<PAGE>
Exhibit 4.1
================================================================================
LARES ASSET SECURITIZATION, INC.,
as Depositor
MAIA MORTGAGE FINANCE STATUTORY TRUST
as Seller
[_],
as Servicer
[_],
as Securities Administrator and as Master Servicer
and
[_],
as Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of ___________, 200_
----------
Luminent Mortgage Trust 200_-_
Mortgage Pass-Through Certificates, Series 200_-_
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND
INTERPRETATION................................. 6
SECTION 1.1
Definitions........................................... 6
SECTION 1.2
Calculations With
Respect to the Mortgage Loans....... 36
SECTION 1.3
Calculations With Respect to Accrued Interest......... 36
SECTION 1.4
Rules of Construction................................. 37
ARTICLE II CONVEYANCE OF MORTGAGE
LOANS.................................. 37
SECTION 2.1
Conveyance of Mortgage Loans to the Depositor......... 37
SECTION 2.2
Conveyance of Mortgage Loans to the Issuing Entity.... 38
SECTION 2.3
Assignment of Mortgage Loans.......................... 39
SECTION 2.4
Books and Records..................................... 39
SECTION 2.5
Review of Documentation............................... 40
SECTION 2.6
Execution and Delivery of Certificates................ 41
SECTION 2.7
Representations and Warranties with Respect to the
Mortgage Loans........................................ 41
SECTION 2.8
Optional Repurchase................................... 42
SECTION 2.9
Repurchase of Mortgage Loans.......................... 42
SECTION 2.10
Substitution of Mortgage Loans........................ 43
SECTION 2.11
Granting
Clause....................................... 44
SECTION 2.12
Purpose............................................... 46
ARTICLE III REPRESENTATIONS AND
WARRANTIES............................... 47
SECTION 3.1
Representations and Warranties of the Seller.......... 47
SECTION 3.2
Representations and Warranties of the Depositor....... 49
SECTION 3.3
Representations and Warranties of the Servicer........ 50
SECTION 3.4
Representations and Warranties of the Master
Servicer and Securities Administrator................. 52
ARTICLE IV SERVICING OF THE MORTGAGE
LOANS............................... 54
SECTION 4.1
General............................................... 54
SECTION 4.2
Use
of Subservicers and Subcontractors................ 56
SECTION 4.3
Collection of Mortgage Loan Payments.................. 57
SECTION 4.4
Realization Upon Defaulted Mortgage Loans............. 57
SECTION 4.5
Establishment of and Deposits to Custodial Account.... 58
SECTION 4.6
Permitted Withdrawals From Custodial Account.......... 60
SECTION 4.7
Establishment of and Deposits to Escrow Account....... 61
SECTION 4.8
Permitted Withdrawals From Escrow Account............. 61
SECTION 4.9
Payment of Taxes, Insurance and Other Charges......... 62
SECTION 4.10
Transfer
of Custodial Account or Escrow Account....... 63
SECTION 4.11
Mortgaged
Property Insurance.......................... 63
SECTION 4.12
Blanket
Mortgage Hazard Insurance..................... 64
SECTION 4.13
Fidelity
Bond and Errors and Omissions Insurance...... 65
SECTION 4.14
Restoration of Mortgaged Property..................... 65
SECTION 4.15
Title,
Management and Disposition of REO Property..... 66
SECTION 4.16
Mortgage
Loan Reports; Real Estate Owned Reports...... 68
SECTION 4.17
Adjustable
Rate Mortgage Loans........................ 68
SECTION 4.18
Prepayment
Premiums................................... 69
SECTION 4.19
Credit
Reporting; Gramm Leach Bliley Act.............. 69
SECTION 4.20
Transfers
of Mortgaged Property....................... 70
i
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TABLE OF CONTENTS
Page
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SECTION 4.21
Satisfaction and Release of Mortgage Files............ 71
SECTION 4.22
Superior
Liens........................................ 72
SECTION 4.23
Servicer
Compensation................................. 73
SECTION 4.24
Servicer
Remittances.................................. 73
ARTICLE V
REPORTS........................................................
74
SECTION 5.1
Assessment of Compliance and Attestation Reports...... 74
SECTION 5.2
Annual Compliance Statement........................... 74
SECTION 5.3
Back-Up SOX Certification............................. 75
SECTION 5.4
Commission Reporting.................................. 75
SECTION 5.5
Distribution Date Report.............................. 78
SECTION 5.6
Subservicers and Subcontractors....................... 80
SECTION 5.7
Additional Information................................ 81
SECTION 5.8
Intention of the Parties and Interpretation........... 81
SECTION 5.9
Indemnification....................................... 82
ARTICLE VI THE
SERVICER..................................................
82
SECTION 6.1
Limitation on Resignation and Assignment by Servicer.. 82
SECTION 6.2
Examination Rights; Additional Information............ 82
SECTION 6.3
Servicer as Bailee.................................... 83
SECTION 6.4
Termination of the Servicer without Cause............. 84
SECTION 6.5
Servicer Events of Default............................ 84
SECTION 6.6
Waiver of Defaults.................................... 86
SECTION 6.7
Servicer Covenants.................................... 86
SECTION 6.8
Indemnification....................................... 87
SECTION 6.9
Opinion............................................... 88
ARTICLE VII MASTER
SERVICER.............................................. 88
SECTION 7.1
Duties of the Master Servicer......................... 88
SECTION 7.2
Assignment or Delegation of Duties by the Master
Servicer.............................................. 89
SECTION 7.3
Fidelity Bond and Errors and Omission Policy.......... 89
SECTION 7.4
Compensation to the
Master Servicer................... 90
SECTION 7.5
Merger or Consolidation............................... 90
SECTION 7.6
Examination Rights.................................... 90
SECTION 7.7
Resignation of Master Servicer........................ 91
SECTION 7.8
Master Servicer to Act as Servicer; Appointment of
Successor............................................. 91
SECTION 7.9
Master Servicer Events of Default; Appointment of
Successor............................................. 93
SECTION 7.10
Waiver of
Defaults.................................... 96
SECTION 7.11
Notification of Master Servicer Default............... 97
SECTION 7.12
Limitation
on Liability of the Master Servicer........ 97
SECTION 7.13
Master
Servicer Covenants............................. 97
SECTION 7.14
Assignment
or Delegation of Duties by Master
Servicer.............................................. 98
SECTION 7.15
Indemnification....................................... 98
SECTION 7.16
Opinion............................................... 99
ARTICLE VIII THE SECURITIES
ADMINISTRATOR................................ 99
SECTION 8.1
Duties of the Securities Administrator................ 99
SECTION 8.2
Records............................................... 100
SECTION 8.3
Compensation.......................................... 100
SECTION 8.4
No
Joint Venture...................................... 100
SECTION 8.5
Other Activities of Securities Administrator and the
Depositor............................................. 100
ii
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TABLE OF CONTENTS
Page
----
SECTION 8.6
Certain Matters Affecting the Securities
Administrator......................................... 100
SECTION 8.7
Securities Administrator Not Liable for Certificates
or Mortgage Loans..................................... 102
SECTION 8.8
Securities Administrator May Own Certificates......... 102
SECTION 8.9
Eligibility Requirements for the Securities
Administrator......................................... 102
SECTION 8.10
Resignation and Removal of the Securities
Administrator......................................... 103
SECTION 8.11
Successor
Securities Administrator.................... 104
SECTION 8.12
Merger or
Consolidation of Securities Administrator... 104
SECTION 8.13
Limitation
of Liability............................... 104
SECTION 8.14
Opinion............................................... 105
ARTICLE IX CONCERNING THE
TRUSTEE........................................ 105
SECTION 9.1
Duties of Trustee..................................... 105
SECTION 9.2
Rights of Trustee..................................... 107
SECTION 9.3
Trustee Not Liable for Certificates................... 107
SECTION 9.4
Trustee May Own Certificates.......................... 108
SECTION 9.5
Eligibility Requirements for Trustee.................. 108
SECTION 9.6
Resignation and Removal of Trustee.................... 108
SECTION 9.7
Successor Trustee..................................... 109
SECTION 9.8
Merger or Consolidation of Trustee.................... 110
SECTION 9.9
Appointment of Co-Trustee or Separate Trustee......... 110
SECTION 9.10
Indemnification of Trustee............................ 112
SECTION 9.11
Fees and
Expenses of Trustee.......................... 112
ARTICLE X TRUST
ADMINISTRATION...........................................
112
SECTION 10.1
Distribution Account.................................. 112
SECTION 10.2
Reserve
Account....................................... 115
SECTION 10.3
Calculation of LIBOR.................................. 116
SECTION 10.4
Cap
Agreement......................................... 116
SECTION 10.5
Priorities
of Distribution............................ 116
SECTION 10.6
Allocation
of Realized Losses......................... 118
SECTION 10.7
REMIC
Distributions................................... 119
SECTION 10.8
Indemnification....................................... 121
ARTICLE XI THE
CERTIFICATES..............................................
122
SECTION 11.1
The
Certificates...................................... 122
SECTION 11.2
Certificate Register; Registration of Transfer and
Exchange of Certificates.............................. 123
SECTION 11.3
Mutilated,
Destroyed, Lost or Stolen Certificates..... 128
SECTION 11.4
Persons
Deemed Owners................................. 128
SECTION 11.5
Access to
List of Certificateholders' Names and
Addresses............................................. 128
SECTION 11.6 Maintenance of Office
or Agency....................... 129
SECTION 11.7
Limitation
on Rights of Holders....................... 129
SECTION 11.8
Acts of
Holders of Certificates....................... 130
ARTICLE XII THE
DEPOSITOR................................................
131
SECTION 12.1
Liabilities of the Depositor.......................... 131
SECTION 12.2
Merger or
Consolidation of the Depositor.............. 131
SECTION 12.3
Limitation
on Liability of the Depositor and Others... 131
ARTICLE XIII
TERMINATION.................................................
132
SECTION 13.1
Termination upon Liquidation or Purchase of all
Mortgage Loans........................................ 132
SECTION 13.2
Final
Distribution on the Certificates................ 133
iii
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TABLE OF CONTENTS
Page
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SECTION 13.3
Additional
Termination Requirements................... 133
ARTICLE XIV REMIC
ADMINISTRATION.........................................
134
SECTION 14.1
REMIC
Administration.................................. 134
SECTION 14.2
Prohibited
Transactions and Activities................ 137
SECTION 14.3
Indemnification with Respect to Prohibited
Transactions or Loss of REMIC Status.................. 137
ARTICLE XV
AMENDMENT.....................................................
138
SECTION 15.1
Without
Consent of the Certificateholders............. 138
SECTION 15.2
With
Consent.......................................... 138
SECTION 15.3
Procedure
and Notice.................................. 139
ARTICLE XVI MISCELLANEOUS
PROVISIONS..................................... 139
SECTION 16.1
Binding
Nature of Agreement; Assignment............... 139
SECTION 16.2
Entire
Agreement...................................... 139
SECTION 16.3
Counterparts.......................................... 139
SECTION 16.4
Provision
of Information.............................. 140
SECTION 16.5
Governing
Law......................................... 140
SECTION 16.6
Notices............................................... 140
SECTION 16.7
Severability of Provisions............................ 142
SECTION 16.8
No
Waivers............................................ 142
SECTION 16.9
Headings
Not to Affect Interpretation................. 142
SECTION 16.10
No
Petitions.......................................... 142
SECTION 16.11
Certificates
Fully Paid and Nonassessable............. 143
SECTION 16.12
Protection of
Assets.................................. 143
iv
<PAGE>
EXHIBITS
Exhibit A
Information Fields for ML Schedule
Exhibit B Contents
of each Mortgage File
Exhibit C Form of
Request for Release
Exhibit D Form of
Realized Gains and Losses
Exhibit E Standard
Layout for Monthly Defaulted Loan Report
Exhibit F Credit
Reporting Procedure
Exhibit 1122
Servicing Criteria
Exhibit SOX Sarbanes Oxley
Certificate
Exhibit G-1 Form of Class A
Certificate
Exhibit G-2 Form of Class M
Certificate
Exhibit G-3 Form of Class C
Certificate
Exhibit G-4 Form of Class P
Certificate
Exhibit G-5 Form of Class R
Certificate
Exhibit G-6 Form of Class RX
Certificate
Exhibit H Form of
Transferor Certificate
Exhibit I-1 Form of Investment
Letter (Non-Rule 144A)
Exhibit I-2 Form of Investment
Letter (Rule 144A)
Exhibit J Form of
Benefit Plan Affidavit
Exhibit K Form of
Affidavit Regarding Transfer of Residual Certificate
SCHEDULES
Schedule A Mortgage Loan
Schedule
Schedule B Representations
and Warranties in respect of the Mortgage Loans
Schedule C LIBOR
Calculation
v
<PAGE>
This
POOLING AND SERVICING AGREEMENT, dated as of ____________, 200_, is
by
and among LARES ASSET SECURITIZATION, INC., a Delaware corporation,
as depositor
(the "DEPOSITOR"), MAIA MORTGAGE FINANCE STATUTORY TRUST, a
Maryland business
trust as seller (the "SELLER"), [ - ], a [national banking
association], as
servicer (the "SERVICER"), [ - ], a [national banking association],
as
securities administrator (the "SECURITIES ADMINISTRATOR") and as
master servicer
(the "MASTER SERVICER"), and [ - ], a [national banking
association], as trustee
(the "TRUSTEE").
PRELIMINARY STATEMENT
WHEREAS, the Seller seeks to sell to the Depositor and the
Depositor seeks
to purchase from the Seller all of the right, title and interest of
the Seller
in certain adjustable-rate first [and second] lien mortgage loans
and fixed-rate
first [and second] lien mortgage loans identified in Schedule A
hereto on a
servicing-released basis pursuant to this Agreement;
WHEREAS, the Seller will make representations and warranties as set
forth
herein with respect to the Mortgage Loans and will assign to the
Depositor
certain representations and warranties that the Seller has received
with respect
to such Mortgage Loans;
WHEREAS, at the Closing Date the Depositor will be the owner of
the
Mortgage Loans and the other property being conveyed and assigned
by it to the
Issuing Entity hereunder for inclusion in the Trust Fund on the
Closing Date;
WHEREAS, on the Closing Date, the Depositor will transfer to the
Issuing
Entity the Mortgage Loans and the other property constituting the
Trust Fund,
and the Issuing Entity will issue the Certificates evidencing the
entire
interest in the Issuing Entity;
WHEREAS, the Depositor will receive the Certificates in
consideration for
the Mortgage Loans and other property being conveyed and assigned
by it to the
Issuing Entity and will sell the Certificates to various
purchasers.
WHEREAS, the Servicer is willing to service the Mortgage Loans for
the
benefit of the Issuing Entity;
WHEREAS, the Master Servicer is willing to master service the
Mortgage
Loans for the benefit of the Issuing Entity;
WHEREAS, the Securities Administrator is willing to provide
certain
services and reports with respect to the Certificates; and
WHEREAS, the descriptions of REMIC I, REMIC II, REMIC III and REMIC
IV that
follow are part of the Preliminary Statement.
1
<PAGE>
REMIC I
As
provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement (but exclusive of the
Reserve Account,
the Non-Mortgagor Prepayment Premium Payment Amount and the Cap
Agreement) as a
real estate mortgage investment conduit (a "REMIC") for federal
income tax
purposes, and such segregated pool of assets will be designated as
"REMIC I."
The Class R-I Interest will represent the sole class of "residual
interests" in
REMIC I for purposes of the REMIC Provisions. The following table
irrevocably
sets forth the designation, the Uncertificated REMIC I Pass-Through
Rate, the
initial Uncertificated Principal Balance, and solely for purposes
of satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii), the "latest
possible maturity
date" for each of the Uncertificated REMIC I Regular Interests.
None of the
Uncertificated REMIC I Regular Interests will be certificated.
Uncertificated REMIC I
Initial
Latest Possible
Designation Pass-Through
Rate
Uncertificated Balance Maturity Date(1)
-----------
----------------------
----------------------
----------------
LTAA
Variable(2)
$
[ - ]
LTA
Variable(2)
$
[ - ]
LTM1
Variable(2)
$
[ - ]
LTM2
Variable(2)
$
[ - ]
LTZZ
Variable(2)
$
[ - ]
LTP
Variable(2)
$100.00
[ - ]
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity date
for
the Mortgage Loan with the latest maturity date has been designated
as
the
"latest possible maturity date" for each REMIC I Regular
Interest.
(2) Calculated in
accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
2
<PAGE>
REMIC II
As
provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Uncertificated REMIC I
Regular
Interests as a REMIC for federal income tax purposes, and such
segregated pool
of assets will be designated as "REMIC II." The Class R-II Interest
will
represent the sole class of "residual interests" in REMIC II for
purposes of the
REMIC Provisions. The following table irrevocably sets forth the
designation,
the Pass-Through Rate, the initial Certificate Principal Balance
or
Uncertificated Principal Balance, as the case may be and solely for
purposes of
satisfying Treasury Regulations Section 1.860G-1(a)(4)(iii), the
"latest
possible maturity date" for each of the Classes of Certificates
and
Uncertificated REMIC II Regular Interests. The Class A Certificates
and Class M
Certificates will be certificated. The Class C Interest and the
Class P Interest
will not be certificated.
<TABLE>
<CAPTION>
Initial Certificate
Principal
or
Uncertificated Principal Latest Possible
Designation
Pass-Through Rate
Balance
Maturity Date(1)
--------------------- -----------------
------------------------ ----------------
<S>
<C>
<C>
<C>
Class A Certificate
Variable(2)
$
[ - ]
Class M-1 Certificate
Variable(2)
$
[ - ]
Class M-2 Certificate
Variable(2)
$
[ - ]
Class C Interest
Variable(3)
$
[ - ]
Class P Interest
N/A(4)
$100.00
[ - ]
</TABLE>
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity date
for
the Mortgage Loan with the latest maturity date has been designated
as
the
"latest possible maturity date" for each Class of Certificates
that
represents one or more of the "regular interests" in REMIC II and
each
Uncertificated REMIC II Regular Interest.
(2) Calculated in
accordance with the definition of "Pass-Through Rate" herein.
(3) The Class C
Interest (i ) will have an initial Uncertificated Principal
Balance equal to $______ and (ii) will bear interest at its
variable
Pass-Through Rate on the Notional Amount of the Class C
Interest
outstanding from time to time. The Class C Interest will not
accrue
interest on its Uncertificated Principal Balance.
(4) The Class P
Interest will not accrue interest.
3
<PAGE>
REMIC III
As
provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the Class C Interest as a
REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC III." The Class RX-III Interest represents the
sole class
of "residual interests" in REMIC III for purposes of the REMIC
Provisions.
The
following table sets forth (or describes) the Class
designation,
Pass-Through Rate and initial Certificate Principal Balance for the
Class C
Certificates that represents a "regular interest" in REMIC III
created
hereunder:
Initial Certificate Latest Possible
Class Designation Pass-Through
Rate
Principal Balance Maturity Date(1)
------------------- -----------------
------------------- ----------------
Class C Certificate
Variable(2)
$
[ - ]
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity date
for
the Mortgage Loan with the latest maturity date has been designated
as
the
"latest possible maturity date" for the Class C Certificates.
(2) The Class C
Certificates will receive 100% of amounts received in respect
of
the Class C Interest.
4
<PAGE>
REMIC IV
As
provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the Class P Interest as a
REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC IV." The Class RX-IV Interest represents the
sole class of
"residual interests" in REMIC IV for purposes of the REMIC
Provisions.
The
following table sets forth (or describes) the Class
designation,
Pass-Through Rate and initial Certificate Principal Balance for the
Class P
Certificates that represents a "regular interest" in REMIC IV
created hereunder:
Initial Certificate Latest Possible
Class Designation Pass-Through
Rate
Principal Balance Maturity Date(1)
------------------- -----------------
------------------- ----------------
Class P Certificate
N/A(2)
$100.00
[ - ]
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the
maturity date
for
the Mortgage Loan with the latest maturity date has been designated
as
the
"latest possible maturity date" for the Class P Certificates.
(2) The Class P
Certificates will receive 100% of amounts received in respect
of
the Class P Interest.
NOW
THEREFORE, in consideration of the mutual agreements herein
contained,
the parties hereto agree as follows:
5
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified
in this
Section 1.1.
ACCEPTED MASTER SERVICING PRACTICES: With respect to any Mortgage
Loan,
those customary mortgage loan master servicing practices of prudent
mortgage
servicing institutions that master service mortgage loans of the
same type and
quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged
Property is located, to the extent applicable to the Master
Servicer, and in
accordance with the applicable state, local and federal laws, rules
and
regulations.
