans and with respect to REO Property pursuant to the applicable
Servicing Agreement.
PURCHASE OBLIGATION: An obligation of the Depositor, [ ] or [ ] to
repurchase Loans under the circumstances and in the manner provided in Section
2.3.
PURCHASE PRICE: With respect to any Loan to be purchased pursuant to a
Purchase Obligation, or any Loan to be purchased or repurchased relating to an
REO Property, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee and the Securities Administrator, an amount equal to the
sum of (i) [ ]% of the Principal Balance thereof as of the date of purchase (or
in the case of an REO Property being purchased as provided in Section 9.1, [ ]%
of the fair market value of such REO Property), (ii) in the case of (x) a Loan,
accrued interest on such Principal Balance at the applicable Net Mortgage Rate
from the date interest was last paid by the related Mortgagor or advanced by the
applicable Servicer or the Master Servicer, which payment or Advance had as of
the date of purchase been distributed pursuant to Section 4.1, through the end
of the calendar month in which the purchase is to be effected and (y) an REO
Property, the sum of (1) accrued interest on such Principal Balance at the
applicable Net Mortgage Rate from the date interest was last paid by the related
Mortgagor or advanced by the applicable Servicer or the Master Servicer through
the end of the calendar month immediately preceding the calendar month in which
such REO Property was acquired, plus (2) REO Imputed Interest for such REO
Property for each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest in accordance with the
applicable Servicing Agreement, (iii) any unreimbursed Servicing Advances and
Advances (including Nonrecoverable Advances) and any unpaid Servicing Fees or
Master Servicing Fees allocable to such Loan or REO Property and (iv) in the
case of a Loan required to be purchased pursuant to Section 2.3, expenses
reasonably incurred or to be incurred by the Master Servicer, the Servicers, the
Trustee or the Securities Administrator in respect of the breach or defect
giving rise to a Purchase Obligation and any costs and damages incurred by the
Trust Fund in connection with any violation by any such Loan of any predatory or
abusive lending law.
RATING AGENCY: Initially, each of ▇▇▇▇▇'▇ and S&P; thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Depositor, or their respective successors in
interest.
RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by each Rating Agency.
REALIZED LOSS: With respect to any Distribution Date and any Liquidated
Loan which became a Liquidated Loan during the related Prepayment Period, the
sum of (i) the Principal Balance of such Loan remaining outstanding (after all
recoveries of principal, including net Liquidation Proceeds, have been applied
thereto) and the principal portion of Nonrecoverable Advances with respect to
such Loan which have been reimbursed from amounts received in respect of the
Loans in such Loan Group other than the related Loan, and (ii) the accrued
interest on such Loan remaining unpaid and the interest portion of
Nonrecoverable Advances with respect to such Loan which have been reimbursed
from amounts received in respect of the Loans in such Loan Group other than the
related Loan. The amounts described in clause (i) shall be the principal portion
of Realized Losses and the amounts described in clause (ii) shall be the
interest portion of Realized Losses. In addition, to the extent a Servicer
receives Subsequent Recoveries with respect to any defaulted Loan, the amount of
the Realized Loss with respect to that defaulted Loan will be reduced to the
extent such recoveries are applied to reduce the Certificate Principal Balance
of any Class of Certificates on any Distribution Date.
RECORD DATE: With respect to the Adjustable Rate Certificates, the
Business Day prior to the related Distribution Date and with respect to the
Certificates other than the Adjustable Rate Certificates, the last Business Day
of the month immediately preceding the month in which the related Distribution
Date occurs.
REFERENCE BANKS: [ ], [ ] and [ ] and their successors in interest;
provided, however, that if any of the foregoing banks are not suitable to serve
as a Reference Bank, then any leading banks selected by the Securities
Administrator which are engaged in transactions in Eurodollar deposits in the
International Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Depositor or any Affiliate thereof and (iii) which have been designated as
such by the Securities Administrator.
REGULAR INTEREST CERTIFICATES: The Certificates, other than the Class [
] Certificates.
REGULATION S PERMANENT GLOBAL CERTIFICATE: As defined in Section 5.1.
REGULATION S TEMPORARY GLOBAL CERTIFICATE: As defined in Section 5.1.
RELEASE DATE: The [ ] day after the later of (i) commencement of the
offering of the Certificates and (ii) the Closing Date.
RELIEF ACT: The Servicemembers Relief Act of 2003, as amended, or
similar state or local laws.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and a Loan, any reduction in the amount of interest collectible on such Loan for
the most recently ended calendar month immediately preceding such Distribution
Date as a result of the application of the Relief Act.
REMAINING PRE-FUNDED AMOUNT: With respect to any Group I Loans, an
amount equal to the Original Pre-Funded Amount minus the amount equal to [ ]% of
the aggregate outstanding Principal Balance of the Subsequent Loans transferred
to such Loan Group during the Pre-Funding Period.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC OPINION: An Opinion of Counsel stating that, under the REMIC
Provisions, any contemplated action will not 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).
REMIC PROVISIONS: Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
REMIC REGULAR INTERESTS: Any of the REMIC I Regular Interests or
Regular Interest Certificates.
REMIC I: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Loans (exclusive of payments of
principal and interest due on or before the Cut-Off Date, if any, received by
the Master Servicer which shall not constitute an asset of the Trust Fund) as
from time to time are subject to this Agreement and all payments under and
proceeds of such Loans (exclusive of any late payment charges received on the
Loans), together with all documents included in the related Mortgage File,
subject to Section 2.1; (ii) such funds or assets as from time to time are
deposited in the Distribution Account and belonging to the Trust Fund; (iii) any
REO Property in respect of a Loan; (iv) the primary hazard insurance policies,
if any, the primary insurance policies, if any, and all other insurance policies
with respect to the Loans; (v) the Depositor's interest in respect of the
representations and warranties made by DBSP in the DBSP Mortgage Loan Purchase
Agreement as assigned to the Trustee pursuant to Section 2.1 hereof; and (vi)
the Depositor's interest in respect of the representations and warranties made
by AHMC in the AHMC Mortgage Loan Purchase Agreement as assigned to the Trustee
pursuant to Section 2.1 hereof. Notwithstanding the foregoing, however, REMIC I
specifically excludes the Class [ ] Reserve Fund, the Cap Contract, the
Pre-Funding Account, the Capitalized Interest Account and any payments made
thereunder.
REMIC I REGULAR INTERESTS: Any of the separate non-certificated
beneficial ownership interests in REMIC I (as defined in the Preliminary
Statement) issued hereunder and designated as a Regular Interest in REMIC I.
Each REMIC I Regular Interest (other than REMIC I Regular Interest [ ], REMIC I
Regular Interest [ ], REMIC I Regular Interest [ ] and REMIC I Regular Interest
[ ]) shall accrue interest at the related Uncertificated REMIC I Pass-Through
Rate in effect from time to time, and shall be entitled to distributions of
principal (other than REMIC I Regular Interest [ ] and REMIC I Regular Interest
[ ]) 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: The pool of assets consisting of the REMIC I Regular
Interests and all payments of principal or interest on or with respect to the
REMIC I Regular Interests after the Cut-Off Date.
REMIC II CERTIFICATES: The Group I Senior Certificates, Group II Senior
Certificates, Class [ ] Certificates and Subordinate Certificates.
REMITTANCE REPORT: A report by the Securities Administrator pursuant to
Section 4.6.
REO DISPOSITION: The sale or other disposition of an REO Property on
behalf of REMIC I.
REO IMPUTED INTEREST: As to any REO Property, for any calendar month
during which such REO Property was at any time part of REMIC I, [ ] month's
interest at the applicable Net Mortgage Rate on the Scheduled Principal Balance
of such REO Property (or, in the case of the first such calendar month, of the
related Loan, if appropriate) as of the close of business on the Distribution
Date in such calendar month.
REO PROPERTY: A Mortgaged Property, title to which has been acquired by
a Servicer on behalf of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise.
RESIDUAL CERTIFICATEHOLDER: The registered Holder of a Class [ ]
Certificate.
RESIDUAL CERTIFICATES: The Class [ ] Certificates. Components [ ] and [
] of the Class [ ] Certificates are hereby designated as the sole Class of
"residual interests" in each of REMIC I and REMIC II, respectively.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any officer
in the corporate trust department or similar group of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject. When used with respect to the Master Servicer or the Securities
Administrator, the Chairman or Vice-Chairman of the Board of Directors or
Trustees, the Chairman or Vice-Chairman of the Executive or Standing Committee
of the Board of Directors or Trustees, the President, the Chairman of the
Committee on Trust Matters, any Vice-President, any Assistant Vice-President,
the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust
Officer, the Controller, any Assistant Controller or any other officer
customarily performing functions similar to those performed by any of the
above-designated officers and in each case having direct responsibility for the
administration of this Agreement, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject. When used with respect
to the Depositor or any other Person, the Chairman or Vice-Chairman of the Board
of Directors, the Chairman or Vice-Chairman of any executive committee of the
Board of Directors, the President, any Vice-President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, or any other
officer of the Depositor customarily performing functions similar to those
performed by any of the above-designated officers and also, with respect to a
particular matter, any other officer to whom 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 McGraw Hill Companies, Inc.,
provided, that at any time it is a Rating Agency.
SCHEDULED PRINCIPAL BALANCE: With respect to any Loan and a Due Date,
the unpaid principal balance of such Loan as specified in the amortization
schedule (before any adjustment to such schedule by reason of bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period) for such
Due Date, after giving effect to any previously applied Curtailments, the
payment of principal on such Due Date and any reduction of the Principal Balance
of such Loan by a bankruptcy court, irrespective of any delinquency in payment
by the related Mortgagor.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: As of the Closing Date, [ ] and thereafter,
its respective successors in interest who 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 [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ] and Class [ ]
Certificates.
SENIOR INTEREST SHORTFALL AMOUNT: For any Distribution Date and the
Senior Certificates of a Loan Group (other than the Class [ ] Certificates and
Class [ ] Certificates) will be equal to that amount by which the Interest
Distribution Amount payable to the related Senior Certificates (other than the
Class [ ] Certificates and Class [ ] Certificates) on such Distribution Date
exceeds the related Available Distribution Amount.
SENIOR LIQUIDATION AMOUNT: For any Distribution Date and a Loan Group,
the aggregate with respect to each related Loan which became a Liquidated Loan
during the related Prepayment Period, of the lesser of: (i) the related Senior
Percentage of the Principal Balance of such Loan (exclusive of the Group I
Discount Fraction thereof, if such Loan is a Group I Discount Loan or the Group
II Discount Fraction thereof, if such Loan is a Group II Discount Loan), and
(ii) the related Senior Prepayment Percentage of the Liquidation Principal with
respect to such Loan (exclusive of the Group I Discount Fraction thereof, if
such Loan is a Group I Discount Loan or the Group II Discount Fraction thereof,
if such Loan is a Group II Discount Loan).
SENIOR PERCENTAGE: As of the Closing Date, [ ]%, with respect to the
Group I Loans, and [ ]% with respect to the Group II Loans; thereafter, for any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate Certificate Principal Balance of the related Senior
Certificates (other than the Class [ ], Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates), immediately preceding such Distribution Date, and the
denominator of which is the aggregate Scheduled Principal Balance of the Loans
in such Loan Group, in each case as of the first day of the related Due Period
(exclusive of the Group I Discount Fraction of any such Loan, if such Loan is a
Group I Discount Loan or the Group II Discount Fraction of any such Loan, if
such Loan is a Group II Discount Loan).
SENIOR PREPAYMENT PERCENTAGE: For any Loan Group and any Distribution
Date, the percentage indicated in the following table:
DISTRIBUTION DATE OCCURRING IN SENIOR PREPAYMENT PERCENTAGE
---------------------------------------------------- ---------------------------------------------------------
[ ] [ ] through [ ] [ ] .......... [ ]%
[ ] [ ] through [ ] [ ]........... Senior Percentage + [ ]% of the Subordinate Percentage
[ ] [ ] through [ ] [ ]........... Senior Percentage + [ ]% of the Subordinate Percentage
[ ] [ ] through [ ] [ ]........... Senior Percentage + [ ]% of the Subordinate Percentage
[ ] [ ] through [ ] [ ]........... Senior Percentage + [ ]% of the Subordinate Percentage
[ ] [ ] and thereafter..................... Senior Percentage
Notwithstanding the foregoing, the Senior Prepayment Percentage with respect to
each Loan Group, will be equal to [ ]% on any Distribution Date on which (i) the
Aggregate Senior Percentage for that Distribution Date exceeds the Aggregate
Senior Percentage as of the Closing Date or (ii) the aggregate Scheduled
Principal Balance of the Loans (including Loans in bankruptcy, foreclosure and
related REO Property) which are [ ] or more days delinquent (averaged over the
preceding six-month period), as a percentage of the Aggregate Subordinate
Amount, is equal to or greater than [ ]% as of such Distribution Date, or
cumulative Realized Losses on the Loans allocated to the Subordinate
Certificates are greater than the following amounts:
PERCENTAGE OF THE AGGREGATE SUBORDINATE
DISTRIBUTION DATE OCCURRING IN AMOUNT AS OF THE CUT-OFF DATE
---------------------------------------------------------- ----------------------------------------
[ ] [ ] through [ ] [ ]................. [ ]%
[ ] [ ] through [ ] [ ]................. [ ]%
[ ] [ ] through [ ] [ ]................. [ ]%
[ ] [ ] through [ ] [ ]................. [ ]%
[ ] [ ] and thereafter........................... [ ]%
If on any Distribution Date the allocation to the Senior Certificates of a Loan
Group (other than the Class [ ], Class [ ], Class [ ], Class [ ] and Class [ ]
Certificates) of Principal Prepayments in the percentage required would reduce
the sum of the aggregate Certificate Principal Balances of the related Senior
Certificates (other than the Class [ ], Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates) below zero, the Senior Prepayment Percentage for such
Distribution Date shall be limited to the percentage necessary to reduce such
sum to [ ].
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date and a Loan Group, the sum of the following for that Distribution Date:
(1) the related Senior Percentage of the related Principal
Distribution Amount (exclusive of the portion thereof
attributable to the Group I Discount Fractional Principal
Amount or the portion thereof attributable to the Group II
Discount Fractional Principal Amount, as applicable);
(2) the related Senior Prepayment Percentage of the related
Principal Prepayment Amount (exclusive of the portion thereof
attributable to the Group I Discount Fractional Principal
Amount or the portion thereof attributable to the Group II
Discount Fractional Principal Amount, as applicable); and
(3) the related Senior Liquidation Amount.
SERVICER: [ ], [ ], [ ], [ ] or [ ], as applicable, or any successor
appointed under the applicable Servicing Agreement.
SERVICER CREDIT RISK MANAGEMENT AGREEMENT: As defined in Section 3.1.
SERVICER REMITTANCE DATE: With respect to each Distribution Date shall
mean (i) with respect to [ ], [ ] and [ ], the [ ] day of the calendar month in
which such Distribution Date occurs or, if such [ ] day is not a Business Day,
the Business Day immediately preceding such [ ] day, (ii) with respect to [ ],
the [ ] day of the calendar month in which such Distribution Date occurs or, if
such [ ] day is not a Business Day, the Business Day immediately preceding such
[ ] day and (iii) with respect to [ ], the [ ] day of the calendar month in
which such Distribution Date occurs or, if such [ ] day is not a Business Day,
the Business Day immediately preceding such [ ] day.
SERVICING ADVANCES: The customary reasonable and necessary
"out-of-pocket" costs and expenses incurred prior to or on or after the Cut-Off
Date by the related Servicer in connection with a default, delinquency or other
unanticipated event by the related Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, in respect of a particular Loan
and (iii) the management (including reasonable fees in connection therewith) and
liquidation of any REO Property. No Servicer shall be required to make any
Servicing Advance in respect of a Loan or REO Property that, in the good faith
business judgment of such Servicer would not be ultimately recoverable from
related Insurance Proceeds or Liquidation Proceeds on such Loan or REO Property
as provided herein.
SERVICING AGREEMENT: The [ ] Servicing Agreement, the [ ] Servicing
Agreement, the [ ] Servicing Agreement, the [ ] Servicing Agreement, the [ ]
Servicing Agreement and the [ ] Servicing Agreement, each as modified by the
related Assignment Agreement.
SERVICING FEE: With respect to each Loan and for any Distribution Date,
an amount equal to [ ] of the product of the related Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Loan as of the Due Date in
the month preceding the month of such Distribution Date. The Servicing Fee is
payable solely from collections of interest on the Loans or as otherwise
provided in the related Servicing Agreement.
SERVICING FEE RATE: As set forth in the related Servicing Agreement.
SERVICING OFFICER: Any individual involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee, the Depositor
and the Securities Administrator on the Closing Date by each Servicer and the
Master Servicer, as such lists may from time to time be amended.
SHIFT PERCENTAGE: Shall be [ ]% for the first [ ]years following the
Closing Date, [ ]% in the sixth year following the Closing Date, [ ]% in the [ ]
year following the Closing Date, [ ]% in the [ ] year following the Closing
Date, [ ]% in the ninth year following the Closing Date and [ ]% for any year
thereafter.
SPECIAL HAZARD COVERAGE: As of the Cut-Off Date $5,083,621.26. On each
Anniversary, the Special Hazard Coverage will be reduced to an amount equal to
the lesser of:
(1) the greatest of:
(a) the aggregate Principal Balance of the Loans located
in the zip code containing the largest aggregate
Principal Balance of the Loans;
(b) [ ]% of the aggregate Principal Balance of the Loans;
and
(c) [ ] the Principal Balance of the largest Loan,
calculated as of the Due Date in the immediately
preceding month (after giving effect to all scheduled
payments whether or not received); and
(2) the Special Hazard Coverage as of the Cut-Off Date as reduced by
the Special Hazard Losses allocated to the Certificates since the
Cut-Off Date.
SPECIAL HAZARD LOSS: The occurrence of any direct physical
loss or damage to a Mortgaged Property relating to a Liquidated Loan, as
reported by the related Servicer, not covered by a standard hazard maintenance
policy with extended coverage which is caused by or results from any cause
except: (i) fire, lightning, windstorm, hail, explosion, riot, riot attending a
strike, civil commotion, vandalism, aircraft, vehicles, smoke, sprinkler
leakage, except to the extent of that portion of the loss which was uninsured
because of the application of a co-insurance clause of any insurance policy
covering these perils; (ii) normal wear and tear, gradual deterioration,
inherent vice or inadequate maintenance of all or part thereof; (iii) errors in
design, faulty workmanship or materials, unless the collapse of the property or
a part thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect, proximate or remote or
be in whole or in part caused by, contributed to or aggravated by a peril
covered by this definition of Special Hazard Loss; (v) hostile or warlike action
in time of peace or war, including action in hindering, combating or defending
against an actual, impending or expected attack (a) by any government or
sovereign power (dejure or defacto), or by an authority maintaining or using
military, naval or air forces, (b) by military, naval or air forces, or (c) by
an agent of any such government, power, authority or forces; (vi) any weapon of
war employing atomic fission or radioactive force whether in time of peace or
war; (vii) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such occurrence; or (viii) seizure or destruction under quarantine or
customs regulations, or confiscation by order of any government or public
authority.
STARTUP DAY: With respect to each REMIC, the day designated as such
pursuant to Section 10.1(b) hereof.
SUBORDINATE CERTIFICATES: The Class [ ] Certificates and Class [ ]
Certificates.
SUBORDINATE LIQUIDATION AMOUNT: For a Distribution Date and a Loan
Group, the excess, if any, of (i) the aggregate Liquidation Principal for all
Loans in such Loan Group which became Liquidated Loans during the related
Prepayment Period, over (ii) the related Senior Liquidation Amount for such
Distribution Date and the Group I Discount Fraction of Liquidation Principal
with respect to Group I Discount Loans or the Group II Discount Fraction of
Liquidation Principal with respect to Group II Discount Loans, as applicable,
received during the related Prepayment Period.
SUBORDINATE PERCENTAGE: For any Distribution Date and a Loan Group, [
]% minus the related Senior Percentage for such date. As of the Closing Date,
the Subordinate Percentage will be [ ]% with respect to the Group I Loans, and [
]% with respect to the Group II Loans.
SUBORDINATE PREPAYMENT PERCENTAGE: For any Distribution Date, [ ]%
minus the related Senior Prepayment Percentage. As of the Closing Date, the
Subordinate Prepayment Percentage will be [ ]% for each Loan Group.
SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date and a Loan Group, an amount equal to the sum of the following
for that Distribution Date:
(1) the related Subordinate Percentage of the related
Principal Distribution Amount (exclusive of the
portion thereof attributable to the Group I Discount
Fractional Principal Amount or the portion thereof
attributable to the Group II Discount Fractional
Principal Amount, as applicable);
(2) the related Subordinate Principal Prepayment Amount
(exclusive of the portion thereof attributable to the
Group I Discount Fractional Principal Amount or the
portion thereof attributable to the Group II Discount
Fractional Principal Amount, as applicable); and
(3) the related Subordinate Liquidation Amount.
provided, however, that the Subordinate Principal Distribution Amount for the
Group I Loans shall be reduced by the amounts required to be distributed to the
Class [ ] Certificates with respect to the Group I Discount Fractional Principal
Shortfall on such Distribution Date and the amounts required to be distributed
to the Senior Certificates of a Loan Group in connection with any Collateral
Deficiency Amount; provided further that the Subordinate Principal Distribution
Amount for the Group II Loans shall be reduced by the amounts required to be
distributed to the Class [ ] Certificates with respect to the Group II Discount
Fractional Principal Shortfall on such Distribution Date and the amounts
required to be distributed to the Senior Certificates of a Loan Group in
connection with any Collateral Deficiency Amount. Any reduction in the
Subordinate Principal Distribution Amount pursuant to the foregoing proviso
shall offset the amount calculated pursuant to clause (1), clause (3) and clause
(2) above, in that order.
SUBORDINATE PRINCIPAL PREPAYMENT AMOUNT: For any Distribution Date and
a Loan Group, the related Subordinate Prepayment Percentage of the Principal
Prepayment Amount for such Distribution Date (exclusive of the portion thereof
attributable to the Group I Discount Fractional Principal Amount for that
Distribution Date or the portion thereof attributable to the Group II Discount
Fractional Principal Amount for that Distribution Date, as applicable).
SUBORDINATION LEVEL: On any specified date with respect to any Class of
Subordinate Certificates, the percentage obtained by dividing: (1) the sum of
the aggregate Certificate Principal Balances of all Classes of Subordinate
Certificates which are subordinate in right of payment to such Class as of such
date, before giving effect to distributions of principal or allocations of
related Realized Losses on such date; by (2) the sum of the aggregate
Certificate Principal Balances of all Classes of Certificates (other than the
Class [ ], Class [ ] and Class [ ] Certificates) as of such date, before giving
effect to distributions of principal or allocations of related Realized Losses
on such date.