ACCEPTED SERVICING PRACTICES: The servicing and administration of
the
Mortgage Loans for which the Servicer is responsible hereunder:
(a)
in the same manner in which, and with the same care, skill,
prudence
and diligence with which, the Servicer generally services and
administers
similar mortgage loans with similar mortgagors (i) for other third
parties,
giving due consideration to customary and usual standards of
practice of prudent
institutional residential mortgage lenders servicing their own
loans, or (ii)
held in the Servicer's own portfolio, whichever standard is
higher;
(b)
with a view to the maximization of the recovery on such Mortgage
Loans
on a net present value basis and the best interests of the Issuing
Entity or any
Person to which the Mortgage Loans may be transferred by the
Issuing Entity;
(c)
without regard to (i) any relationship that the Servicer or any
affiliate thereof may have with the related Mortgagor or any other
party to the
transactions, (ii) the right of the Servicer to receive
compensation or other
fees for its services rendered pursuant to this Agreement, (iii)
the obligations
of the Servicer to make Monthly Advances and Servicing Advances,
(iv) the
ownership, servicing or management by the Servicer or any affiliate
thereof for
others of any other mortgage loans or mortgaged properties, and (v)
any debt the
Servicer or any of its affiliates has extended to any mortgagor;
and
(d)
in accordance with the applicable state, local and federal laws,
rules
and regulations.
ACCOUNTANT: A person engaged in the practice of accounting who
(except when
this Agreement provides that an Accountant must be Independent) may
be employed
by or affiliated with a party hereto or an Affiliate thereof.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan that contains a
provision
pursuant to which the Mortgage Rate is adjusted periodically.
6
<PAGE>
ADJUSTED NET MORTGAGE RATE: With respect to each Mortgage Loan, a
rate
equal to the per annum Mortgage Rate less the sum of the (i)
Servicing Fee Rate
and (ii) the Master Servicing Fee Rate and (iii) the Lender Paid
Mortgage
Insurance Rate.
ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan, the date
on
which the Mortgage Rate is adjusted in accordance with the terms of
the related
Mortgage Note and Mortgage.
ADVANCE: Any Monthly Advance or Servicing Advance.
ADVERSE REMIC EVENT: As defined in Section 14.1(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.
AGGREGATE OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to
any
Distribution Date, the lesser of (i) the Principal Proceeds and
(ii) the
Overcollateralization Release Amount.
AGREEMENT: This Pooling and Servicing Agreement, including all
exhibits and
schedules hereto, and all amendments or supplements hereto.
APPLIED LOSS AMOUNT: As defined in Section 10.6(a).
APPRAISED VALUE: With respect to any Mortgage Loan, the lesser of
(a) the
value set forth on the appraisal made in connection with the
origination of the
related Mortgage Loan as the value of the related Mortgaged
Property, or (b) the
amount paid by the Mortgagor for the Mortgaged Property, provided,
however, that
in the case of a refinanced Mortgage Loan or a Mortgage Loan that
was not
originated in connection with the borrower's purchase of the
Mortgaged Property,
such value shall be based solely on the appraisal made in
connection with the
origination of such Mortgage Loan.
ASSESSMENT OF COMPLIANCE: As defined in Section 5.1.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer
or equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction wherein the related Mortgaged Property is located to
reflect the
assignment of the Mortgage to the Trustee, which assignment, notice
of transfer
or equivalent instrument may be in the form of one or more blanket
assignments
covering the Mortgage Loans secured by Mortgaged Properties in the
same
jurisdiction, if permitted by law.
ATTESTATION REPORT: As defined in Section 5.1.
AVAILABLE FUNDS: For each Distribution Date, the sum of the
Principal
Proceeds and the Interest Proceeds for such Distribution Date.
7
<PAGE>
BACKUP SOX CERTIFICATION: As defined in Section 5.3.
BANKRUPTCY CODE: The United States Bankruptcy Code of 1986, as
amended, as
codified in 11 U.S.C. Sections 101-1330.
BENEFIT PLAN AFFIDAVIT: An affidavit in substantially the form
attached
hereto as Exhibit J.
BOOK-ENTRY
CERTIFICATES: Each Class of Certificates other than the Class
C,
P, R and RX Certificates.
BUSINESS DAY: Any day other than (a) a Saturday or a Sunday or (b)
a day on
which banking institutions in the states of [ - ] and [ - ] are
authorized or
obligated by law or executive order to be closed.
CAP
AGREEMENT: The agreement entered into by and between the Trustee
and
the Cap Provider, dated as of [ - ], providing for certain payments
to be made
to the Securities Administrator on behalf of the Issuing
Entity.
CAP
PAYMENT: The aggregate of all payments received by the
Securities
Administrator from the Cap Provider on a Distribution Date pursuant
to the Cap
Agreement.
CAP
PROVIDER: [ - ]
CERTIFICATE: Any one of the mortgage-backed certificates issued
pursuant to
this Agreement executed by the Trustee in substantially the forms
attached
hereto as Exhibit G-1 Exhibit G-2, Exhibit G-3, Exhibit G-4,
Exhibit G-5 and
Exhibit G-6.
CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates
other than the Class C, R and RX Certificates and any Distribution
Date, the
maximum dollar amount of principal to which the Holder thereof is
then entitled
hereunder, such amount being equal to the initial principal balance
of such
Class of Certificates as of the Closing Date minus the sum of (a)
all
distributions of principal previously made with respect that Class
of
Certificates and (b) all Applied Loss Amounts previously allocated
to that Class
of Certificates and increased by any Subsequent Recoveries
allocated to such
Class for previous Distribution Dates. With respect to each Class C
Certificate
as of any Distribution Date, the Percentage Interest evidenced by
such
Certificate times the Uncertificated Principal Balance of the Class
C Interest.
For purposes of Article VIII hereof, unless specifically provided
to the
contrary, the Certificate Principal Balance shall be determined as
of the close
of business of the immediately preceding Distribution Date, after
giving effect
to all distributions made on such Distribution Date.
CERTIFICATEHOLDER OR HOLDER: With respect to a Book-Entry
Certificate, the
beneficial owner of such Book-Entry Certificate, and with respect
to a
Definitive Certificate, the Holder of such Definitive Certificate
and in whose
name a Certificate is registered in the Certificate Register.
CERTIFICATE REGISTRAR The Person appointed to maintain the
Certificate
Register.
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<PAGE>
CERTIFICATE REGISTER: The register maintained pursuant to Section
11.2.
CLASS: All Certificates bearing the same class designation as set
forth in
the Preliminary Statement. In the case of the REMIC Regular
Interests, the term
"Class" refers to such REMIC Regular Interests having the same
designation as
set forth in the Preliminary Statement.
CLASS A CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class A Certificates
having an initial
Certificate Principal Balance and Pass-Through Rate as set forth
herein and
representing (i) a Regular Interest in REMIC II and (ii) the right
to receive
amounts in respect of its related Net WAC Cap Carryover Amount.
CLASS C CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage-Backed
Certificates, Series 200_-_, Class C Certificates having an initial
Certificate
Principal Balance, a Notional Amount and associated Pass-Through
Rate as set
forth herein and representing (i) a Regular Interest in REMIC III,
and (ii) the
obligation to pay the Net WAC Cap Carryover Amount.
CLASS C DISTRIBUTABLE AMOUNT: With respect to any Distribution Date
and the
Class C Interest, the sum of (i) the interest accrued on such Class
C Interest
at its Pass-Through Rate calculated on its Notional Amount less the
amount
(without duplication) of Net WAC Cap Carryover Amounts paid
pursuant to Section
10.5(a)(iii)(E), (ii) any remaining Aggregate Overcollateralization
Release
Amounts and (iii) the aggregate of amounts remaining in the Reserve
Account
after the distributions in Section 10.5(a)(iii)(D), as specified in
Section
10.2(b)(i) - (v). With respect to the Class C Certificate, 100% of
the amount
distributed to the Class C Interest.
CLASS C INTEREST: An uncertificated interest in the Trust Fund
representing
the right to distributions as set forth herein and evidencing (i) a
Regular
Interest in REMIC II and (ii) the obligation to pay the Net WAC Cap
Carryover
Amount.
CLASS M CERTIFICATES: The Class M-1 and M-2 Certificates.
CLASS M INTERESTS: The Class M-1 Interest and the Class M-2
Interest.
CLASS M-1 CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class M-1 Certificates
having an
initial Certificate Principal Balance and Pass-Through Rate as set
forth herein
and representing (i) a Regular Interest in REMIC II and (ii) the
right to
receive amounts in respect of its related Net WAC Cap Carryover
Amount.
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<PAGE>
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution
Date on or
after the Stepdown Date and as long as a Trigger Event is not in
effect, the
excess of (a) the sum of (i) the aggregate Certificate Principal
Balances of the
Class A Certificates (after taking into account the payment of the
Senior
Principal Distribution Amount on such Distribution Date) and (ii)
the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to
such Distribution Date over (b) the lesser of (i) the product of
(A)
approximately [ - ]% and (B) the aggregate Scheduled Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period and
(ii) the amount
by which the aggregate Scheduled Principal Balance of the Mortgage
Loans as of
the last day of the related Due Period exceeds the product of (A) [
- ]% and (B)
the Cut-off Date Balance of the Mortgage Loans.
CLASS M-2 CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class M-2 Certificates
having an
initial Certificate Principal Balance and Pass-Through Rate as set
forth herein
and (i) representing a Regular Interest in REMIC II and (ii) the
right to
receive amounts in respect of its related Net WAC Cap Carryover
Amount.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution
Date on or
after the Stepdown Date and as long as a Trigger Event is not in
effect, the
excess of (a) the sum of (i) the aggregate Certificate Principal
Balances of the
Class A and M-1 Certificates (after taking into account the payment
of the
Senior Principal Distribution Amount and the Class Principal
Distribution Amount
for the Class M-1 Certificates on such Distribution Date) and (ii)
the
Certificate Principal Balance of the Class M-2 Certificates
immediately prior to
such Distribution Date over (b) the lesser of (i) the product of
(A)
approximately [ - ]% and (B) the aggregate Scheduled Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period and
(ii) the amount
by which the aggregate Scheduled Principal Balance of the Mortgage
Loans as of
the last day of the related Due Period exceeds the product of (A) [
- ]% and (B)
the Cut-off Date Balance of the Mortgage Loans.
CLASS P CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class P Certificates
having an initial
Certificate Principal Balance and Pass-Through Rate as set forth
herein and
representing a Regular Interest in REMIC IV.
CLASS P INTEREST: An uncertificated interest in the Trust Fund
representing
the right to distributions as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS PRINCIPAL DISTRIBUTION AMOUNT: With respect to each
Distribution
Date, each of the Class M-1 Principal Distribution Amount and the
Class M-2
Principal Distribution Amount for such Distribution Date, as
applicable.
CLASS R CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class R Certificates
representing the
Residual Interest in each of REMIC I and REMIC II.
CLASS R-I INTEREST: The uncertificated Residual Interest in REMIC
I.
CLASS R-II INTEREST: The uncertificated Residual Interest in REMIC
II.
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<PAGE>
CLASS RX CERTIFICATES: The Luminent Mortgage Trust 200_-_
Mortgage
Pass-Through Certificates, Series 200_-_, Class RX Certificates
representing the
Residual Interest in each of REMIC III and REMIC IV.
CLASS RX-III INTEREST: The uncertificated Residual Interest in
REMIC III.
CLASS RX-IV INTEREST: The uncertificated Residual Interest in REMIC
IV.
CLEAN-UP CALL: The termination of the Issuing Entity in connection
with the
purchase of the Mortgage Loans pursuant to Section 13.1.
CLOSING DATE: [ - ].
CODE: The Internal Revenue Code of 1986, as it may be amended from
time to
time, or any successor statutes thereto, and applicable U.S.
Department of the
Treasury regulations issued pursuant thereto.
COMMISSION: The Securities and Exchange Commission.
COMPENSATING INTEREST PAYMENT: With respect to any Distribution
Date, an
amount equal to the lesser of (a) the aggregate Prepayment Interest
Shortfall
with respect to such Distribution Date and (b) the amount of the
Servicing Fee
actually paid to, or retained by, the Servicer in respect of such
Distribution
Date.
COMPLIANCE STATEMENT: As defined in Section 5.2.
CONDEMNATION PROCEEDS: All awards or settlements in respect of a
Mortgaged
Property, whether permanent or temporary, partial or entire, by
exercise of the
power of eminent domain or condemnation, to the extent not required
to be
released to a Mortgagor in accordance with the terms of the related
Mortgage
Loan Documents.
CONTROL: The meaning specified in Section 8-106 of the UCC.
CORPORATE TRUST OFFICE: With respect to:
(a)
the Securities Administrator, the principal corporate trust office
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 Agreement, is located at [ - ], or at such other address as
the
Securities Administrator may designate from time to time by notice
to
Certificateholders, the Trustee, the Depositor, the Seller, the
Master Servicer
and the Servicer; provided, however, that with respect to the
Securities
Administrator and presentment of the Certificates for registration
of transfer,
exchange or final payment: [ - ]; and
(b)
the Trustee, the principal office of the Trustee at which at
any
particular time its corporate trust business in connection with
this Agreement
shall be administered, which office at the date of execution of
this Agreement
is located at [ - ], or at such other address as the Trustee may
designate from
time to time by notice to the Certificateholders, the Securities
Administrator,
the Depositor, the Seller, the Master Servicer and the
Servicer.
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<PAGE>
CORRESPONDING CLASS: The following chart illustrates the
Corresponding
Classes of Uncertificated REMIC I Regular Interests, Uncertificated
REMIC II
Regular Interests and Certificates:
UNCERTIFICATED REMIC I UNCERTIFICATED REMIC II
REGULAR INTEREST
REGULAR INTEREST CLASS OF
CERTIFICATES
---------------------- -----------------------
---------------------
LTA
N/A
Class A Certificate
LTM1
N/A
Class M-1 Certificate
LTM2
N/A
Class M-2 Certificate
LTP
Class P Interest
Class P Certificate
N/A
Class C Interest
Class C Certificate
CUMULATIVE REALIZED LOSSES: The aggregate Realized Losses incurred
in
respect of Liquidated Mortgage Loans since the Cut-off Date, as
reduced by the
aggregate amount of Subsequent Recoveries received since the
Cut-off Date.
CUMULATIVE REALIZED LOSS PERCENTAGE: With respect to any
Distribution Date,
a fraction, expressed as a percentage, obtained by dividing (a) the
aggregate
amount of Cumulative Realized Losses incurred on the Mortgage Loans
from the
Cut-off Date through the last day of the related Due Period by (b)
the aggregate
Cut-off Balance of the Mortgage Loans.
CURRENT INTEREST: With respect to any Distribution Date and each
Class of
Certificates (other than the Class C, Class P, Class R and Class
RX
Certificates), the amount of interest, calculated in accordance
with Section
1.3, accrued during the related Interest Accrual Period at the
Pass-Through Rate
for such Class on the related Certificate Principal Balance
immediately prior to
such Distribution Date.
CUSTODIAL ACCOUNT: The account or accounts established and
maintained
pursuant to Section 4.5 hereof.
CUSTODIAN: [ - ], or its successor in interest or assigns.
CUT-OFF DATE: [ - ].
CUT-OFF DATE BALANCE: The aggregate Scheduled Principal Balance of
the
Mortgage Loans as of the close of business on the Cut-off Date.
DEBT
SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
of
the Scheduled Monthly Payment that the related Mortgagor is
obligated to pay on
any Due Date as a result of any proceeding under bankruptcy law or
any similar
proceeding.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation
by a
court of competent jurisdiction of the Mortgaged Property in an
amount less than
the then-outstanding indebtedness under the Mortgage Loan, or any
reduction in
the amount of principal to be paid in connection with any Scheduled
Monthly
Payment that results in a permanent forgiveness of principal, which
valuation or
reduction results from an order of such court which is final and
non-appealable
in a proceeding under the Bankruptcy Code.
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<PAGE>
DEFINITIVE CERTIFICATES: Any Certificate evidenced by a
physical
certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 11.2(e).
DELETED MORTGAGE LOAN: A Mortgage Loan that is repurchased from the
Trust
Fund or as to which one or more Qualified Substitute Mortgage Loans
are
substituted therefor.
DELINQUENCY RATE: For any Due Period, the fraction, expressed as
a
percentage, the numerator of which is the aggregate Scheduled
Principal Balance
of all Mortgage Loans that are 60 or more days delinquent
(including all
foreclosures and REO Properties) as of the close of business on the
last day of
the preceding calendar month, and the denominator of which is the
aggregate
Scheduled Principal Balance of the Mortgage Loans as of the close
of business on
the last day of such calendar month.
DEPOSITOR: Lares Asset Securitization, Inc., a Delaware
corporation, or its
successors in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company,
the nominee of which is Cede & Co., as the registered Holder of
the Book-Entry
Certificates. The Depository shall at all times be a "clearing
corporation" as
defined in Section 8-102(a)(5) of the UCC of the State of New York
and
registered as a "clearing agency" pursuant to Section 17A of the
Exchange Act as
amended.
DETERMINATION DATE: With respect to any Distribution Date, the
Business Day
preceding the Servicer Remittance Date.
DISQUALIFIED ORGANIZATION: (a) The United States, any State or
political
subdivision thereof, any foreign government, any international
organization, or
any agency or instrumentality of any of the foregoing; (b) any
organization
(other than a farmer's cooperative as defined in Section 521 of the
Code) that
is exempt from federal income taxation (including taxation under
the unrelated
business taxable income provisions of the Code); (c) any rural
telephone or
electrical service cooperative described in Section 1381(a)(2)(C)
of the Code;
(d) any foreign permanent establishment or fixed base (within the
meaning of an
applicable income tax treaty) of a U.S. Person; (e) any "electing
large
partnership"; or (f) any other entity so designated by Treasury
rulings or
regulations promulgated or otherwise in effect as of the date
hereof. In
addition, a corporation will 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 Freddie Mac, a
majority of its
board of directors is not selected by such governmental unit.
DISTRIBUTION ACCOUNT: The separate account established and
maintained
pursuant to Section 10.1.
DISTRIBUTION DATE: The __ day of each calendar month or if the [ -
] day is
not a Business Day, the next succeeding Business Day, commencing in
[ - ].
DISTRIBUTION DATE REPORT: As defined in Section 5.5.
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<PAGE>
DUE
DATE: The day of the month on which the Scheduled Monthly Payment
is
due on a Mortgage Loan, exclusive of any days of grace, as
specified in the
related Mortgage Note.
DUE
PERIOD: With respect to any Distribution Date and a Mortgage Loan,
the
period commencing on the second day of the month immediately
preceding the month
in which such Distribution Date occurs (or the day following the
Cut-off Date in
respect of the first Due Period) and ending at the close of
business on the
first day of the calendar month in which such Distribution Date
occurs.
EDGAR: The "Electronic Data Gathering, Analysis, and Retrieval"
system of
the Commission, which performs automated collection, validation,
indexing,
acceptance, and forwarding of submissions by companies and others
who are
required by law to file forms with the Commission.
ELIGIBLE ACCOUNT: Any of (a) an account or accounts maintained with
a
federal or state chartered depository institution or trust company
the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the debt obligations of such holding company) have the
highest
short-term ratings of each Rating Agency at the time any amounts
are held on
deposit therein, (b) an account or accounts in a depository
institution or trust
company in which such accounts are insured by the FDIC (to the
limits
established by the FDIC), provided that any such deposits not so
insured shall
be maintained in an account at a depository institution or trust
company whose
commercial paper or other short term debt obligations (or, in the
case of a
depository institution or trust company which is the principal
subsidiary of a
holding company, the commercial paper or other short term debt
obligations of
such holding company) have been rated by each Rating Agency in its
highest
short-term rating category, (c) a trust account or accounts
maintained with (i)
the trust department of a federal or state chartered depository
institution or
(ii) a trust company, acting in its fiduciary capacity, or (d) any
other account
acceptable to each Rating Agency. Eligible Accounts may bear
interest, and may
include, if otherwise qualified under this definition, accounts
maintained with
the Trustee, the Securities Administrator or the Master
Servicer.