SUBSEQUENT CUT-OFF DATE: With respect to those Subsequent Loans sold to
the Trust pursuant to a Subsequent Transfer Instrument, the later of (i) first
day of the month in which the related Subsequent Transfer Date occurs or (ii)
the date of origination of such Loan.
SUBSEQUENT LOAN: A Loan sold by the Depositor to the Trust Fund during
the Pre-Funding Period pursuant to Section 2.6, such Loan being identified on
the Loan Schedule attached to a Subsequent Transfer Instrument and assigned to
the Group I Loans.
SUBSEQUENT LOAN PURCHASE AGREEMENT: The agreement between the Depositor
and DBSP, regarding the transfer of the Subsequent Loans by [ ] to the
Depositor.
SUBSEQUENT RECOVERIES: With respect to any Distribution Date, all
amounts received during the related Prepayment Period by the related Servicer
specifically related to a defaulted Loan or disposition of an REO Property prior
to the related Prepayment Period that resulted in a Realized Loss, after the
liquidation or disposition of such defaulted Loan.
SUBSEQUENT TRANSFER DATE: With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Loans are transferred to
the Trust Fund.
SUBSEQUENT TRANSFER INSTRUMENT: Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee and the
Depositor substantially in the form attached hereto as Exhibit E, by which
Subsequent Loans are transferred to the Trust Fund.
SUBSTITUTE LOAN: A mortgage loan substituted for a Deleted Loan
pursuant to the terms of this Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance, after application of
all scheduled payments of principal and interest due during or prior to the
month of substitution, not in excess of the Scheduled Principal Balance of the
Deleted Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate not less than (and not
more than one percentage point in excess of) the Mortgage Interest Rate of the
Deleted Loan, (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Loan, (iv) have the same Due
Date as the Due Date on the Deleted Loan, (v) have a Loan-to-Value Ratio as of
the date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Loan as of such date, (vi) have a risk grading at least equal to the
risk grading assigned on the Deleted Loan, (vii) is a "qualified mortgage" as
defined in the REMIC Provisions and (viii) conform to each representation and
warranty set forth in Section 6 of the related Mortgage Loan Purchase Agreement
applicable to the Deleted Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Loans, the amounts described in clause (i)
hereof shall be determined on the basis of aggregate principal balances, the
Mortgage Interest Rates described in clause (ii) hereof shall be determined on
the basis of weighted average Mortgage Interest Rates, the terms described in
clause (iii) hereof shall be determined on the basis of weighted average
remaining term to maturity, the Loan-to-Value Ratios described in clause (v)
hereof shall be satisfied as to each such Substitute Loan, the risk gradings
described in clause (vi) hereof shall be satisfied as to each such Substitute
Loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clauses (vii) and (viii) hereof must
be satisfied as to each Substitute Loan or in the aggregate, as the case may be.
TAX MATTERS PERSON: The Holder of the Class [ ] Certificates issued
hereunder or any Permitted Transferee of such Class [ ] Certificateholder shall
be the initial "tax matters person" for REMIC I and REMIC II within the meaning
of Section 6231(a)(7) of the Code.
TERMINATION PRICE: As defined in Section 9.1.
TRANSFEREE: Any Person who is acquiring by an Ownership Interest in a
Junior Subordinate Certificate or Residual Certificate.
TRUST FUND: Collectively, all of the assets of REMIC I, REMIC II, the
Cap Contract, the Class [ ] Reserve Fund, the Pre-Funding Account, the
Capitalized Interest Account and any amounts on deposit therein and any proceeds
thereof.
TRUST REMIC: Any of REMIC I or REMIC II.
TRUSTEE: [ ], a national banking association, or its successor in
interest, or any successor trustee appointed as herein provided.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Prepayment Interest Shortfalls and shortfalls
resulting from application of the Relief Act.
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest, 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 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 4.1 and
4.3, as applicable and, if and to the extent necessary and appropriate, shall be
further reduced on such Distribution Date by Realized Losses, as provided in
Sections 4.2. The Uncertificated Principal Balance of each REMIC Regular
Interest shall never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC I
Regular Interests [ ], [ ], [ ], [ ], [ ], [ ], [ ], [ ], [ ], [ ], [ ], [ ], [
], [ ], [ ] and [ ] [ ]% per annum. With respect to REMIC I Regular Interest [
], the percentage equivalent of a fraction the numerator of which is equal to
the product of (i) the excess of (a) the weighted average of the Net Mortgage
Rates of the Group I Non-Discount Loans over (b) [ ]% and (ii) the aggregate
Principal Balance of the Group I Non-Discount Loans and the denominator of which
is equal to the aggregate Principal Balance of the Group I Loans. With respect
to REMIC I Regular Interest [ ], the percentage equivalent of a fraction the
numerator of which is equal to the product of (i) the excess of (a) the weighted
average of the Net Mortgage Rates of the Group II Non-Discount Loans over (b) [
]% and (ii) the aggregate Principal Balance of the Group II Non-Discount Loans
and the denominator of which is equal to the aggregate Principal Balance of the
Group II Loans. With respect to REMIC I Regular Interests [ ], [ ], [ ] and [ ],
[ ]%.
UNDERWRITER: [ ]
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property such that
the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.9.
U.S. PERSON: A citizen or resident of the United States, a corporation
or partnership (including an entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in, or under the
laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, 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 such U.S. Persons have the authority to control all substantial decisions
of the trust. To the extent prescribed in regulations by the Secretary of the
Treasury, which have not yet been issued, a trust which was in existence on
August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part 1 of subchapter J of chapter 1 of the Code), and which was
treated as a U.S. Person on August 20, 1996 may elect to continue to be treated
as a U.S. Person notwithstanding the previous sentence.
VERIFICATION AGENT: As defined in Section 3.28.
VERIFICATION REPORT: As defined in Section 3.28.
[ ] CUSTODIAL AGREEMENT: The Custodial Agreement dated as of [ ], 20[
], among the Trustee, [ ] as Custodian and as a Servicer, [ ] and [ ] as such
agreement may be amended or supplemented from time to time.
[ ] SERVICING AGREEMENT: Shall mean the Seller's Warranties and
Servicing Agreement, dated as of [ ], 20[ ], between [ ] and [ ], as amended (as
modified pursuant to the related Assignment Agreement).
Section 1.2 ALLOCATION OF CERTAIN INTEREST SHORTFALL.
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 Prepayment Interest Shortfalls incurred in respect of
the Loans for any Distribution Date shall be allocated to the REMIC I Regular
Interests, pro rata, 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.
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 CONVEYANCE OF TRUST FUND. The Depositor, concurrently with
the execution and delivery hereof, does hereby transfer, assign, set over and
otherwise convey to the Trustee, on behalf of the Trust, without recourse, for
the benefit of the Certificateholders, all the right, title and interest of the
Depositor, including any security interest therein for the benefit of the
Depositor, in and to the Loans identified on the Loan Schedule, the rights of
the Depositor under the Mortgage Loan Purchase Agreements, the Servicing
Agreements, the Assignment Agreements, the Subsequent Mortgage Loan Purchase
Agreement and such assets as shall from time to time be credited or a required
by the terms of this Agreement to be credited to the Pre-Funding Account and
Capitalized Interest Account, (including, without limitation the right to
enforce the obligations of the other parties thereto thereunder), and all other
assets included or to be included in REMIC I. Such assignment includes all
interest and principal received by the Depositor or the applicable Servicer on
or with respect to the Loans (other than payments of principal and interest due
on such Loans on or before the Cut-Off Date). The Depositor herewith delivers to
the Trustee executed copies of the Mortgage Loan Purchase Agreements and the
Assignment Agreements (with copies of the related Servicing Agreements attached
thereto).
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the applicable Custodian pursuant to the
applicable Custodial Agreement the documents with respect to each Loan as
described under Section 2 of the applicable Custodial Agreement (the "Loan
Documents"). In connection with such delivery and as further described in the
applicable Custodial Agreement, the applicable Custodian will be required to
review such Loan Documents and deliver to the Trustee, the Depositor, the Master
Servicer and [ ] or [ ], as applicable, certifications (in the forms attached to
the applicable Custodial Agreement) with respect to such review with exceptions
noted thereon. In addition, the Depositor under the Custodial Agreements will
have to cure certain defects with respect to the Loan Documents for the related
Loans after the delivery thereof by the Depositor to the Custodians 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, including,
but not limited to certain insurance policies and documents contemplated by
Section 3.12, and preparation and delivery of the certifications shall be
performed by the Custodians pursuant to the terms and conditions of the
Custodial Agreements.
The Depositor shall deliver or cause the related originator to deliver
to the related Servicer copies of all trailing documents required to be included
in the related Mortgage File at the same time the originals or certified copies
thereof are delivered to the Trustee or applicable Custodian, such documents
including the mortgagee policy of title insurance and any Loan Documents upon
return from the recording office. The Servicers shall not be responsible for any
custodian fees or other costs incurred in obtaining such documents and the
Depositor shall cause the Servicers to be reimbursed for any such costs the
Servicers may incur in connection with performing its obligations under this
Agreement.
The Loans permitted by the terms of this Agreement to be included in
the Trust are limited to (i) Loans (which the Depositor acquired pursuant to the
Mortgage Loan Purchase Agreements, which contains, among other representations
and warranties, a representation and warranty of [ ] or [ ], as applicable, that
no Loan sold by it to the Depositor 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) Substitute Loans (which, by definition as set forth herein and referred to
in the Mortgage Loan Purchase Agreements, are required to conform to, among
other representations and warranties, the representation and warranty of the [ ]
or [ ], as applicable, that no Substitute Loan sold by it to the Depositor 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 2.2 ACCEPTANCE BY TRUSTEE. The Trustee acknowledges receipt,
subject to the provisions of Section 2.1 hereof and Section 2 of the Custodial
Agreements, of the Loan Documents and all other assets included in the
definition of "REMIC I" under clauses (i), (ii), (to the extent of amounts
deposited into the Distribution Account), (iv) and (v) and declares that it
holds (or the applicable Custodian on its behalf holds) and will hold such
documents and the other documents delivered to it constituting a Loan Document,
and that it holds (or the applicable 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.
Section 2.3 REPURCHASE OR SUBSTITUTION OF LOANS.
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of a breach
by [ ] or [ ], as applicable, of any representation, warranty or covenant under
the related Mortgage Loan Purchase Agreement in respect of any Loan that
materially and adversely affects the value of such Loan or the interest therein
of the Certificateholders, the Trustee or the applicable Custodian shall
promptly notify [ ] or [ ], as applicable, of such defect, missing document or
breach and request that [ ] or [ ], as applicable, deliver such missing
document, cure such defect or breach within sixty (60) days from the date [ ] or
[ ], as applicable, was notified of such missing document, defect or breach, and
if [ ] or [ ], as applicable, does not deliver such missing document or cure
such defect or breach in all material respects during such period, the Trustee
shall enforce the obligations of [ ] or [ ], as applicable, under the related
Mortgage Loan Purchase Agreement to repurchase such Loan from REMIC I at the
Purchase Price within [ ] days after the date on which [ ] or [ ], as
applicable, was notified of such missing document, defect or breach, if and to
the extent that [ ] or [ ], as applicable, is obligated to do so under the
related Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Loan shall be deposited in the Distribution Account and the Trustee, upon
receipt of written certification from the Securities Administrator of such
deposit and receipt by the applicable Custodian of a properly completed request
for release for such Loan in the form of EXHIBIT 3 to the applicable Custodial
Agreement, shall release or cause the applicable Custodian to release to [ ] or
[ ], as applicable, the related Mortgage File and the Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as [ ] or [ ], as applicable, shall
furnish to it and as shall be necessary to vest in [ ] or [ ], as applicable,
any Loan released pursuant hereto, and the Trustee shall not have any further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Loan as provided above, if so provided in the related Mortgage Loan
Purchase Agreement, [ ] or [ ], as applicable, may cause such Loan to be removed
from REMIC I (in which case it shall become a Deleted Loan) and substitute one
or more Substitute Loans in the manner and subject to the limitations set forth
in Section 2.3(b). It is understood and agreed that the obligation of [ ] and [
] to cure or to repurchase (or to substitute for) any Loan sold by it to the
Depositor as to which a document is missing, a material defect in a constituent
document exists or as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such omission, defect or breach
available to the Trustee and the Certificateholders. Notwithstanding the
foregoing, if the representation made by [ ] or [ ], as applicable, in Section
6(xxiv) of the related Mortgage Loan Purchase Agreement is breached, the Trustee
shall enforce the obligation of [ ] or [ ], as applicable, to repurchase such
Loan at the Purchase Price, or to provide a Substitute Loan (plus any costs and
damages incurred by the Trust Fund in connection with any violation by any such
Loan of any predatory or abusive lending law) within ninety (90) days after the
date on which [ ] or [ ], as applicable, was notified of such breach.
In addition, promptly upon the earlier of discovery by the Master
Servicer or receipt of notice from a Servicer or [ ] or [ ], as applicable, to a
Responsible Officer of the Master Servicer of the breach of the representation
of [ ] or [ ], as applicable, set forth in Section 5(x) of the related Mortgage
Loan Purchase Agreement which materially and adversely affects the interests of
the Holders of the Certificates in any Prepayment Charge, the Master Servicer
shall promptly notify [ ] or [ ], as applicable, and the Trustee of such breach.
The Trustee shall enforce the obligations of [ ] or [ ], as applicable, under
the related Mortgage Loan Purchase Agreement to remedy such breach to the extent
and in the manner set forth in the related Mortgage Loan Purchase Agreement.
(b) Any substitution of Substitute Loans for Deleted Loans made
pursuant to Section 2.3(a) must be effected prior to the date which is two years
after the Startup Day for REMIC I.
As to any Deleted Loan for which [ ] or [ ], as applicable, substitutes
a Substitute Loan or Loans, such substitution shall be effected by [ ] or [ ],
as applicable, delivering to the Trustee or the applicable Custodian on behalf
of the Trustee, for such Substitute Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2 of the applicable Custodial Agreement, as applicable, together with an
Officers' Certificate providing that each such applicable Substitute Loan
satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
applicable Custodian on behalf of the Trustee shall acknowledge receipt of such
Substitute Loan or Loans and, within [ ] Business Days thereafter, review such
documents and deliver to the Depositor, the Trustee and the Master Servicer,
with respect to such Substitute Loan or Loans, an initial certification pursuant
to the applicable Custodial Agreement, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the applicable Custodian
on behalf of the Trustee shall deliver to the Depositor, the Trustee and the
Master Servicer a final certification pursuant to the applicable Custodial
Agreement with respect to such Substitute Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Substitute Loans
in the month of substitution are not part of REMIC I and shall be retained by [
] or [ ], as applicable. For the month of substitution, distributions to
Certificateholders shall reflect the Monthly Payment due on such Deleted Loan on
or before the Due Date in the month of substitution, and [ ] or [ ], as
applicable, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Loan. The Depositor shall give or cause to
be given written notice to the Certificateholders that such substitution has
taken place, shall amend the Loan Schedule to reflect the removal of such
Deleted Loan from the terms of this Agreement and the substitution of the
Substitute Loan or Loans and shall deliver a copy of such amended Loan Schedule
to the Trustee and the Master Servicer. Upon such substitution, such Substitute
Loan or Loans shall constitute part of the Trust Fund and shall be subject in
all respects to the terms of this Agreement and the related Mortgage Loan
Purchase Agreement including all applicable representations and warranties
thereof included herein or in the related Mortgage Loan Purchase Agreement.
For any month in which [ ] or [ ], as applicable, substitutes one or
more Substitute Loans for one or more Deleted Loans, the Master Servicer shall
determine the amount (the "Substitution Shortfall Amount"), if any, by which the
aggregate Purchase Price of all such Deleted Loans exceeds the aggregate of, as
to each such Substitute Loan, the Scheduled Principal Balance thereof as of the
Due Date in the month of substitution, together with one month's interest on
such Scheduled Principal Balance at the applicable Net Mortgage Rate, plus all
outstanding Advances and Servicing Advances (including Nonrecoverable Advances)
related thereto. On the date of such substitution, [ ] or [ ], as applicable,
shall deliver or cause to be delivered to the Securities Administrator for
deposit in the Distribution Account an amount equal to the Substitution
Shortfall Amount, if any, and the Trustee or the applicable Custodian on behalf
of the Trustee, upon receipt of the related Substitute Loan or Loans and
certification by the Securities Administrator of such deposit and receipt by the
applicable Custodian of a properly completed request for release for such Loan
in the form of EXHIBIT 3 to the applicable Custodial Agreement, shall release to
[ ] or [ ], as applicable, the related Mortgage File or Files and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as [ ] or [ ], as applicable,
shall deliver to it and as shall be necessary to vest therein any Deleted Loan
released pursuant hereto.
In addition, [ ] or [ ] , as applicable, shall obtain at its own
expense and deliver to the Trustee, the Master Servicer, the Securities
Administrator and the Depositor an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on any REMIC,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
(c) Upon discovery by the Depositor, [ ], [ ], the Master Servicer or
the Trustee that any Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall
within [ ] Business Days give written notice thereof to the other parties. In
connection therewith, [ ] or [ ] , as applicable, shall repurchase or substitute
one or more Substitute Loans for the affected Loan within [ ] days of the
earlier of discovery or receipt of such notice with respect to such affected
Loan. Such repurchase or substitution shall be made by (i) [ ] or [ ], as
applicable, if the affected Loan's status as a non-qualified mortgage is or
results from a breach of any representation, warranty or covenant made by [ ] or
[ ], as applicable, under the related Mortgage Loan Purchase Agreement or (ii)
the Depositor, if the affected Loan's status as a non-qualified mortgage does
not result from a breach of representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.3(a).
The Trustee shall reconvey to [ ], [ ] or the Depositor the Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Loan repurchased for breach of a representation or warranty.
(d) Within [ ] days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.5 which
materially and adversely affects the interests of the related Certificateholders
in any Loan or Prepayment Charge, the Master Servicer shall cure such breach in
all material respects.
Section 2.4 AUTHENTICATION AND DELIVERY OF CERTIFICATES; DESIGNATION OF
CERTIFICATES AS REMIC REGULAR INTERESTS AND RESIDUAL INTERESTS.
(a) The Trustee acknowledges the transfer to the extent provided herein
and assignment to it of the Trust Fund and, concurrently with such transfer and
assignment, has caused the Securities Administrator to execute and authenticate
and has delivered to or upon the order of the Depositor, in exchange for the
Trust Fund, Certificates evidencing the entire ownership of the Trust Fund.
(b) This Agreement shall be construed so as to carry out the intention
of the parties that each of REMIC I and REMIC II be treated as a REMIC at all
times prior to the date on which the Trust Fund is terminated. The "regular
interests" (within the meaning of Section 860G(a)(1) of the Code) in REMIC II
shall consist of the Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ]and Class [ ]Certificates. The
"residual interest" (within the meaning of Section [ ] of the Code) in REMIC II
shall consist of Component R-2. The "regular interests" (within the meaning of
Section 860G(a)(1) of the Code) of REMIC I shall consist of the REMIC I Regular
Interests. The "residual interest" (within the meaning of Section 860(G)(a)(2)
of the Code) of REMIC I shall consist of Component R-1.
Section 2.5 REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER. The
Master Servicer hereby represents, warrants and covenants to the Trustee, for
the benefit of each of the Trustee, the Certificateholders and the Depositor
that as of the Closing Date or as of such date specifically provided herein:
(a) 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;
(b) The Master Servicer has the full power and authority to conduct its
business as presently conducted by it and to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Master Servicer has duly authorized the execution, delivery and performance
of this Agreement, has duly executed and delivered this Agreement, and this
Agreement, assuming due authorization, execution and delivery by the Depositor
and the Trustee, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity;
(c) 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 (i) result in a breach of any term or provision of charter and by-laws
of the Master Servicer or (ii) 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, (A) the ability of the Master Servicer to perform its obligations under
this Agreement or (B) the business, operations, financial condition, properties
or assets of the Master Servicer taken as a whole;
(d) 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;
(e) 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;
(f) There are no actions or proceedings against, or investigations
known to it of, the Master Servicer before any court, administrative or other
tribunal (i) that might prohibit its entering into this Agreement, (ii) seeking
to prevent the consummation of the transactions contemplated by this Agreement
or (iii) 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
(g) 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.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.5 shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders.
Section 2.6 CONVEYANCE OF SUBSEQUENT LOANS.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Securities Administrator's delivery, on behalf of the
Trustee, on the Subsequent Transfer Dates to or upon the order of the Depositor
of all or a portion of the balance of funds in the Pre-Funding Account, the
Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over
and convey without recourse to the Trust Fund but subject to the other terms and
provisions of this Agreement all of the right, title and interest of the
Depositor in and to (i) the Subsequent Loans identified on the Loan Schedule
attached to the related Subsequent Transfer Instrument delivered by the
Depositor on such Subsequent Transfer Date, (ii) all interest accruing thereon
on and after the Subsequent Cut-Off Date and all collections in respect of
interest and principal due after the Subsequent Cut-Off Date and (iii) all items
with respect to such Subsequent Loans to be delivered pursuant to Section 2.1
and the other items in the related Mortgage Files; provided, however, that the
Depositor reserves and retains all right, title and interest in and to principal
received and interest accruing on the Subsequent Loans prior to the related
Subsequent Cut-Off Date. The transfer to the Trustee for deposit in the Trust
Fund by the Depositor of the Subsequent Loans identified on the Loan Schedule
shall be absolute and is intended by the Depositor, the Trustee and the
Certificateholders to constitute and to be treated as a sale of the Subsequent
Loans by the Depositor to the Trust Fund. The related Mortgage File for each
Subsequent Loan shall be delivered to the Trustee (or the applicable Custodian
on its behalf) at least three (3) Business Days prior to the related Subsequent
Transfer Date.
The purchase price paid by the Trustee on behalf of the Trust
Fund from amounts released from the Pre-Funding Account shall be [ ] of the
aggregate Principal Balance of the related Subsequent Loans so transferred (as
identified on the Loan Schedule provided by the Depositor). This Agreement shall
constitute a fixed-price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.
(b) The Depositor shall transfer to the Trustee for deposit in the
Trust Fund the Subsequent Loans and the other property and rights related
thereto as described in paragraph (a) above, and the Securities Administrator
shall release funds from the Pre-Funding Account only upon the satisfaction of
each of the following conditions on or prior to the related Subsequent Transfer
Date:
(i) the Depositor shall have provided the Trustee, the
Securities Administrator and the Rating Agencies with a timely addition
notice substantially in the form set forth on Exhibit D hereto (an
"Addition Notice") and shall have provided any information reasonably
requested by the Trustee with respect to the Subsequent Loans;
(ii) the Depositor shall have delivered to the Trustee and the
Securities Administrator a duly executed Subsequent Transfer
Instrument, substantially in the form of Exhibit E, which shall include
a Loan Schedule listing the Subsequent Loans, and [ ] shall have
delivered a computer file acceptable to the Trustee and the Securities
Administrator containing such Loan Schedule to the Trustee and the
Securities Administrator at least [ ] Business Days prior to the
related Subsequent Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Depositor shall not
be insolvent nor shall it have been rendered insolvent by such transfer
nor shall it be aware of any pending insolvency;
(iv) such sale and transfer shall not result in a material
adverse tax consequence to the Trust Fund or the Certificateholders;
(v) the Pre-Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent
Loans in a manner that it believed to be adverse to the interests of
the Certificateholders;
(vii) the Depositor shall have delivered to the Trustee (with
a copy to the Securities Administrator) a Subsequent Transfer
Instrument confirming the satisfaction of the conditions precedent
specified in this Section 2.6 and, pursuant to the Subsequent Transfer
Instrument, assigned to the Trustee without recourse for the benefit of
the Certificateholders all the right, title and interest of the
Depositor, in, to and under the Subsequent Mortgage Loan Purchase
Agreement, to the extent of the Subsequent Loans;
(viii) the Depositor shall have delivered to the Trustee an
Opinion of Counsel addressed to the Trustee and the Rating Agencies
with respect to the transfer of the Subsequent Loans substantially in
the form of the Opinion of Counsel delivered to the Trustee on the
Closing Date regarding the true sale of the Subsequent Loans; and
(ix) [ ] or a successor to [ ], appointed in accordance with
the terms of this Agreement, is the servicer of the Subsequent Loans.
(c) Each Subsequent Loan that has been identified and is expected to be
sold to the trust on the related Subsequent Transfer Date will have the
characteristics set forth below as of the Cut-Off Date. In addition, the
obligation of the Trust Fund to purchase any Subsequent Loan that has not been
identified on the Cut-Off Date, but is sold to the Trust during the Pre-Funding
Period, is subject to the satisfaction of the conditions set forth in the
immediately preceding paragraph and the accuracy of the following
representations and warranties with respect to each such Subsequent Loan
determined as of the applicable Subsequent Transfer Date: (i) such Subsequent
Loan may not be [ ] or more days delinquent as of the last day of the month
preceding the Subsequent Cut-Off Date; (ii) the servicer of each Subsequent Loan
will be [ ] (or its successor); (iii) such Subsequent Loan will be secured by a
first lien; (iv) the original term to stated maturity of such Subsequent Loan
will be no less than [ ]; (v) the latest maturity date of any Subsequent Loan
will be no later than [ ]; (vi) no Subsequent Loan will have a first payment
date occurring after [ ]; (vii) such Subsequent Loan will have a credit score of
not less than [ ]; (viii) such Subsequent Loan will not have a loan-to-value
ratio greater than [ ]%; and (ix) such Subsequent Loan will not have a principal
balance greater than $[ ].
(d) As of each Subsequent Cut-Off Date, the aggregate of the Subsequent
Loans identified and expected to be sold to the trust on the related Subsequent
Transfer Date, including any Subsequent Loans that have not been identified on
the Cut-Off Date and are sold to the trust during the Pre-Funding Period, will
satisfy the following criteria: (i) have a weighted average credit score greater
than approximately [ ]; (ii) have no less than approximately [ ]% of the
Mortgaged Properties be owner occupied; (iii) have no less than approximately [
]% of the Mortgaged Properties be single family detached or planned unit
developments; (iv) have no more than approximately [ ]% of the Subsequent Loan
be cash out refinance; (v) have a weighted average remaining term to stated
maturity of less than approximately [ ]; (vi) have a weighted average
loan-to-value ratio of not more than approximately [ ]%; (vii) no more than
approximately [ ]% of the Subsequent Loan by aggregate principal balance will be
concentrated in one state; and (viii) be acceptable to the Rating Agencies.
(e) Notwithstanding the foregoing, any Subsequent Loan may be rejected
by any Rating Agency if the inclusion of any such Subsequent Loan would
adversely affect the ratings of any Class of Certificates. At least [ ] Business
Day prior to the Subsequent Transfer Date, each Rating Agency shall notify the
Trustee and the Securities Administrator as to which Subsequent Loans, if any,
shall not be included in the transfer on the Subsequent Transfer Date; provided,
however, that [ ] shall have delivered to each Rating Agency at least [ ]
Business Days prior to such Subsequent Transfer Date a computer file acceptable
to each Rating Agency describing the characteristics specified in paragraphs (c)
and (d) above.
Section 2.7 ESTABLISHMENT OF THE 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 "Deutsche Alt-A Securities, Inc. Mortgage Loan Trust,
Series [ ]" and does hereby appoint [ ], as Trustee in accordance with the
provisions of this Agreement.
Section 2.8 PURPOSES 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
2.8 may not be amended, without the consent of the Certificateholders evidencing
[ ]% or more of the aggregate voting rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS
Section 3.1 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Loans in accordance with the terms of the applicable Servicing
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 each 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 each Servicer and shall cause each
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Servicer under the applicable Servicing Agreement.
The Master Servicer shall independently and separately monitor each Servicer's
servicing activities with respect to each related 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 Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the statements specified in Section 4.6 and any other information and
statements required to be provided by the Master Servicer hereunder. The Master
Servicer shall reconcile the results of its Loan monitoring with the actual
remittances of the Servicers to the Distribution Account pursuant to the
applicable Servicing Agreements.
Notwithstanding anything in this Agreement or any Servicing Agreement
to the contrary, the Master Servicer shall not have any duty or obligation to
enforce any Credit Risk Management Agreement that a Servicer is a party to (a
"Servicer Credit Risk Management Agreement") or to supervise, monitor or oversee
the activities of the Credit Risk Manager under any such Servicer Credit Risk
Management Agreement with respect to any action taken or not taken by the
applicable Servicer pursuant to a recommendation of the Credit Risk Manager.
The Trustee shall furnish the Servicers and the Master Servicer with
any limited powers of attorney and other documents, each in a form acceptable to
it, necessary or appropriate to enable the Servicers and the Master Servicer to
service or master service and administer the related Loans and REO Property. The
Trustee shall have no responsibility for any action of the Master Servicer or
any Servicer pursuant to any such limited power of attorney and shall be
indemnified by the Master Servicer or such Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or such Servicer.
The Trustee, the Custodians 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 related 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 Custodians or the Securities Administrator;
provided, however, that, unless otherwise required by law, none of the Trustee,
the Custodians 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 Custodians 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, a Custodian's or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the related 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 such Servicer or 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
Loan Document or otherwise available at law or equity. The Trustee shall have no
responsibility for the willful malfeasance or any wrongful or negligent actions
taken by the Master Servicer or any Servicer in respect of any document
delivered by the Trustee under this paragraph, and the Trustee shall be
indemnified by the Master Servicer or such Servicer for any cost, liability or
expense arising from the misuse thereof by the Master Servicer or such Servicer.
Section 3.2 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall treat each REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of [ ], [ ], the related Servicer or the Master Servicer to assure
such continuing treatment. In particular, the Trustee shall not (a) sell or
permit the sale of all or any portion of the Loans or of any investment of
deposits in an Account unless such sale is as a result of a repurchase of the
Loans pursuant to this Agreement or the Trustee has received an Opinion of
Counsel stating that such sale will not result in an Adverse REMIC Event as
defined in Section 10.1(f) hereof prepared at the expense of the Trust Fund and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement, the Assignment Agreements or Section 2.3 of this Agreement,
as applicable, accept any contribution to any REMIC after the Startup Day
without receipt of an Opinion of Counsel stating that such contribution will not
result in an Adverse REMIC Event as defined in Section 10.1(f) hereof.
Section 3.3 MONITORING OF SERVICERS. (a) The Master Servicer shall be
responsible for monitoring the compliance by each Servicer with its duties under
the related Servicing Agreement. In the review of each Servicer's activities,
the Master Servicer may rely upon an officer's certificate of any Servicer with
regard to such Servicer's compliance with the terms of its Servicing Agreement.
In the event that the Master Servicer, in its judgment, determines that a
Servicer should be terminated in accordance with its Servicing Agreement, or
that a notice should be sent pursuant to such Servicing Agreement with respect
to the occurrence of an event that, unless cured, would constitute grounds for
such termination, the Master Servicer shall notify the [ ], [ ] and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate; provided, however that if defaulting Servicer is
[ ], the Trustee shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer (other than
[ ]) fails to perform its obligations in accordance with the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Servicer thereunder and act as servicer of the related Loans
or to cause the Trustee to enter in to a new Servicing Agreement with a
successor servicer selected by the Master Servicer; provided however that if the
defaulting servicer is [ ], the Trustee shall terminate the rights and
obligations of such Servicer and enter into a new Servicing Agreement with a
successor servicer selected by it provided, further that, it is understood and
acknowledged by the parties hereto that there will be a period of transition
(not to exceed [ ] days) before the actual servicing functions can be fully
transferred to such successor servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer or the Trustee, as
applicable, in its good faith business judgment, would require were it the owner
of the related Loans. The Master Servicer or the Trustee, as applicable shall
pay the costs of such enforcement at its own expense, provided that the Master
Servicer or the Trustee, as applicable 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.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of an a Servicer, appointment of a successor servicer
or the transfer and assumption of servicing by the Master Servicer with respect
to any Servicing Agreement (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 related Servicer as a result of
an event of default by such 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 Loans in accordance with the related Servicing
Agreement) are not fully and timely reimbursed by the terminated Servicer, the
Master Servicer or the Trustee, as applicable shall be entitled to reimbursement
of such costs and expenses from the Distribution Account.
(d) The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.
(e) If the Master Servicer acts as Servicer, it shall not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces.
Section 3.4 FIDELITY BOND. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions insurance
policy that would meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, 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. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees. Any such errors and omissions policy and fidelity bond may not be
cancelable without [ ] days' prior written notice to the Trustee.
Section 3.5 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Loans and shall have full power and authority, subject to the REMIC
Provisions and the provisions of Article X hereof, to do any and all things that
it may deem necessary or desirable in connection with the master servicing and
administration of the 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 and the related Servicing
Agreement, as applicable; provided, however, that the Master Servicer shall not
(and, consistent with its responsibilities under Section 3.3, shall not permit
any Servicer to) knowingly or intentionally take any action, or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause any REMIC to
fail to qualify as a REMIC or result in the imposition of a tax upon the Trust
Fund (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (but not at the expense of the Master Servicer) to the effect
that the contemplated action will not cause any REMIC to fail to qualify as a
REMIC or result in the imposition of a tax upon any REMIC. The Trustee shall
furnish the Master Servicer, upon written request from a Servicing Officer, with
any powers of attorney, in form acceptable to the Trustee, empowering the Master
Servicer or the related 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 Loans or the Mortgaged
Property, in accordance with the applicable Servicing Agreement and this
Agreement, and the Trustee shall execute and deliver such other documents, as
the Master Servicer or the related Servicer may request, to enable the Master
Servicer to master service and administer the 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 or any other executed documents delivered by the Trustee pursuant to
this paragraph by the Master Servicer or any Servicer and shall be indemnified
by the Master Servicer or such Servicer 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 8.10 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 3.6 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the extent
provided in the applicable Servicing Agreement and to the extent Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers
to enforce such clauses in accordance with the applicable Servicing Agreement.
If applicable law prohibits the enforcement of a due-on-sale clause or such
clause is otherwise not enforced in accordance with the applicable Servicing
Agreement, and, as a consequence, a Loan is assumed, the original Mortgagor may
be released from liability in accordance with the applicable Servicing
Agreement.
Section 3.7 RELEASE OF MORTGAGE FILES.
(a) Upon becoming aware of a Payoff with respect to any Loan, or the
receipt by any 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 applicable Servicer will (or if the applicable
Servicer does not, the Master Servicer may), if required under the applicable
Servicing Agreement, promptly furnish to the applicable Custodian, on behalf of
the Trustee, two copies of a request for release substantially in the form
attached to the applicable Custodial Agreement, and signed by a Servicing
Officer or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer (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 Protected Account
maintained by the applicable Servicer pursuant to its Servicing Agreement have
been or will be so deposited) and shall request that the applicable Custodian,
on behalf of the Trustee, deliver to the applicable Servicer the related
Mortgage File. Upon receipt of such certification and request, the applicable
Custodian, on behalf of the Trustee, shall promptly release the related Mortgage
File to the applicable Servicer and the Trustee and applicable Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any such
Payoff, each Servicer is authorized to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the 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
Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The applicable Custodian, on behalf of the Trustee, shall,
upon the request of a Servicer or the Master Servicer, and delivery to the
applicable Custodian, on behalf of the Trustee, of two copies of a request for
release signed by a Servicing Officer substantially in the form attached to the
applicable Custodial Agreement (or in a mutually agreeable electronic format
which will, in lieu of a signature on its face, originate from a Servicing
Officer), release the related Mortgage File held in its possession or control to
the related Servicer or the Master Servicer, as applicable. Such request for
release shall obligate such Servicer or the Master Servicer to return the
Mortgage File to the applicable Custodian on behalf of the Trustee, when the
need therefor by the related Servicer or the Master Servicer no longer exists
unless the Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the applicable Custodian, on behalf of the
Trustee, to such Servicer or the Master Servicer.
Section 3.8 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR TRUSTEE.
(a) The Master Servicer and each Servicer (to the extent required by
the related Servicing Agreement) shall transmit to the Trustee or the applicable
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or the applicable Custodian. Any funds received by
the Master Servicer or a Servicer in respect of any Loan or which otherwise are
collected by the Master Servicer or a Servicer as Liquidation Proceeds,
Insurance Proceeds or Subsequent Recoveries in respect of any Loan shall be held
for the benefit of the Trustee and the related 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, and
to the right of each Servicer to retain its Servicing Fee and other amounts as
provided in the applicable Servicing Agreement. The Master Servicer shall, and
(to the extent provided in the applicable Servicing Agreement) shall cause each
Servicer to, provide access to information and documentation regarding the 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. (b) All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer or any Servicer, in respect of any Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer or such Servicer, as
applicable, for and on behalf of the Trustee and the related Certificateholders
and shall be and remain the sole and exclusive property of the Trustee;
provided, however, that the Master Servicer and each 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 such Servicer under this Agreement or
the applicable Servicing Agreement.
Section 3.9 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.
(a) For each Loan, the Master Servicer shall enforce any obligation of
the Servicers under the related Servicing Agreements to maintain or cause to be
maintained standard fire and casualty insurance and, where applicable, flood
insurance, all in accordance with the provisions of the related Servicing
Agreements. It is understood and agreed that such insurance shall be with
insurers meeting the eligibility requirements set forth in the applicable
Servicing 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.
(b) Pursuant to Section 3.23, any amounts collected by the Master
Servicer or by any 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 the applicable
Servicing Agreement) shall be deposited into the Distribution Account, subject
to withdrawal pursuant to Section 3.24. Any cost incurred by the Master Servicer
or any Servicer in maintaining any such insurance if the Mortgagor defaults in
its obligation to do so shall be added to the amount owing under the Loan where
the terms of the Loan so permit; provided, however, that the addition of any
such cost shall not be taken into account for purposes of calculating the
distributions to be made to Certificateholders and shall be recoverable by the
Master Servicer or such Servicer pursuant to Section 3.24.
Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of the
Trustee and the related 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 a 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 Loan to the
insurer under any applicable insurance policy need not be so deposited (or
remitted).
Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.
(a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any primary mortgage
insurance policy or any loss which, but for the actions of such Master Servicer
or Servicer, would have been covered thereunder. The Master Servicer shall use
its best reasonable efforts to cause each Servicer (to the extent required under
the related Servicing Agreement) to keep in force and effect (to the extent that
the Loan requires the Mortgagor to maintain such insurance) primary mortgage
insurance applicable to each Loan in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) 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 and the related Servicing
Agreement, as applicable.
(b) The Master Servicer agrees to cause each Servicer (to the extent
required under the related Servicing Agreement) to present, on behalf of the
Trustee and the related 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 Loans. Pursuant to Sections 3.22 and
3.23, any amounts collected by the Master Servicer or any Servicer under any
primary mortgage insurance policies shall be deposited by the related Servicer
in its Protected Account or by the Master Servicer in the Distribution Account,
subject to withdrawal pursuant to Section 3.22 or 3.24, as applicable.
Section 3.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES
AND DOCUMENTS.
The Trustee or the applicable 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 otherwise
has fulfilled its obligations under this Agreement, the Trustee or the
applicable 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 applicable Custodial Agreement. The Master Servicer shall
promptly deliver or cause to be delivered to the Trustee or the applicable
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 Loan Documents that come into the
possession of the Master Servicer from time to time.
Section 3.13 REALIZATION UPON DEFAULTED LOANS. The Master Servicer
shall cause each Servicer (to the extent required under the related Servicing
Agreement) to foreclose upon, repossess or otherwise comparably convert the
ownership of Mortgaged Properties securing such of the 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 the applicable
Servicing Agreement.
Section 3.14 COMPENSATION FOR THE MASTER SERVICER.
(a) The Master Servicer shall have the right to receive all income and
gain realized from any investment of funds in the Distribution Account as
compensation (collectively, the "Master Servicing Compensation"). Servicing
compensation in the form of assumption fees, if any, late payment charges, as
collected, if any, or otherwise (but not including any Prepayment Charges) shall
be retained by the applicable Servicer and shall not be deposited in the related
Protected Account. 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.
(b) 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 3.20.
Section 3.15 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Loan, the deed or certificate of sale shall be issued
to the Trustee, or to its nominee, on behalf of the related Certificateholders.
The Master Servicer shall, to the extent provided in the applicable Servicing
Agreement, cause the applicable Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Further, the
Master Servicer shall, to the extent provided in the related Servicing
Agreement, cause the applicable Servicer 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 [ ]-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 applicable Servicer
shall have applied for, prior to the expiration of such [ ]-year period, an
extension of such [ ]-year period in the manner contemplated by Section
856(e)(3) of the Code, in which case the [ ]-year period shall be extended by
the applicable extension period. The Master Servicer shall cause the applicable
Servicer (to the extent provided in the related Servicing Agreement) to protect
and conserve, such REO Property in the manner and to the extent required by the
applicable Servicing 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.
(b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the Protected Account.
(c) The Master Servicer or the related Servicer, as applicable, 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 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 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.
(d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer or the applicable Servicer as provided above
shall be deposited in the Protected Account on or prior to the Determination
Date in the month following receipt thereof and be remitted by wire transfer in
immediately available funds to the Master Servicer for deposit into the
Distribution Account on the next succeeding Remittance Date.
Section 3.16 ANNUAL STATEMENT AS TO COMPLIANCE.
The Master Servicer will deliver to the Trustee, not later than March
1st of each calendar year beginning in 2007, an Officers' Certificate (an
"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 or other applicable
servicing agreement has been made under such officers' supervision and (ii) to
the best of such officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement or other applicable
servicing 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 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 Master Servicer
has delegated any servicing responsibilities with respect to the Mortgage loans
to a subservicer, the Master Servicer shall deliver a similar Annual Statement
of Compliance by that subservicer to the Trustee as described above as and when
required with respect to the Master Servicer.
If the Master Servicer cannot deliver the related 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 Annual Statement of
Compliance, but in no event later than March 10th of such year.
Failure of the Master Servicer to timely comply with this Section 3.16
shall be deemed a Master Servicer Event of Default, and the Trustee may, in
addition to whatever rights the Trustee may have under this Agreement and at law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately 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 supercede any other provision in this Agreement or any other agreement to
the contrary.
Section 3.17 ASSESSMENTS OF COMPLIANCE AND ATTESTATION REPORTS.
On and after January 1, 2006, the Master Servicer shall service and
administer the Mortgage loans in accordance with all applicable requirements of
the servicing criteria. Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1123 of Regulation AB, the Master Servicer shall deliver to theTrustee
on or before March 1st of each calendar year beginning in 2007, a report
regarding the Master Servicer's assessment of compliance (an "Assessment of
Compliance") with the servicing criteria during the preceding calendar year. The
Assessment of Compliance must be reasonably satisfactory to the Trustee, and as
set forth in Regulation AB, the Assessment of Compliance must contain the
following:
(a) A statement by such officer of its responsibility for assessing
compliance with the servicing criteria applicable to the Master Servicer;
(b) A statement by such officer that such officer used the servicing
criteria attached as Exhibit F hereto, and which will also be attached to the
Assement of Compliance, to assess compliance with the servicing criteria
applicable to the Master Servicer;
(c) 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;
(d) 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
(e) 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.
Such report at a minimum shall address each of the servicing criteria
specified on Exhibit F hereto which are indicated as applicable to the Master
Servicer.
On or before March 1st of each calendar year beginning in 2007, the
Master Servicer shall furnish to the Trustee 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.
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 Attestation Report as
and when provided above.
Such Assessment of Compliance, as to any subservicer, shall at a
minimum address each of the servicing criteria specified on Exhibit F hereto
which are indicated as applicable to any "primary servicer." Notwithstanding the
foregoing, as to any subcontractor, an Assessment of Compliance is not required
to be delivered unless it is required as part of a Form 10-K with respect to the
Trust Fund.
If the Master Servicer cannot deliver any Assessment of Compliance or
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 Assessment of
Compliance or Attestation Report, but in no event later than March 10th of such
year.
Failure of the Master Servicer to timely comply with this Section 3.17
shall be deemed a Master Servicer Event of Default, and the Trustee may, in
addition to whatever rights the Trustee may have under this Agreement and at law
or equity or to damages, including injunctive relief and specific performance,
upon notice immediately 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 supercede any other provision in this Agreement or any other agreement to
the contrary.
The Trustee shall also provide an Assessment of Compliance and
Attestation Report, as and when provided above, which shall at a minimum address
each of the servicing criteria specified on Exhibit F hereto which are indicated
as applicable to the "trustee" or "securities administrator." In addition, the
Trustee shall cause the Custodian to deliver to the Trustee and the Depositor an
Assessment of Compliance and Attestation Report, as and when provided above,
which shall at a minimum address each of the servicing criteria specified on
Exhibit F hereto which are indicated as applicable to a "custodian."
Notwithstanding the foregoing, as to any Custodian, an Assessment of Compliance
is not required to be delivered unless it is required as part of a Form 10-K
with respect to the Trust Fund.
Section 3.18 RESERVED.
Section 3.19 RESERVED.
Section 3.20 OBLIGATION OF THE MASTER SERVICER IN RESPECT OF
COMPENSATING INTEREST. The Master Servicer shall deposit in the Distribution
Account not later than each Distribution Account Deposit Date an amount equal to
the lesser of (i) the aggregate amounts required to be paid by the Servicers
under the Servicing Agreements with respect to Compensating Interest on the
related Loans for the related Distribution Date, and not so paid by the related
Servicers and (ii) the Master Servicing Compensation for such Distribution Date
without reimbursement therefor.
Section 3.21 RESERVED.
Section 3.22 PROTECTED ACCOUNTS.