ELIGIBLE INVESTMENTS: Any dollar-denominated investment that is one
or more
of the following (and may include investments for which the
Trustee, the
Securities Administrator and/or their Affiliates, or the Master
Servicer and/or
its Affiliates, provides services or receives compensation):
(a)
cash;
(b)
direct registered obligations of, and registered obligations the
timely
payment of principal and interest on which is fully and expressly
guaranteed by,
the United States or any agency or instrumentality of the United
States the
obligations of which are expressly backed by the full faith and
credit of the
United States;
(c)
demand and time deposits in, interest bearing trust accounts
at,
certificates of deposit of, bankers' acceptances payable within 183
days of
issuance issued by, or Federal funds sold by any depository
institution or trust
company incorporated under the laws of the United
14
<PAGE>
States or any state thereof and subject to supervision and
examination by
Federal and/or state banking authorities so long as the commercial
paper and/or
the debt obligations of such depository institution or trust
company (or, in the
case of the principal depository institution in a holding company
system, the
commercial paper or debt obligations of such holding company) at
the time of
such investment or contractual commitment providing for such
investment have a
credit rating of not less than "AA+" by S&P and "Aa2" by
Moody's (and if rated
"Aa2", such rating is not on watch for downgrade by Moody's) in the
case of
long-term debt obligations, or "A-1+" by S&P and "P-1" by
Moody's (and if rated
"P-1", such rating is not on watch for downgrade by Moody's) and in
the case of
commercial paper and short-term debt obligations; provided that (i)
in each
case, the issuer thereof must have at the time of such investment
or contractual
commitment providing for such investment a long-term credit rating
of not less
than "Aa2" by Moody's (and if rated "Aa2", such rating is not on
watch for
downgrade by Moody's) and (ii) in the case of commercial paper and
short-term
debt obligations with a maturity of longer than 91 days, the issuer
thereof must
also have at the time of such investment or contractual commitment
providing for
such investment a long-term credit rating of not less than "AA+" by
S&P;
(d)
unleveraged repurchase obligations (if treated as debt for
United
States federal income tax purposes by the issuer) with respect to
(i) any
security described in clause (b) above or (ii) any other registered
security
issued or guaranteed by an agency or instrumentality of the United
States (in
each case without regard to the final maturity of such security),
in either case
entered into with a United States federal or state depository
institution or
trust company (acting as principal) described in clause (c) above
or entered
into with a corporation (acting as principal) whose long-term
rating at the time
of such investment or contractual commitment providing for such
investment is
not less than "AA+" by S&P and "Aa2" by Moody's (and if rated
"Aa2", such rating
is not on watch for downgrade by Moody's) or whose short-term
credit rating at
the time of such investment or contractual commitment providing for
such
investment is "A-1+" by S&P and "P-1" by Moody's (and if rated
"P-1", such
rating is not on watch for downgrade by Moody's) at the time of
such investment;
provided that (A) in each case, the issuer thereof must have at the
time of such
investment or contractual commitment providing for such investment
a long-term
credit rating of not less than "Aa2" by Moody's (and if rated
"Aa2", such rating
is not on watch for downgrade by Moody's) and (B) if such security
has a
maturity of longer than 91 days, the issuer thereof must also have
at the time
of such investment or contractual commitment providing for such
investment a
long-term credit rating of not less than "AA+" by S&P and "Aa2"
by Moody's (and
if rated "Aa2", such rating is not on watch for downgrade by
Moody's);
(e)
registered debt securities bearing interest or sold at a
discount
issued by any corporation incorporated under the laws of the United
States or
any state thereof that have a credit rating at the time of such
investment or
contractual commitment providing for such investment of not less
than "AA" by
S&P and "Aa2" by Moody's (and if rated "Aa2", such rating is
not on watch for
downgrade by Moody's);
(f)
commercial paper or other short-term obligations with a maturity of
not
more than 183 days from the date of issuance and having at the time
of such
investment or contractual commitment providing for such investment
a credit
rating of "A-1+" by S & P; provided, that (i) in each case, the
issuer thereof
must have at the time of such investment or contractual commitment
providing for
such investment a long-term credit rating of not less than "Aa2"
by
15
<PAGE>
Moody's (and if rated "Aa2", such rating is not on watch for
downgrade by
Moody's) and (ii) if such security has a maturity of longer than 91
days, the
issuer thereof must also have at the time of such investment or
contractual
commitment providing for such investment a long-term credit rating
of not less
than "AA" by S & P;
(g)
Reinvestment Agreements issued by any bank (if treated as a deposit
by
such bank), or a registered Reinvestment Agreement issued by any
insurance
company or other corporation or entity organized under the laws of
the United
States or any state thereof (if treated as debt for tax purposes by
the issuer),
in each case, that has a credit rating of not less than "A-1+" by
S&P and "P-1"
by Moody's (and if rated "P-1", such rating is not on watch for
downgrade by
Moody's); provided, that (i) in each case, the issuer thereof must
have at the
time of such investment or contractual commitment providing for
such investment
a long-term credit rating of not less than "Aa2" by Moody's (and if
rated "Aa2",
such rating is not on watch for downgrade by Moody's) and (ii) if
such security
has a maturity of longer than 91 days, the issuer thereof must also
have at the
time of such investment or contractual commitment providing for
such investment
a long-term credit rating of not less than "AA" by S & P;
and
(h)
interests in any money market fund or similar investment vehicle
having
at the time of investment therein the highest credit rating
assigned by each of
the Rating Agencies (which may include money market funds or common
trust funds,
including without limitation, any fund for which the Securities
Administrator or
its Affiliate serves as an investment adviser, administrator,
shareholder
servicing agent and/or from which such party collects fees).
In
each case (other than clause (a)), such Eligible Investment shall
have a
final maturity (giving effect to any applicable grace period) no
later than the
Business Day immediately preceding the Distribution Date (or, if
the Securities
Administrator or an Affiliate is the obligor on such Eligible
Investment, the
Distribution Date) next following the Due Period in which the date
of investment
occurs; provided, that, Eligible Investments may not include (i)
any
interest-only security, any security purchased at a price in excess
of 100% of
the par value or any security that provides for payment of both
principal and
interest with a yield to maturity in excess of 120% of the yield to
maturity at
par, (ii) any floating rate security whose interest rate is
inversely or
otherwise not proportionately related to an interest rate index or
is calculated
as other than the sum of an interest rate index plus a spread,
(iii) securities
subject to an offer, (iv) any security with a rating from S&P
which includes the
subscript "p," "pi," "q," "r" or "t", or (v) any investment, the
income from
which is or will be subject to deduction or withholding for or on
account of any
withholding or similar tax.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATES: Any of the Class R, Class RX, Class
C and
Class P Certificates and any Class of Certificates with a rating
below the
lowest applicable rating requirement of an exemption listed in
footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487
(2002), or any successor exemption.
ERRORS AND OMISSIONS INSURANCE POLICY: An errors and omissions
insurance
policy to be maintained by the Servicer pursuant to Section 4.13 or
by the
Master Servicer pursuant to Section 8.3.
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<PAGE>
ESCROW ACCOUNT: The separate account or accounts created and
maintained by
the Servicer pursuant to Section 4.7 hereof.
ESCROW PAYMENTS: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, fire and hazard insurance premiums, condominium
charges, and
any other payments required to be escrowed by the Mortgagor with
the mortgagee
pursuant to the Mortgage or any other related document.
EXCESS CASH FLOW: With respect to any Distribution Date, an amount
equal to
Available Funds remaining after distribution of all amounts
pursuant to Section
10.5(a)(i) and (ii).
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FANNIE MAE: Fannie Mae, a federally chartered and privately
owned
corporation organized and existing under the Federal National
Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FICO: The credit score used for underwriting a Mortgage Loan.
FIDELITY BOND: A fidelity bond to be maintained by the Servicer
pursuant to
Section 4.13 or by the Master Servicer pursuant to Section 8.3.
FINAL CERTIFICATION: A certification as to the completeness of
each
Mortgage File provided by the Custodian within 90 days following
the Closing
Date in accordance with Section 2.5.
FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date following
the
month of the scheduled maturity date of the Mortgage Loan having
the latest
scheduled maturity date as of the Cut-off Date.
FIXED RATE MORTGAGE LOAN: Any Mortgage Loan for which the Mortgage
Rate is
constant and is not determined by reference to an Index.
FORMULA RATE: For each Class
of Certificates, a per annum rate equal to the
lesser of (i) One-Month LIBOR plus the applicable Pass-Through
Margin and (ii)
14.00%.
FREDDIE MAC: The Federal Home Loan Mortgage Corporation (FHLMC), or
any
successor thereto.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage Loan,
the fixed
percentage amount set forth in the related Mortgage Note which is
added to the
Index in order to determine the related Mortgage Rate, as set forth
in the
Mortgage Loan Schedules.
HUD:
The United States Department of Housing and Urban Development, or
any
successor thereto.
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<PAGE>
INDENTURE: An indenture relating to the issuance of notes secured
by all or
a portion of the Class C Certificates, the Class P Certificates
and/or the Class
R and Class RX Certificates.
INDEPENDENT: When used with respect to any Accountants, a Person
who is
"independent" within the meaning of Rule 2-01(b) of the Securities
and Exchange
Commission's Regulation S-X. When used with respect to any other
Person, a
Person who (a) is in fact independent of another specified Person
and any
Affiliate of such other Person, (b) does not have any material
direct financial
interest in such other Person or any Affiliate of such other
Person, and (c) is
not connected with such other Person or any Affiliate of such other
Person as an
officer, employee, promoter, underwriter, trustee, partner,
director or Person
performing similar functions.
INDEX: The index specified in the related Mortgage Note for
calculation of
the Mortgage Rate thereof.
INITIAL CERTIFICATION: A certification as to the completeness of
each
Mortgage File provided by the Custodian on the Closing Date in
accordance with
Section 2.5.
INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property,
if applicable, including the proceeds of any hazard or flood
insurance policy.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date and
each
Class of Certificates (other than the Class C Certificates) and
the
Uncertificated REMIC II Regular Interests (other than the Class C
Interest), the
period commencing on the Distribution Date in the month immediately
preceding
the month in which such Distribution Date occurs (or, in the case
of the first
Distribution Date, the Closing Date) and ending on the close of
business on the
calendar day immediately preceding such Distribution Date. With
respect to any
Distribution Date and the Class C Certificates, the Class C
Interest and the
REMIC I Regular Interests, the one month period ending on the last
day of the
calendar month immediately preceding the month in which such
Distribution Date
occurs.
INTEREST DISTRIBUTION AMOUNT: For each Class of Certificates, on
any
Distribution Date, an amount equal to the sum of (i) the Current
Interest for
such Class of Certificates for such Distribution Date, (ii) any
unpaid Current
Interest for such Class from a prior Distribution Date (together
with any unpaid
interest thereon), and (iii) interest accrued during the related
Interest
Accrual Period on the amount described in clause (ii) above at the
Pass-Through
Rate applicable to such Class of Certificates. The Interest
Distribution Amount
may be reduced by Prepayment Interest Shortfalls or Relief Act
Reductions
allocable to such Class of Certificates.
INTEREST PROCEEDS: With respect to any Distribution Date, the sum
of all
scheduled and unscheduled payments of interest on the Mortgage
Loans, all
Liquidation Proceeds in respect of interest from Liquidated
Mortgage Loans, all
Insurance Proceeds on the Mortgage Loans in respect of interest and
the interest
portion of the Repurchase Price of each Mortgage Loan that is
repurchased upon a
breach of representations regarding such Mortgage Loan, each as is
received or
advanced in the related Due Period or the related Prepayment
Period, as
applicable, less the
18
<PAGE>
Servicing Fee with respect to such Distribution Date and excluding,
for the
avoidance of doubt, any Prepayment Premiums.
INVESTMENT LETTER: As defined in Section 11.2.
ISSUING ENTITY: Luminent Mortgage Trust 200_-_.
LIBOR: The London interbank offered rate for one-month United
States dollar
deposits established pursuant to Schedule C hereto.
LIBOR BUSINESS DAY: As defined in Schedule C.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which was
liquidated in the
Prepayment Period related to such Distribution Date and as to which
the Servicer
has certified to the Master Servicer and the Securities
Administrator that it
has received all amounts it expects to receive in connection with
the
liquidation of such Mortgage Loan, including the final disposition
of any REO
Property.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in
liquidation,
unreimbursed expenses paid or incurred by or for the account of the
Servicer,
such expenses including (a) property protection expenses, (b)
property sales
expenses, (c) foreclosure and sale costs, including court costs and
reasonable
attorneys' fees, and (d) similar expenses reasonably paid or
incurred in
connection with liquidation.
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of
such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of
the related
Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the
Mortgage Loan.
LOAN-TO-VALUE RATIO OR LTV: With respect to Mortgage Loan secured
by a
first lien mortgage, the ratio of the original loan amount of such
Mortgage Loan
at its origination (unless otherwise indicated) to (a) the
Appraised Value of
the Mortgaged Property. With respect to any Mortgage Loan secured
by a junior
lien position, a fraction, expressed as a percentage, the numerator
of which is
the sum of (1) the original loan amount of the related Mortgage
Loan and (2) any
outstanding principal balance of mortgage loans the liens on which
are equal in
priority or senior to the lien on such related Mortgage Loan (each
such sum
calculated at the date of origination of such related Mortgage
Loan), and the
denominator of which is the Appraised Value of the Mortgaged
Property.
LOSSES: As defined in Section 14.3.
LPMI
POLICY: A policy of primary mortgage guaranty insurance with
respect
to a Mortgage Loan, the premiums of which are paid by someone other
than the
Mortgagor from its own funds, without reimbursement.
LPMI
PROCEEDS: Proceeds of any Lender Paid Mortgage Insurance
Policy.
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<PAGE>
MAJORITY IN INTEREST: As to the Certificates or any Class thereof,
the
Holders of Certificates or Certificates of such Class evidencing,
in the
aggregate, at least 51% of the Percentage Interests evidenced by
all
Certificates or all Certificates of such Class.
MARGIN STEPUP DATE:
The first Distribution Date after the date on which the
Clean-up Call may be exercised.
MARKER RATE: With respect to the Class C Interest and any
Distribution
Date, a per annum rate equal to two times the weighted average of
the
Uncertificated REMIC I Pass-Through Rates for each Uncertificated
REMIC I
Regular Interest (other than Uncertificated REMIC I Regular
Interest LTAA and
Uncertificated REMIC I Regular Interest LTP), with the rate on each
such
Uncertificated REMIC I Regular Interest (other than Uncertificated
REMIC I
Regular Interest LTZZ) subject to the lesser of (i) LIBOR plus the
applicable
Pass-Through Margin and (ii) the Net WAC Rate for the purpose of
this
calculation for such Distribution Date and with the rate on
Uncertificated REMIC
I Regular Interest LTZZ subject to a cap of zero for the purpose of
this
calculation; provided, however, that solely for this purpose,
calculations of
the Uncertificated REMIC I Pass-Through Rate and the related caps
with respect
to each Uncertificated REMIC I Regular Interest (other than
Uncertificated REMIC
I Regular Interest LTAA, Uncertificated REMIC I Regular Interest
LTZZ and
Uncertificated REMIC I Regular Interest LTP) shall be multiplied by
a fraction,
the numerator of which is the actual number of days in the Interest
Accrual
Period and the denominator of which is 30.
MASTER SERVICER: [ - ] and its successors and assigns in its
capacity as
master servicer.
MASTER SERVICER EVENT OF DEFAULT: As defined in Section 7.9(a).
MASTER SERVICING FEE: As to each Mortgage Loan and any Distribution
Date,
an amount equal to (i) one twelfth of the Master Servicing Fee Rate
multiplied
by (ii) the Scheduled Principal Balance of such Mortgage Loan as of
the Due Date
in the prior calendar month.
MASTER SERVICING FEE RATE: [ - ]% per annum.
MATERIAL DEFECT: With respect to any Mortgage Loan, as defined in
Section
2.5(c).
MAXIMUM LTZZ UNCERTIFICATED INTEREST DEFERRAL AMOUNT: With respect
to any
Distribution Date, the excess of (i) accrued interest at the
Uncertificated
REMIC I Pass-Through Rate applicable to Uncertificated REMIC I
Regular Interest
LTZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of Uncertificated REMIC I Regular Interest LTZZ
minus the
Uncertificated REMIC I Overcollateralization Amount, in each case
for such
Distribution Date, over (ii) the Uncertificated Interest on each
Uncertificated
REMIC I Regular Interest (other than Uncertificated REMIC I Regular
Interest
LTAA, Uncertificated REMIC I Regular Interest LTZZ and
Uncertificated REMIC I
Regular Interest LTP) for such Distribution Date, with the rate on
each such
Uncertificated REMIC I Regular Interest subject to a cap equal to
the lesser of
(i) LIBOR plus the applicable Pass-Through Margin and (ii) the Net
WAC Rate;
provided, however, that solely for this purpose, calculations of
the
Uncertificated REMIC I Remittance Rate and the related caps with
respect to each
Uncertificated REMIC I Regular Interest (other than Uncertificated
REMIC I
Regular Interest LTAA, Uncertificated REMIC I Regular Interest LTZZ
and
Uncertificated REMIC I Regular Interest LTP) shall be
20
<PAGE>
multiplied by a fraction, the numerator of which is the actual
number of days in
the Interest Accrual Period and the denominator of which is 30.
MERS: MERSCORP, Inc., its successor and assigns.
MERS
DESIGNATED MORTGAGE LOAN: A Mortgage Loan for which (a) the Seller
has
designated or will designate MERS as, and have taken or will take
such action as
is necessary to cause MERS to be, the mortgagee of record, as
nominee for the
Seller and its successors and assigns, in accordance with MERS
Procedures Manual
and (b) the Seller has designated or will designate the Trustee as
the Investor
on the MERS(R) System.
MERS
PROCEDURES MANUAL: The MERS Procedures Manual, as it may be
amended,
supplemented or otherwise modified from time to time.
MERS(R) SYSTEM: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
MONTHLY ADVANCE: With respect to any Mortgage Loan on any
Determination
Date, an amount equal to the portion of each Scheduled Monthly
Payment due in
the Due Period to which such Determination Date relates that is
delinquent at
the close of business on such Determination Date, excluding any
balloon payment
or any shortfalls attributable to the Relief Act.
MOODY'S: Moody's Investors Service, Inc.
MORTGAGE: The mortgage, deed of trust or other instrument securing
a
Mortgage Note, which creates a lien on an estate in fee simple or
leasehold
estate in real property securing the Mortgage Note.
MORTGAGE FILE: The mortgage documents listed on Exhibit B hereto
pertaining
to a particular Mortgage Loan.
MORTGAGE LOAN: An individual Mortgage Loan which is the subject of
this
Agreement, each Mortgage Loan sold and subject to this Agreement
being
identified on the Mortgage Loan Schedule hereto, which Mortgage
Loan includes
without limitation the Mortgage File, the Scheduled Monthly
Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds
and
obligations arising from or in connection with such Mortgage
Loan.
MORTGAGE LOAN DOCUMENTS: The documents referred to in Section (a)
of
Exhibit B.
MORTGAGE LOAN REMITTANCE RATE: With respect to each Mortgage Loan,
the
related Mortgage Rate less the Servicing Fee Rate and the Lender
Paid Mortgage
Insurance Rate.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans transferred to
the
Trustee, or the Custodian on its behalf, as part of the Trust Fund
and from time
to time subject to this Agreement attached hereto as Schedule A
that sets forth
the information required on Exhibit A for each Mortgage Loan.
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<PAGE>
MORTGAGE NOTE: The original executed note or other evidence of
indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
including any
riders or addenda thereto.
MORTGAGE RATE: With respect to each Mortgage Loan, the annual rate
at which
interest accrues on such Mortgage Loan from time to time in
accordance with the
provisions of the related Mortgage Note.
MORTGAGED PROPERTY: The real property securing repayment of the
debt
evidenced by a Mortgage Note.
MORTGAGOR: The obligor on a Mortgage Note.
NET
PREPAYMENT INTEREST SHORTFALLS: As to any Distribution Date, the
amount
by which the aggregate of Prepayment Interest Shortfalls during the
related
Prepayment Period exceeds the Compensating Interest Payments made
with respect
to such Distribution Date.
NET
WAC CAP CARRYOVER AMOUNT: For each Class of Certificates on a
Distribution Date, the sum of (i) the excess, if any, of (a) the
amount that
would have been the Current Interest for such Class of Certificates
at the
Formula Rate for such Distribution Date over (b) the actual amount
of Current
Interest distributable for such Class of Certificates on such
Distribution Date,
(ii) any excess described in clause (i) above for any prior
Distribution Date
that remains unpaid (together with any unpaid interest thereon) on
such
Distribution Date, and (iii) interest accrued during the Interest
Accrual Period
related to such Distribution Date on the amount described in clause
(ii) above
at the Formula Rate applicable to such Class of Certificates.
NET
WAC RATE: As to any Distribution Date, a per annum rate equal to
the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans
as of the
first day of the Due Period for such Distribution Date, calculated
on the basis
of the actual number of days in the related Interest Accrual Period
and a
360-day year.
NON-MORTGAGOR PREPAYMENT PREMIUM PAYMENT AMOUNT: The amount payable
by the
Servicer in respect of any waived or uncollected Prepayment
Premiums pursuant to
Section 4.18. The amounts payable by the Servicer shall equal the
difference
between the amount of Prepayment Premium due by a Mortgagor and the
actual
amount paid. Such amounts payable by the Servicer shall not be part
of any REMIC
formed hereunder.