(a) The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Loan by
Loan basis, into which accounts shall be deposited within [ ] hours (or as of
such other time specified in the related Servicing Agreement) of receipt all
collections of principal and interest on any Loan and with respect to any REO
Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries and advances made from the
Servicer's own funds (less servicing compensation as permitted by the applicable
Servicing Agreement in the case of any Servicer) and all other amounts to be
deposited in the Protected Account. Each Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by the related Servicing Agreement. To the extent provided
in the related Servicing Agreement, the Protected Account shall be held in a
depository institution and segregated on the books of such institution in the
name of the Trustee for the benefit of the Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts
on deposit in a Protected Account may be invested in Eligible Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds, such
Eligible Investments to mature, or to be subject to redemption or withdrawal, no
later than the date on which such funds are required to be withdrawn for deposit
in the Distribution Account, and shall be held until required for such deposit.
The income earned from Eligible Investments made pursuant to this Section 3.22
shall be paid to the related Servicer under the applicable Servicing Agreement,
and amount required to be distributed to the Certificateholders resulting from
the loss of monies on such investments shall be borne by and be the risk of the
related Servicer. The related Servicer (to the extent provided in the Servicing
Agreement) shall deposit the amount of any such loss in the Protected Account
within [ ] Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Distribution Date on which the moneys
so invested are required to be remitted to the Master Servicer or the Securities
Administrator.
(c) To the extent provided in the related Servicing Agreement and
subject to this Article III, on or before each Servicer Remittance Date, the
related Servicer shall withdraw or shall cause to be withdrawn from the
Protected Accounts and shall immediately deposit or cause to be deposited in the
Distribution Account amounts representing the following collections and payments
(other than with respect to principal of or interest on the Loans due on or
before the Cut-Off Date):
(i) Monthly Payments on the Loans received or any related
portion thereof advanced by the Servicers pursuant to the Servicing
Agreements which were due on or before the related Due Date, net of the
amount thereof comprising the Servicing Fees;
(ii) Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries received by the Servicers with
respect to such Loans in the related Prepayment Period, Compensating
Interest and the amount of any related Prepayment Charges; and
(iii) Any amount to be used as an Advance.
(d) Withdrawals may be made from a Protected Account or the
Distribution Account only to make remittances as provided in Sections 3.22(c),
3.23 and 3.24 or as otherwise provided in the Servicing Agreements, to reimburse
the Master Servicer or a Servicer for Advances which have been recovered by
subsequent collection from the related Mortgagor, to remove amounts deposited in
error; to remove fees, charges or other such amounts deposited on a temporary
basis, or to clear and terminate the account at the termination of this
Agreement in accordance with Section 9.1. As provided in Sections 3.22(c) and
3.23(b) or as otherwise provided in the Servicing Agreements certain amounts
otherwise due to the Servicers may be retained by them and need not be deposited
in the Distribution Account.
Section 3.23 DISTRIBUTION ACCOUNT.
(a) The Securities Administrator shall establish and maintain, a
Distribution Account with respect to the Loans as a segregated trust account or
accounts. The Master Servicer shall deposit in the Distribution Account as
identified by the Master Servicer and as received by the Master Servicer, the
following amounts with respect to the related Loans for the benefit of the
related Certificateholders:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Advance and any amounts in respect of Prepayment
Interest Shortfalls or Curtailment Shortfalls;
(iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries received by or on behalf of the Master Servicer;
(iv) The Purchase Price with respect to any Loans purchased by
[ ] or [ ] pursuant to Section 2.3 and all proceeds of any Loans or
property acquired with respect thereto purchased by the Master Servicer
pursuant to Section 9.1;
(v) Any amounts required to be deposited by the Master
Servicer or any Servicer with respect to losses on investments of
deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer 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 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 Master Servicer or the related Servicer to the
Distribution Account. In the event that the Master Servicer shall deposit or
cause to be deposited to the Distribution Account any amount not required to be
credited thereto, the Securities Administrator, upon receipt of a written
request therefor signed by a Servicing Officer of the Master Servicer, shall
promptly transfer such amount to the Master Servicer, any provision herein to
the contrary notwithstanding.
(c) The Distribution Account shall constitute a trust account of the
Trust Fund segregated on the books of the Securities Administrator and held by
the Securities Administrator in trust in its Corporate Trust Office, and the
Distribution Account and the funds deposited therein shall not be subject to,
and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Securities Administrator (whether made directly,
or indirectly through a liquidator or receiver of the Securities Administrator).
The amount at any time credited to the Distribution Account shall be invested in
the name of the Master Servicer, in such Eligible Investments selected by the
Master Servicer or deposited in demand deposits with such depository
institutions as selected by the Master Servicer, provided that time deposits of
such depository institutions would be an Eligible Investment. All Eligible
Investments shall mature or be subject to redemption or withdrawal on or before,
and shall be held until, the Distribution Date following the date of the
investment of such funds (the "Investment Withdrawal Distribution Date") if the
obligor for such Eligible Investment is the Securities Administrator or, if such
obligor is any other Person, the Business Day preceding such Investment
Withdrawal Distribution Date. All investment earnings on amounts on deposit in
the Distribution Account from time to time shall be for the account of the
Master Servicer. The Master Servicer shall be permitted to receive distribution
of any and all investment earnings from the Distribution Account on each
Distribution Date. If there is any loss on an Eligible Investment or demand
deposit, the Master Servicer shall deposit such amount in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Securities Administrator shall take such action as may be necessary
to ensure that the related Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to a claim against the
estate of the Securities Administrator) as provided by 12 U.S.C. ss. 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 3.24 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT.
(a) The Securities Administrator shall, from time to time on demand of
the Master Servicer make or cause to be made such withdrawals or transfers from
the Distribution Account as the Master Servicer has designated for such transfer
or withdrawal pursuant to the Servicing Agreements for the following purposes,
not in any order of priority:
(i) to reimburse the Master Servicer or any Servicer for any
Advance of its own funds, the right of the Master Servicer or a
Servicer to reimbursement pursuant to this subclause (i) being limited
to amounts received on a particular Loan (including, for this purpose,
the Purchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late payments or recoveries of the principal
of or interest on such Loan respecting which such Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Loan for amounts expended by the Master Servicer or such 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 Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Loan for insured expenses
incurred with respect to such Loan and to reimburse the Master Servicer
or such Servicer from Liquidation Proceeds from a particular Loan for
Liquidation Expenses incurred with respect to such Loan;
(iv) to pay the Master Servicer or any Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Loan, the amount which the
Master Servicer or such Servicer would have been entitled to receive
under subclause (vii) of this Subsection (a) as servicing compensation
on account of each defaulted scheduled payment on such Loan if paid in
a timely manner by the related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the
Purchase Price for any Loan, the amount which the Master Servicer or
such Servicer would have been entitled to receive under subclause (vii)
of this Subsection (a) as servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for any
Nonrecoverable Advance, after a Realized Loss has been allocated with
respect to the related Loan if the Advance or Servicing Advance has not
been reimbursed pursuant to clause (i);
(vii) to pay the Master Servicing Compensation to the Master
Servicer, the Servicing Fee to the Servicers (to the extent such
Servicing Fee was not retained by a Servicer pursuant to the related
Servicing Agreement), the Credit Risk Management Fee to the Credit Risk
Manager for such Distribution Date and to reimburse the Master Servicer
for expenses, costs and liabilities incurred by and reimbursable to it
pursuant to Sections 3.3, 6.3, 8.5 and 10.1.
(viii) to reimburse or pay any Servicer any such amounts as
are due thereto under the applicable Servicing Agreement and have not
been retained by or paid to such Servicer, to the extent provided in
the related Servicing Agreement;
(ix) to reimburse the Trustee, the Custodians and the
Securities Administrator for expenses, costs and liabilities, if any,
incurred by or reimbursable to such parties pursuant to this Agreement
or the Custodial Agreements;
(x) to remove amounts deposited in error; and
(xi) to clear and terminate the Distribution Account pursuant
to Section 9.1.
(b) The Master Servicer shall keep and maintain separate accounting, on
a Loan by Loan basis, for the purpose of accounting for any reimbursement from
the Distribution Account pursuant to subclauses (i) through (vi), inclusive, or
with respect to any such amounts which would have been covered by such
subclauses had the amounts not been retained by the Master Servicer without
being deposited in the Distribution Account under Section 3.23(b).
(c) On each Distribution Date, the Securities Administrator shall
distribute the related Available Distribution Amount to the Holders of the
related Certificates in accordance with Section 4.1.
Section 3.25 CLASS [ ] RESERVE FUND.
(a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a segregated trust accounts titled, "Class [ ] Reserve
Fund, ▇▇▇▇▇ Fargo Bank, National Association, in trust for the registered
holders of Deutsche Alt-A Securities, Inc. Mortgage Loan Trust, Series [ ],
Class [ ] Mortgage Pass-Through Certificates"."
(b) On each Distribution Date, the Securities Administrator will
deposit into the Class [ ] Reserve Fund an amount equal to the amount by which
the sum of the Basis Risk Carryover Amounts with respect to the Class [ ]
Certificates exceeds the sum of any amounts received by the Securities
Administrator with respect to the Cap Contract since the prior Distribution
Date. On each Distribution Date, after making the distributions required under
Section 4.1(a)(i) through (iv) and Section 4.1(b)(1) through (4), the Securities
Administrator will withdraw from the Class [ ] Reserve Fund the amounts on
deposit therein (which shall include any payments received under the Cap
Contract) and distribute such amounts to the Class [ ] Certificates in respect
of any Basis Risk Carryover Amounts due to the Class [ ] Certificates as set
forth in Section 4.1(a)(v) and (b)(5).
(c) The Reserve Fund constitutes an "outside reserve fund" within the
meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of any REMIC.
For federal and state income tax purposes, [ ] will be deemed to be the owner of
each Reserve Fund. Upon the termination of the Trust Fund, or the payment in
full of the Certificates, all amounts remaining on deposit in the Class [ ]
Reserve Fund will be released by the Trust Fund and distributed to [ ] or its
designees. The Class [ ] Reserve Fund will be part of the Trust Fund but not
part of any REMIC and any payments to the Holders of the Class [ ] Certificates
of Basis Risk Carryover Amounts will not be payments with respect to a "regular
interest" in a REMIC within the meaning of Code Section 860(G)(a)(1).
(d) [ ] hereby agrees that the Securities Administrator will deposit
into the Class [ ] Reserve Fund the amounts described above on each Distribution
Date. [ ] further agrees that its agreement to such action by the Securities
Administrator is given for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by such acceptance.
(e) The Securities Administrator shall direct any depository
institution maintaining the Class [ ] Reserve Fund to invest the funds in such
account in one or more Eligible Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Securities Administrator or an Affiliate manages or advises such investment,
and (ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator or
an Affiliate manages or advises such investment. All income and gain earned upon
such investment shall be deposited into the Class [ ] Reserve Fund. In no event
shall the Securities Administrator be liable for any investments made pursuant
to this clause (e).
(f) For federal tax return and information reporting, the right of the
Holders of the Class [ ] Certificates to receive payments from the related
Reserve Fund in respect of any Basis Risk Carryover Amount shall be assigned a
value of $[ ].
Section 3.26 PRE-FUNDING ACCOUNT.
(a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a trust account which at all times shall be an Eligible
Account and shall be titled "Pre-Funding Account, [ ], in trust for the
registered holders of Deutsche Alt-A Securities, Inc. Mortgage Loan Trust,
Series [ ], Mortgage Pass-Through Certificates" (the "Pre-Funding Account"). The
Securities Administrator shall, promptly upon receipt, deposit in the
Pre-Funding Account and retain therein the Original Pre-Funded Amount remitted
on the Closing Date by the Depositor. Funds deposited in the Pre-Funding Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth herein.
(b) The Securities Administrator will invest funds deposited in the
Pre-Funding Account only as directed in writing by the Depositor (and such
amounts shall not be invested if no direction is received by Securities
Administrator) in Permitted Investments with a maturity date (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Securities Administrator or an Affiliate manages or advises such
investment, (ii) no later than the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if the Securities
Administrator or an Affiliate manages or advises such investment or (iii) within
one (1) Business Day of the Securities Administrator's receipt thereof. For
federal income tax purposes, the Depositor shall be the owner of the Pre-Funding
Account and shall report all items of income, deduction, gain or loss arising
therefrom. All income and gain realized from investment of funds deposited in
the Pre-Funding Account shall be transferred to the Depositor. The Depositor
shall deposit in the Pre-Funding Account the amount of any net loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss without any right of reimbursement therefor. At no time will the
Pre-Funding Account be an asset of any REMIC created hereunder.
(c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Securities Administrator as follows:
(i) On any Subsequent Transfer Date, the Securities
Administrator shall withdraw from the Pre-Funding Account an amount
equal to [ ]% of the Principal Balances of the related Subsequent Loans
as of the Subsequent Cut-Off Date, transferred and assigned to the
Trustee for deposit in the mortgage pool on such Subsequent Transfer
Date and pay such amount to or upon the order of the Depositor upon
satisfaction of the conditions set forth in Section 2.6 with respect to
such transfer and assignment;
(ii) If the amount on deposit in the Pre-Funding Account
(exclusive of any investment income therein) has not been reduced to [
] during the Pre-Funding Period, on the day immediately following the
termination of the Pre-Funding Period, the Securities Administrator
shall deposit into the Distribution Account any amounts remaining in
the Pre-Funding Account (exclusive of any investment income therein)
for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the
end of the Pre-Funding Period and (B) the termination of this
Agreement, with any amounts remaining on deposit therein being paid to
the Holders of the Certificates then entitled to distributions in
respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC I on the date of withdrawal.
Section 3.27 CAPITALIZED INTEREST ACCOUNT.
(a) No later than the Closing Date, the Securities Administrator shall
establish and maintain a trust account which shall at all times be an Eligible
Account and shall be titled "Capitalized Interest Account, [ ], in trust for the
registered holders of Deutsche Alt-A Securities, Inc. Mortgage Loan Trust,
Series [ ], Mortgage Pass-Through Certificates" (the "Capitalized Interest
Account"). The Securities Administrator shall, promptly upon receipt, deposit in
the Capitalized Interest Account and retain therein the Original Capitalized
Interest Amount remitted on the Closing Date by the Depositor. Funds deposited
in the Capitalized Interest Account shall be held in trust for the
Certificateholders for the uses and purposes set forth herein.
(b) The Securities Administrator will invest funds deposited in the
Capitalized Interest Account only as directed in writing by the Depositor (and
such amounts shall not be invested if no direction is received by the Securities
Administrator) in writing in Permitted Investments with a maturity date (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Securities Administrator or an Affiliate manages or
advises such investment, (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Securities Administrator or an Affiliate manages or advises such investment or
(iii) within [ ] Business Day of the Securities Administrator's receipt thereof.
The amount of any losses in the Capitalized Interest Account incurred in respect
of any such investments shall promptly be deposited by the Depositor in the
Capitalized Interest Account. All income or gain realized from any such
investment of funds on deposit in the Capitalized Interest Account shall be
credited to the Capitalized Interest Account. At no time will the Capitalized
Interest Account be an asset of any REMIC created hereunder.
(c) On each Distribution Account Deposit Date during the Pre-Funding
Period, upon satisfaction of the conditions for the conveyance of Subsequent
Loans set forth in Section 2.6, the Securities Administrator shall transfer from
the Capitalized Interest Account to the Distribution Account an amount equal to
the lesser of the Capitalized Interest Requirement (which, to the extent
required, may include investment earnings on amounts on deposit therein) and the
amount remaining in the Capitalized Interest Account for the related
Distribution Date. If any funds remain in the Capitalized Interest Account at
the end of the Pre-Funding Period, the Securities Administrator shall make the
transfer described in the preceding sentence if necessary for the Distribution
Date following the expiration of the Pre-Funding Period and the Securities
Administrator shall distribute any remaining funds in the Capitalized Interest
Account to the order of the Depositor.
Section 3.28 PREPAYMENT PENALTY VERIFICATION.
On or prior to each Servicer Remittance Date, each Servicer shall, to
the extent provided in the respective Servicing Agreement, provide in an
electronic format acceptable to the Master Servicer the data necessary for the
Master Servicer to perform its verification duties agreed to by the Master
Servicer and the Depositor. The Master Servicer or a third party reasonably
acceptable to the Master Servicer and the Depositor (the "Verification Agent")
will perform such verification duties and will use its best efforts to issue its
findings in a report (the "Verification Report") delivered to the Master
Servicer and the Depositor within [ ] Business Days following the related
Distribution Date; provided, however, that if the Verification Agent is unable
to issue the Verification Report within [ ] Business Days following the
Distribution Date, the Verification Agent may issue and deliver to the Master
Servicer and the Depositor the Verification Report upon the completion of its
verification duties. The Master Servicer shall forward the Verification Report
to the respective Servicer and shall notify such Servicer if the Master Servicer
has determined that such Servicer did not deliver the appropriate Prepayment
Charges to the Master Servicer in accordance with the respective Servicing
Agreement. Such written notification from the Master Servicer shall include the
loan number, prepayment penalty code and prepayment penalty amount as calculated
by the Master Servicer or the Verification Agent, as applicable, of each Loan
for which there is a discrepancy. If the respective Servicer agrees with the
verified amounts, such Servicer shall adjust the immediately succeeding
Remittance Report and the amount remitted to the Master Servicer with respect to
prepayments accordingly. If the respective Servicer disagrees with the
determination of the Master Servicer, such Servicer shall, within [ ] Business
Days of its receipt of the Verification Report, notify the Master Servicer of
such disagreement and provide the Master Servicer with detailed information to
support such Servicer's position. The respective Servicer and the Master
Servicer shall cooperate to resolve any discrepancy on or prior to the
immediately succeeding Servicer Remittance Date, and such Servicer will indicate
the effect of such resolution on the related Remittance Report and shall adjust
the amount remitted with respect to prepayments on such Servicer Remittance Date
accordingly.
During such time as the respective Servicer and the Master Servicer are
resolving discrepancies with respect to the Prepayment Charges, no payments in
respect of any disputed Prepayment Charges will be remitted to the Distribution
Account and the Master Servicer shall not be obligated to remit such payments,
unless otherwise required pursuant to Section 7.1 hereof. In connection with
such duties, the Master Servicer shall be able to rely solely on the information
provided to it by the respective Servicer in accordance with this Section. The
Master Servicer shall not be responsible for verifying the accuracy of any of
the information provided to it by the respective Servicer or for performing the
Master Servicer's duties under this Section 3.28 with respect to a Servicer if
such Servicer is unable or unwilling to provide the required data to the Master
Servicer or is not required to provide such information to the Master Servicer.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS; ADVANCES;
STATEMENTS AND REPORTS
Section 4.1 DISTRIBUTIONS TO CERTIFICATEHOLDERS.
On each Distribution Date, the Securities Administrator, to the extent
on deposit therein and based solely upon the Remittance Report for such
Distribution Date, shall withdraw from the Distribution Account the Group I
Available Distribution Amount and Group II Available Distribution Amount for
such Distribution Date and distribute to each related Certificateholder, by wire
transfer in immediately available funds for the account of the Certificateholder
or by any other means of payment acceptable to each Certificateholder of record
on the immediately preceding Record Date (other than as provided in Section 9.1
respecting the final distribution) as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register, from
the amount so withdrawn and to the extent of the Group I Available Distribution
Amount and Group II Available Distribution Amount, as applicable, such
Certificateholder's Percentage Interest of the following amounts and in
following order and priority:
(a) On each Distribution Date prior to the Credit Support Depletion
Date, the Securities Administrator will distribute the Group I Available
Distribution Amount and Group II Available Distribution Amount in the following
order and priority:
(i) On each Distribution Date, the Group I Available
Distribution Amount shall be distributed as follows:
(1) FIRST, concurrently to the Group I Senior Certificates
(other than the Class [ ] Certificates), the related Interest
Distribution Amount on a PRO RATA basis based on the related Interest
Distribution Amount with respect to each such Class; provided, however,
that for each Distribution Date prior to the Class [ ] Accretion
Termination Date, the Class [ ] Accrual Amount shall be payable as
principal to the Class [ ], Class [ ], Class [ ] and Class [ ]
Certificates in the amount and priority set forth below in clauses
(i)(5), (i)(6) and (i)(7);
(2) SECOND, to the Class [ ] Certificates, the related Senior
Principal Distribution Amount until the Certificate Principal Balance
of the Class [ ] Certificates has been reduced to [ ];
(3) THIRD, concurrently, to the Class [ ] Certificates and the
Class [ ] Certificates on a PRO RATA basis based on the Certificate
Principal Balance of each such Class, an amount equal to the Class [
]/Class [ ] Priority Amount, until the Certificate Principal Balance of
each such Class has been reduced to [ ];
(4) FOURTH, to the Class [ ] Certificates, the Group I
Discount Fractional Principal Amount until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to [ ];
(5) FIFTH, to the Class [ ], Class [ ] and Class [ ]
Certificates, from the related Senior Principal
Distribution Amount, an amount up to $[ ] for each
Distribution Date, in the following order of priority:
(A) concurrently, to the Class [ ] Certificates and Class [ ]
Certificates, on a PRO RATA basis based on the Certificate Principal
Balance of each such Class, until the Certificate Principal Balance of
each such Class has been reduced to [ ]; provided that prior to the
Class [ ] Accretion Termination Date, distributions pursuant to this
clause shall be made first from the Class [ ] Accrual Amount for such
Distribution Date and second from the related Senior Principal
Distribution Amount remaining after distributions pursuant to clauses
(i)(2) and (i)(3) above; and
(B) to the Class [ ] Certificates, until the Certificate
Principal Balance of the Class [ ] Certificates has been reduced to [
];
(6) SIXTH, to the Class [ ] Certificates, up to an amount
equal to $[ ] for each Distribution Date, until the Certificate
Principal Balance of the Class [ ] Certificates has been reduced to [
]; provided that prior to the Class [ ] Accretion Termination Date,
distributions pursuant to this clause shall be made first from the
Class [ ] Accrual Amount for such Distribution Date and second from the
related Senior Principal Distribution Amount, in each case remaining
after distributions pursuant to clauses (i)(2), (i)(3) and (i)(5)
above;
(7) SEVENTH, to the Class [ ] Certificates, up to an amount
equal to $[ ]; provided that prior to the Class [ ] Accretion
Termination Date, distributions pursuant to this clause shall be made
first from the Class [ ] Accrual Amount for such Distribution Date and
second from the related Senior Principal Distribution Amount, in each
case remaining after distributions pursuant to clauses (i)(2), (i)(3),
(i)(5) and (i)(6) above;
(8) EIGHTH, concurrently, to the Class [ ] Certificates and
the Class [ ] Certificates on a PRO RATA basis based on the Certificate
Principal Balance of each such Class, the related Senior Principal
Distribution Amount remaining after payments pursuant to clauses
(i)(2), (i)(3) and (i)(5) through (i)(7) above, until the Certificate
Principal Balance of each such Class has been reduced to [ ];
(9) NINTH, to the Class [ ] Certificates, the related Senior
Principal Distribution Amount remaining after payments pursuant to
clauses (i)(2), (i)(3) and (i)(5) through (i)(8) above, without regard
to amounts distributed pursuant to clause (i)(7) above, until the
Certificate Principal Balance of the Class [ ] Certificates has been
reduced to zero;
(10) TENTH, to the Class [ ] Certificates, the related Senior
Principal Distribution Amount remaining after payments pursuant to
clauses (i)(2), (i)(3) and (i)(5) through (i)(9) above, without regard
to amounts distributed pursuant to clause (i)(6) above, until the
Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ];
(11) ELEVENTH, to the Class [ ] Certificates, the related
Senior Principal Distribution Amount remaining after payments pursuant
to clauses (i)(2), (i)(3) and (i)(5) through (i)(10) above until the
Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ];
(12) TWELFTH, concurrently, to the Class [ ] Certificates and
Class [ ] Certificates, on a PRO RATA basis, based on the Certificate
Principal Balance of each such Class, the related Senior Principal
Distribution Amount remaining after payments pursuant to clauses
(i)(2), (i)(3) and (i)(5) through (i)(11) above, without regard to the
Class [ ]/Class [ ] Priority Amount, until the Certificate Principal
Balance of each such Class has been reduced to [ ]; and
(13) THIRTEENTH, the Group I Discount Fractional Principal
Shortfall to the Class [ ] Certificates, but not more than an amount
equal to the Subordinate Principal Distribution Amount related to the
Group I Loans for such Distribution Date (without regard to the proviso
of such definition).