NON-RECOVERABLE ADVANCE: Any Servicing Advance (in respect of the
Servicer
only) or Monthly Advance previously made or proposed to be made in
respect of a
Mortgage Loan or REO Property by the Servicer or Master Servicer
(in its
capacity as successor servicer) which, in the reasonable discretion
of the
Servicer or Master Servicer in accordance with Accepted Servicing
Practices will
not or, in the case of a proposed Servicing Advance or Monthly
Advance, would
not, ultimately be recoverable by the Servicer or Master Servicer
from the
related Mortgagor, related Liquidation Proceeds, Condemnation
Proceeds,
Insurance Proceeds, REO Disposition Proceeds or otherwise. The
determination by
the Servicer that all or a portion of a Servicing Advance or
Monthly Advance
would be a Non-recoverable Advance shall be evidenced by an
Officer's
Certificate delivered to the Master Servicer and the Securities
Administrator
setting forth such determination and a reasonable explanation
thereof.
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<PAGE>
NON-PERMITTED FOREIGN HOLDER: As defined in Section 11.2(f).
NON-U.S. PERSON: A Person that is not a U.S. Person.
NOTIONAL AMOUNT: With respect to the Class C Certificates, a
notional
amount equal to the aggregate principal balance of the
Uncertificated REMIC I
Regular Interests other than Uncertificated REMIC I Regular
Interest LTP. With
respect to the Class C Interest, a notional amount equal to the
aggregate
principal balance of the Uncertificated REMIC I Regular Interests
other than
Uncertificated REMIC I Regular Interest LTP.
OFFERED CERTIFICATES: The Class A and Class M Certificates.
OFFICER'S CERTIFICATE: A certificate (a) signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a Managing
Director, a
Vice President, an Assistant Vice President, the Treasurer, the
Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the
Depositor or the
Servicer, as the case may be, or (b), if provided for in this
Agreement, signed
by a Servicing Officer and delivered to the Depositor, the Master
Servicer, the
Securities Administrator and the Trustee, as the case may be, as
required by
this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, which shall not
be at the
expense of the Master Servicer, the Securities Administrator or the
Trustee, who
may be counsel for the Seller, the Servicer, the Custodian, the
Depositor, the
Master Servicer, the Securities Administrator or the Trustee,
including in-house
counsel, reasonably acceptable to the Securities Administrator, the
Trustee
and/or the Master Servicer, as applicable; provided, however, that
with respect
to the interpretation or application of the federal income tax or
ERISA matters,
such counsel must be nationally recognized as expert in the federal
income tax
or ERISA aspects, as applicable, of asset securitization and must
be Independent
of the Securities Administrator, the Trustee and the Master
Servicer.
OUTSTANDING: As of the date of determination, all Certificates
theretofore
executed authenticated and delivered under this Agreement
except:
(a)
Certificates theretofore cancelled by the Certificate Registrar
or
delivered to the Certificate Registrar for cancellation;
(b)
Certificates the payment for which money in the necessary amount
has
been theretofor deposited with the Trustee in trust for the Holders
of such
Certificates (provided, however, that if such Certificates are to
be redeemed,
notice of such redemption has been duly given pursuant to this
Agreement or
provision for such notice has been made, satisfactory to the
Trustee); and
(c)
Certificates in exchange for or in lieu of which other
Certificates
have been authenticated and delivered pursuant to this Agreement
unless proof
satisfactory to the Trustee is presented that any such Certificates
are held by
a bona fide purchaser;
provided, that in determining whether the Certificateholders of the
requisite
Outstanding Balance of the Certificates have given any request,
demand,
authorization, direction, notice, consent or waiver hereunder.
Certificates
owned by the Depositor, any Servicer, or any Affiliate of any
of
23
<PAGE>
the foregoing Persons shall be disregarded and deemed not to be
Outstanding,
except that, in determining whether the Trustee shall be protected
in relying
upon any such request, demand, authorization, direction, notice,
consent or
waiver, only Certificates that a Responsible Officer of the Trustee
actually
knows to be so owned shall be so disregarded (unless such action
requires the
consent, waiver, request or demand of 100% of the outstanding
balance
represented by a particular Class and 100% of the outstanding
balance
represented by such Class is registered in the name of one or more
of the
foregoing entities). Certificates so owned that have been pledged
in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of
the Trustee the pledgee's right so to act with respect to such
Certificates and
that the pledgee is not the Depositor, any Servicer, or any
Affiliate of any of
the foregoing Persons.
OVERCOLLATERALIZATION AMOUNT: As of any Distribution Date, the
excess, if
any, of the aggregate Scheduled Principal Balance of the Mortgage
Loans as of
the last day of the related Due Period over the aggregate
Certificate Principal
Balance of all Classes of Certificates other than Class C
Certificates (after
taking into account all distributions of principal on such
Distribution Date and
the increase of any Certificate Principal Balance as a result of
Subsequent
Recoveries).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: For any Distribution Date,
the
excess, if any, of (a) the Target Overcollateralization Amount for
such
Distribution Date over (b) the Overcollateralization Amount for
such
Distribution Date, after giving effect to the distribution of the
Principal
Distribution Amount on such Distribution Date.
OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Distribution Date
on or after the Stepdown Date on which a Trigger Event is not in
effect, the
lesser of (a) the Principal Proceeds for such Distribution Date and
(b) the
excess, if any, of (i) the Overcollateralization Amount for such
Distribution
Date, assuming that 100% of the Principal Proceeds are applied as a
principal
payment on the Certificates on such Distribution Date over (ii) the
Targeted
Overcollateralization Amount for such Distribution Date. With
respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.
OWNERSHIP INTEREST: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
PASS-THROUGH MARGIN: With respect to the Offered Certificates,
the
following percentages:
PRIOR TO MARGIN
ON AND AFTER MARGIN
STEPUP DATE
STEPUP DATE
---------------
-------------------
Class A Certificates
[ - ]%
[ - ]%
Class M-1 Certificates
[ - ]%
[ - ]%
Class M-2 Certificates
[ - ]%
[ - ]%
PASS-THROUGH RATE: The Pass-Through Rate with respect to the
Offered
Certificates and any Distribution Date shall equal the lesser of
(i) the related
Formula Rate for such Distribution
24
<PAGE>
Date and (ii) the Net WAC Rate for such Distribution Date. For
federal income
tax purposes, the following Pass-Through Rates shall apply:
With
respect to the Offered Certificates and any Distribution Date,
the
lesser of (x) the related Formula Rate for such Distribution Date
and (y) the
Net WAC Rate for such Distribution Date.
With
respect to the Class C Interest and any Distribution Date, a rate
per
annum equal to the percentage equivalent of a fraction, the
numerator of which
is (x) the sum of (i) 100% of the interest on Uncertificated REMIC
I Regular
Interest LTP and (ii) interest on the Uncertificated Principal
Balance of each
Uncertificated REMIC I Regular Interest listed in clause (y) at a
rate equal to
the related Uncertificated REMIC I Pass-Through Rate minus the
Marker Rate and
the denominator of which is (y) the aggregate Uncertificated
Balance of each
Uncertificated REMIC I Regular Interest (other than Uncertificated
REMIC I
Regular Interest LTP).
With
respect to the Class C Certificate, 100% of the interest
distributable
on the Class C Interest.
The
Class P Interest, the Class P Certificates, the Class R
Certificates
and the Class RX Certificates shall not have a Pass-Through
Rate.
PAYING AGENT: The Person appointed to make distributions on the
Certificates.
PERCENTAGE INTEREST: Shall equal in the case of any Certificate,
the
percentage interest set forth on the face thereof or equal to the
percentage
obtained by dividing the initial principal amount of such
Certificate by the
initial aggregate amount set forth on the face of all Certificates
of the same
Class.
PERMITTED TRANSFEREE: Any person other than:
(a)
a Disqualified Organization;
(b)
a Non-U.S. Person unless such Non-U.S. Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue
Service Form
W-8ECI or any applicable successor form; and
(c)
any other Person so designated by the Depositor based upon an
Opinion
of Counsel that the Transfer of an ownership interest in a Residual
Certificate
to such Person may cause any Trust REMIC to fail to qualify as a
REMIC at any
time that the Certificates are outstanding.
PERSON: Any individual, corporation, partnership, joint
venture,
association, joint-stock company, limited liability company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution Date
and each
Mortgage Loan that was the subject of a Principal Prepayment in
full during the
portion of the related Prepayment Period beginning on the first day
of the
calendar month in which such Distribution
25
<PAGE>
Date occurs through the end of the Prepayment Period relating to
such
Distribution Date, an amount equal to interest (to the extent
received) at the
applicable Mortgage Loan Remittance Rate on the amount of such
Principal
Prepayment for the number of days commencing on the first day of
the calendar
month in which such Distribution Date occurs and ending on the date
on which
such Principal Prepayment is so applied.
PREPAYMENT INTEREST
SHORTFALL: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment
in full or in
part during the portion of the related Prepayment Period occurring
between the
first day of the related Prepayment Period and the last day of the
calendar
month preceding the month in which such Distribution Date occurs
and that the
Servicer applied to reduce the outstanding principal balance of
such Mortgage
Loan on a date preceding the Due Date in the succeeding calendar
month, an
amount equal to interest at the applicable Mortgage Loan Remittance
Rate on the
amount of such Principal Prepayment for the number of days
commencing on the
date on which the prepayment is applied and ending on the last day
of the
calendar month preceding such Distribution Date.
PREPAYMENT PERIOD: With respect to any Distribution Date [and (i)
any
Principal Prepayment in full, the period that commences on and
includes the __
day of the month immediately preceding the month in which such
Distribution Date
occurs (or from the Cut-off Date, in the case of the first
Prepayment Period)
and ends on and includes the __ day of the month in which such
Distribution Date
occurs, and (ii) any partial Principal Prepayment], the calendar
month preceding
the month in which the Distribution Date occurs.
PREPAYMENT PREMIUM: With respect to a Mortgage Loan, the prepayment
charge
or penalty interest required to be paid by the Mortgagor in
connection with a
prepayment of the related Mortgage Loan, as provided in the related
Mortgage
Note or Mortgage, and as specified on the related Mortgage Loan
Schedule.
PRINCIPAL PROCEEDS: For any Distribution Date, the sum of all
scheduled and
unscheduled payments of principal on the Mortgage Loans, all
Liquidation
Proceeds in respect of principal from Liquidated Mortgage Loans,
all Insurance
Proceeds on the Mortgage Loans in respect of principal, and the
principal
portion of the Repurchase Price of each Mortgage Loan that is
repurchased upon a
breach of representations regarding such Mortgage Loan in such
Mortgage Loan
Group, each as is received or advanced in the related Due Period or
the related
Prepayment Period, as applicable, excluding, for the avoidance of
doubt, any
Prepayment Premiums.
PRIVATE CERTIFICATE: Any
Class of Certificates that is not registered under
the Securities Act.
PROSPECTUS: Each of the (i) preliminary prospectus supplement,
dated _____,
together with the accompanying prospectus dated _____, and (ii) the
prospectus
supplement dated ____, together with the accompanying prospectus
dated ____, in
each case relating to the Offered Certificates.
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan eligible to
be
substituted by the Seller or Originator for a Deleted Mortgage Loan
which must
meet the following criteria:
26
<PAGE>
(a)
have a Scheduled Principal Balance, after deduction of all
Scheduled
Monthly Payments due in the month of substitution (or in the case
of a
substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an
aggregate Scheduled Principal Balance), not in excess of the
Scheduled Principal
Balance of the Deleted Mortgage Loan;
(b)
have a Mortgage Loan Remittance Rate not less than, and not more
than
2% greater than, the Mortgage Loan Remittance Rate of the Deleted
Mortgage Loan;
(c)
have a remaining term to maturity not greater than and not more
than
one year less than that of the Deleted Mortgage Loan;
(d)
comply with each representation and warranty set forth in Section
2.7;
(e)
be of the same type as the Deleted Mortgage Loan;
(f)
have a Gross Margin not less than that of the Deleted Mortgage
Loan, if
the Deleted Mortgage Loan was an Adjustable Rate Mortgage Loan;
(g)
have the same lien priority as the lien priority of the
replaced
Mortgage Loan;
(h)
have the same Index as the Deleted Mortgage Loan;
(i)
have a FICO score not less than that of the Deleted Mortgage
Loan;
(j)
have an LTV not greater than that of the Deleted Mortgage Loan;
(k)
have a Prepayment Premium with a term and an amount at least equal
to
the Prepayment Premium of the Deleted Mortgage Loan; and
(l)
have a credit grade not lower in quality than that of the
Deleted
Mortgage Loan.
RATING AGENCY: Each of [Moody's], [S&P], [Fitch] and [Dominion
Bond Rating
Service].
REALIZED LOSS: With respect to each Liquidated Mortgage Loan, an
amount
(not less than zero or more than the Scheduled Principal Balance of
the Mortgage
Loan) as of the date of such liquidation, equal to (a) the
Scheduled Principal
Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
(b) interest at the Adjusted Net Mortgage Rate from the Due Date as
to which
interest was last paid or advanced (and not reimbursed) to the
Certificateholders up to the Due Date in the month in which
Liquidation Proceeds
are required to be distributed on the Scheduled Principal Balance
of such
Liquidated Mortgage Loan from time to time, minus (c) the
Liquidation Proceeds,
if any, received during the month in which such liquidation
occurred, to the
extent applied as recoveries of interest at the Adjusted Net
Mortgage Rate and
to principal of the Liquidated Mortgage Loan. With respect to each
Mortgage Loan
which has become the subject of a Deficient Valuation, if the
principal amount
due under the related Mortgage Note has been reduced, the
difference between the
principal balance of the Mortgage Loan outstanding immediately
prior to such
Deficient Valuation and the principal balance of the Mortgage Loan
as reduced by
the Deficient Valuation. With respect to each
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<PAGE>
Mortgage Loan which has become the subject of a Debt Service
Reduction, the
amount, if any, by which the principal portion of the related
Scheduled Monthly
Payment has been reduced.
RECORD DATE: As to any Distribution Date and with respect to
all
Certificates (other than the Class C Certificates, the Class P
Certificates, the
Class R Certificates and the Class RX Certificates), the last
Business Day
preceding such Distribution Date. With respect to the Class C
Certificates,
Class P Certificates, Class R Certificates and Class RX
Certificates, the last
Business Day of the calendar month preceding the month in which the
Distribution
Date occurs.
REGULAR CERTIFICATES: Any of the Class A Certificates, Class M
Certificates, Class C Certificates or Class P Certificates.
REGULATION AB: Subpart 229.1100 Asset Backed Securities (Regulation
AB), 17
C.F.R. Sections 229.110-229.1123, as such may be amended from time
to time, and
subject to such clarification and interpretation as have been
provided by the
Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff
of the Commission, or as may be provided by the Commission or its
staff from
time to time.
REINVESTMENT AGREEMENT: A guaranteed reinvestment agreement from a
bank,
insurance company or other corporation or entity organized under
the laws of the
United States or any state thereof under which no payments are
subject to any
withholding tax or, if subject to withholding tax imposed by any
jurisdiction,
the obligor thereunder is required to make "gross up" payments that
cover the
full amount of any such withholding tax on an after-tax basis;
provided that
such agreement provides that it is terminable by the purchaser,
without premium
or penalty, in the event that the rating assigned to such agreement
by any
Rating Agency is at any time lower than the rating required
pursuant to the
terms of this Agreement to be assigned to such agreement in order
to permit the
purchase thereof.
RELIEF ACT: The Servicemembers Civil Relief Act, as such may be
amended
from time to time, or any similar state laws.
RELIEF ACT REDUCTIONS: With respect to any Distribution Date and
any
Mortgage Loan as to which there has been a reduction in the amount
of interest
collectible thereon for the most recently ended calendar month as a
result of
the application of the Relief Act, the amount, if any, by which (a)
interest
collectible on such Mortgage Loan for the most recently ended
calendar month is
less than (b) interest accrued thereon for such month pursuant to
the Mortgage
Note.
REGULAR INTEREST: A "regular interest" in a REMIC within the
meaning of
Section 860G(a)(1) of the Code.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution
Date, an amount (subject to adjustment based on the actual number
of days
elapsed in the respective Interest Accrual Periods for the
indicated
Uncertificated REMIC I Regular Interests for such Distribution
Date) equal to
(a) the product of (i) the aggregate Scheduled Principal Balance
of
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<PAGE>
the Mortgage Loans and REO Properties then outstanding and (ii)
the
Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LTAA minus
the Marker Rate, divided by (b) 12.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT: 1.0% of the
Overcollateralization Target Amount.
REMIC I OVERCOLLATERALIZED AMOUNT: With respect to any date of
determination, (i) 1.0% of the aggregate Uncertificated Balance of
the
Uncertificated REMIC I Regular Interests minus (ii) the aggregate
Uncertificated
Principal Balance of each Uncertificated REMIC I Regular Interest
(other than
Uncertificated REMIC I Regular Interest LTAA and Uncertificated
REMIC I Regular
Interest LTZZ) in each case as of such date of determination.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution
Date, an amount equal to the product of (i) aggregate Scheduled
Principal
Balance of the Mortgage Loans and REO Properties then outstanding
and (ii) one
minus a fraction, the numerator of which is two times the
aggregate
Uncertificated Principal Balance of each Uncertificated REMIC I
Regular Interest
(other than Uncertificated REMIC I Regular Interest LTAA,
Uncertificated REMIC I
Regular Interest LTZZ and Uncertificated REMIC I Regular Interest
LTP) and the
denominator of which is the aggregate Uncertificated Principal
Balance of each
Uncertificated REMIC I Regular Interest (other than Uncertificated
REMIC I
Regular Interest LTAA and Uncertificated REMIC I Regular Interest
LTP).
REMIC PROVISIONS: Provisions of the federal income tax law relating
to real
estate mortgage investment conduits, which appear at Sections 860A
through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions,
and
regulations promulgated thereunder, as the foregoing may be in
effect from time
to time as well as provisions of applicable state laws.
REMIC REGULAR INTEREST: Any Uncertificated REMIC I Regular Interest
or
Uncertificated REMIC II Regular Interest.
REO
DISPOSITION: The sale or other disposition of REO Property.
REO
DISPOSITION PROCEEDS: All amounts received with respect to an
REO
Property pursuant to Section 4.15.
REO
PROPERTY: A Mortgaged Property acquired by the Servicer on behalf
of
the Issuing Entity through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan required to
be
purchased pursuant to this Agreement (other than pursuant to
Section 13.1), an
amount equal to the sum of (a) 100% of the Scheduled Principal
Balance of the
Mortgage Loan on the date of such purchase, (b) accrued interest
thereon at the
applicable Mortgage Rate from the date through which interest was
last paid by
the Mortgagor to the Due Date in the month in which the Repurchase
Price is to
be distributed to the Certificateholders, (c) any unreimbursed
Advances and (d)
any costs and damages incurred in connection with the violation by
such Mortgage
Loan of any predatory or anti-abusive lending law.
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<PAGE>
REQUEST FOR RELEASE: The Request for Release submitted by the
Servicer to
the Trustee or the Custodian on behalf of the Trustee, in the form
of Exhibit C.
RESERVE ACCOUNT: The trust account created and maintained by the
Trustee
pursuant to Section 10.2. The Reserve Account shall not be an asset
of any REMIC
formed under this Agreement.
RESIDUAL CERTIFICATES: The Class R Certificates and the Class
RX
Certificates.
RESIDUAL INTEREST: The sole class of "residual interests" in a
REMIC within
the meaning of Section 860G(a)(2) of the Code.
RESPONSIBLE OFFICER: With respect to:
(a)
the Servicer, any officer of the Servicer with direct
responsibility
for the administration of this Agreement and any other officer to
whom, with
respect to a particular matter, such matter is referred due to such
officer's
knowledge of an familiarity with the particular subject;
(b)
the Trustee, any managing director, any director, vice president,
any
assistant vice president, any associate, any assistant secretary or
any other
officer of the Trustee customarily performing functions similar to
those
performed by any of the above designated officers who at such time
shall be
officers to whom, with respect to a particular matter, the matter
is referred
because of the officer's knowledge of and familiarity with the
particular
subject and who has direct responsibility for the administration of
this
Agreement;
(c)
the Securities Administrator, any vice president, any managing
director, any director, any associate, any assistant vice
president, any
assistant secretary, any trust officer or any other officer or
employee of the
Securities Administrator customarily performing functions similar
to those
performed by any of the above designated officers and also to whom,
with respect
to a particular matter, such matter is referred because of such
officer's or
employee's knowledge of and familiarity with the particular subject
and in each
case who shall have direct responsibility for the administration of
this
Agreement; and
(d)
the Master Servicer, any vice president, any managing director,
any
director, any associate, any assistant vice president, any
assistant secretary,
any trust officer or any other officer or employee of the Master
Servicer
customarily performing functions similar to those performed by any
of the above
designated officers and also to whom, with respect to a particular
matter, such
matter is referred because of such officer's or employee's
knowledge of and
familiarity with the particular subject and in each case who shall
have direct
responsibility for the administration of this Agreement.