(ii) On each Distribution Date, the Group II Available Distribution
Amount shall be distributed as follows:
(1) FIRST, concurrently to the Group II Senior Certificates
(other than the Class [ ] Certificates), the related Interest
Distribution Amount on a PRO RATA basis based on the related Interest
Distribution Amount with respect to each such Class;
(2) SECOND, concurrently, to the Class [ ] Certificates and
the Class [ ] Certificates on a PRO RATA basis based on the Certificate
Principal Balance of each such Class, an amount equal to the Class [
]/Class [ ] Priority Amount, until the Certificate Principal Balance of
each such Class has been reduced to [ ];
(3) THIRD, to the Class [ ] Certificates, the Group II
Discount Fractional Principal Amount until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to [ ];
(4) FOURTH, to the Class [ ] Certificates, the related Senior
Principal Distribution Amount remaining after payments pursuant to
clause (ii)(2) above, until the Certificate Principal Balance of the
Class [ ] Certificates has been reduced to [ ];
(5) FIFTH, to the Class [ ] Certificates, the related Senior
Principal Distribution Amount remaining after payments pursuant to
clauses (ii)(2) and (ii)(4) above, until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to [ ];
(6) SIXTH, concurrently, to the Class [ ] Certificates and
Class [ ] Certificates, on a PRO RATA basis, based on the Certificate
Principal Balance of each such Class, the related Senior Principal
Distribution Amount remaining after payments pursuant to clauses
(ii)(2), (ii)(4) and (ii)(5) above, without regard to the Class [
]/Class [ ] Priority Amount, until the Certificate Principal Balance of
each such Class has been reduced to [ ]; and
(7) SEVENTH, the Group II Discount Fractional Principal
Shortfall to the Class [ ] Certificates, but not more than an amount
equal to the Subordinate Principal Distribution Amount related to the
Group II Loans for such Distribution Date (without regard to the
proviso of such definition).
(iii) From the Group I Available Distribution Amount and Group II
Available Distribution Amount remaining after payments pursuant to clauses (i)
and (ii) above, (a) FIRST, the Senior Interest Shortfall Amount for each Class
of Senior Certificates (other ----- than the Class [ ] Certificates and Class [
] Certificates) for such Distribution Date, if any, pro rata according to the
amount of interest to which each such Class would otherwise be entitled, (b)
SECOND, an amount equal to the ------ Collateral Deficiency Amount, if any, to
the Senior Certificates (other than the Class [ ], Class [ ] and Class [ ]
Certificates), pro rata among the Senior Certificates (other than the Class [ ],
Class [ ] and Class [ ] Certificates) based on the related Collateral Deficiency
Amount and within each group of Certificates, on a pro rata basis, if
applicable, based on the Certificate Principal Balance of each such Class, as a
payment of principal and (c) THIRD, if such Distribution Date is a Cross Payment
Trigger Date, the Principal Prepayment Amount distributable to the ----- Senior
Certificates (other than the Class [ ], Class [ ] and Class [ ] Certificates)
that have been paid in full, will be paid as principal to the related Senior
Certificates (other than the Class [ ], Class [ ] and Class [ ] Certificates)
that have not been paid in full in accordance with the priorities set forth in
clauses (i) and (ii) above.
(iv) From the sum of the remaining Group I Available Distribution
Amount and Group II Available Distribution Amount, after payments pursuant to
clauses (i) through (iii) above, to the Class [ ], Class [ ], Class [ ], Class [
], Class [ ] and Class [ ] Certificates, sequentially, in that order, an amount
equal to their respective Interest Distribution Amounts for such Distribution
Date and their pro rata share, based on the outstanding Certificate Principal
Balance of each such Class, of the Subordinate Principal Distribution Amount;
provided, however, that on any Distribution Date on which the Subordination
Level for any Class of Subordinate Certificates is less than the Subordination
Level as of the Closing Date, the portion of the Subordinate Principal
Prepayment Amount otherwise payable to the Class or Classes of the Subordinate
Certificates junior to such Class will be distributed to the most senior Class
of Subordinate Certificates for which the Subordination Level is less than such
percentage as of the Closing Date, and to the Class or Classes of Subordinate
Certificates senior thereto, pro rata based on the Certificate Principal Balance
of each such Class.
(v) From the remaining Group I Available Distribution Amount, to the
Class [ ] Reserve Fund, and then from the Class [ ] Reserve Fund (including any
payments received under the Cap Contract), to the Class [ ] Certificates in
respect of any Basis Risk Carryover Amounts due the Class [ ] Certificates as
follows:
(1) FIRST, to the holders of the Class [ ] Certificates, any
amounts received by the Securities Administrator on account of the Cap
Contract for such Distribution Date; and
(2) SECOND, to the Class [ ] Certificates, any Basis Risk
Carryover Amount remaining unpaid after distributions pursuant to
clause (1) above.
(vi) To the Group I Senior Certificates (other than the Class [ ]
Certificates and Class [ ] Certificates) and Group II Senior Certificates (other
than the Class [ ] Certificates), from the related Available Distribution Amount
remaining after distributions pursuant to clauses (i) through (v) above, by Pro
Rata Allocation, the amount of any unreimbursed losses previously allocated to
such Classes of Certificates, and then to the Subordinate Certificates, in the
order of their seniority, the amount of any unreimbursed losses previously
allocated to such Classes of Certificates.
(vii) To the Class [ ] Certificates, the remainder (which is expected
to be [ ]), if any of the Group I Available Distribution Amount and Group II
Available Distribution Amount remaining after distributions pursuant to clauses
(i) through (vi) above.
(b) On each Distribution Date on or after the Credit Support Depletion
Date, to the extent of the Group I Available Distribution Amount and Group II
Available Distribution Amount on such Distribution Date, distributions will be
made to the Senior Certificates in the following order of priority:
(1) FIRST, (a) to the Group I Senior Certificates (other than
the Class [ ] Certificates) from the Group I Available Distribution
Amount, the related Interest Distribution Amount pro rata based on the
amount payable to each such Class and (b) to the Group II Senior
Certificates (other than the Class [ ] Certificates) from the Group II
Available Distribution Amount, the related Interest Distribution Amount
pro rata based on the amount payable to each such Class;
(2) SECOND, (a) from the Group I Available Distribution Amount
remaining after payments in clause (1)(a) above, the Group I Discount
Fractional Principal Amount to the Class [ ] Certificates and (b) from
the Group II Available Distribution Amount remaining after payments in
clause (1)(b) above, the Group II Discount Fractional Principal Amount
to the Class [ ] Certificates;
(3) THIRD, (a) to the Group I Senior Certificates (other than
the Class [ ], Class [ ] and Class [ ] Certificates) on a pro rata
basis based on the Certificate Principal Balance of each such Class,
the Group I Available Distribution Amount remaining after payments
pursuant to clause (1)(a) and (2)(a) above and (b) to the Group II
Senior Certificates (other than the Class [ ] Certificates and Class [
] Certificates) on a pro rata basis based on the Certificate Principal
Balance of each such Class, the Group II Available Distribution Amount
remaining after payments pursuant to clauses (1)(b) and (2)(b) above,
in each case until the Certificate Principal Balance of each such Class
has been reduced to [ ];
(4) FOURTH, from the Group I Available Distribution Amount and
Group II Available Distribution Amount remaining after payments
pursuant to clauses (1), (2) and (3) above, to each Class of
Certificates for which a Senior Interest Shortfall Amount exists, the
Senior Interest Shortfall Amount for such Distribution Date, pro rata,
based on such Senior Interest Shortfall Amount;
(5) FIFTH, from the Group I Available Distribution Amount
remaining after payments pursuant to clauses (1) through (4) above, to
the Class [ ] Reserve Fund and then from the Class [ ] Reserve Fund, to
the Class [ ] Certificates, the Basis Risk Carryover Amount payable to
such Class for such Distribution Date (after taking into account all
payments received by the Securities Administrator from the Cap
Contract);
(6) SIXTH, (a) from the Group I Available Distribution Amount
remaining after payments pursuant to clauses (1) through (5) above, to
the Group I Senior Certificates (other than the Class [ ] Certificates
and Class [ ] Certificates) on a pro rata basis based on the
outstanding Certificate Principal Balance of such Class, the amount of
any unreimbursed losses previously allocated to each such Class and (b)
from the Group II Available Distribution Amount remaining after
payments pursuant to clauses (1) through (4) above, to the Group II
Senior Certificates (other than the Class [ ] Certificates) on a pro
rata basis based on the outstanding Certificate Principal Balance of
each such Class, the amount of any unreimbursed losses previously
allocated to each such Class; and
(7) SEVENTH, to the Class [ ] Certificates, the remainder, if
any (which is expected to be [ ]), of the Group I Available
Distribution Amount and Group II Available Distribution Amount
remaining after distributions pursuant to clauses (1) through (6)
above.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Loans serviced by [ ] pursuant to the [ ] Servicing Agreement
and received during the related Prepayment Period will be withdrawn from the
Distribution Account and distributed to the Class [ ] Certificates, and all
amounts representing Prepayment Charges in respect of the Loans serviced by [ ],
[ ], [ ] and [ ] pursuant to the [ ] Servicing Agreement and received during the
related Prepayment Period will be withdrawn from the Distribution Account and
distributed to the Class [ ] 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 [ ] Certificates or Class [ ] Certificates.
On the Distribution Date in [ ], prior to making any distributions to
the Class [ ] Certificates, the Securities Administrator shall make a payment of
principal to the Class [ ] Certificates and Class [ ] Certificates,
respectively, in reduction of the Certificate Principal Balance of each such
Class from amounts on deposit in sub-accounts of the Distribution Account
established and maintained by the Securities Administrator, on behalf of the
Trustee, for the exclusive benefit of the Class [ ] Certificateholders and Class
[ ] Certificateholders, as applicable.
Section 4.2 ALLOCATION REALIZED LOSSES.
(a) Prior to each Distribution Date, the Master Servicer, based solely
on the information provided by the related Servicer, shall determine the amount
of Realized Losses, if any, with respect to each Loan.
(b) Realized Losses, other than Excess Losses, shall be allocated as
follows: (i) for losses allocable to principal, (a) first, sequentially, to the
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ] and Class [ ]
Certificates, in that order, until the Certificate Principal Balance of each
such Class been reduced to zero and (b) second, (1) with respect to Realized
Losses related to the Group I Loans, concurrently to each Class of the Group I
Senior Certificates (other than the Class [ ] Certificates and Class [ ]
Certificates) on a pro rata basis based on the Certificate Principal Balance of
each such Class, in each case until the Certificate Principal Balance of each
such Class has been reduced to zero; provided, that any such Realized Loss
allocable to the Class [ ] Certificates and Class [ ] Certificates will be
allocated first to the Class [ ] Certificates, up to a maximum amount of $[ ]
with respect to the Class [ ] Certificates, and up to a maximum amount of $[ ]
with respect to the Class [ ] Certificates, until the Certificate Principal
Balance of the Class [ ] Certificates has been reduced to [ ], and then to the
Class [ ] Certificates and Class [ ] Certificates, respectively, until the
Certificate Principal Balance of each such Class has been reduced to [ ], and
(2) with respect to Realized Losses related to the Group II Loans, concurrently
to each Class of Group II Senior Certificates (other than the Class [ ]
Certificates) until the Certificate Principal Balance of each such Class has
been reduced to zero, provided, that any such Realized Loss allocable to the
Class [ ] Certificates will be allocated first to the Class [ ] Certificates,
until the Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ], and then to the Class [ ] Certificates, until the Certificate
Principal Balance of the Class [ ] Certificates has been reduced to [ ];
PROVIDED, HOWEVER, that following the Credit Support Depletion Date, if any loss
is incurred with respect to a Group I Discount Loan, the Group I Discount
Fraction of such loss will first be allocated to the Class [ ] Certificates and
the remainder of such loss will be allocated as described above in clause
(i)(b)(2); PROVIDED, FURTHER, that following the Credit Support Depletion Date,
if any loss is incurred with respect to a Group II Discount Loan, the Group II
Discount Fraction of such loss will first be allocated to the Class [ ]
Certificates and the remainder of such loss will be allocated as described above
in clause (i)(b)(2); and (ii) for losses allocable to interest, (a) first,
sequentially, to the Class [ ], Class [ ], Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates, in that order, in reduction of accrued but unpaid
interest thereon until the amount of interest accrued on such Certificate on
such Distribution Date has been reduced to [ ], and then in reduction of the
Certificate Principal Balance of such Certificate until the Certificate
Principal Balance thereof has been reduced to [ ], and (b) second, to the Senior
Certificates relating to the Loan Group for which such Realized Losses were
incurred, by Pro Rata Allocation, in reduction of accrued but unpaid interest
thereon until the amount of interest accrued on such Certificate has been
reduced to [ ] and then with respect to the Senior Certificates (other than the
Class [ ], Class [ ], Class [ ], Class [ ] and Class [ ] Certificates), in
reduction of the Certificate Principal Balance of each such Certificate until
the aggregate of the Certificate Principal Balances thereof have been reduced to
[ ]; provided, that (1) the Pro Rata Allocation of any such loss allocable to
the Class [ ] Certificates and Class [ ] Certificates will be allocated first to
the Class [ ] Certificates, up to a maximum amount of $[ ] with respect to the
Class [ ] Certificates, and up to a maximum amount of $[ ] with respect to the
Class [ ] Certificates, until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates and
Class [ ] Certificates, respectively, until the Certificate Principal Balance of
each such Class has been reduced to [ ]; and (2) the Pro Rata Allocation of any
such loss allocable to the Class [ ] Certificates will be allocated first to the
Class [ ] Certificates until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates
until the Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ]. In addition, to the extent the related Servicer receives
Subsequent Recoveries with respect to any defaulted Loan, the amount of the
Realized Loss with respect to that defaulted 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. In the event that
a Servicer receives any Subsequent Recoveries, such Subsequent Recoveries shall
be distributed as part of the Group I Available Distribution Amount or Group II
Available Distribution Amount, as applicable, in accordance with the priorities
in Section 4.1, and the Certificate Principal Balance of each Class of
Subordinate Certificates that has been reduced by the allocation of a Realized
Loss to such Certificate shall be increased, in order of seniority, by the
amount of such Subsequent Recoveries. Holders of such Certificates are not
entitled to any payment in respect of current interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs.
(c) Excess Losses with respect to the Loans will be allocated to the
outstanding Class or Classes of Senior Certificates (other than the Class [ ],
Class [ ] and Class [ ] Certificates) of the related Loan Group and to the
Subordinate Certificates by Pro Rata Allocation; provided, that (i) the Pro Rata
Allocation of any such loss allocable to the Class [ ] Certificates and Class [
] Certificates will be allocated first to the Class [ ] Certificates, up to a
maximum amount of $[ ] with respect to the Class [ ] Certificates, and up to a
maximum amount of $[ ] with respect to the Class [ ] Certificates, until the
Certificate Principal Balance of the Class [ ] Certificates has been reduced to
[ ], and then to the Class [ ] Certificates and Class [ ] Certificates,
respectively, until the Certificate Principal Balance of each such Class has
been reduced to [ ]; and (ii) the Pro Rata Allocation of any such loss allocable
to the Class [ ] Certificates will be allocated first to the Class [ ]
Certificates until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates
until the Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ].
(d) On each Distribution Date, if the aggregate Certificate Principal
Balance of the Senior Certificates (other than the Class [ ], Class [ ] and
Class [ ] Certificates) and Subordinate Certificates exceeds the aggregate
Principal Balance of the Loans (after giving effect to distributions of
principal and the allocation and reimbursement of all losses on the related
Certificates on such Distribution Date), such excess will be deemed a principal
loss and will be allocated to the Subordinate Certificates in reverse order of
seniority until the Certificate Principal Balance of each such Class has been
reduced to zero. If the Certificate Principal Balance of each Class of
Subordinate Certificates has been reduced to zero and the aggregate Certificate
Principal Balance of the Senior Certificates (other than the Class [ ], Class [
] and Class [ ] Certificates) exceeds the aggregate Principal Balance of the
Loans (after giving effect to distributions of principal and the allocation and
reimbursement of all losses on the Certificates on such Distribution Date), such
excess will be deemed a principal loss and, (i) if attributable to the Group I
Loans, will be allocated to the Group I Senior Certificates (other than the
Class [ ] Certificates and Class [ ] Certificates) by Pro Rata Allocation, until
the Certificate Principal Balance of each such Class has been reduced to [ ];
provided, that any such Realized Loss allocable to the Class [ ] Certificates
and Class [ ] Certificates will be allocated first to the Class [ ]
Certificates, up to a maximum amount of $[ ] with respect to the Class [ ]
Certificates, and up to a maximum amount of $[ ] with respect to the Class [ ]
Certificates, until the Certificate Principal Balance of the Class [ ]
Certificates has been reduced to [ ], and then to the Class [ ] Certificates and
Class [ ] Certificates, respectively, until the Certificate Principal Balance of
each such Class has been reduced to zero; and (ii) if attributable to the Group
II Loans, will be allocated to the Group II Senior Certificates (other than the
Class [ ] Certificates), by Pro Rata Allocation, until the Certificate Principal
Balance of each such Class has been reduced to [ ]; provided, that any such
Realized Loss allocable to the Class [ ] Certificates will be allocated first to
the Class [ ] Certificates until the Certificate Principal Balance of the Class
[ ] Certificates has been reduced to [ ], and then to the Class [ ] Certificates
until the Certificate Principal Balance of the Class [ ] Certificates has been
reduced to [ ].
Realized Losses from the Loans shall be applied after all distributions
have been made on each Distribution Date, to each REMIC I Regular Interest in
the same manner and priority as Realized Losses are allocated to the
Corresponding Certificates.
Section 4.3 REDUCTION OF CERTIFICATE PRINCIPAL BALANCES ON THE
CERTIFICATES.
(a) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal or allocations of Realized
Losses with respect to the related Loans made on any Distribution Date shall be
binding upon all Holders of such Certificate and of any Certificate issued upon
the registration of transfer or exchange therefor or in lieu thereof, whether or
not such distribution is noted on such Certificate. Holders of such Certificates
will not be entitled to any payment in respect of current interest on the amount
of such increases for any Interest Accrual Period preceding the Distribution
Date on which such increase occurs.
(b) The final distribution of principal of each Certificate (and the
final distribution with respect to the Residual Certificates upon termination of
the Trust Fund) shall be payable in the manner provided above only upon
presentation and surrender thereof on or after the Distribution Date therefor at
the office or agency of the Securities Administrator specified in the notice
delivered pursuant to Section 4.6 or Section 9.1.
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Loans and related Insurance Proceeds and Liquidation Proceeds
received and expected to be received during the applicable Prepayment Period,
the Securities Administrator believes that the entire remaining unpaid aggregate
Certificate Principal Balance of any Class of Certificates shall become
distributable on the next Distribution Date, the Securities Administrator shall,
no later than the Determination Date of the month of such Distribution Date,
mail or cause to be mailed to each Person in whose name a Certificate to be so
retired is registered at the close of business on the Record Date, to the
Underwriter and to each Rating Agency a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution shall be available in the Distribution Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution
shall be payable on such Distribution Date, but only upon presentation
and surrender of such Certificate at the office or agency of the
Securities Administrator maintained for such purpose (the address of
which shall be set forth in such notice), and (B) no interest shall
accrue on such Certificate after such Distribution Date.
Section 4.4 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or original
issue discount that the Trustee and the Securities Administrator reasonably
believe are applicable under the Code. The consent of Certificateholders shall
not be required for such withholding. In the event the Securities Administrator
does withhold any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Securities Administrator shall indicate the amount withheld to
such Certificateholders.
Section 4.5 DISTRIBUTIONS ON THE REMIC I REGULAR INTERESTS.
Distributions of principal from the Loans shall be deemed to be made to
the REMIC I Regular Interests, in each case from the related Loan Group, first,
to REMIC I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular
Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC
I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular Interest [
], REMIC I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular
Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC
I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular Interest [
], REMIC I Regular Interest [ ], REMIC I Regular Interest [ ], REMIC I Regular
Interest [ ] and REMIC I Regular Interest [ ] in the same manner and priority as
such distributions are made to the Corresponding Certificates. Interest shall be
payable to each REMIC I Regular Interest at the related Uncertificated REMIC I
Pass-Through Rate on each such REMIC I Regular Interest's Uncertificated
Principal Balance.