RESPONSIBLE PARTY: _____, _____, and _____, which are those
Persons
required to provide reports pursuant to Item 1122 of Regulation AB.
Exhibit 1122
identifies the Servicing Criteria as to which the Responsible
Parties have
responsibility with respect to this transaction.
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<PAGE>
ROLLING THREE MONTH DELINQUENCY RATE: With respect to any
Distribution
Date, the average of the Delinquency Rates for each of the three
(or a shorter
period, in the case of the first and second Distribution Dates)
immediately
preceding months.
RULE
144A LETTER: As defined in Section 11.2(b).
S&P: Standard & Poor's Rating Services, a division of The
McGraw-Hill
Companies, Inc.
SARBANES-OXLEY ACT: The Sarbanes-Oxley Act of 2002, as amended from
time to
time.
SCHEDULED MONTHLY PAYMENT: Each scheduled payment of principal and
interest
(or of interest only, if applicable) to be paid by the Mortgagor on
a Mortgage
Loan, as reduced (except where otherwise specified herein) by the
amount of any
related Debt Service Reduction or pursuant to the Relief Act
(excluding all
amounts of principal and interest that were due on or before the
Cut-off Date
whenever received) and, in the case of an REO Property, an amount
equivalent to
the Scheduled Monthly Payment that would have been due on the
related Mortgage
Loan if such Mortgage Loan had remained in existence.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan as
of any
date of determination will be generally equal to its outstanding
principal
balance as of the Cut-off Date, after giving effect to the
principal portion of
any Scheduled Monthly Payments due on or before such date, whether
or not
received, reduced by (a) the principal portion of all Scheduled
Monthly Payments
due on or before the Due Date in the Due Period immediately
preceding such date
of determination, whether or not received, and (b) all amounts
allocable to
unscheduled principal payments received on or before the last day
of the Due
Period immediately preceding such date of determination.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: [ - ], or any successor or assigns under
this
Agreement.
SELLER: Maia Mortgage Finance Statutory Trust, or any
successor.
SENIOR ENHANCEMENT PERCENTAGE: For a Distribution Date, a
fraction
expressed, as a percentage, equal to (a) the sum of the aggregate
Certificate
Principal Balance of the Class M Certificates and the
Overcollateralization
Amount, in each case before taking into account any payments of
principal to the
Certificates on that Distribution Date, divided by (b) the
aggregate Scheduled
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution Date
on or
after the Stepdown Date and as long as a Trigger Event is not in
effect, the
excess of (a) the aggregate Certificate Principal Balance of the
Class A
Certificates immediately prior to such Distribution Date over (b)
the lesser of
(i) the product of (1) [ - ]% and (2) the aggregate Scheduled
Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
and (ii) the
amount by which the aggregate Scheduled Principal Balance of the
Mortgage Loans
as of the last day of the related Due Period exceeds the product of
(1) [ - ]%
and (2) the Cut-off Date Balance.
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<PAGE>
SERVICER: [ - ] and its successor in interest or assigns or any
successor
to the Servicer under this Agreement.
SERVICER EVENT OF DEFAULT: Any one of the conditions or
circumstances
enumerated in Section 6.5.
SERVICER REMITTANCE AMOUNT: As defined in Section 4.24(a).
SERVICER REMITTANCE
DATE: The day in each calendar month on which the
Servicer is required to remit payments to the Distribution Account,
which is the
___ Business Day following the ____ day of such calendar month,
commencing in
_____________.
SERVICER REPORT: The reports provided by the Servicer to the
Master
Servicer and the Securities Administrator pursuant to Section
5.5
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket"
costs and expenses (including reasonable attorneys' fees and
disbursements)
other than Monthly Advances incurred prior to, on or after the
Cut-off Date in
the performance by the Servicer of its servicing obligations,
including, but not
limited to, the cost of (a) the inspection, maintenance,
preservation,
restoration and protection of any Mortgaged Property, (b) any
enforcement or
judicial proceedings, including foreclosures, in respect of a
particular
Mortgage Loan, including any expenses incurred in relation to any
such
proceedings that result from the Mortgage Loan being registered on
the MERS(R)
System, (c) the management (including reasonable fees in connection
therewith)
and liquidation of any REO Property, (d) compliance with the
obligations under
Section ______ and (e) obtaining any legal documentation required
to be included
in the Mortgage File and/or correcting any outstanding title issues
(i.e., any
lien or encumbrance on the Mortgaged Property that prevents the
effective
enforcement of the intended lien position) reasonably necessary for
the Servicer
to perform its obligations under this Agreement. Servicing Advances
also include
any reasonable "out-of-pocket" costs and expenses (including legal
fees)
incurred by the Servicer in connection with executing and recording
instruments
of satisfaction, deeds of reconveyance or an Assignment of Mortgage
to the
extent not recovered from the Mortgagor or otherwise payable under
this
Agreement.
SERVICING CRITERIA: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
SERVICING FEE: With respect to each Mortgage Loan, the amount of
the annual
fee payable on account of servicing, which shall, for a period of
one full
month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate and
(b) the Scheduled Principal Balance of such Mortgage Loan as of the
first day of
the related Due Period. The Servicing Fee is payable solely from
the interest
portion (including recoveries with respect to interest from
Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds of such
Scheduled Monthly
Payment collected by the Servicer, or as otherwise provided under
Section 4.7.
SERVICING FEE RATE: [ - ]% per annum.
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<PAGE>
SERVICING FILE: With respect to each Mortgage Loan, the file
retained by
the Servicer consisting of originals of all documents in the
Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan
Documents,
the originals of which are delivered to the Custodian on behalf of
the Trustee.
SERVICING OFFICER: Any officer of a Servicer involved in or
responsible for
the administration and servicing of the Mortgage Loans whose name
appears on a
list of servicing officers furnished by the Servicer on the Closing
Date to the
Master Servicer upon request, as such list may from time to time be
amended.
SPONSOR: _______________________
STARTUP DAY: As defined in the Preliminary Statement.
STEPDOWN DATE: The earlier to occur of (a) the Distribution Date on
which
the aggregate Certificate Principal Balance of the Class A
Certificates is
reduced to zero, and (b) the later to occur of (i) the Distribution
Date in [ -
] or (ii) the first Distribution Date on which the Senior
Enhancement Percentage
is greater than or equal to [ - ]%.
SUBCONTRACTOR: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as servicing is commonly
understood by
participants in the mortgage-backed securities market) of the
Mortgage Loans but
performs one or more discrete functions identified in Item 122(d)
of Regulation
AB with respect to the Mortgage Loans under the direction or
authority of the
Servicer or a Subservicer.
SUBSEQUENT RECOVERY: Any amount (net of reimbursable expenses)
received on
a Mortgage Loan subsequent to such Mortgage Loan being determined
to be a
Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior month. If
Subsequent Recoveries are received, they will be included as part
of the
Principal Proceeds for the Distribution Date following the calendar
month in
which they are received and distributed in accordance with the
priorities
described herein. In addition, after giving effect to all
distributions on a
Distribution Date, the unpaid Applied Loss Amount for the Class M
Certificates
then outstanding with the highest distribution priority will be
decreased by the
amount of such Subsequent Recoveries until reduced to zero (with
any remaining
Subsequent Recoveries applied to reduce the Applied Loss Amount of
the class
with the next highest distribution priority), and the Certificate
Principal
Balance of such Class or Classes of Class M Certificates will be
increased by
the same amount.
SUBSERVICER: Any Person that services the Mortgage Loans on behalf
of the
Servicer or any Subcontractor and is responsible for the
performance (whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by the
Servicer under
this Agreement that are identified in Item 1122(d) of Regulation
AB.
SUBSTITUTING PARTY: As defined in Section 2.10(a).
SUBSTITUTION ADJUSTMENT AMOUNT: As defined in Section 2.10(c).
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<PAGE>
TARGET OVERCOLLATERALIZATION AMOUNT: For any Distribution Date (a)
prior to
the Stepdown Date, an amount equal to [ - ]% of the Cut-off Date
Balance. For
any Distribution Date on or after the Stepdown Date, the lesser of
(i) [ - ]% of
the Cut-off Date Balance of the Mortgage Loans and (ii) [ - ]% of
the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the last
day of the
related Due Period, subject to a floor equal to [ - ]% of the
Cut-off Date
Balance; provided, however, if a Trigger Event has occurred and is
continuing on
the related Distribution Date, the Target Overcollateralization
Amount will be
the same as the Target Overcollateralization Amount on the
preceding
Distribution Date.
TAX
MATTERS PERSON: The person designated as "tax matters person" in
the
manner provided under Treasury regulation Section 1.860F-4(d) and
temporary
Treasury regulation Section 301.6231(a)(7)1T. Initially, the Tax
Matters Person
for REMICs I and II shall be the Holder of the Class R
Certificates, and the Tax
Matters Person for REMICs III and IV shall be the Holder of the
Class RX
Certificates. The Trustee will be appointed as agent of each such
Tax Matters
Person pursuant to Section 14.1(k) herein unless otherwise
designated.
TERMINATION PRICE: As defined in Section 13.1(a).
TRANSFEROR CERTIFICATE: As defined in Section 11.2(b).
TRIGGER EVENT: An event that is in effect on any Distribution Date
on or
after the Stepdown Date, if either (a) the Rolling Three Month
Delinquency Rate
as of the last day of the related Due Period equals or exceeds [ -
]% of the
Senior Enhancement Percentage on such Distribution Date or (b) the
Cumulative
Realized Loss Percentage on such Distribution Date exceeds the
applicable
percentages set forth in the table below with respect to such
Distribution Date:
Distribution Date Occurring In
Percentage
------------------------------
-----------------------------------------------
[ - ] -- [ - ]
[ - ]% for the first month plus an additional
1/12th of [ - ]% for each month thereafter
[ - ] -- [ - ]
[ - ]% for the first month plus an additional
1/12th of [ - ]% for each month thereafter
[ - ] -- [ - ]
[ - ]% for the first month plus an additional
1/12th of [ - ]% for each month thereafter
[ - ] -- [ - ]
[ - ]% for the first month plus an additional
1/12th of [ - ]% for each month thereafter
[ - ] -- [ - ]
[ - ]%
TRUST FUND: As defined in Section 2.5.
TRUSTEE: [ - ] and, if a successor trustee is appointed hereunder,
such
successor.
TRUST REMIC: Each REMIC created under the terms of this
Agreement.
UCC:
The Uniform Commercial Code as enacted in the relevant
jurisdiction.
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<PAGE>
UNCERTIFICATED INTEREST: With respect to any REMIC Regular Interest
for any
Distribution Date, one month's interest at the REMIC Remittance
Rate applicable
to such REMIC Regular Interest for such Distribution Date, accrued
on the
Uncertificated Principal thereof immediately prior to such
Distribution Date.
Uncertificated Interest in respect of any Uncertificated REMIC I
Interest, and
the Class C Interest shall accrue on the basis of a 360-day year
consisting of
twelve 30-day months. Uncertificated Interest with respect to each
Distribution
Date, as to any REMIC Regular Interest, shall be reduced by an
amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any,
for such
Distribution Date to the extent not otherwise covered and (b) the
aggregate
amount of any Relief Act Interest Shortfall, if any, allocated, in
each case, to
such REMIC Regular Interest. In addition, Uncertificated Interest
with respect
to each Distribution Date, as to any REMIC Regular Interest shall
be reduced by
Realized Losses, if any, allocated to such REMIC Regular
Interest.
UNCERTIFICATED
PRINCIPAL BALANCE: With respect to the Class C Interest an
amount equal to the excess, if any, of (A) the then aggregate
Uncertificated
Principal Balance of the Uncertificated REMIC I Regular Interests
over (B) the
then aggregate Certificate Principal Balance of the Class A
Certificates, the
Class M Certificates and the Class P Certificates then
outstanding.
With
respect to each other REMIC Regular Interest, the amount of any
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 and, if and to the extent necessary and
appropriate, shall be
further reduced on such Distribution Date by Realized Losses. The
Uncertificated
Principal Balance of REMIC I Regular Interest LTZZ shall be
increased by
interest deferrals as provided in Section 10.7. The Uncertificated
Principal
Balance of each REMIC Regular Interest shall never be less than
zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATES: As of any Distribution
Date, the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage
Loans,
weighted on the basis of the Uncertificated Principal Balance of
such
Uncertificated REMIC I Regular Interests for each such Distribution
Date.
UNCERTIFICATED REMIC I REGULAR INTERESTS: Uncertificated REMIC I
Regular
Interest LTAA, Uncertificated REMIC I Regular Interest LTA,
Uncertificated REMIC
I Regular Interest LTM1, Uncertificated REMIC I Regular Interest
LTM2,
Uncertificated REMIC I Regular Interest LTZZ and Uncertificated
REMIC I Regular
Interest LTP. Each such interest represents the beneficial
ownership interests
in REMIC I as a Regular Interest in REMIC I. Each REMIC I Regular
Interest shall
accrue interest at the related Uncertificated REMIC I Pass-Through
Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
UNCERTIFICATED REMIC II REGULAR INTERESTS: The Class C Interest and
Class P
Interest. Each such interest represents the beneficial ownership
interests in
REMIC II as a Regular
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<PAGE>
Interest in REMIC II. Each REMIC II Regular Interest shall accrue
interest at
its related Pass-Through Rate in effect from time to time, and
shall be entitled
to distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
UNDERWRITER'S EXEMPTION: Any exemption listed in footnote 1 of, and
amended
by, PTE 2002-41 at 67 Fed. Reg. 54487 (August 22, 2002), or any
substantially
similar successor administrative exemption granted by the U.S.
Department of
Labor.
UNDERWRITING GUIDELINES: Those underwriting guidelines employed by
the
Seller with respect to Mortgage Loans.
U.S.
PERSON: (a) A citizen or resident of the United States, (b) a
corporation created or organized in or under the laws of the United
States, any
state thereof or the District of Columbia, including an entity
treated as a
corporation for federal income tax purposes (c) a partnership
(unless Treasury
regulations are adopted that provide otherwise) created or
organized in or under
the laws of the United States, any state thereof or the District of
Columbia,
including an entity treated as a partnership for federal income tax
purposes,
none of the interests in which are owned, directly or indirectly
through one or
more intermediate entities, by a person that is not a U.S. Person
within the
meaning this paragraph, (d) an estate the income of which is
includible in gross
income for United States federal income tax purposes, regardless of
its source,
(e) a trust if a court within the United States is able to exercise
primary
supervision over the administration of such trust and one or more
United States
fiduciaries have the authority to control all substantial decisions
of the trust
(or to the extent provided in applicable Treasury regulations,
certain trusts in
existence on August 20, 1996 that are eligible to be treated as
United States
persons).
VOTING INTERESTS: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate. As of any date
of
determination, the Voting Interests shall be allocated 1% to the
Residual
Certificates, 1% to the Class P Certificates, and the balance among
Holders of
the Certificates in proportion to the Certificate Principal Balance
of their
respective Certificates on such date.
SECTION 1.2 Calculations With Respect to the Mortgage Loans.
Calculations required to be made pursuant to this Agreement with
respect to
any Mortgage Loan in the Trust Fund shall be made based upon
current information
as to the terms of the Mortgage Loans and reports of payments
received from the
Mortgagor on such Mortgage Loans provided by the Servicer to the
Master Servicer
and the Securities Administrator. Payments and distributions to be
made by the
Securities Administrator shall be based on information provided by
the Servicer.
Neither the Trustee, the Master Servicer nor the Securities
Administrator shall
be required to recompute, verify or recalculate the information
supplied to it
by the Servicer.
SECTION 1.3 Calculations With Respect to Accrued Interest.
All
calculations of interest described herein with respect to any Class
of
Certificates, other than Class C Certificates, and the
Uncertificated REMIC III
Regular Interests (other than the Class C Interest), shall be made
on the basis
of an assumed 360-day year and the actual
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<PAGE>
number of days in the related Interest Accrual Period. The Class C
Certificates,
the Class C Interest and the Uncertificated REMIC I and REMIC II
Regular
Interests shall accrue interest on the basis of an assumed 360-day
year
consisting of twelve 30-day months.
SECTION 1.4 Rules of Construction.
Unless the context otherwise clearly requires:
(a)
the definitions of terms herein shall apply equally to the singular
and
plural forms of the terms defined;
(b)
whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms;
(c)
the words "include," "includes" and "including" shall be deemed to
be
followed by the phrase "without limitation;"
(d)
the word "will" shall be construed to have the same meaning and
effect
as the word "shall;"
(e)
any definition of or reference to any agreement, instrument or
other
document herein shall be construed as referring to such agreement,
instrument or
other document as from time to time amended, supplemented or
otherwise modified
(subject to any restrictions on such amendments, supplements or
modifications
set forth herein);
(f)
any reference herein to any Person, or to any Person in a
specified
capacity, shall be construed to include such Person's permitted
successors and
assigns or such Person's permitted successors in such capacity, as
the case may
be; and
(g)
all references in this instrument to designated "Sections,"
"clauses"
and other subdivisions are to the designated Sections, clauses and
other
subdivisions of this instrument as originally executed, and the
words "herein,"
"hereof," "hereunder" and other words of similar import refer to
this Agreement
as a whole and not to any particular Section, clause or other
subdivision.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
SECTION 2.1 Conveyance of Mortgage Loans to the Depositor.
On
the Closing Date, in exchange for the Certificates or the net
proceeds
thereof, the Seller does hereby sell, transfer, assign, or set
over, deposit
with and otherwise convey without recourse (except as provided
herein), and the
Depositor does hereby purchase, all right, title and interest of
the Seller in
and to the Mortgage Loans listed on the Mortgage Loan Schedule,
having a Cut-off
Date Balance as set forth in such Mortgage Loan Schedule.
(a)
The Depositor shall be entitled to (i) all Scheduled Monthly
Payments
of principal due after the Cut-off Date, (ii) all other recoveries
of principal
collected after the Cut-off Date
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(less scheduled payments of principal due on or before the Cut-off
Date and
collected after the Cut-off Date), (iii) all Scheduled Monthly
Payments of
interest due after the Cut-off Date (minus that portion of any such
payment
which is allocable to the period prior to the Cut-off Date) and
(iv) all
Prepayment Premiums. Scheduled Monthly Payments prepaid with
respect to a Due
Date after the Cut-off Date shall not be applied to the principal
balance as of
the Cut-off Date, but the Seller shall remit any such prepaid
amounts to the
Servicer for deposit into the Custodial Account for the benefit of
the
Depositor.
(b)
In the case of Mortgage Loans that have been prepaid in full after
the
Cut-off Date and prior to the Closing Date, the Seller shall remit
to the
Servicer for deposit in the Custodial Account the portion of any
amount so
prepaid that is required to be deposited in the Custodial Account
pursuant to
Section 4.5.
(c)
Upon the sale of the Mortgage Loans, the ownership of each
Mortgage
Note, the related Mortgage and the related Mortgage File shall vest
immediately
in the Depositor, and the ownership of all records and documents
with respect to
the related Mortgage Loan prepared by or which come into the
possession of the
Seller shall vest immediately in the Depositor and shall be
retained and
maintained by the Seller, in trust, at the will of the Depositor
and only in
such custodial capacity.
(d)
The Seller shall deliver the Mortgage Loan Schedule, the Mortgage
Loan
File and Mortgage Loan Documents to be purchased on the related
Closing Date to
the Custodian at least three Business Days prior to such Closing
Date.
SECTION 2.2 Conveyance of Mortgage Loans to the Issuing Entity.
(a)
On the Closing Date, in exchange for the Certificates or the
net
proceeds thereof, the Depositor does hereby sell, transfer, assign,
set over,
deposit with and otherwise convey to the Issuing Entity, without
recourse
(except as otherwise provided herein), all right, title and
interest of the
Depositor in and to the Mortgage Loans purchased by the Depositor
from the
Seller.
(b)
The Issuing Entity shall be entitled to all payments on the
Mortgage
Loans as provided in Section 2.1(b).
(c)
Upon the issuance of the Certificates, the ownership of each
Mortgage
Note, the related Mortgage and the related Mortgage File shall vest
immediately
in the Issuing Entity, and the ownership of all records and
documents with
respect to the related Mortgage Loan prepared by or which come into
the
possession of the Seller shall vest immediately in the Issuing
Entity and shall
be retained and maintained by the Seller, in trust, at the will of
the Issuing
Entity and only in such custodial capacity.