Section 4.6 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee shall prepare
and make available to each Holder of Certificates, the Master Servicer, the swap
provider and the Depositor a statement setting forth for the Certificates:
(i) the applicable record dates, accrual periods,
determination dates for calculating distributions and general
distribution dates;
(ii) the total cash flows received and the general sources
thereof;
(iii) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(iv) the amount of any net swap payment payable to the
derivative administrator, any net swap payment payable to the swap
provider, any swap termination payment payable to the derivative
administrator and any swap termination payment payable to the swap
provider;
(v) 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 and (C) the
extra principal distribution amount (if any);
(vi) the amount of such distribution to Holders of each Class
allocable to interest;
(vii) the amount of such distribution to Holders of each Class
of Class A Certificates and Class M Certificates allocable to interest
and the portion thereof, if any, provided by the derivative
administration agreement;
(viii) the iterest carry forward amount and any basis risk
shortfall carry forward amount for each Class of Certificates;
(ix) the Pass-Through Rate for each Class of Class [ ]
Cerrtificates and Class [ ] Certificates with respect to the current
Accrual Period, and, if applicable, whether such Pass-Through Rate was
limited by the net rate cap;
(x) the aggregate of the stated Principal Balance of (A) all
of the Mortgage loans and (B) the adjustable rate mortgage loans, for
the following Distribution Date;
(xi) the Certificate Principal Balance or Certificate Notional
Amount, as applicable, of each Class after giving effect (i) to all
distributions allocable to principal on such Distribution Date and (ii)
the allocation of any applied Realized Loss amounts for such
Distribution Date;
(xii) the number and stated Principal Balance of the Mortgage
loans in each Loan Group in respect of which (A) one scheduled payment
is delinquent, (B) two scheduled payments are delinquent, (C) three or
more scheduled payments are delinquent and (D) foreclosure proceedings
have been commenced, in each case as of the close of business on the
last day of the calendar month preceding such Distribution Date and
separately identifying such information for the (1) first lien Mortgage
loans, (2) second lien Mortgage loans, and (3) adjustable rate Mortgage
loans, in each such Loan Group;
(xiii) the amount of Advances included in the distribution on
such Distribution Date (including the general purpose of such
Advances), the aggregate amount of unreimbursed Advances at the close
of business on the Distribution Date, and the general source of funds
for reimbursements;
(xiv) the cumulative amount of applied Realized Loss amounts
to date;
(xv) if applicable, material modifications, extensions or
waivers to Mortgage Loan terms, fees, penalties or payments during the
preceding calendar month or that have become material over time;
(xvi) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month, the loan number and 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 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
stated Principal Balance of the Mortgage loans that are 60 days or more
delinquent or are in bankruptcy or foreclosure or are REO Properties,
and the denominator of which is the aggregate stated Principal Balance
of all of the Mortgage loans in each case as of the close of business
on the last day of the calendar month preceding such Distribution Date
and separately identifying such information for the (1) first lien
Mortgage loans, and (2) adjustable rate Mortgage loans;
(xix) the Realized Losses during the related Prepayment Period
and the cumulative Realized Losses through the end of the preceding
month;
(xx) whether a trigger event exists;
(xxi) the amount of the distribution made on such Distribution
Date to the Holders of the Class [ ] Certificates allocable to
Prepayment Charges;
(xxii) updated pool composition data including the following
with respect to each Loan Group: average loan balance, weighted average
mortgage rate, weighted average loan-to-value ratio at origination,
weighted average FICO at originationweighted average remaining term;
and [NOTE - Item 1121(a)(8) requires updated pool composition
information, the foregoing is a suggestion of what to provide]
(xxiii) information about any additions of, substitutions for
or removal of any Mortgage loans from the Trust Fund, and any changes
in the underwriting, acquisition or selection criteria as to any
Mortgage loans added to the Trust Fund.
The Trustee 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 Trustee's internet
website. The Trustee's internet website shall initially be located at
"▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇". Assistance in using the website can be obtained by calling
the Trustee'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 Trustee may change the way monthly statements are distributed in order
to make such distributions more convenient or more accessible to the above
parties.
(b) The Trustee's responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
will make available a copy of each statement provided pursuant to this Section
4.6 to each Rating Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon 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 4.6 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee 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 interests 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 interests 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 Realized Losses 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.
Section 4.7 ADVANCES.
If the Monthly Payment on a Loan or a portion thereof is delinquent as
of its Due Date, other than as a result of interest shortfalls due to bankruptcy
proceedings or application of the Relief Act, and the related Servicer fails to
make an advance of the delinquent amount pursuant to the related Servicing
Agreement, the Master Servicer shall deposit in the Distribution Account, from
its own funds or from amounts on deposit in the Distribution Account that are
held for future distribution, not later than the Distribution Account Deposit
Date immediately preceding the related Distribution Date an amount equal to such
delinquency, net of the Servicing Fee and Master Servicing Fee for such Loan
except to the extent the Master Servicer determines any such advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds, or future payments
on the Loan for which such Advance was made. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Distribution Account on or before any future Distribution Account Deposit Date
to the extent that related Available Distribution Amount (determined without
regard to Advances to be made on the related Distribution Account Deposit Date)
shall be less than the total amount that would be distributed to the related
Classes of Certificateholders pursuant to Section 4.1 on such Distribution Date
if such amounts held for future distributions had not been so used to make
Advances. Subject to the foregoing, the Master Servicer shall continue to make
such Advances through the date that the related Servicer is required to do so
under its Servicing Agreement. In the event the Master Servicer elects not to
make an Advance because the Master Servicer deems such Advance nonrecoverable
pursuant to this Section 4.7, on the related Distribution Account Deposit Date,
the Master Servicer shall present an Officer's Certificate to the Trustee (i)
stating that the Master Servicer elects not to make an Advance in a stated
amount and (ii) detailing the reason it deems the advance to be nonrecoverable.
ARTICLE V
THE CERTIFICATES
Section 5.1 THE CERTIFICATES.
(a) The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Loans and all other assets included in
REMIC I.
The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-12. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.
Upon original issue, the Certificates shall be executed 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.
(b) The Certificates, other than the Class [ ] Certificates, Class [ ]
Certificates and Junior Subordinate Certificates, shall initially be issued as
one or more Certificates held by the Book-Entry Custodian or, if appointed to
hold such Certificates as provided below, the Depository and registered in the
name of the Depository or its nominee and, except as provided below,
registration of such Certificates may not be transferred by the Securities
Administrator except to another Depository that agrees to hold such Certificates
for the respective Certificate Owners with Ownership Interests therein. The
Certificate Owners shall hold their respective Ownership Interests in and to
such Certificates through the book-entry facilities of the Depository and,
except as provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Securities Administrator is hereby initially
appointed as the Book-Entry Custodian and hereby agrees to act as such in
accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Servicers, the
Master Servicer and, if the Trustee is not the Book-Entry Custodian, the
Trustee, any other transfer agent (including the Depository or any successor
Depository) to act as Book-Entry Custodian under such conditions as the
predecessor Book-Entry Custodian and the Depository or any successor Depository
may prescribe, provided that the predecessor Book-Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any such
appointment of other than the Depository. If the Securities Administrator
resigns or is removed in accordance with the terms hereof, the successor
Securities Administrator or, if it so elects, the Depository shall immediately
succeed to its predecessor's duties as Book-Entry Custodian. The Depositor shall
have the right to inspect, and to obtain copies of, any Certificates held as
Book-Entry Certificates by the Book-Entry Custodian.
(c) Any Junior Subordinate Certificate or Class [ ] Certificate
initially offered and sold in offshore transactions in reliance on Regulation S
shall be issued in the form of a temporary global certificate in definitive,
fully registered form (each, a "Regulation S Temporary Global Certificate"),
which shall be deposited with the Securities Administrator or an agent of the
Securities Administrator as custodian for the Depository and registered in the
name of Cede & Co. as nominee of the Depository for the account of designated
agents holding on behalf of Euroclear or Clearstream. Beneficial interests in
each Regulation S Temporary Global Certificate may be held only through
Euroclear or Clearstream; provided, however, that such interests may be
exchanged for interests in a Definitive Certificate in accordance with the
requirements described in Section 5.2. After the expiration of the Release Date,
a beneficial interest in a Regulation S Temporary Global Certificate may be
exchanged for a beneficial interest in the related permanent global certificate
of the same Class (each, a "Regulation S Permanent Global Certificate"), in
accordance with the procedures set forth in Section 5.2. Each Regulation S
Permanent Global Certificate shall be deposited with the Securities
Administrator or an agent of the Securities Administrator as custodian for the
Depository and registered in the name of [ ] as nominee of the Depository.
(d) The Junior Subordinate Certificates and Class [ ] Certificates
offered and sold to Qualified Institutional Buyers ("QIBs") in reliance on Rule
144A under the Securities Act ("Rule 144A") will be issued in the form of
Definitive Certificates.
(e) The Trustee, the Servicers, the Securities Administrator, the
Master Servicer and the Depositor may for all purposes (including the making of
payments due on the Book-Entry Certificates and Global Certificates) deal with
the Depository as the authorized representative of the Certificate Owners with
respect to the Book-Entry Certificates and Global Certificates for the purposes
of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the Book-Entry Certificates and Global
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of the Book-Entry Certificates and Global
Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Certificateholders and shall
give notice to the Depository of such record date.
If (i)(A) the Depositor advises the Securities Administrator in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Securities
Administrator in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Master Servicer Event
of Default, Certificate Owners representing in the aggregate not less than [ ]%
of the Ownership Interests of the Book-Entry Certificates advise the Securities
Administrator through the Depository, in writing, that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Securities Administrator shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. With respect to a Global Certificate, the related
Certificate Owner (other than a Holder of a Regulation S Temporary Global
Certificate) may request that its interest in a Global Certificate be exchanged
for a Definitive Certificate. Upon surrender to the Securities Administrator of
the Book-Entry Certificates by the Book-Entry Custodian or the Depository, as
applicable, or the Global Certificates by the Depository accompanied by
registration instructions from the Depository for registration of transfer, the
Securities Administrator shall cause the Definitive Certificates to be issued.
Such Definitive Certificates will be issued in minimum denominations of $[ ]
except that any beneficial ownership that was represented by a Book-Entry
Certificate, or a Global Certificate, as applicable in an amount less than $[ ]
immediately prior to the issuance of a Definitive Certificate shall be issued in
a minimum denomination equal to the amount represented by such Book-Entry
Certificate or a Global Certificate, as applicable. None of the Depositor, the
Servicers, the Master Servicer, the Securities Administrator or the Trustee
shall be liable for any delay in the delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Securities Administrator on behalf of the
Trustee, to the extent applicable with respect to such Definitive Certificates,
and the Securities Administrator on behalf of the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(f) Neither the Trustee nor the Securities Administrator shall have any
liability to the Trust Fund and shall be indemnified by the Trust Fund for, any
cost, liability or expense incurred by them arising from a registration of a
Certificate or transfer, pledge sale or other disposition of a Certificate in
reliance upon a certification, Officer's Certificate, affidavit, ruling or
Opinion of Counsel described in this Article V.
Section 5.2 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Securities Administrator shall cause to be kept at one of the
offices or agencies to be appointed by the Securities Administrator in
accordance with the provisions of Section 8.11, a Certificate Register for the
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
(b) No transfer of any Junior Subordinate Certificate or Class [ ]
Certificate shall be made unless that transfer is made pursuant to an effective
registration statement under the Securities Act, and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Junior Subordinate Certificate or Class [ ]
Certificate is to be made without registration or qualification (other than in
connection with the initial transfer of any such Certificate by the Depositor),
the Securities Administrator shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the Securities Act,
written certifications from the Certificateholder desiring to effect the
transfer and from such Certificateholder's prospective transferee, substantially
in the form attached hereto as Exhibit B-1; (ii) if such transfer is purportedly
being made in reliance upon Rule 501(a) under the Securities Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the form
attached hereto as Exhibit B-2; (iii) if such transfer is purportedly being made
in reliance on Regulation S, a written certification from the prospective
transferee, substantially in the form attached hereto as Exhibit B-3 and (iv) in
all other cases, an Opinion of Counsel satisfactory to the Securities
Administrator that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, the Master Servicer, the Securities
Administrator or the Servicers), together with copies of the written
certification(s) of the Certificateholder desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. Neither of the Depositor nor the Securities
Administrator is obligated to register or qualify any such Certificates under
the Securities Act or any other securities laws or to take any action not
otherwise required under this Agreement to permit the transfer of such
Certificates without registration or qualification. Any Certificateholder
desiring to effect the transfer of any such Certificate shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Master Servicer, the
Securities Administrator and the Servicers 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.
A holder of a beneficial interest in a Regulation S Temporary Global
Certificate must provide Euroclear or Clearstream, as the case may be, with a
certificate in the form of Annex A to Exhibit B-4 hereto certifying that the
beneficial owner of the interest in such Global Certificate is not a U.S. Person
(as defined in Regulation S), and Euroclear or Clearstream, as the case may be,
must provide to the Trustee and Securities Administrator a certificate in the
form of Exhibit B-4 hereto prior to (i) the payment of interest or principal
with respect to such holder's beneficial interest in the Regulation S Temporary
Global Certificate and (ii) any exchange of such beneficial interest for a
beneficial interest in a Regulation S Permanent Global Certificate.
(c) No transfer of a Class [ ] Certificate or a Residual Certificate or
any interest therein shall be made to any Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any Person acquiring such Certificates with "Plan Assets" of a Plan
within the meaning of the Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Securities Administrator is
provided with an Opinion of Counsel on which the Depositor, the Master Servicer,
the Securities Administrator, the Trustee and the Servicers may rely, which
establishes to the satisfaction of the Securities Administrator that the
purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Servicers, the Trustee, the
Master Servicer, the Securities Administrator or the Trust Fund to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the
Servicers, the Trustee, the Master Servicer, the Securities Administrator, the
Trust Fund. An Opinion of Counsel will not be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Securities Administrator shall be entitled to
conclusively rely upon a representation (which, upon the request of the
Securities Administrator, shall be a written representation) from the Depositor
of the status of such transferee as an affiliate of the Depositor.
Each Transferee of a Class [ ] Certificate or Class [ ] Certificate
will be deemed to have represented by virtue of its purchase or holding of such
Certificate (or interest therein) or, with respect to each Transferee of a
Junior Subordinate Certificate, shall certify that either (a) such Transferee is
not a Plan or purchasing such Certificate with Plan Assets, (b) for Certificates
other than the Junior Subordinate Certificates, it has acquired and is holding
such Certificate in reliance on Prohibited Transaction Exemption ("PTE") 94-84
or FAN 97-03E, as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE
2000-58, 65 Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67 Fed. Reg.
54487 (August 22, 2002) (the "Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "[BBB-]" (or
its equivalent) by a Rating Agency or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in PTCE 95-60, and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied.
If any Certificate or any interest therein is acquired or held in
violation of the conditions described in this Section 5.2, the next preceding
permitted beneficial owner will be treated as the beneficial owner of that
Certificate, retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any
certificate or interest therein was effected in violation of the conditions
described in this Section 5.2 shall indemnify and hold harmless the Depositor,
the Trustee, the Servicers, the Master Servicer, the Securities Administrator
and the Trust Fund from and against any and all liabilities, claims, costs or
expenses incurred by those parties as a result of that acquisition or holding.
(d) Each Transferee of a Class [ ] Certificate shall be deemed by the
acceptance or acquisition of the related Ownership Interest to have agreed to be
bound by the following provisions and to have irrevocably appointed the
Depositor or its designee as its attorney-in-fact to negotiate the terms of any
mandatory sale under clause (v) below and to execute all instruments of transfer
and to do all other things necessary in connection with any such sale, and the
rights of each Transferee of a Class [ ] Certificate are expressly subject to
the following provisions:
(i) Each such Transferee 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.
(ii) No Person shall acquire an Ownership Interest in a Class
[ ] Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class [ ] Certificate, the Securities
Administrator shall as a condition to registration of the transfer,
require delivery to it, in form and substance satisfactory to it, of
each of the following:
(A) an affidavit in the form of Exhibit C hereto from
the proposed Transferee to the effect that such Transferee is
a Permitted Transferee and that it is not acquiring its
Ownership Interest in the Class [ ] Certificate that is the
subject of the proposed transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee; and
(B) a covenant of the proposed Transferee to the
effect that the proposed Transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the Class
[ ] Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Class [ ] Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported Transferee. If any purported Transferee shall, in
violation of the provisions of this Section, become a Holder of a Class
[ ] Certificate, then the prior Holder of such Class [ ] Certificate
that is a Permitted Transferee shall, upon discovery that the
registration of transfer of such Class [ ] Certificate was not in fact
permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Class [ ]
Certificate. The Securities Administrator shall be under no liability
to any Person for any registration of transfer of a Class [ ]
Certificate that is in fact not permitted by this Section or for making
any distributions due on such Class [ ] Certificate to the Holder
thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Securities
Administrator received the documents specified in clause (iii). The
Securities Administrator shall be entitled to recover from any Holder
of a Class [ ] Certificate that was in fact not a Permitted Transferee
at the time such distributions were made all distributions made on such
Class [ ] Certificate. Any such distributions so recovered by the
Securities Administrator shall be distributed and delivered by the
Securities Administrator to the prior Holder of such Class [ ]
Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class [ ] Certificate in violation of the
restrictions in this Section, then the Securities Administrator shall
have the right but not the obligation, without notice to the Holder of
such Class [ ] Certificate or any other Person having an Ownership
Interest therein, to notify the Depositor to arrange for the sale of
such Class [ ] Certificate. The proceeds of such sale, net of
commissions (which may include commissions payable to the Depositor or
its affiliates in connection with such sale), expenses and taxes due,
if any, will be remitted by the Securities Administrator to the
previous Holder of such Class [ ] Certificate that is a Permitted
Transferee, except that in the event that the Securities Administrator
determines that the Holder of such Class [ ] Certificate may be liable
for any amount due under this Section or any other provisions of this
Agreement, the Securities Administrator may withhold a corresponding
amount from such remittance as security for such claim. The terms and
conditions of any sale under this clause (v) shall be determined in the
sole discretion of the Securities Administrator and it shall not be
liable to any Person having an Ownership Interest in a Class [ ]
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class [ ] Certificate in violation of the
restrictions in this Section, then the Securities Administrator upon
receipt of reasonable compensation will provide to the Internal Revenue
Service, and to the persons specified in Sections 860E(e)(3) and (6) of
the Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of Class [ ] interests to
Disqualified Organizations.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Securities Administrator, in form and substance satisfactory to
the Securities Administrator, (i) written notification from each Rating Agency
that the removal of the restrictions on transfer set forth in this Section will
not cause such Rating Agency to downgrade its rating of the Certificates and
(ii) an Opinion of Counsel to the effect that such removal will not cause any
REMIC created hereunder to fail to qualify as a REMIC. The Holder of the Class [
] Certificate issued hereunder, while not a Disqualified Organization, is the
Tax Matters Person.
(e) 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 8.11,
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.
(f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with Authorized Denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 8.11. 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.
(g) 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.
(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Securities Administrator in accordance with its
customary procedures.
Section 5.3 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (i) 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 (ii) there is delivered to Securities Administrator such
security or indemnity as may be required by it to save it harmless, then, in the
absence of actual knowledge by the Securities Administrator that such
Certificate has been acquired by a protected 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 the same Class and of like denomination and Percentage Interest.
Upon the issuance of any new Certificate under this Section, 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
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC created hereunder, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 5.4 PERSONS DEEMED OWNERS.
The Depositor, the Servicers, the Trustee, the Master Servicer, the
Securities Administrator and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.1 and for all other
purposes whatsoever, and none of the Depositor, the Servicers, the Trustee, the
Master Servicer, the Securities Administrator or any agent of any of them shall
be affected by notice to the contrary.
Section 5.5 CERTAIN AVAILABLE INFORMATION.
On or prior to the date of the first sale of any Junior Subordinate
Certificate or Class [ ] Certificate to an Independent third party, the
Depositor shall provide to the Securities Administrator [ ] copies of any
private placement memorandum or other disclosure document used by the Depositor
in connection with the offer and sale of such Certificate. In addition, if any
such private placement memorandum or disclosure document is revised, amended or
supplemented at any time following the delivery thereof to the Securities
Administrator, the Depositor promptly shall inform the Securities Administrator
of such event and shall deliver to the Securities Administrator [ ] copies of
the private placement memorandum or disclosure document, as revised, amended or
supplemented. The Securities Administrator shall maintain at its office as set
forth in Section 11.5 hereof and shall make available free of charge during
normal business hours for review by any Holder of a Certificate or any Person
identified to the Securities Administrator as a prospective transferee of a
Certificate, originals or copies of the following items: (i) in the case of a
Holder or prospective transferee of a Junior Subordinate Certificate or Class [
] Certificate, the private placement memorandum or other disclosure document
relating to such Class of Certificates, in the form most recently provided to
the Securities Administrator; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.1, (B) all monthly
statements required to be delivered to Certificateholders of the Junior
Subordinate Certificates and Class [ ] Certificates pursuant to Section 4.6
since the Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date and (C) any copies of all
Officers' Certificates of the Servicers since the Closing Date delivered to the
Master Servicer to evidence such Person's determination that any Monthly Advance
or Servicing Advance was, or if made, would be a Nonrecoverable Monthly Advance
or Nonrecoverable Servicing Advance. Copies and mailing of any and all of the
foregoing items will be available from the Securities Administrator upon request
at the expense of the Person requesting the same.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER AND THE CREDIT RISK MANAGER
Section 6.1 LIABILITY OF THE DEPOSITOR AND THE MASTER SERVICER.
The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement upon them in their respective capacities as Depositor and
Master Servicer and undertaken hereunder by the Depositor and the Master
Servicer herein.
Section 6.2 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE MASTER
SERVICER.
Subject to the following paragraph, the Depositor shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer shall keep in full effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its formation. The
Depositor and the Master Servicer each shall 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 Loans and to
perform its respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or consolidated with
or into any Person, or transfer all or substantially all of its assets to any
Person, in which case any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the Rating Agencies' ratings of the
Certificates in effect immediately prior to such merger or consolidation will
not be qualified, reduced or withdrawn as a result thereof (as evidenced by a
letter to such effect from the Rating Agencies).
Section 6.3 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE MASTER
SERVICER, THE SERVICERS, THE SECURITIES ADMINISTRATOR AND Others.
None of the Depositor, the Master Servicer, the Securities
Administrator, the Servicers or any of the directors, officers, employees or
agents of the Depositor, the Master Servicer, the Securities Administrator or
the Servicers shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement or the Servicing Agreements, or
for errors in judgment; provided, however, that this provision shall not protect
the Depositor, the Master Servicer, the Securities Administrator, the Servicers
or any such person against any breach of warranties, representations or
covenants made herein or in the Servicing Agreements, or against any specific
liability imposed on the Master Servicer, the Securities Administrator or the
Servicers pursuant hereto or pursuant to the Servicing Agreements, or against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder or under the Servicing
Agreements. The Depositor, the Master Servicer, the Securities Administrator,
the Servicers and any director, officer, employee or agent of the Depositor, the
Master Servicer, the Securities Administrator or the Servicers may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder or under the
Servicing Agreements. The Depositor, the Master Servicer, the Servicers, the
Securities Administrator, the Custodians and any director, officer, employee or
agent of the Depositor, the Master Servicer, the Servicers, the Custodian or the
Securities Administrator shall be indemnified and held harmless by the Trust
Fund against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement, the Certificates, any Servicing
Agreement or the Cap Contract, or any loss, liability or expense incurred by any
of such Persons other than by reason of such Person's willful misfeasance, bad
faith or gross negligence in the performance of its duties hereunder or by
reason of reckless disregard of its obligations and duties hereunder. None of
the Depositor, the Master Servicer, the Securities Administrator, any Custodian
or any Servicer shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement, the Custodial Agreement, the applicable Servicing Agreement or
the Cap Contract and, in its opinion, does not involve it in any expense or
liability; provided, however, that each of the Depositor, the Master Servicer,
the Custodians and the Securities Administrator 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 Master Servicer, the Custodians, the
Servicers and the Securities Administrator shall be entitled to be reimbursed
therefor from the Distribution Account as and to the extent provided in Article
III, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Distribution Account.
Section 6.4 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 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 6.5 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 (a) shall be a Person which shall be qualified to
service mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth
of not less than $[ ] (unless otherwise approved by each Rating Agency pursuant
to clause (ii) below); (c) shall be reasonably satisfactory to the Trustee (as
evidenced in a writing signed by the Trustee); and (d) 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 and selling
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 prior to
the effective date thereof.
Section 6.6 RIGHTS OF THE DEPOSITOR IN RESPECT OF THE MASTER SERVICER.
The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of the Master Servicer's rights and
obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish to the
Depositor and the Trustee the most recent financial statements of its parent and
such other information relating to the Master Servicer's capacity to perform its
obligations under this Agreement as it possesses. To the extent such information
is not otherwise available to the public, the Depositor and the Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
this Agreement or to the extent that it is appropriate to do so (i) in working
with legal counsel, auditors, taxing authorities or other governmental agencies
or (ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in any case, the Depositor or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
Section 6.7 DUTIES OF THE CREDIT RISK MANAGER.
For and on behalf of the Depositor, pursuant to the Credit Risk
Management Agreements the Credit Risk Manager will provide reports and
recommendations concerning certain delinquent and defaulted Loans, and as to the
collection of any Prepayment Charges with respect to the Loans. 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 related Servicer and/or Master Servicer
for all information and data (including loss and delinquency information and
data) relating to the servicing of the related Loans. 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 Servicers, the Master
Servicer, the Trustee and each Rating Agency. Notwithstanding the foregoing, the
termination of the Credit Risk Manager pursuant to this Section shall not become
effective until the appointment of a successor Credit Risk Manager.
Section 6.8 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.
Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability to the Trustee, the
Certificateholders, or the Depositor for any action taken or for refraining from
the taking of any action made in good faith pursuant to this Agreement, in
reliance upon information provided by a Servicer under a Credit Risk Management
Agreement, or for 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 or bad faith in
its performance of its duties. 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 a Servicer pursuant to a Credit Risk
Management Agreement in the performance of its duties thereunder and hereunder.
Section 6.9 REMOVAL OF THE CREDIT RISK MANAGER.
The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders evidencing, in aggregate, not less than [ ]% of the aggregate
Percentage Interests of all Classes of Certificates, in the exercise of its or
their sole discretion. The Certificateholders shall provide written notice of
the Credit Risk Manager's removal to the Trustee. Upon receipt of such notice,
the Trustee shall provide written notice to the Credit Risk Manager of its
removal, which shall be effective upon receipt of such notice by the Credit Risk
Manager.
Section 6.10 TRANSFER OF SERVICING BY [ ] OF CERTAIN LOANS SERVICED BY
[ ].
[ ] may, at its option, transfer the servicing responsibilities of [ ]
as a Servicer with respect to the Loans serviced pursuant to the [ ] Servicing
Agreement at any time without cause. No such transfer shall become effective
unless and until a successor to [ ] shall have been appointed to service and
administer the related Loans pursuant to the terms and conditions of the [ ]
Servicing Agreement or a servicing agreement that is reasonably acceptable to [
], the Master Servicer and the Rating Agencies. No appointment shall be
effective unless (i) such successor to [ ] meets the eligibility criteria set
forth in this Section 6.10, (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 and (iv) all amounts
reimbursable to [ ] under the [ ] Servicing Agreement shall have been paid to [
], and all servicing transfer costs incurred by the Master Servicer shall have
been paid to it, by the successor appointed pursuant to the terms of this
Section 6.10 or by [ ] including without limitation, all unreimbursed Monthly
Advances and Servicing Advances made by [ ] and all out-of-pocket expenses of [
] incurred in connection with the transfer of servicing to such successor. [ ]
shall provide a copy of the written confirmation of the Rating Agencies and the
servicing agreement executed by such successor to the Trustee, the Securities
Administrator and the Master Servicer. In connection with such appointment and
assumption described herein, [ ] may make such arrangements for the compensation
of such successor out of payments on Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted [ ] under the [ ] Servicing Agreement. [ ] shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
Notwithstanding the foregoing, any successor to [ ] appointed under
this Agreement with respect to the Loans serviced pursuant to the [ ] Servicing
Agreement must (i) be an established mortgage loan servicing institution that is
a ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac approved seller/servicer, (ii) be approved by each
Rating Agency by a written confirmation from each Rating Agency that the
appointment of such successor Servicer would not result in the reduction or
withdrawal of the then current ratings of any outstanding Class of Certificates,
(iii) have a net worth of not less than $[ ] and (iv) assume all the
responsibilities, duties or liabilities of [ ] (other than liabilities of [ ]
incurred prior to the transfer of servicing from [ ]) under the [ ] Servicing
Agreement in connection with the servicing and administration of the related
Loans or a servicing agreement that is reasonably acceptable to [ ], the Master
Servicer and the Rating Agencies.
ARTICLE VII
DEFAULT
Section 7.1 MASTER SERVICER EVENTS OF DEFAULT.
"Master Servicer Event of Default," wherever used herein, means any one
of the following events:
(i) Reserved;
(ii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in this
Agreement, or the breach by the Master Servicer of any representation
and warranty contained in Section 2.5, which continues unremedied for a
period of [ ] 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 the related
Certificates evidencing, in aggregate, not less than [ ]% of the
aggregate Certificate Principal Balance of the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of [ ] days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to it or of or relating to all or substantially all of
its property; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) any failure of the Master Servicer to make any Advance on
any Distribution Account Deposit Date required to be made from its own
funds pursuant to Section 4.7 which continues unremedied until 3:00
p.m. New York time on the Business Day immediately following the
Distribution Account Deposit Date.
If a Master Servicer Event of Default described in clauses (ii) through
(v) of this Section shall occur, then, and in each and every such case, so long
as such Master Servicer Event of Default shall not have been remedied, the
Depositor or the Trustee may, and at the written direction of the Holders of
Certificates evidencing, in aggregate, not less than [ ]% of the aggregate
Certificate Principal Balance of the Certificates, 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 (and the
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) in its capacity as Master Servicer (and in its capacity as
Securities Administrator if the Master Servicer and the Securities Administrator
are the same entity) under this Agreement, to the extent permitted by law, and
in and to the Loans and the proceeds thereof. Except as otherwise provided in
Section 7.4, if a Master Servicer Event of Default described in clause (vi)
hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer (and the Securities Administrator if the Master Servicer and the
Securities Administrator are the same entity) in its capacity as Master Servicer
under this Agreement (and in its capacity as Securities Administrator if the
Master Servicer and the Securities Administrator are the same entity) and in and
to the 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
(and, if applicable, the Securities Administrator) under this Agreement, whether
with respect to the Certificates (other than as a Holder of any Certificate) or
the Loans or otherwise, shall pass to and be vested in the Trustee pursuant to
and under this Section, and, without limitation, the Trustee is hereby
authorized and empowered, as attorney-in-fact or otherwise, to execute and
deliver, on behalf of and at the expense of the Master Servicer, (and, if
applicable, the Securities Administrator) 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 Loans and related
documents, or otherwise. The Master Servicer (and, if applicable, the Securities
Administrator) agrees promptly (and in any event no later than [ ] 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 (and, if
applicable, the Securities Administrator's) functions under this Agreement, and
to cooperate with the Trustee in effecting the termination of the Master
Servicer's (and, if applicable, the Securities Administrator'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, whether in
respect of Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.3, notwithstanding any such termination, with respect to
events occurring prior to such termination). For purposes of this Section 7.1,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
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 Event of Default of which it has
knowledge as provided above.
Section 7.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer (and, if applicable, the Securities Administrator) in its capacity as
Master Servicer (and, if applicable, the Securities Administrator) under this
Agreement and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Trustee (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.3 and the obligation to deposit amounts in
respect of losses pursuant to Section 3.23(c)) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances no later than each Distribution Date pursuant to Section 4.7; provided,
however, if the Trustee is prohibited by law or regulation from obligating
itself to make advances regarding delinquent mortgage loans, then the Trustee
shall not be obligated to make Advances pursuant to Section 4.7; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 7.1
shall not be considered a default by the Trustee as successor to the Master
Servicer hereunder. As compensation therefor, the Trustee shall be entitled to
the Master Servicing Fee and all funds relating to the Loans, investment
earnings on the Distribution Account and all other remuneration to which the
Master Servicer would have been entitled if it had continued to act hereunder.
Notwithstanding the above and subject to the immediately following paragraph,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act or if it is prohibited by law from making advances regarding
delinquent mortgage loans or if the Holders of Certificates evidencing, in
aggregate, not less than [ ]% of the Certificate Principal Balance of the
Certificates so request in writing promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and having a net worth of not less
than $[ ], as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement.
No appointment of a successor to the Master Servicer (and, if
applicable, the Securities Administrator) under this Agreement shall be
effective until the assumption by the successor of all of the Master Servicer's
(and, if applicable, the Securities Administrator's) responsibilities, duties
and liabilities hereunder. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Loans as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer (and, if applicable, the Securities Administrator)
as such hereunder. The Depositor, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Pending appointment of a successor to the Master Servicer (and,
if applicable, the Securities Administrator) under this Agreement, the Trustee
shall act in such capacity as hereinabove provided. The transition costs and
expenses incurred by the Trustee in connection with the replacement of the
Master Servicer (and, if applicable, the Securities Administrator) shall be
reimbursed out of the Trust Fund.
Section 7.3 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of the Master Servicer pursuant to Section 7.1
or any appointment of a successor to the Master Servicer pursuant to Section
7.2, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Not later than the later of [ ] days after the occurrence of any
event, which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or [ ] days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to all Holders of Certificates, at the expense of
the Trust Fund, notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.
Section 7.4 WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.
The Holders evidencing, in aggregate, not less than [ ]% of the
aggregate Percentage Interests of all Certificates affected by any default or
Master Servicer Event of Default hereunder may waive such default or Master
Servicer Event of Default; PROVIDED, HOWEVER, a default or Master Servicer Event
of Default under clause (vi) of Section 7.1 may be waived only by all of the
Holders of the related Regular Interest Certificates. Upon any such waiver of a
default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.1 DUTIES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
The Trustee, prior to the occurrence of a Master Servicer Event of
Default and after the curing or waiver of all Master Servicer Events of Default
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. During the continuance of a Master Servicer Event of Default, 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 its 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.
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 on their face to the requirements of this
Agreement. If any such instrument is found not to conform on its face to the
requirements of this Agreement, 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 shall provide notice to the Trustee
thereof and the Trustee shall provide notice to the Certificateholders.
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 Event of
Default, and after the curing or waiver of all such Master Servicer
Events of Default 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 such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee 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, 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 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 the Securities
Administrator, respectively, was negligent in ascertaining the
pertinent facts; and
(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 in accordance with the direction of the
Holders of Certificates evidencing, in aggregate, not less than [ ]%
(or such other percentage set forth in this Agreement) of the aggregate
Certificate Principal Balance of the Certificates, relating 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 power conferred upon the Trustee or the Securities
Administrator under this Agreement.
Section 8.2 CERTAIN MATTERS AFFECTING TRUSTEE AND SECURITIES
ADMINISTRATOR.
(a) Except as otherwise provided in Section 8.1:
(i) Before taking any action pursuant to this Agreement, the
Trustee and the Securities Administrator may request and rely upon and
shall be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel of its selection and any advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such 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 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 Event of Default
(which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree
of care and skill in their exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person's own
affairs;
(iv) Neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Event of
Default hereunder and after the curing or waiver of all Master Servicer
Events of Default 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 the Holders of Certificates
evidencing, in aggregate, not less than [ ]% of the Trust Fund;
PROVIDED, -------- HOWEVER, if 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 by such Certificateholders, the Trustee or
the Securities Administrator, as applicable, may require reasonable
indemnity satisfactory to it against such expense, or liability from
such Certificateholders as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(vii) The Securities Administrator shall not be liable for any
loss resulting from the investment of funds held in the Distribution
Account at the direction of the Master Servicer pursuant to Section
3.23(c);
(viii) Neither the Trustee nor the Securities Administrator
shall be liable for any action taken, suffered, or omitted to be taken
by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(ix) The Trustee shall not be deemed to have notice of any
default or Master Servicer Event of Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Certificates and this Agreement; and
(x) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, each
agent, custodian and other Person employed to act hereunder.
(b) 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.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
Section 8.3 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR 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 acknowledgments of the Trustee contained
in Article II and the representations and warranties of the Trustee in Section
8.12) shall be taken as the statements of the Depositor and neither the Trustee
nor the Securities Administrator assumes any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations or warranties as to the validity or sufficiency of this
Agreement (other than as specifically set forth in Section 8.12), the Cap
Contract or of the Certificates (other than the signature of the Securities
Administrator and authentication of the Securities Administrator on the
Certificates) or of any Loan or related document. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Loans or deposited in or withdrawn from the Distribution Account.
Section 8.4 TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR MAY
OWN CERTIFICATES.
Each of the Trustee, the Master Servicer and the Securities
Administrator in its individual capacity or any other capacity may become the
owner or pledgee of Certificates and may transact business with other interested
parties and their Affiliates with the same rights it would have if it were not
Trustee, Master Servicer or the Securities Administrator.
Section 8.5 FEES AND EXPENSES OF TRUSTEE AND SECURITIES ADMINISTRATOR.
The fees of the Trustee and the Securities Administrator hereunder and
of [ ] under the [ ] Custodial Agreement 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 Custodians
and any director, officer, employee or agent of the Trustee, the Securities
Administrator and the Custodians shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense (including reasonable attorney's
fees and expenses) incurred by the Trustee or the Securities Administrator in
connection with any default administration to be performed by the Trustee or the
Securities Administrator pursuant to this Agreement or other agreements related
hereto and any claim or legal action or any pending or threatened claim or legal
action arising out of or in connection with the acceptance or administration of
its respective obligations and duties under this Agreement or the Cap Contract,
including other agreements related hereto, other than any loss, liability or
expense (i) for which the Trustee is indemnified by the Master Servicer, (ii)
that constitutes a specific liability of the Trustee or the Securities
Administrator, respectively, pursuant to Section 10.1(g) or (iii) any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence by the Trustee, or Securities Administrator in the performance
of its duties hereunder or by reason of reckless disregard of its obligations
and duties hereunder. 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. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the Trustee. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer's
own funds, without reimbursement from REMIC I therefor.
Section 8.6 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 Master
Servicer or any Affiliate of the foregoing) organized and doing business under
the laws of any state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $[ ] (or a member of a bank holding company whose capital and
surplus is at least $[ ]) 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 8.7.
Additionally, the Securities Administrator (i) may not be an
originator, Master Servicer, Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator is in an institutional trust
department, (ii) must be authorized to exercise corporate trust powers under the
laws of its jurisdiction of organization, and (iii) must be rated at least
"[A/F1]" by Fitch, if Fitch is a Rating Agency, or the equivalent rating by S&P
or ▇▇▇▇▇'▇ (or such rating acceptable to Fitch pursuant to a rating
confirmation). If no successor securities administrator shall have been
appointed and shall have accepted appointment within [ ] days after [ ], as
Securities Administrator, ceases to be the securities administrator pursuant to
this Section 8.6, then the Trustee shall perform the duties of the Securities
Administrator pursuant to this Agreement. The Trustee shall notify the Rating
Agencies of any change of Securities Administrator. Notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, promptly appoint or petition a court of competent jurisdiction to
appoint, a Person that satisfies the eligibility criteria set forth herein as
the Trustee under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Trustee under this Agreement. [ ]
or one of its Affiliates shall act as Securities Administrator for so long as it
is Master Servicer under this Agreement.
Section 8.7 RESIGNATION AND REMOVAL OF TRUSTEE AND SECURITIES
ADMINISTRATOR.
The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination 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 [ ] 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, successor securities
administrator, Trustee or 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 8.6 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 evidencing, in aggregate, not less than [
]% of the Certificate Principal Balance of the Certificates, 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. All costs and expenses incurred by the Trustee in
connection with its removal without cause hereunder shall be reimbursed to it by
the Trust Fund.
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 8.8.
Notwithstanding anything to the contrary contained herein, the Master
Servicer and the Securities Administrator shall at all times be the same Person.
Section 8.8 SUCCESSOR TRUSTEE OR SECURITIES ADMINISTRATOR.
Any successor trustee or successor securities administrator appointed
as provided in Section 8.7 shall execute, acknowledge and deliver to the
Depositor and its predecessor trustee or predecessor securities administrator an
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 Loan Documents and related documents and statements to the
extent held by it hereunder, as well as all moneys, 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 unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 8.6 and the appointment of such successor
trustee or successor securities administrator shall not result in a downgrading
of any Class of Certificates by any Rating Agency, as evidenced by a letter from
each Rating Agency.
Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Depositor shall mail
notice of the succession of such trustee hereunder to all Holders of the related
Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within [ ] days after acceptance of
appointment by the successor trustee or successor securities administrator, the
successor trustee or successor securities administrator shall cause such notice
to be mailed at the expense of the Depositor.
Section 8.9 MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES
ADMINISTRATOR.
Any corporation or association into which the Trustee or the Securities
Administrator may be merged or converted or with which it may be consolidated or
any corporation or association resulting from any merger, conversion or
consolidation to which the Trustee or the Securities Administrator shall be a
party, or any corporation or association succeeding to the business of the
Trustee or the Securities Administrator shall be the successor of the Trustee or
the Securities Administrator hereunder, provided such corporation or association
shall be eligible under the provisions of Section 8.6, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC I or property securing the same may at the time be located, the 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 8.10,
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
8.6 hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.8 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to 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 VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee, or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
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 8.11 APPOINTMENT OF OFFICE OR AGENCY.
The Securities Administrator shall appoint an office or agency in the [
] located at [ ], where the Certificates may be surrendered for registration of
transfer or exchange, and presented for final distribution and where notices and
demands to or upon the Securities Administrator in respect of the Certificates
and this Agreement may be served.
Section 8.12 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee hereby represents and warrants to the Master Servicer, the
Securities Administrator 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 incorporation 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.
(vi) 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 8.13 REPORTS FILED WITH SECURITIES AND EXCHANGE
COMMISSION.
(a) (i) Within 15 days after each Distribution Date, the Trustee shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("▇▇▇▇▇"), a distribution report
on Form 10-D, signed by the Master Servicer, 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 part of the monthly statement; provided that the Trustee shall
have received no later than 2 days prior to the date such distribution report on
Form 10-D is required to be filed, all information required to be provided to
the Trustee as described in clause (a)(iv) below.
The Trustee will prepare and file current reports on Form 8-K in
respect of the Trust, signed by the Master Servicer, as and when required;
provided, that, the Trustee shall have received no later than one Business Day
prior to the filing deadline for such current report, all information, data, and
exhibits required to be provided or filed with such current report and required
to be provided to the Trustee as described in clause (a)(iv) below.
Prior to January 30 in each year commencing in 2007, the Trustee 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, 2007 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 an annual compliance statement, together with a copy of the Assessment of
Compliance and Attestation Report to be delivered by the Master Servicer
pursuant to Section 3.17 (including with respect to any subservicer or
subcontractor, if required to be filed). Prior to (x) March 31, 2007 and (y)
unless and until a Form 15 suspension notice shall have been filed, March 31 of
each year thereafter, the Trustee 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 Assessment of Compliance,
Attestation Report, annual compliance statements and other documentation
provided by the Master Servicer pursuant to Section 3.17 (including with respect
to any subservicer or subcontractor, if required to be filed) and with respect
to the Trustee and the Custodian, and the Form 10-K certification signed by the
Depositor; provided that the Trustee shall have received no later than March 15
of each calendar year prior to the filing deadline for the Form 10-K all
information, data and exhibits required to be provided or filed with such Form
10-K and required to be provided to the Trustee as described in clause (a)(iv)
below.
As to each item of information required to be included in any Form
10-D, Form 8-K or Form 10-K, the Trustee's obligation to include the information
in the applicable report is subject to receipt from the entity that is indicated
in Exhibit __ as the responsible party for providing that information, if other
than the Trustee, as and when required as described above. Each of the Master
Servicer, Seller and Depositor hereby agree to notify and provide to the Trustee
all information that is required to be included in any Form 10-D, Form 8-K or
Form 10-K, with respect to which that entity is indicated in Exhibit __ as the
responsible party for providing that information. The swap provider will be
obligated pursuant to the swap agreement to provide to the Trustee any
information that may be required to be included in any Form 10-D, Form 8-K or
Form 10-K. The Trustee shall be responsible for determining the significance
percentage (as defined in Item 1115 of Regulation AB) of the swap provider at
any time. The Master Servicer shall be responsible for determining the pool
concentration applicable to any subservicer or originator at any time, for
purposes of disclosure as required by Items 1117 and 1119 of Regulation AB.
The Depositor hereby grants to the Master Servicer a limited power of
attorney to sign each Form 10-D, Form 8-K and Form 10-K on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (x)
receipt by the Master Servicer from the Depositor of written termination of such
power of attorney and (y) the termination of the Trust Fund. The Depositor
agrees to promptly furnish to the Trustee, 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 Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this Section 8.13; provided, however, the Trustee will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Depositor c/o Bear, ▇▇▇▇▇▇▇
& Co. Inc., Attn: Managing Director-Analysis and Control, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 3859. Fees and expenses incurred by the Trustee
in connection with this Section 8.13 shall not be reimbursable from the Trust
Fund.
(b) In connection with the filing of any 10-K hereunder, the Trustee
shall sign a certification (in the form attached hereto as Exhibit K) for the
Depositor regarding certain aspects of the Form 10-K certification signed by the
Depositor, provided, however, that the Trustee shall not be required to
undertake an analysis of any accountant's report attached as an exhibit to the
Form 10-K.
(c) In connection with the filing of any 10-K hereunder, the Master
Servicer shall sign a certification (in the form attached hereto as Exhibit __)
for the benefit of the Depositor regarding certain aspects of the Form 10-K
certification signed by the Depositor, provided, however, that the Master
Servicer shall not be required to undertake an analysis of any accountant's
report attached as an exhibit to the Form 10-K.
(d) The Trustee shall indemnify and hold harmless the Depositor and its
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 Trustee's obligations under this Section 8.13 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.
The Depositor shall indemnify and hold harmless the Trustee and its
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 obligations of the Depositor under this Section 8.13 or the
Depositor's negligence, bad faith or willful misconduct in connection therewith.