(d)
In connection with such transfer and assignment of the Mortgage
Loans,
the Depositor does hereby deliver to, and deposit with, or cause to
be delivered
to and deposited with the Custodian, on behalf of the Trustee, for
the benefit
of the Certificateholders, the Mortgage File with respect to each
Mortgage Loan,
and the ownership of all records and documents with respect to the
related
Mortgage Loan prepared by or which come into the possession of the
Depositor
shall vest immediately in the Trustee for the benefit of the
Certificateholders
and shall
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be retained and maintained by the Depositor, in trust, at the will
of the
Trustee for the benefit of the Certificateholders and only in such
custodial
capacity.
SECTION 2.3 Assignment of Mortgage Loans.
(a)
The Seller shall cause an Assignment of Mortgage with respect to
each
Mortgage Loan (other than a MERS Designated Mortgage Loan) to be
completed in
the form and substance acceptable for recording in the relevant
jurisdiction,
such assignment shall either be in blank or be endorsed to "[ - ],
as Trustee of
the Luminent Mortgage Trust 200_-_, Mortgage Pass-Through
Certificates, Series
200_-_, without recourse," on or prior to the Closing Date;
provided, however,
that such Assignments of Mortgage Loans need not be recorded unless
and until
the Trustee is advised by a Rating Agency that such Assignment of
Mortgage is
required to be recorded to protect the Trustee's interest in the
Mortgage Loans.
Any such recordation of an Assignment of Mortgage shall be effected
at the
expense of the Seller.
(b)
In connection with the assignment of any MERS Designated Mortgage
Loan,
the Seller agrees that, on or prior to the Closing Date, the Seller
will cause
the MERS(R) System to indicate that such Mortgage Loans have been
assigned by
the Seller to the Depositor which has assigned such Mortgage Loans
to the
Trustee in accordance with this Agreement for the benefit of
the
Certificateholders by including (or deleting, in the case of
Mortgage Loans
which are repurchased in accordance with this Agreement) in such
computer files
the code in the field that identifies the specific Trustee and the
code in the
field "Pool Field" that identifies the series of the Certificates
for which such
Mortgage Loans serve as collateral. The Seller further agrees that
it will not,
and will not permit the Servicer to, and each of the Servicer and
the Master
Servicer agrees that it will not, alter the codes referenced in
this paragraph
with respect to any MERS Designated Mortgage Loan during the term
of this
Agreement unless and until such MERS Designated Mortgage Loan is
repurchased in
accordance with the terms of this Agreement.
SECTION 2.4 Books and
Records.
(a)
The contents of each Servicing File are and shall be held in trust
by
the Servicer for the benefit of the Trustee on behalf of the
Certificateholders.
The Servicer shall take all necessary steps to ensure that the
documents
required to be included in the Servicing File are complete and
shall maintain
the Servicing File as required by this Agreement, Accepted
Servicing Practices
and applicable law. Possession of each Servicing File by the
Servicer is at the
will of the Trustee for the sole purpose of servicing the related
Mortgage Loan
and such retention and possession by the Seller is in a custodial
capacity only.
The Servicer shall release its custody of the contents of any
Servicing File
only in accordance with written instructions from the Trustee,
unless such
release is required as incidental to the Seller's servicing of the
Mortgage
Loans or is in connection with the transfer of servicing or a
repurchase of any
Mortgage Loan.
(b)
All original documents relating to the Mortgage Loans that are
not
delivered to the Custodian, to the extent delivered to the
Servicer, are and
shall be held by the Servicer in trust for the benefit of the
Trustee on behalf
of the Certificateholders. In the event that any such original
document is
required pursuant to the terms of this Section to be a part of a
Mortgage File,
such document shall be delivered promptly to the Custodian on
behalf of the
Trustee.
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(c)
Upon and after a sale of Mortgage Loans to the Trustee for the
benefit
of the Certificateholders, all proceeds arising out of the Mortgage
Loans, as
provided in Section 2.1(b) shall be received and held by the
Servicer in trust
for the benefit of the Trustee on behalf of the
Certificateholders.
(d)
Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee, the Servicer or the
Certificateholders of any unsatisfied duty, claim or other
liability on any
Mortgage Loan or to any Mortgagor.
SECTION 2.5 Review of Documentation.
(a)
On the Closing Date, the Custodian will execute and deliver to
the
Depositor, the Servicer and the Trustee an Initial Certification
with respect to
the Mortgage Loans. Based on its review and examination, and only
as to the
documents identified in the Initial Certification, the Custodian
will
acknowledge that (i) such documents appear regular on their face
and relate to
such Mortgage Loan and (ii) with respect to each MERS Designated
Mortgage Loan,
the MERS number on the Mortgage Loan Schedule matches the MERS
number on the
Mortgage for the related Mortgage File. The Custodian shall not be
under any
duty or obligation to inspect, review or examine such documents,
instruments,
certificates or other papers to determine that the same are
genuine,
enforceable, recordable or appropriate for the represented purpose
or that they
have actually been recorded in the real estate records or that they
are other
than what they purport to be on their face.
(b)
Within 90 days after the Closing Date, the Custodian will execute
and
deliver to the Depositor, the Servicer, and the Trustee a Final
Certification
with any applicable exceptions noted therein. The Custodian shall
(i) determine
whether such documents are executed and endorsed, but shall be
under no duty or
obligation to inspect, review or examine any such documents,
instruments,
certificates or other papers to determine that the same are valid,
binding,
legally effective, properly endorsed, genuine, enforceable or
appropriate for
the represented purpose or that they have actually been recorded or
are in
recordable form or that they are other than what they purport to be
on their
face and (ii) with respect to each MERS Designated Mortgage Loan,
certify that
the MERS number on the Mortgage Loan Schedule matches the MERS
number on the
Mortgage for the related Mortgage File. The Custodian shall not
have any
responsibility for verifying the genuineness or the legal
effectiveness of or
authority for any signatures of or on behalf of any party or
endorser.
(c)
If in the course of the review described in paragraph (c) above,
the
Custodian discovers any document or documents constituting a part
of a Mortgage
File is missing, does not appear regular on its face (i.e., is
mutilated,
damaged, defaced, torn or otherwise physically altered) or appears
to be
unrelated to the Mortgage Loans identified in the Mortgage Loan
Schedule, as
applicable (each, a "MATERIAL DEFECT"), the Custodian shall
identify the
Mortgage Loan to which such Material Defect relates in the Final
Certification.
Within 90 days of its receipt of such notice, the Seller shall be
required to
cure such Material Defect (and, in such event, the Seller shall
provide the
Trustee and the Custodian with an Officer's Certificate confirming
that such
cure has been effected). If the Seller does not effect a cure
within such 90-day
period, it shall repurchase the related Mortgage Loan from the
Trust Fund at the
Repurchase Price; provided, however, that the Seller may, in lieu
of
repurchasing a Mortgage Loan,
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substitute for such Mortgage Loan a Qualified Substitute Mortgage
Loan subject
to the provisions of Section 2.10, provided that such substitution
occurs within
two years of the Closing Date. The failure of the Trustee to
deliver, or cause
the Custodian to deliver, the Final Certification within 90 days
from the
Closing Date shall not affect or relieve the Seller of its
obligation to
repurchase any Mortgage Loan pursuant to this Section 2.5 or any
other Section
of this Agreement requiring the repurchase of Mortgage Loans from
the Trust
Fund.
SECTION 2.6 Execution and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
assets
conveyed and sold to it hereunder (the "TRUST FUND"). Concurrently
with such
transfer and assignment, the Securities Administrator has executed
the
Certificates in authorized denominations evidencing directly or
indirectly the
entire ownership of the Trust Fund, and, upon the written order of
the
Depositor, has authenticated the same Certificates. The Trustee
agrees to hold
the Trust Fund and exercise the rights referred to above for the
benefit of all
present and future Holders of the Certificates and to perform the
duties set
forth in this Agreement in accordance with the standard of care set
forth
herein.
SECTION 2.7 Representations and Warranties with Respect to the
Mortgage
Loans.
(a)
The Seller hereby makes the representations and warranties relating
to
the Mortgage Loans set forth in Schedule B hereto as of the Closing
Date and,
with respect to any Qualified Substitute Mortgage Loan originated
by the Seller,
as of the date of substitution of such Qualified Substitute
Mortgage Loan.
(b)
Upon discovery or receipt of written notice by the Depositor,
the
Servicer, the Master Servicer, the Securities Administrator or the
Trustee that
the Seller has breached any representation or warranty in respect
of a Mortgage
Loan that materially and adversely affects the value of such
Mortgage Loan or
the interest therein of the Certificateholders, the Depositor, the
Master
Servicer, the Securities Administrator or the Trustee, as the case
may be,
promptly shall notify the Trustee in writing of such breach, and
the Trustee
shall enforce the Seller's obligations hereunder to repurchase or,
subject to
Section 2.10, substitute the related Mortgage Loan from the Trust
Fund on or
prior to the Determination Date following the expiration of the
90-day period
following the earlier of the date on which the breach was
discovered or notice
of the breach was received by the Trustee; provided, however, that,
if such
breach cannot reasonably be cured within such 90-day period,
subject to Section
2.7(d) below, if the Seller shall have commenced to cure such
breach within such
90-day period, the Seller shall be permitted to proceed thereafter
diligently
and expeditiously to cure the breach within an additional 90-day
period. Without
limiting the foregoing, the Seller's breach of a representation or
warranty
contained in clauses [(__)] through [(__)], inclusive, of Schedule
B, shall be
deemed to materially and adversely affect the interest of the
Certificateholders, and shall require a repurchase or substitution
as provided
herein.
(c)
It is understood and agreed that the obligations of the Seller to
cure,
repurchase or substitute for any Mortgage Loan as to which a
document is
missing, a material defect in a constituent document exists or as
to which such
a breach has occurred and is continuing shall
41
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constitute the sole remedy available to the Trustee on behalf of
the
Certificateholders and the Certificateholder against such party
respecting such
omission, defect or breach. If the Seller is not a member of MERS
at the time it
repurchases a Mortgage Loan and the Mortgage is registered on the
MERS(R)
System, the Trustee shall cause the Seller, at the Seller's own
expense and
without any right of reimbursement, to cause MERS to execute and
deliver an
assignment of the Mortgage in recordable form to transfer the
Mortgage from MERS
to the Seller and to cause such Mortgage to be removed from
registration on the
MERS(R) System in accordance with the MERS rules and
regulations.
(d)
Upon discovery by the Depositor or the Trustee that any Mortgage
Loan
does not constitute a "qualified mortgage" within the meaning of
Section
860G(a)(3) and the related REMIC provisions of the Code, the party
discovering
such fact shall promptly (and in any event within five Business
Days of
discovery) give written notice thereof to the other parties. In
connection
therewith, the Depositor shall, or shall cause the Seller to
repurchase or,
subject to the limitations set forth in Section 2.10, substitute
one or more
Qualified Substitute Mortgage Loans for the affected Mortgage Loan
within 75
days of the earlier of discovery or receipt of such notice with
respect to such
affected Mortgage Loan. Any such repurchase or substitution shall
be made in the
same manner as set forth above. The Trustee shall re-convey to the
repurchasing
party the Mortgage Loan to be released pursuant hereto in the same
manner, and
on the same terms and conditions, as it would a Mortgage Loan
repurchased for
breach of a representation or warranty.
SECTION 2.8 Optional Repurchase.
The
Seller may, at its option, repurchase a Mortgage Loan (i) that is
90 or
more days delinquent or (ii) the related Mortgaged Property of
which has
suffered material damage (evidence of such determination to be
delivered in
writing to the Trustee and the Master Servicer in the form and
substance
satisfactory to the Servicer, the Trustee and the Master Servicer
prior to
purchase); provided that the Seller may not acquire more than [ -
]% of the
Mortgage Loans by aggregate Cut-off Date Balance pursuant to this
Section 2.8.
SECTION 2.9 Repurchase of Mortgage Loans.
(a)
The purchase price for any Mortgage Loan repurchased by the
Seller
pursuant to this Agreement shall be the Repurchase Price for such
Mortgage Loan.
The Repurchase Price for any Mortgage Loan repurchased pursuant to
this
Agreement shall be deposited into the Distribution Account.
(b)
The Custodian, upon receipt of a Request for Release from the
Seller
(which Request for Release shall include a certification by the
Seller of the
repurchase and the remittance of the Repurchase Price to the
Securities
Administrator for deposit into the Distribution Account), shall
release to the
Seller the related Mortgage File. The Trustee or its authorized
designee shall
execute and deliver such instruments of transfer or assignment, in
each case
without recourse, representation or warranty, as the Seller may
furnish to the
Trustee or the Custodian and as shall be necessary to vest in such
party any
Mortgage Loan released pursuant hereto. None of the Trustee, the
Securities
Administrator, the Master Servicer or the Custodian shall have
any
responsibility for determining the sufficiency of such assignment
for its
intended
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purpose, and upon such release, the Trustee and the Custodian shall
have no
further responsibility with regard to such Mortgage File.
SECTION 2.10 Substitution of Mortgage Loans.
(a)
In lieu of repurchasing any such Mortgage Loan as provided above,
the
Seller (as such, the "SUBSTITUTING PARTY") may cause such Mortgage
Loan to be
removed from the Trust Fund (in which case it shall become a
"DELETED MORTGAGE
LOAN") and substitute one or more Qualified Substitute Mortgage
Loans in the
manner and subject to the limitations of this Section 2.10. Any
substitution of
Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made
pursuant to
this Section 2.10 must be effected prior to the last Business Day
that is within
two years after the Closing Date. As to any Deleted Mortgage Loan
for which the
Substituting Party substitutes a Qualified Substitute Mortgage Loan
or Loans,
such substitution shall be effected by delivering to the Custodian,
for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage,
the assignment to the Substituting Party, and such other documents
and
agreements, with all necessary endorsements thereon, together with
an Officers'
Certificate stating that each such Qualified Substitute Mortgage
Loan satisfies
the definition thereof and specifying the Substitution Adjustment
Amount (as
described below), if any, in connection with such substitution. The
Custodian
shall acknowledge receipt for such Qualified Substitute Mortgage
Loan and,
within 45 days thereafter, shall review such Mortgage Files and
deliver to the
Substituting Party, the Trustee and the Depositor, with respect to
such
Qualified Substitute Mortgage Loans, a certification substantially
in the form
of a revised Initial Certification, with any exceptions noted
thereon. Within 90
days of the date of substitution, the Custodian shall deliver to
the
Substituting Party, the Trustee and the Depositor a certification
substantially
in the form of a revised Final Certification, with respect to such
Qualified
Substitute Mortgage Loans, with any exceptions noted thereon.
Scheduled Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in
the month of
substitution shall not be included as part of the Trust Fund and
shall be
retained by the Substituting Party. For the month of substitution,
payments to
the Certificateholders shall reflect the collections and recoveries
in respect
of such Deleted Mortgage Loan in the related Due Period and the
Substituting
Party shall thereafter be entitled to retain all amounts
subsequently received
in respect of such Deleted Mortgage Loan. Upon such substitution,
such Qualified
Substitute Mortgage Loan shall constitute part of the Trust Fund
and shall be
subject in all respects to the terms of this Agreement as of the
date of
substitution.
(b)
The Depositor shall amend the related Mortgage Loan Schedule to
reflect
the removal of such Deleted Mortgage Loan and the substitution of
the Qualified
Substitute Mortgage Loan or Loans and the Seller shall deliver the
amended
Mortgage Loan Schedule to the Trustee, the Master Servicer, the
Securities
Administrator, the Custodian and the Servicer. Upon such
substitution, the
Qualified Substitute Mortgage Loan shall be subject to the terms of
this
Agreement in all respects, and the Seller shall be deemed to have
made with
respect to such Qualified Substitute Mortgage Loan, as of the date
of
substitution, the representations and warranties made pursuant to
Section 2.7
with respect to such Mortgage Loan.
(c)
For any month in which any Substituting Party substitutes one or
more
Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the
Seller shall deposit the excess (each, a "SUBSTITUTION ADJUSTMENT
AMOUNT"), if
any, by which the aggregate Scheduled
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Principal Balances of all such Deleted Mortgage Loans exceeds the
aggregate
Scheduled Principal Balances of the Qualified Substitute Mortgage
Loans
replacing such Deleted Mortgage Loans, together with (i) amounts
specified in
clause (c) of the definition of Repurchase Price and (ii) one
month's interest
on such excess amount at the applicable Net Mortgage Rate. On the
date of such
substitution, the Seller shall deliver or cause to be delivered to
the
Securities Administrator for deposit in the Distribution Account an
amount equal
to the related Substitution Adjustment Amount, if any, and the
Custodian, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans
and a Request
for Release from the Seller, which includes a written certification
of the
Seller of delivery of such amount to the Securities Administrator,
shall release
to the Substituting Party the related Mortgage File or Files. The
Custodian
shall execute and deliver such instruments of transfer or
assignment, in each
case without recourse, representation or warranty, as the
Substituting Party
shall deliver to the Trustee with respect to any Deleted Mortgage
Loan to be
released pursuant hereto.
(d)
In addition, the Trustee shall cause the Substituting Party to
obtain
at its own expense and deliver to the Trustee an Opinion of Counsel
to the
effect that such substitution (either specifically or as a class
of
transactions) shall not cause (a) any federal tax to be imposed on
the Trust
Fund, including without limitation, any federal tax imposed on
"prohibited
transactions" under Section 860F(a)(l) of the Code or on
"contributions after
the Startup Date" under Section 860G(d)(l) of the Code, or (b) any
REMIC created
hereunder to fail to qualify as a REMIC at any time that any
Certificate is
outstanding. If such Opinion of Counsel can not be delivered, then
such
substitution may only be effected at such time as the required
Opinion of
Counsel can be given.
SECTION 2.11 Granting Clause.
(a)
It is intended that the conveyance of the Mortgage Loans by the
Seller
to the Depositor and by the Depositor to the Trustee for the
benefit of the
Certificateholders, as provided for in Sections 2.1 and 2.2, be
construed as a
sale of the Mortgage Loans and other assets in the Trust Fund by
the Seller to
the Depositor and by the Depositor to the Trustee for the benefit
of the
Certificateholders. Further, it is not intended that any such
conveyances be
deemed a pledge of the Mortgage Loans by the Seller to the
Depositor to secure a
debt or other obligation of the Seller, or a pledge of the Mortgage
Loans by the
Depositor to the Trustee for the benefit of the Certificateholders
to secure a
debt or other obligation of the Depositor. However, in the event
that the
Mortgage Loans are held to be property of the Seller or the
Depositor or if for
any reason this Agreement is held or deemed to create a security
interest in the
Mortgage Loans and other assets in the Trust Fund, then it is
intended that:
(i) this Agreement shall also be deemed to be a security
agreement
within the meaning of Articles 8 and 9 of the UCC;
(ii) the conveyances provided for in Sections 2.1 and 2.2 shall
be
deemed a grant by the Seller to the Depositor, and by the Depositor
to the
Trustee for the benefit of the Certificateholders, as the case may
be, of
(1)
a security interest in all of the Seller's right and Depositor's
right,
as
applicable, (including the power to convey title thereto), title
and
interest, whether now owned or hereafter acquired, in and to (A)
the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any
related
insurance policies and
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all
other documents in the related Mortgage Files, (B) all amounts
payable
pursuant to the Mortgage Loans in accordance with the terms thereof
and (C)
any
and all general intangibles consisting of, arising from or relating
to
any
of the foregoing, and all proceeds of the conversion, voluntary
or
involuntary, of the foregoing into cash, instruments, securities or
other
property, including without limitation all Liquidation Proceeds,
all
Insurance Proceeds and all amounts from time to time held or
invested in
the
Distribution Account and the Custodial Account, whether in the form
of
cash, instruments, securities or other property and (2) an
assignment by
the
Seller to the Depositor and by the Depositor to the Trustee for
the
benefit of the Certificateholders of any security interest in any
and all
of
the Seller's and Depositor's right (including the power to convey
title
thereto), title and interest, whether now owned or hereafter
acquired, in
and
to the property described in the foregoing clauses (1)(A) through
(C);
(iii) the possession by the Trustee, the Custodian or any other
agent
of
the Trustee of Mortgage Notes, and such other items of property
as
constitute instruments, money, negotiable documents or chattel
paper shall
be
deemed to be "possession by the secured party," or possession by
a
purchaser or a person designated by such secured party, for
purposes of
perfecting the security interest pursuant to the UCC and any other
UCC
(including, without limitation, Sections 9-313, 8-313 or 8-321
thereof);
and
(iv) 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 Issuing Entity for the purpose of perfecting
such
security interest under applicable law.
(b)
The Seller and the Depositor shall, to the extent consistent with
this
Agreement, take such reasonable actions as may be necessary to
ensure that, if
this Agreement were deemed to create a security interest in the
Mortgage Loans
and the other property of the Trust Fund, such security interest
would be deemed
to be a perfected security interest of first priority under
applicable law and
will be maintained as such throughout the term of this Agreement.
Without
limiting the generality of the foregoing, the Seller and the
Depositor shall
prepare and file any UCC financing statements that are necessary to
perfect the
Depositor's and the Trustee's security interest in or lien on the
Mortgage
Loans, as evidenced by an Officer's Certificate of the Seller and
the Depositor,
and furnish a copy of each such filed financing statement to the
Trustee. The
Seller and the Depositor shall prepare and file, at the expense of
the Trust
Fund, all filings necessary to maintain the effectiveness of any
original
filings necessary under the relevant UCC to perfect the Trustee's
security
interest in or lien on the Mortgage Loans for the benefit of
the
Certificateholders, including without limitation (i) continuation
statements,
and (ii) to the extent that a Responsible Officer of the Depositor
has received
written notice of such change or transfer, such other statements as
may be
occasioned by (A) any change of name of the Seller, the Depositor
or the
Trustee, (B) any change of location of the domicile or the chief
executive
office of the Seller or the Depositor, or (C) any transfer of any
interest of
the Seller or the Depositor in any Mortgage Loan.
(c)
Neither the Seller nor the Depositor shall organize under the law
of
any jurisdiction other than the State under which each is organized
as of the
Closing Date (whether
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changing its jurisdiction of organization or organizing under an
additional
jurisdiction) without giving 30 days prior written notice of such
action to the
Servicer and the Trustee. Before effecting such change, each of the
Seller or
the Depositor proposing to change its jurisdiction of organization
shall prepare
and file in the appropriate filing office any financing statements
or other
statements necessary to continue the perfection of the interests of
its
transferees, including the Trustee for the benefit of the
Certificateholders, in
the Mortgage Loans.
(d)
Neither the Seller nor the Depositor shall take any action
inconsistent
with the sale by the Seller or the Depositor of its right, title
and interest in
and to the Mortgage Loans or Trust Fund and shall indicate or shall
cause to be
indicated in its records and records held on its behalf that
ownership of each
Mortgage Loan and the other property of the Trust Fund is held by
the Trustee
for the benefit of the Certificateholders. In addition, the Seller
and the
Depositor shall respond to any inquiries from third parties with
respect to
ownership of a Mortgage Loan or any other property of the Trust
Fund by stating
that it is not the owner of such Mortgage Loan and that ownership
of such
Mortgage Loan or other property of the Trust Fund is held by the
Trustee for the
benefit of the Certificateholders.
SECTION 2.12 Purpose.
(a)
The permitted activities of the Issuing Entity shall be limited to
the
following:
(i) to issue Certificates pursuant to the Agreement and to sell
the
Certificates;
(ii) to pay the organizational, start-up and transactional expenses
of
the
Issuing Entity;
(iii) to assign, grant, transfer, pledge, sell and convey the
Mortgage
Loans pursuant to this Agreement;
(iv) to enter into and perform its obligations under this
Agreement;
(v) to engage in those activities, including entering into
agreements
that
are necessary, suitable or convenient to accomplish the foregoing
or
are
incidental thereto or connected therewith; and
(vi) subject to compliance with this Agreement, to engage in
such
other activities as may be required in connection with the
conservation of
the
Trust Fund and the making of distributions to the
Certificateholders.
(b)
The Issuing Entity shall not engage in any activity other than
in
connection with the foregoing or other than as required or
authorized by the
terms of this Agreement. No amendment pursuant to Section 15.1
shall change the
permitted activities of the Issuing Entity.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Seller.
The
Seller hereby represents and warrants to the other parties hereto
as of
the Closing Date that:
(a)
The Seller has been duly organized and is validly existing as a
limited
liability company in good standing under the laws of Maryland, with
full power
and authority to own its assets and conduct its business as
presently being
conducted.
(b)
The Seller has the full entity power and authority to execute
and
deliver this Agreement and to perform its obligations hereunder,
and the
execution, delivery and performance of this Agreement (including
all instruments
of transfer to be delivered pursuant to this Agreement) by the
Seller and the
consummation of the transactions contemplated hereby have been duly
and validly
authorized.
(c)
This Agreement constitutes a legal, valid and binding obligation of
the
Seller, enforceable against the Seller in accordance with its
terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect
affecting the enforcement of creditors' rights in general and
except as such
enforceability may be limited by general principles of equity
(whether
considered in a proceeding at law or in equity).
(d)
None of the execution and delivery of this Agreement, the sale of
the
Mortgage Loans by the Seller, the transactions contemplated hereby,
or the
fulfillment of or compliance with the terms and conditions of this
Agreement
will conflict with or result in a breach of any of the terms, the
certificate of
incorporation, bylaws or any legal restriction or any agreement or
instrument to
which the Seller is now a party or by which it is bound, or
constitute a default
or result in the violation of any law, rule, regulation, order,
judgment or
decree to which the Seller or its property is subject, or impair
the ability of
the Issuing Entity to realize on the Mortgage Loans, or impair the
value of the
Mortgage Loans.
(e)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Seller of or compliance by the Seller with this
Agreement or
the sale of the Mortgage Loans as evidenced by the consummation of
the
transactions contemplated by this Agreement, or if required, such
consent,
approval, authorization or order has been obtained prior to the
related Closing
Date.
(f)
There is no action, suit, proceeding or investigation pending or to
its
knowledge threatened against the Seller which, either individually
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or which would draw into
question the
validity of this Agreement or the Mortgage Loans or of any action
taken or
contemplated herein, or which would be likely to impair materially
the ability
of the Seller to perform under the terms of this Agreement.
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<PAGE>
(g)
The transfer, assignment and conveyance of the Mortgage Loans by
the
Seller pursuant to this Agreement are not subject to the bulk
transfer or any
similar statutory provisions in effect in any applicable
jurisdiction.
(h)
The Seller is solvent and the sale of the Mortgage Loans will not
cause
the Seller to become insolvent. The sale of the Mortgage Loans is
not undertaken
to hinder, delay or defraud any of the Seller's creditors.
(i)
The consideration received by the Seller upon the sale of the
Mortgage
Loans under this Agreement constitutes fair consideration and
reasonably
equivalent value for the Mortgage Loans.
(j)
The Seller has determined that the disposition of the Mortgage
Loans
from Seller to Depositor pursuant to this Agreement will be
afforded sale
treatment for accounting purposes, all on a non-consolidated
basis.
(k)
The Seller has not transferred the Mortgage Loans to the Depositor
with
any intent to hinder, delay or defraud any of its creditors.
(l)
The Seller has not dealt with any broker, investment banker, agent
or
other Person that may be entitled to any commission or compensation
in the
connection with the sale of the Mortgage Loans.
(m)
Immediately prior to the transfer by the Seller to the Depositor
of
each Mortgage Loan, the Seller had good and equitable title to each
Mortgage
Loan, subject to no prior lien, claim, participation interest,
mortgage,
security interest, pledge, charge or other encumbrance or other
interest of any
nature. On and after the transfer by the Seller to the Depositor of
each
Mortgage Loan, the Depositor will have good and equitable title to
each Mortgage
Loan, subject to no prior lien, claim, participation interest,
mortgage,
security interest, pledge, charge or other encumbrance or other
interest of any
nature.
(n)
None of this Agreement, the information set forth in the Mortgage
Loan
Schedules attached hereto and the information contained in the
related
electronic data file delivered to the Master Servicer by the
Seller, nor any
statement, report or other document furnished or to be furnished by
or on behalf
of the Seller pursuant to this Agreement or in connection with the
transactions
contemplated hereby, contains any untrue statement of material fact
or omits to
state a material fact necessary to make the statements contained
therein not
misleading.
(o)
The information about the Seller under the heading "The Sponsor" in
the
Prospectus relating to the Seller, as of the respective dates of
the preliminary
prospectus supplement and the prospectus supplement, and as of the
Closing Date,
does not include an untrue statement of a material fact and does
not omit to
state a material fact, with respect to the statements made,
necessary in order
to make the statements in light of the circumstances under which
they were made
not misleading.
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<PAGE>
SECTION 3.2 Representations and Warranties of the Depositor.
The
Depositor hereby represents and warrants to the other parties
hereto as
of the Closing Date that:
(a)
The Depositor has been duly organized and is validly existing as
a
corporation in good standing under the laws of Delaware, with full
power and
authority to own its assets and conduct its business as presently
being
conducted.
(b)
The Depositor has the full corporate power and authority to execute
and
deliver this Agreement and to perform its obligations hereunder,
and the
execution, delivery and performance of this Agreement (including
all instruments
of transfer to be delivered pursuant to this Agreement) by the
Depositor and the
consummation of the transactions contemplated hereby have been duly
and validly
authorized.
(c)
This Agreement constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with its
terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect
affecting the enforcement of creditors' rights in general and
except as such
enforceability may be limited by general principles of equity
(whether
considered in a proceeding at law or in equity).
(d)
None of the execution and delivery of this Agreement, the sale of
the
Mortgage Loans by the Depositor, the transactions contemplated
hereby, or the
fulfillment of or compliance with the terms and conditions of this
Agreement
will conflict with or result in a breach of any of the terms,
certificate of
incorporation, bylaws or any legal restriction or any agreement or
instrument to
which the Depositor is now a party or by which it is bound, or
constitute a
default or result in the violation of any law, rule, regulation,
order, judgment
or decree to which the Depositor or its property is subject, or
impair the
ability of the Issuing Entity to realize on the Mortgage Loans, or
impair the
value of the Mortgage Loans.
(e)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Depositor of or compliance by the Depositor with
this
Agreement or the sale of the Mortgage Loans is evidenced by the
consummation of
the transactions contemplated by this Agreement, or if required,
such consent,
approval, authorization or order has been obtained prior to the
related Closing
Date.
(f)
There is no action, suit, proceeding or investigation pending or to
its
knowledge threatened against the Depositor which, either
individually or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Depositor, or in
any material impairment of the right or ability of the Depositor to
carry on its
business substantially as now conducted, or which would draw into
question the
validity of this Agreement or the Mortgage Loans or of any action
taken or to be
contemplated herein, or which would be likely to impair materially
the ability
of the Depositor to perform under the terms of this Agreement.
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<PAGE>
(g)
The transfer, assignment and conveyance of the Mortgage Loans by
the
Depositor pursuant to this Agreement are not subject to the bulk
transfer or any
similar statutory provisions in effect in any applicable
jurisdiction.
(h)
The Depositor is solvent and the sale of the Mortgage Loans will
not
cause the Depositor to become insolvent. The sale of the Mortgage
Loans is not
undertaken to hinder, delay or defraud any of the Depositor's
creditors.
(i)
The consideration received by the Depositor upon the sale of
the
Mortgage Loans under this Agreement constitutes fair consideration
and
reasonably equivalent value for the Mortgage Loans.
(j)
The Depositor has determined that the disposition of the Mortgage
Loans
from Depositor to the Issuing Entity pursuant to this Agreement
will be afforded
sale treatment for accounting purposes, all on a non-consolidated
basis.
(k)
The Depositor has not transferred the Mortgage Loans to the Trust
Fund
with any intent to hinder, delay or defraud any of its
creditors.
(l)
The Depositor has not dealt with any broker, investment banker,
agent
or other Person that may be entitled to any commission or
compensation in the
connection with the sale of the Mortgage Loans.
(m)
Immediately prior to the transfer by the Depositor to the Trust
Fund of
each Mortgage Loan, the Depositor had good and equitable title to
each Mortgage
Loan (insofar as such title was conveyed to it by the Seller),
subject to no
prior lien, claim, participation interest, mortgage, security
interest, pledge,
charge or other encumbrance or other interest of any nature. On and
after the
transfer by the Depositor to the Trust Fund of each Mortgage Loan,
the Issuing
Entity will have good and equitable title to each Mortgage Loan
(insofar as such
title was conveyed to it by the Seller) subject to no prior lien,
claim,
participation interest, mortgage, security interest, pledge, charge
or other
encumbrance or other interest of any nature.
SECTION 3.3 Representations and Warranties of the Servicer.
The
Servicer hereby represents and warrants to the other parties hereto
as
of the Closing Date that:
(a)
The Servicer is a national banking association, duly organized
and
validly existing in good standing under the laws of the United
States of
America, with full power and authority to own its assets and
conduct its
business as presently being conducted.
(b)
The Servicer has the full corporate power and authority to execute
and
deliver this Agreement and to perform its obligations hereunder,
and the
execution, delivery and performance of this Agreement (including
all instruments
of transfer to be delivered pursuant to this Agreement) by the
Servicer and the
consummation of the transactions contemplated hereby have been duly
and validly
authorized.
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<PAGE>
(c)
This Agreement constitutes a legal, valid and binding obligation of
the
Servicer, enforceable against the Servicer in accordance with its
terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect
affecting the enforcement of creditors' rights in general and
except as such
enforceability may be limited by general principles of equity
(whether
considered in a proceeding at law or in equity).
(d)
None of the execution and delivery of this Agreement, the
transactions
contemplated hereby, or the fulfillment of or compliance with the
terms and
conditions of this Agreement will conflict with or result in a
breach of any of
the terms, articles of incorporation, or by-laws or any legal
restriction or any
agreement or instrument to which the Servicer is now a party or by
which it is
bound, or constitute a default or result in the violation of any
law, rule,
regulation, order, judgment or decree to which the Servicer or its
property is
subject, or impair the ability of the Issuing Entity to realize on
the Mortgage
Loans, or impair the value of the Mortgage Loans.
(e)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Servicer of or compliance by the Servicer with
this Agreement
as evidenced by the consummation of the transactions contemplated
by this
Agreement, or if required, such consent, approval, authorization or
order has
been obtained prior to the related Closing Date.
(f)
There is no action, suit, proceeding or investigation pending or to
its
knowledge threatened against the Servicer which, either
individually or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Servicer, or in any
material impairment of the right or ability of the Servicer to
carry on its
business substantially as now conducted, or which would draw into
question the
validity of this Agreement or the Mortgage Loans or of any action
taken or to be
contemplated herein, or which would be likely to impair materially
the ability
of the Servicer to perform under the terms of this Agreement.
(g)
The Servicer is an approved servicer of conventional
residential
mortgage loans for Fannie Mae and Freddie Mac, with the facilities,
procedures,
and experienced personnel necessary for the sound servicing of
mortgage loans of
the same type as the Mortgage Loans. The Servicer is in good
standing to service
mortgage loans for Fannie Mae and Freddie Mac, and no event has
occurred,
including but not limited to a change in insurance coverage, which
would make
the Servicer unable to comply with Fannie Mae or Freddie Mac
eligibility
requirements.
(h)
The Servicer acknowledges and agrees that the Servicing Fee
represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Servicer, for accounting and
tax purposes,
as compensation for the servicing and administration of the
Mortgage Loans
pursuant to this Agreement.
(i)
The consummation of the transactions contemplated by this Agreement
are
in the ordinary course of business of the Servicer, which is in the
business of
servicing loans.
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<PAGE>
(j)
There has been no material adverse change in the business,
operations,
financial condition or assets of the Servicer since the date of the
Servicer's
most recent financial statements.
(k) The Servicer is not
aware and has not received notice that any default,
early amortization or other performance triggering event has
occurred to any
other securitization due to any act or failure to act of the
Servicer.
(l)
The Servicer has not been terminated as servicer in a
residential
mortgage loan securitization, either due to a servicing default or
to
application of a servicing performance test or trigger.
(m)
No material noncompliance with the applicable Servicing Criteria
with
respect to other securitizations of residential mortgage loans
involving the
Servicer as servicer has been disclosed or reported by the
Servicer.
(n)
No material changes to the Servicer's policies or procedures
with
respect to the servicing function it will perform under this
Agreement for
mortgage loans of a type similar to the Mortgage Loans have
occurred during the
three-year period immediately preceding the date hereof.
(o)
There are no aspects of the Servicer's financial condition that
could
have a material adverse effect on the performance by the Servicer
of its
servicing obligations under this Agreement.
(p)
There are no material legal or governmental proceedings pending
(or
known to be contemplated) against the Servicer.
(q)
There are no affiliations, relationships or transactions relating
the
Servicer with respect to any securitization transaction and any
party thereto
identified by the Depositor of a type described in Item 1119 of
Regulation AB.
SECTION 3.4 Representations and Warranties of the Master Servicer
and
Securities Administrator.
[ -
] hereby represents and warrants to the other parties hereto as of
the
Closing Date that:
(a)
It is a national banking association, duly organized and
validly
existing in good standing under the laws of the United States of
America, with
full power and authority to own its assets and conduct its business
as presently
being conducted.
(b)
It has the full corporate power and authority to execute and
deliver
this Agreement and to perform its obligations hereunder, and the
execution,
delivery and performance of this Agreement (including all
instruments of
transfer to be delivered pursuant to this Agreement) by the Master
Servicer or
the Securities Administrator and the consummation of the
transactions
contemplated hereby have been duly and validly authorized.
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<PAGE>
(c)
This Agreement constitutes a legal, valid and binding obligation of
the
Master Servicer and Securities Administrator, enforceable against
each in
accordance with its terms, except as enforceability may be limited
by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or
hereafter in effect affecting the enforcement of creditors' rights
in general
and except as such enforceability may be limited by general
principles of equity
(whether considered in a proceeding at law or in equity).
(d)
None of the execution and delivery of this Agreement, the
transactions
contemplated hereby, or the fulfillment of or compliance with the
terms and
conditions of this Agreement will conflict with or result in a
breach of any of
the terms, articles of incorporation or by-laws or any legal
restriction or any
agreement or instrument to which the Master Servicer or the
Securities
Administrator are now a party or by which it is bound, or
constitute a default
or result in the violation of any law, rule, regulation, order,
judgment or
decree to which the Master Servicer or the Securities Administrator
or their
respective properties are subject, or impair the ability of the
Issuing Entity
to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans.
(e)
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 and the Securities Administrator
of or
compliance by the Master Servicer and Securities Administrator with
this
Agreement as evidenced by the consummation of the transactions
contemplated by
this Agreement, or if required, such consent, approval,
authorization or order
has been obtained prior to the related Closing Date.
(f)
There is no action, suit, proceeding or investigation pending or to
its
knowledge threatened against the Master Servicer or the Securities
Administrator
which, either individually or in the aggregate, may result in any
material
adverse change in the business, operations, financial condition,
properties or
assets of the Master Servicer or the Securities Administrator, or
in any
material impairment of the right or ability of the Master Servicer
or the
Securities Administrator to carry on its business substantially as
now
conducted, or which would draw into question the validity of this
Agreement or
the Mortgage Loans or of any action taken or to be contemplated
herein, or which
would be likely to impair materially the ability of the Master
Servicer or the
Securities Administrator to perform under the terms of this
Agreement.
(g)
At such time as the Master Servicer is the successor servicer, it
is an
approved servicer of conventional residential mortgage loans for
Fannie Mae and
Freddie Mac, with the facilities, procedures, and experienced
personnel
necessary for the sound servicing of mortgage loans of the same
type as the
Mortgage Loans. At such time the Master Servicer is the successor
servicer, the
Master Servicer or an Affiliate of the Master Servicer is a
HUD-approved
mortgagee pursuant to Section 203 of the National Housing Act and
is in good
standing to service mortgage loans for Fannie Mae and Freddie Mac,
and no event
has occurred, including but not limited to a change in insurance
coverage, which
would make it or any of its Affiliates unable to comply with Fannie
Mae or
Freddie Mac eligibility requirements or which would require
notification to
either Fannie Mae or Freddie Mac.
(h)
The consummation of the transactions contemplated by this Agreement
are
in the ordinary course of business of the Master Servicer and
Securities
Administrator.
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<PAGE>
(i)
It has not been terminated as master servicer or securities
administrator in a residential mortgage loan securitization, either
due to a
master servicing default or other inability to perform the required
services.
(j)
No material noncompliance with the applicable Servicing Criteria
with
respect to other securitizations of residential mortgage loans
involving the
Master Servicer or Securities Administrator as servicer has been
disclosed or
reported by the Master Servicer.
(k)
No material changes to the Master Servicer's policies or
procedures
with respect to the master servicing function it will perform under
this
Agreement for mortgage loans of a type similar to the Mortgage
Loans have
occurred during the three-year period immediately preceding the
date hereof.
(l)
There are no aspects of the Master Servicer's financial condition
that
could have a material adverse effect on the performance by it of
its master
servicing obligations under this Agreement.
(m)
There are no material legal or governmental proceedings pending
(or
known to be contemplated) against the Master Servicer.