The Master Servicer shall indemnify and hold harmless the Trustee and
the Depositor 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 obligations of the Master Servicer
under this Section 8.13 or the Master Servicer's negligence, bad faith or
willful misconduct in connection therewith.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor or the Trustee, as applicable, then
the defaulting party, in connection with a breach of its respective obligations
under this Section 8.13 or its respective negligence, bad faith or willful
misconduct in connection therewith, agrees that it shall contribute to the
amount paid or payable by the other parties as a result of the losses, claims,
damages or liabilities of the other party in such proportion as is appropriate
to reflect the relative fault and the relative benefit of the Depositor on the
one hand and the Trustee on the other.
(e) Nothing shall be construed from the foregoing subsections (a), (b)
and (c) to require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 8.13(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.
Notwithstanding the provisions of Section 11.1, this Section 8.13 may
be amended without the consent of the Certificateholders.
Section 8.14 INTENTION OF THE PARTIES AND INTERPRETATION.
Each of the parties acknowledges and agrees that the purpose of
Sections 3.16, 3.17 and 8.13 of this Agreement is to facilitate compliance by
the Seller and the Depositor with the provisions of Regulation AB promulgated by
the SEC under the 1934 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 Seller or
the Depositor for delivery of additional or different information as the Seller
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.
ARTICLE IX
TERMINATION
Section 9.1 TERMINATION UPON PURCHASE OR LIQUIDATION OF THE LOANS.
(a) Subject to Section 9.2, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer, the
Securities Administrator and the Trustee (other than the obligations of the
Master Servicer to the Securities Administrator and the Trustee pursuant to
Section 8.5 and of the Master Servicer to pay Compensating Interest to the
Securities Administrator and the Securities Administrator to make payments in
respect of REMIC I Regular Interests or the Classes of Certificates as
hereinafter set forth) shall terminate upon payment to the Certificateholders
and the deposit of all amounts held by or on behalf of the Trustee and required
hereunder to be so paid or deposited on the Distribution Date coinciding with or
following the earlier to occur of (i) the purchase by the Master Servicer (as
defined below) of all Loans and each REO Property remaining in REMIC I and (ii)
the final payment or other liquidation (or any advance with respect thereto) of
the last Loan or REO Property remaining in REMIC I; PROVIDED, HOWEVER, that in
no event shall the trust created hereby continue beyond the earlier of (a) the
expiration of [ ] years from the death of the last survivor of the descendants
of [ ], the late [ ], living on the date hereof and (b) the Last Scheduled
Distribution Date. The purchase by the Master Servicer of all Loans and each REO
Property remaining in REMIC I shall be at a price (the "Termination Price")
equal to the sum of (i) the greater of (A) the aggregate Purchase Price of all
the Loans included in REMIC I, plus the appraised value of each REO Property, if
any, included in REMIC I, such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee in their reasonable
discretion and (B) the aggregate fair market value of all of the assets of REMIC
I (as determined by the Master Servicer, as of the close of business on the
third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to the third paragraph
of this Section 9.1) plus (ii) any amounts due the Servicers and the Master
Servicer in respect of unpaid Servicing Fees, Master Servicing Compensation and
outstanding Monthly Advances and Servicing Advances.
(b) The Master Servicer shall have the right to purchase all of the
Loans and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; PROVIDED, HOWEVER, that the Master Servicer may elect to purchase all
of the Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only if the aggregate Scheduled Principal Balance of the Loans and the
fair market value of each REO Property remaining in the Trust Fund at the time
of such election is less than or equal to [ ]% of the aggregate Scheduled
Principal Balance of the Loans as of the Cut-Off Date plus the Original
Pre-Funded Amount.
(c) Notice of the liquidation of the Certificates shall be given
promptly by the Securities Administrator by letter to the Certificateholders
mailed (a) in the event such notice is given in connection with the purchase of
the Loans and each REO Property by the Master Servicer, not earlier than the [ ]
day and not later than the [ ] day of the month next preceding the month of the
final distribution on the Certificates or (b) otherwise during the month of such
final distribution on or before the Determination Date in such month, in each
case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and the final payment in respect of REMIC I Regular Interests or the
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Securities Administrator therein designated,
(ii) the amount of any such final payment, (iii) that no interest shall accrue
in respect of REMIC I Regular Interests or Certificates from and after the
Interest Accrual Period relating to the final Distribution Date therefor and
(iv) that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Securities Administrator. In the event such
notice is given in connection with the purchase of all of the Loans and each REO
Property remaining in the REMIC I by the Master Servicer, the Master Servicer
shall deliver to the Securities Administrator for deposit in the Distribution
Account not later than the last Business Day of the month next preceding the
month of the final distribution on the Certificates an amount in immediately
available funds equal to the above-described Termination Price. The Securities
Administrator shall remit (a) to the Master Servicer from such funds deposited
in the Distribution Account (i) any amounts which the Master Servicer notifies
it in writing that the Master Servicer would be permitted to withdraw and retain
from the Distribution Account pursuant to Section 3.24 and (ii) any other
amounts otherwise payable by the Securities Administrator to the Master Servicer
from amounts on deposit in the Distribution Account pursuant to the terms of
this Agreement and notified by the Master Servicer in writing and (b) to the
Servicers, any amounts reimbursable to the Servicers pursuant to the Servicing
Agreements, in each case prior to making any final distributions pursuant to
Section 9.1(d) below. Upon certification to the Trustee and the Securities
Administrator by a Servicing Officer of the making of such final deposit, the
Trustee shall promptly release to the Master Servicer the Mortgage Files for the
remaining Loans, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate such transfer in each case without
recourse, representation or warranty.
(d) Upon presentation of the Certificates by the Certificateholders on
the final Distribution Date, the Securities Administrator shall distribute to
each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.1 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
9.1 shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Securities Administrator shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall, directly or through an agent, mail a final notice to the
remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the funds in trust and of
contacting such Certificateholders shall be paid out of the assets remaining in
the trust funds. If within [ ] year after the final notice any such Certificates
shall not have been surrendered for cancellation, the Securities Administrator
shall pay to the Depositor all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Securities Administrator as a result of such Certificateholder's failure
to surrender its Certificate(s) for final payment thereof in accordance with
this Section 9.1. Any such amounts held in trust by the Securities Administrator
shall be held in an Eligible Account and the Securities Administrator may direct
any depository institution maintaining such account to invest the funds in one
or more Eligible Investments. All income and gain realized from the investment
of funds deposited in such accounts held in trust by the Securities
Administrator shall be for the benefit of the Securities Administrator;
PROVIDED, HOWEVER, that the Securities Administrator shall deposit in such
account the amount of any loss of principal incurred in respect of any such
Eligible Investment made with funds in such accounts immediately upon the
realization of such loss.
Immediately following the deposit of funds in trust hereunder in
respect of the Certificates, the Trust Fund shall terminate.
Section 9.2 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event that the Master Servicer purchases all the Loans and
each REO Property or the final payment on or other liquidation of the last Loan
or REO Property remaining in REMIC I pursuant to Section 9.1, the Trust Fund
shall be terminated in accordance with the following additional requirements:
(i) The Securities Administrator shall specify the [ ] day in
the [ ]-day liquidation period in a statement attached to each REMIC's
final Tax Return pursuant to Treasury regulation Section 1.860F-1 and
shall satisfy all requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained by and at the expense of the Master
Servicer;
(ii) During such [ ]-day liquidation period and, at or prior
to the time of making of the final payment on the Certificates, the
Securities Administrator shall sell all of the assets of REMIC I to the
Master Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit,
or cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand in the Trust Fund (other than cash
retained to meet claims), and the Trust Fund shall terminate at that
time.
(b) At the expense of the requesting Master Servicer (or, if the Trust
Fund is being terminated as a result of the occurrence of the event described in
clause (ii) of the first paragraph of Section 9.1, at the expense of the Trust
Fund), the Master Servicer shall prepare or cause to be prepared the
documentation required in connection with the adoption of a plan of liquidation
of each REMIC pursuant to this Section 9.2.
(c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Securities Administrator to specify the [ ]-day
liquidation period for each REMIC, which authorization shall be binding upon all
successor Certificateholders.
ARTICLE X
REMIC PROVISIONS
Section 10.1 REMIC ADMINISTRATION.
(a) The Trustee shall elect to treat each REMIC as a REMIC under the
Code and, if necessary, under applicable state law and as instructed by the
Securities Administrator. Each such election shall be made by the Securities
Administrator on Form 1066 or other appropriate federal tax or information
return or any appropriate state return for the taxable year ending on the last
day of the calendar year in which the Certificates are issued. For the purposes
of the REMIC election in respect of REMIC I, the REMIC I Regular Interests shall
be designated as the "regular interests" in REMIC I and Component [ ] shall be
designated as the "residual interest" in REMIC I. The Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ],
Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ], Class [ ] and
Class [ ] Certificates shall be designated as the "regular interests" in REMIC
II and Component [ ] shall be designated as the "residual interest" in REMIC II.
The Trustee shall not permit the creation of any "interests" in each Trust REMIC
(within the meaning of Section 860G of the Code) other than the REMIC I Regular
Interests and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC created hereunder within the meaning of Section 860G(a)(9) of the Code.
(c) The Securities Administrator shall be reimbursed for any and all
expenses relating to any tax audit of the Trust Fund (including, but not limited
to, any professional fees or any administrative or judicial proceedings with
respect to each REMIC that involve the Internal Revenue Service or state tax
authorities), including the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Securities Administrator, as agent for
each REMIC's tax matters person shall (i) act on behalf of the Trust Fund in
relation to any tax matter or controversy involving any REMIC and (ii) represent
the Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The holder of the largest Percentage Interest of each Class of Residual
Certificates shall be designated, in the manner provided under Treasury
regulations Section 1.860F-4(d) and Treasury regulations Section
301.6231(a)(7)-1, as the tax matters person of the related REMIC created
hereunder. By their acceptance thereof, the holder of the largest Percentage
Interest of the Residual Certificates hereby agrees to irrevocably appoint the
Securities Administrator or an Affiliate as its agent to perform all of the
duties of the tax matters person for the Trust Fund.
(d) The Securities Administrator shall prepare and file and the Trustee
shall sign all of the Tax Returns in respect of each REMIC created hereunder.
The expenses of preparing and filing such returns shall be borne by the
Securities Administrator without any right of reimbursement therefor.
(e) The Securities Administrator shall perform on behalf of each REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, as required by the Code, the REMIC Provisions or other
such compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee upon receipt of additional reasonable
compensation, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
prepayment assumptions (as set forth in the Prospectus) as required) and (iii)
to the Internal Revenue Service the name, title, address and telephone number of
the person who shall serve as the representative of each REMIC. The Depositor
shall provide or cause to be provided to the Securities Administrator, within [
] days after the Closing Date, all information or data that the Securities
Administrator reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including, without limitation,
the price, yield, prepayment assumption and projected cash flow of the
Certificates.
(f) To the extent in the control of the Trustee or the Securities
Administrator, each such Person (i) shall take such action and shall cause each
REMIC created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions, (ii) shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (A) endanger the status of each REMIC as
a REMIC or (B) result in the imposition of a tax upon the Trust Fund (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless such action or inaction is permitted under this Agreement or the Trustee
and the Securities Administrator have received an Opinion of Counsel, addressed
to them (at the expense of the party seeking to take such action but in no event
at the expense of the Trustee or the Securities Administrator) to the effect
that the contemplated action will not, with respect to any REMIC, endanger such
status or result in the imposition of such a tax, nor (iii) shall the Securities
Administrator take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action; provided that the Securities Administrator
may conclusively rely on such Opinion of Counsel and shall incur no liability
for its action or failure to act in accordance with such Opinion of Counsel. In
addition, prior to taking any action with respect to any REMIC or the respective
assets of each, or causing any REMIC to take any action, which is not
contemplated under the terms of this Agreement, the Securities Administrator
shall consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any REMIC, and the Securities Administrator shall not take any such action or
cause any REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could occur. The Trustee may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not permitted by this Agreement, but in no
event shall such cost be an expense of the Trustee.
(g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.3 hereof, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Securities Administrator pursuant
to Section 10.3 hereof, if such tax arises out of or results from a breach by
the Securities Administrator of any of its obligations under this Article X,
(iii) to the Master Servicer pursuant to Section 10.3 hereof, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations
under Article III or under this Article X, or (iv) against amounts on deposit in
the Distribution Account and shall be paid by withdrawal therefrom.
(h) The Trustee and the Securities Administrator shall, for federal
income tax purposes, maintain books and records with respect to each REMIC on a
calendar year and on an accrual basis.
(i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any REMIC other than in connection with any
Substitute Loan delivered in accordance with Section 2.3 unless it shall have
received an Opinion of Counsel addressed to it to the effect that the inclusion
of such assets in the Trust Fund will not cause the related REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
such REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.
(j) Neither the Trustee nor the Securities Administrator shall
knowingly enter into any arrangement by which any REMIC will receive a fee or
other compensation for services nor permit any REMIC to receive any income from
assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) 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. In connection with the foregoing, the
Securities Administrator shall provide the name and address of the person who
can be contacted to obtain information required to be reported to the holders of
Regular Interests in each REMIC as required by IRS Form 8811.
Section 10.2 PROHIBITED TRANSACTIONS AND ACTIVITIES.
None of the Depositor, the Securities Administrator, the Master
Servicer or the Trustee shall sell, dispose of or substitute for any of the
Loans (except in connection with (i) the foreclosure of a Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of REMIC I (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Loans pursuant to Article
II of this Agreement), nor acquire any assets for any REMIC (other than REO
Property acquired in respect of a defaulted Loan), nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to any REMIC after the Closing Date (other than a Substitute Loan delivered in
accordance with Section 2.3), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
REMIC as a REMIC or (b) cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.3 INDEMNIFICATION.
(a) The Trustee agrees to be liable for any taxes and costs incurred by
the Trust Fund, the Depositor, the Securities Administrator or the Master
Servicer including, without limitation, any reasonable attorneys fees imposed on
or incurred by the Trust Fund, the Depositor, the Securities Administrator or
the Master Servicer as a result of the Trustee's failure to perform its
covenants set forth in this Article X in accordance with the standard of care of
the Trustee set forth in this Agreement.
(b) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs including, without limitation,
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of the Master Servicer's failure to
perform its covenants set forth in Article III in accordance with the standard
of care of the Master Servicer set forth in this Agreement.
(c) The Securities Administrator agrees to be liable for any taxes and
costs incurred by the Trust Fund, the Depositor or the Trustee including,
without limitation, any reasonable attorneys fees imposed on or incurred by the
Trust Fund, the Depositor or the Trustee as a result of the Securities
Administrator's failure to perform its covenants set forth in this Article X in
accordance with the standard of care of the Securities Administrator set forth
in this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 AMENDMENT. This Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Securities Administrator and the
Trustee, without the consent of any of the Certificateholders, (a) to cure any
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Agreement, (b) to
modify, eliminate or add to any provisions to such extent as shall be necessary
to maintain the qualification of the Trust Fund as two REMICs at all times that
any Certificates are outstanding, provided, that such action shall not, as
evidenced by an Opinion of Counsel addressed and delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates evidencing, in aggregate, not less than [
]% of the Trust Fund for the purpose of adding any provisions or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (a) reduce in any manner the amount of, or delay the timing
of, payments received on Loans which are required to be distributed in respect
of any Certificate without the consent of the Holder of such Certificate; (b)
adversely affect in any material respect the interest of the Holders of the
Senior Certificates (other than the Class [ ] Certificates) in a manner other
than as described in (a) above without the consent of the Holders of such Senior
Certificates (other than the Class [ ] Certificates) aggregating not less than [
]% of the aggregate Percentage Interest evidenced by all Senior Certificates
(other than the Class [ ] Certificates); (c) adversely affect in any material
respect the interest of the Holders of the Subordinate Certificates in a manner
other than as described in clause (a) above without the consent of the Holders
of Subordinate Certificates aggregating not less than [ ]% of the aggregate
Percentage Interest evidenced by all Subordinate Certificates; (d) adversely
affect in any material respect the interest of the Holders of the Class [ ]
Certificates in a manner other than as described in clause (a) above without the
consent of the Holders of the Class [ ] Certificates ; (e) adversely affect in
any material respect the interest of the Holders of the Class [ ] Certificates
in a manner other than as described in clause (a) above without the consent of
the Holders of the Class [ ] Certificates ; (f) adversely affect in any material
respect the interest of the Class [ ] Certificateholder without the consent of
the Holder of the Class [ ] Certificates; (g) change in any material respect the
rights and obligations of the Master Servicer or successor Master Servicer under
this Agreement without the prior written consent of such party; or (h) reduce
the aforesaid percentage of the Certificates the Holders of which are required
to consent to any such amendments without the consent of the Holders of all
Certificates then outstanding; provided, that for the purposes of this
Agreement, the Holder of the Class [ ] Certificate shall have no right to vote
at all times that any Senior Certificates (other than the Class [ ]
Certificates), or Subordinate Certificates are outstanding if such amendment
relates to the modification, elimination or addition of any provision necessary
to maintain the qualification of the Trust Fund as [ ] REMICs. Without limiting
the generality of the foregoing, any amendment to this Agreement required in
connection with the compliance with or the clarification of any reporting
obligations described in Section 8.13 hereof shall not require the consent of
any Certificateholder or any Opinion of Counsel or Rating Agency confirmation.
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 addressed to it to the effect that such amendment
will not cause any of REMIC I or REMIC II of the Trust Fund to fail to qualify
as a REMIC at any time that any REMIC Regular Interests or Regular Interest
Certificates are outstanding.
As soon as practicable after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and Rating Agency.
It shall not be necessary for the consent of the Certificateholders
under this Section 11.1 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.
Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to it
stating that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
Section 11.2 RECORDATION OF AGREEMENT; COUNTERPARTS. To the extent
permitted by applicable law, this Agreement (or an abstract hereof, if
acceptable by the applicable recording office) is subject to recordation in all
appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Depositor at the expense of
the Certificateholders, but only after the Depositor has delivered to the
Trustee an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein no Certificateholder,
solely by virtue of its status as Certificateholder, shall have any right to
vote 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
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless all of the
Holders of Certificates evidencing, in aggregate, not less than [ ]% of the
Trust Fund shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for [ ] 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 of any provision of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 11.3, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 11.4 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW),
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.5 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by certified or registered mail, return receipt requested
(a) in the case of the Depositor, to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Deutsche Alt-A Securities, Inc., Mortgage Loan Trust, Series [ ],
(telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, or such other address or telecopy number as
may hereafter be furnished to the Master Servicer and the Trustee in writing by
the Depositor, (b) in the case of the Master Servicer and the Securities
Administrator, [ ] and for overnight delivery to [ ], Attention: [ ] (telecopy
number: ([ ]), or such other address or telecopy number as may hereafter be
furnished to the Trustee and the Depositor in writing by the Master Servicer or
the Securities Administrator, and (c) in the case of the Trustee, at the
Corporate Trust Office or such other address or telecopy number as the Trustee
may hereafter furnish to the Master Servicer and the Depositor in writing by the
Trustee. Any notice required or permitted to be given to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given when mailed, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above.
Section 11.6 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 11.7 NOTICE TO RATING AGENCIES.
The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Master Servicer Event of
Default that has not been cured or waived;
3. The resignation or termination of the Master Servicer
or the Trustee;
4. The repurchase or substitution of Loans pursuant to
or as contemplated by Section 2.3; and
5. Any event that would result in the inability of the
Trustee to make advances regarding delinquent Loans
pursuant to Section 7.2.
The Securities Administrator shall promptly provide notice to the
Rating Agencies with respect to each of the following:
1. The final payment to the Holders of any Class of
Certificates; and
2. Any change in the location of the Distribution
Account.
The Master Servicer shall make available to each Rating Agency copies
of the following:
1. Each annual statement as to compliance described in
Section 3.16; and
2. Each annual independent public accountants' servicing
report described in Section 3.17.
Any such notice pursuant to this Section 11.7 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first Class [ ]ail, postage prepaid, or by express delivery service to Standard
& Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and to ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.
Section 11.8 ARTICLE AND SECTION REFERENCES.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.9 GRANT OF SECURITY INTEREST.
It is the express intent of the parties hereto that the conveyance of
the Loans by the Depositor to the Trustee, on behalf of the Trust Fund and for
the benefit of the Certificateholders, be, and be construed as, a sale of the
Loans by the Depositor and not a pledge of the Loans to secure a debt or other
obligation of the Depositor. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Loans are held to be property of the
Depositor, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Loans by the Depositor to the Trustee, on
behalf of the Trust Fund and for the benefit of the related Certificateholders,
to secure a debt or other obligation of the Depositor and (b)(1) this Agreement
shall also be deemed to be a security agreement within the meaning of Articles 8
and 9 of the Uniform Commercial Code as in effect from time to time in the State
of New York; (2) the conveyance provided for in Section 2.1 hereof shall be
deemed to be a grant by the Depositor to the Trustee, on behalf of the Trust
Fund and for the benefit of the related Certificateholders, of a security
interest in all of the Depositor's right, title and interest in and to the Loans
and all amounts payable to the holders of the Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts in the Capitalized Interest Account and amounts,
other than investment earnings, from time to time held or invested in the
Distribution Account and any Pre-Funding Account, whether in the form of cash,
instruments, securities or other property; (3) the obligations secured by such
security agreement shall be deemed to be all of the Depositor's obligations
under this Agreement, including the obligation to provide to the
Certificateholders the benefits of this Agreement relating to the Loans and the
Trust Fund; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law.
Accordingly, the Depositor hereby grants to the Trustee, on behalf of the Trust
Fund and for the benefit of the Certificateholders, a security interest in the
Loans and all other property described in clause (2) of the preceding sentence,
for the purpose of securing to the Trustee the performance by the Depositor of
the obligations described in clause (3) of the preceding sentence.
Notwithstanding the foregoing, the parties hereto intend the conveyance pursuant
to Section 2.1 to be a true, absolute and unconditional sale of the Loans and
assets constituting the Trust Fund by the Depositor to the Trustee, on behalf of
the Trust Fund and for the benefit of the Certificateholders.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
DEUTSCHE ALT-A SECURITIES, INC.,
as Depositor
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
[ ]
as Master Servicer and Securities
Administrator
By:______________________________
Name:
Title:
[ ], not in its individual
capacity
but solely as Trustee
By:______________________________
Name:
Title:
With Respect to Sections 6.7, 6.8 and 6.9:
[ ]
f/k/a [ ]
By:________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED
with respect to Section 6.10:
[ ]
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
ACKNOWLEDGED BY:
[ ]
By:
---------------------------------
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of [ ], before me, a notary public in and for said
State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Alt-A Securities, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of [ ], before me, a notary public in and for said
State, personally appeared _____________________ known to me to be a
_____________________ of Deutsche Alt-A Securities, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the __ day of [ ], before me, a notary public in and for said State,
personally appeared _________________________ known to me to be a
___________________ of [ ], one of the national banking associations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association, and acknowledged to
me that such national banking association 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 the ___ day of [ ], before me, a notary public in and for said
State, personally appeared _______________ known to me to be a _______________
of [ ], one of the national banking associations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said national banking association, and acknowledged to me that such national
banking association 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]