(n)
There are no affiliations, relationships or transactions relating
the
Master Servicer with respect to this transaction and any party
thereto
identified by the Depositor of a type described in Item 1119 of
Regulation AB.
ARTICLE IV
SERVICING OF THE MORTGAGE LOANS
SECTION 4.1 General.
(a)
The Servicer shall service and administer the Mortgage Loans on
behalf
of the Issuing Entity in accordance with this Agreement and shall
have full
power and authority, acting alone or through one or more
subservicers, to do any
and all things in connection with such servicing and administration
that the
Servicer may deem necessary or desirable, consistent with the terms
of this
Agreement and with Accepted Servicing Practices.
(b)
Subject to the terms of this Agreement, the Servicer may waive,
modify
or vary any term of any Mortgage Loan or consent to the
postponement of strict
compliance with any such term or in any manner grant indulgence to
any Mortgagor
if in the Servicer's reasonable and prudent determination,
consistent with
Accepted Servicing Practices, such waiver, modification,
postponement or
indulgence is not materially adverse to the Issuing Entity or
the
Certificateholders; provided, however, the Servicer shall not make
any future
advances of funds to the Mortgagor with respect to a Mortgage Loan
or extend the
Due Dates for Scheduled Monthly Payments on a Mortgage Note past
the Due Period
with respect to the Maturity Date. Further, the Servicer shall not,
unless the
Mortgagor is in default with respect to the Mortgage Loan or such
default is, in
the judgment of the Servicer, reasonably foreseeable, permit any
modification
with respect to any Mortgage Loan that would (i) change the
Mortgage Rate, defer
or forgive the payment thereof of any principal or interest
payments, reduce the
Scheduled Principal Balance (except for actual payments of
principal) or extend
the final maturity date with
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respect to such Mortgage Loan, (ii) affect adversely the status of
any REMIC as
a REMIC or (iii) cause any REMIC to be subject to a tax on
"prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Further, the
Servicer shall not permit any modification with respect to any
Mortgage Loan
that would both (x) effect an exchange or reissuance of such
Mortgage Loan under
Section 1.860G 2(b) of the Treasury regulations and (y) cause any
REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC
under the Code
or the imposition of any tax on "prohibited transactions" or
"contributions"
after the Startup Day under the REMIC Provisions. In the event of
any
modification that permits the deferral of interest or principal
payments on any
Mortgage Loan, the Servicer shall, on the Business Day immediately
preceding the
Servicer Remittance Date in any month in which any such principal
or interest
payment has been deferred, deposit as a Monthly Advance in the
Custodial Account
from its own funds the difference between (i) such month's
principal and one
month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal
balance of such Mortgage Loan and (ii) the amount paid by the
Mortgagor. The
Servicer shall be entitled to reimbursement for such Advances to
the same extent
as for all other Monthly Advances. Without limiting the generality
of the
foregoing, the Servicer shall continue, and is hereby authorized
and empowered,
to execute and deliver on behalf of itself and the Issuing Entity,
all
instruments of satisfaction or cancellation, or of partial or full
release,
discharge and all other comparable instruments, with respect to the
Mortgage
Loans and with respect to the Mortgaged Properties. If reasonably
required by
the Servicer, the Trustee shall furnish the Servicer with any
powers of attorney
(which are acceptable to the Trustee) and other documents necessary
or
appropriate to enable the Servicer to carry out its servicing and
administrative
duties under this Agreement.
(c)
Subject to Section 4.3 the Servicer may arrange for the
subservicing of
any Mortgage Loan it services by a Servicer pursuant to a
subservicing
agreement; provided, however, that such subservicing arrangement
and the terms
of the related subservicing agreement must provide for the
servicing of such
Mortgage Loan in a manner consistent with the servicing
arrangements
contemplated hereunder. The Servicer shall be solely liable for all
fees owed to
the Subservicer under any subservicing agreement, regardless of
whether the
Servicer's compensation hereunder is adequate to pay such fees.
Notwithstanding
the provisions of any subservicing agreement, any of the provisions
of this
Agreement relating to agreements or arrangements between the
Servicer and a
Subservicer or reference to actions taken through a Subservicer or
otherwise,
the Servicer shall remain obligated and liable to the Issuing
Entity for the
servicing and administration of the Mortgage Loans it services in
accordance
with the provisions of this Agreement without diminution of such
obligation or
liability by virtue of such subservicing agreements or arrangements
or by virtue
of indemnification from the Servicer and to the same extent and
under the same
terms and conditions as if the Servicer alone were servicing and
administering
those Mortgage Loans. All actions of each Subservicer performed
pursuant to the
related subservicing agreement shall be performed as agent of the
Servicer with
the same force and effect as if performed directly by the Servicer.
For purposes
of this Agreement, the Servicer shall be deemed to have received
any
collections, recoveries or payments with respect to the Mortgage
Loans it
services that are received by a subservicer regardless of whether
such payments
are remitted by the Subservicer to the Servicer. Any subservicing
agreement
entered into by the Servicer shall provide that it may be assumed
or terminated
by the Master Servicer, if the Master Servicer has assumed the
duties of the
Servicer, or by any successor servicer, at the Master Servicer's or
successor
servicer's option, as applicable, without cost or obligation to the
assuming or
terminating party or its assigns. Any
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subservicing agreement, and any other transactions or services
relating to the
Mortgage Loans involving a Subservicer, shall be deemed to be
between the
Servicer and such subservicer alone, and the Master Servicer shall
not be deemed
a party thereto and shall have no claims or rights of action
against, rights,
obligations, duties or liabilities to or with respect to the
Subservicer or its
officers, directors or employees.
SECTION 4.2 Use of Subservicers and Subcontractors.
The
Servicer shall not hire or otherwise utilize the services of
any
Subservicer to fulfill any of the obligations of the Servicer as
servicer under
this Agreement unless the Servicer complies with the provisions of
Section
4.2(a). The Servicer shall not hire or otherwise utilize the
services of any
Subcontractor, and shall not permit any Subservicer to hire or
otherwise utilize
the services of any Subcontractor, to fulfill any of the
obligations of the
Servicer as servicer under this Agreement unless the Servicer
complies with the
provisions of Section 4.2(a) of this Section.
(a)
It shall not be necessary for the Servicer to seek the consent of
the
Depositor or the Master Servicer to the utilization of any
Subservicer. The
Servicer shall cause any Subservicer used by the Servicer (or by
any
Subservicer) for the benefit of the Depositor to comply with the
provisions of
this Section, with Item 1108 of Regulation AB, and with Sections
5.1, 5.2, 5.9
and 6.7 of this Agreement to the same extent as if such Subservicer
were the
Servicer, and to provide the information required with respect to
such
Subservicer under Section 6.7(a) of this Agreement. The Servicer
shall be
responsible for obtaining from each Subservicer and delivering to
the Depositor
and the Master Servicer any servicer Compliance Statement required
to be
delivered by such Subservicer under Section 5.2, any Assessment of
Compliance
and Attestation Report required to be delivered by such Subservicer
under
Section 5.1, and any certification required to be delivered to the
Person that
will be responsible for signing the Back-Up SOX Certification under
Section 5.3
as and when required to be delivered.
(b)
It shall not be necessary for the Servicer to seek the consent of
the
Depositor or Master Servicer to the utilization of any
Subcontractor. The
Servicer shall promptly upon request provide to the Master Servicer
and the
Depositor (or any designee of the Depositor, such as an
administrator) a written
description (in form and substance satisfactory to the Depositor
and the Master
Servicer) of the role and function of each Subcontractor utilized
by the
Servicer or any Subservicer, specifying (i) the identity of each
such
Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB, and
(iii) which elements of the Servicing Criteria will be addressed in
Assessments
of Compliance provided by each Subcontractor identified pursuant to
this Section
4.2(a).
(c)
As a condition to the utilization of any Subcontractor determined
to be
"participating in the servicing function" within the meaning of
Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used
by the
Servicer (or by any Subservicer) for the benefit of the Depositor
to comply with
the provisions of Sections 5.1 and 5.9 of this Agreement to the
same extent as
if such Subcontractor were the Servicer. The Servicer shall be
responsible for
obtaining from each Subcontractor and delivering to the Depositor
any assessment
of
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compliance and attestation and any other certifications required to
be delivered
by such Subcontractor under Section 5.1, in each case as and when
required to be
delivered.
SECTION 4.3 Collection of Mortgage Loan Payments.
(a)
Continuously from the date hereof until the principal and interest
on
all Mortgage Loans are paid in full or the Mortgage Loans have been
fully
liquidated (with respect to Mortgage Loans that remain subject to
this
Agreement), the Servicer shall proceed diligently to collect all
payments due
under each of the Mortgage Loans when the same shall become due and
payable, and
shall to the extent such procedures shall be consistent with this
Agreement and
the terms and provisions of any applicable mortgage insurance
policy, follow
such collection procedures as it follows with respect to mortgage
loans
comparable to the Mortgage Loans and held for its own account.
(b)
If any Mortgage Loan is more than 60 days delinquent, the
Servicer
immediately shall inspect the Mortgaged Property and shall conduct
subsequent
inspections in accordance with Accepted Servicing Practices or as
may be
required by any primary mortgage guaranty insurer. The Servicer
shall keep a
written report of each such inspection.
SECTION 4.4 Realization Upon Defaulted Mortgage Loans.
(a)
The Servicer shall use efforts consistent with Accepted
Servicing
Practices to foreclose upon or otherwise comparably convert the
ownership of
such Mortgage Properties as come in to and continue in default and
as to which
no satisfactory arrangements can be made for collection of
delinquent payments
pursuant to Section 4.3. The Servicer shall realize upon defaulted
Mortgage
Loans in such manner as will maximize the receipt of principal and
interest by
the Issuing Entity, taking into account, among other things, the
timing of
foreclosure proceedings, provided that the Servicer is expressly
prohibited from
selling Mortgage Loans as an alternative to foreclosure or
deed-in-lieu thereof.
Foreclosure or comparable proceedings shall be initiated within 120
days of
default for Mortgaged Properties for which no satisfactory
arrangements can be
made for collection of delinquent payments unless prevented by
statutory
limitations or states whose insolvency laws prohibit such actions
within such
timeframe. The Servicer shall from its own funds make all necessary
and proper
Servicing Advances; provided, however, that the Servicer shall not
be required
to expend its own funds in connection with any foreclosure or
towards the
restoration or preservation of any Mortgaged Property, unless it
shall determine
(i) that such preservation, restoration and/or foreclosure will
increase the net
proceeds of liquidation of the Mortgage Loan to the Issuing Entity
after
reimbursement for such expenses and (ii) that such expenses will be
recoverable
by it either through Liquidation Proceeds (respecting which it
shall have
priority for purposes of withdrawals from the Custodial Account
pursuant to
Section 4.6) or through Insurance Proceeds (respecting which it
shall have
similar priority).
(b)
If the Servicer has knowledge that a Mortgaged Property that
the
Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of
foreclosure is located within a one-mile radius of any site with
environmental
or hazardous waste risks known to the Servicer, the Servicer will,
prior to
acquiring the Mortgaged Property, consider such risks and only take
action
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in accordance with Accepted Servicing Practices. The Servicer shall
not have any
obligation to purchase any Mortgaged Property at any foreclosure
sale.
SECTION 4.5 Establishment of and Deposits to Custodial Account.
(a)
The Servicer shall establish and maintain one or more accounts
(the
"CUSTODIAL ACCOUNT"), designated "Custodial Account of [Name of
Servicer], as
Servicer f/b/o Luminent Mortgage Trust 200_-_." The Custodial
Account shall be
established as an Eligible Account, and any funds therein shall at
all times be
insured to the fullest extent allowed by applicable law. All funds
required to
be deposited in the Custodial Account shall be held in trust for
the Trustee
until withdrawn in accordance with Section 4.6. The Servicer shall
segregate and
hold all funds collected and received pursuant to a Mortgage Loan
separate and
apart from any of its own funds and general assets. Within five
Business Days
following any request of the Master Servicer, the Servicer shall
provide the
Master Servicer with written confirmation of the existence of such
Custodial
Account.
(b)
Funds on deposit in the Custodial Account may be invested at
the
direction of the Servicer, but only in Eligible Investments that
mature not
later than the Business Day prior to the Servicer Remittance Date
next following
the date of such investment. All income and gain realized from any
such
investment shall be for the benefit of the Servicer and shall be
subject to its
withdrawal or order from time to time. The amount of any losses
incurred in
respect of any such investments shall be deposited in the Custodial
Account by
the Servicer out of its own funds immediately as such losses are
realized.
(c)
The Servicer shall deposit in the Custodial Account within two
Business
Days of Servicer's receipt, and retain therein, the following
collections
received by the Servicer and payments made by the Servicer after
the Cut-off
Date (other than payments of principal and interest due on or
before the Cut-off
Date), or prior to the Cut-off Date but allocable to a period
subsequent
thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments (including Prepayment Premiums
paid by
any
Mortgagor or by the Servicer pursuant to Section 4.18 of this
Agreement);
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds (net of Liquidation Expenses);
(iv) all Insurance Proceeds, including amounts required to be
deposited pursuant to Section 4.11 (other than proceeds to be held
in the
Escrow Account and applied to the restoration or repair of the
Mortgaged
Property or released to a Mortgagor in accordance with Section 4.14
and
Accepted Servicing Practices) and Section 4.12;
(v) all Condemnation Proceeds which are not applied to the
restoration
or
repair of the Mortgaged Property or released to the Mortgagor
in
accordance with Section 4.15 and Accepted Servicing Practices;
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(vi) any amounts required to be deposited in the Custodial
Account
pursuant to Sections 2.1(b) or 4.21;
(vii) any amounts payable in connection with the repurchase of
any
Mortgage Loan and all amounts required to be deposited by the
Servicer in
connection with a shortfall in principal amount of any Qualified
Substitute
Mortgage Loan pursuant to Section 2.9;
(viii) with respect to each Principal Prepayment and any
Prepayment
Interest Shortfall, the Compensating Interest Payment (to be paid
by the
Servicer out of its own funds);
(ix) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section
4.15;
(x) any amounts required to be deposited by the Servicer pursuant
to
Section 4.12 in connection with the deductible clause in any
blanket hazard
insurance policy; and
(xi) any other amounts required to be deposited into the
Custodial
Account hereunder.
(d)
No later than the Servicer Remittance Date, the Servicer shall
deposit
in the Custodial Account from its own funds or from amounts held
for future
remittance an amount equal to all Monthly Advances with respect to
the related
Determination Date (with interest adjusted to the Mortgage Loan
Remittance
Rate). Any amounts held for future remittance and so used shall be
replaced by
the Servicer by deposit in the Custodial Account on or before the
next Servicer
Remittance Date. The Servicer's obligation to make such Monthly
Advances as to
any Mortgage Loan will continue through the later of (i) the last
Scheduled
Monthly Payment due prior to the payment in full of the Mortgage
Loan, or (ii)
the last Servicer Remittance Date prior to the Servicer Remittance
Date for the
remittance of all Liquidation Proceeds and other payments or
recoveries
(including Insurance Proceeds, Condemnation Proceeds and REO
Disposition
Proceeds) with respect to the Mortgage Loan; provided, however,
that any such
obligation under this Section 4.5(d) shall cease with respect to a
Mortgage Loan
if the Servicer determines, in its reasonable good faith judgment,
that Monthly
Advances with respect to such Mortgage Loan are Non-recoverable
Advances. In the
event that the Servicer determines that any such Monthly Advances
are
Non-recoverable Advances, the Servicer shall provide the Master
Servicer and the
Securities Administrator with a certificate signed a Responsible
Officer of the
Servicer evidencing such determination and setting forth the basis
for such
determination.
(e)
The foregoing requirements for deposit into the Custodial Account
shall
be exclusive, it being understood and agreed that, without limiting
the
generality of the foregoing, payments in the nature of late payment
charges,
assumption fees and other ancillary income (other than Prepayment
Premiums and
Non-Mortgagor Prepayment Premium Payment Amounts), to the extent
permitted by
Section 4.3, need not be deposited by the Servicer into the
Custodial Account.
In the event that the Servicer shall remit any amount not required
to be
remitted and not otherwise subject to withdrawal pursuant to
Section 4.6, it may
at any time withdraw such amount from the Custodian Account, any
provision
herein to the contrary
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notwithstanding. In no event shall the Securities Administrator,
the Master
Servicer or the Trustee incur liability for withdrawals from the
Custodian
Account at the direction of the Servicer.
SECTION 4.6 Permitted Withdrawals From Custodial Account.
The
Servicer may, from time to time, withdraw funds from the
Custodial
Account for the following purposes:
(a)
to make remittances to the Securities Administrator in the amounts
and
in the manner provided for in Section 4.24;
(b)
to reimburse itself for unreimbursed Monthly Advances, the
Servicer's
right to reimburse itself pursuant to this subclause (b) being
limited to
amounts received on the related Mortgage Loan which represent late
payments of
principal and/or interest respecting which any such advance was
made, it being
understood that in the case of any such reimbursement the
Servicer's right
thereto shall be prior to the rights of the Issuing Entity, except
that, where
the Servicer is required to repurchase a Mortgage Loan pursuant to
Section 4.21,
the Servicer's right to such reimbursement shall be subsequent to
the payment to
the Issuing Entity of the Repurchase Price pursuant to such
Sections and all
other amounts required to be paid to the Issuing Entity with
respect to such
Mortgage Loan;
(c)
to reimburse itself for unreimbursed Servicing Advances and for
any
unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this
subclause (c) with respect to any Mortgage Loan being limited to
related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other
amounts as may be collected by the Servicer from the Mortgagor or
otherwise
relating to the Mortgage Loan, it being understood that in the case
of any such
reimbursement the Servicer's right thereto shall be prior to the
rights of the
Issuing Entity, except that where the Servicer is required to
repurchase a
Mortgage Loan pursuant to Section 4.21, in which case the
Servicer's right to
such reimbursement shall be subsequent to the payment to the
Issuing Entity of
the Repurchase Price pursuant to such Sections and all other
amounts required to
be paid to the Issuing Entity with respect to such Mortgage
Loan;
(d)
to pay itself interest earned on funds deposited in the
Custodial
Account to the extent such amount was previously credited;
(e)
to pay any amount required to be paid pursuant to Section 4.15
related
to any REO Property, it being understood that, in the case of any
such
expenditure or withdrawal related to a particular REO Property, the
amount of
such expenditure or withdrawal from the Custodial Account shall be
limited to
amounts on deposit in the Custodial Account with respect to the
related REO
Property;
(f)
to reimburse itself for any Non-recoverable Advances after
liquidation
of the Mortgaged Property not otherwise reimbursed above;
(g)
to remove funds inadvertently placed in the Custodial Account by
the
Servicer;
(h)
to reimburse itself any Prepayment Interest Excess; and
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(i)
to clear and terminate the Custodial Account upon the termination
of
this Agreement.
The
Servicer shall keep and maintain separate accounting, on a
Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from
the Custodial Account.
SECTION 4.7 Establishment of and Deposits to Escrow Account.
(a)
The Servicer shall establish and maintain one or more accounts
(an
"ESCROW ACCOUNT"), designated "Escrow Account of [Name of
Servicer], as Servicer
f/b/o Luminent Mortgage Trust 200_-_ and various Mortgagors." Each
Escrow
Account shall be established as an Eligible Account, and any funds
therein shall
at all times be insured to the fullest extent allowed by applicable
law. The
Servicer shall segregate and hold all funds collected and received
pursuant to a
Mortgage Loan separate and apart from any of its own funds and
general assets.
Within five Business Days following any request of the Master
Servicer, the
Servicer shall provide the Master Servicer with written
confirmation of the
existence of such Custodial Account.
(b)
To the extent permitted by law, funds on deposit in the Escrow
Account
may be invested at the direction of the Servicer. The Servicer
shall be entitled
to retain any interest paid on funds deposited in the Escrow
Account, other than
interest on escrowed funds required by law to be paid to any
Mortgagor. To the
extent required by law, the Servicer shall pay interest on escrowed
funds to a
Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or
that interest paid thereon is insufficient for such purposes.
(c)
The Servicer shall deposit in the Escrow Account within two
Business
Days of Servicer's receipt, and retain therein, the following
collections
received by the Servicer:
(i) all Escrow Payments collected on account of the Mortgage
Loans,
for
the purpose of effecting timely payment of any such items as
required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation
Proceeds which are to be applied to the restoration or repair of
any
Mortgaged Property.
(d)
The Servicer shall make withdrawals from the Escrow Account only
to
effect such payments as are required under this Agreement, as set
forth in
Section 4.8.
SECTION 4.8 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer
only:
(a)
to effect timely payments of ground rents, taxes, assessments,
water
rates, condominium charges, fire and hazard insurance premiums or
other items
constituting Escrow Payments for the related Mortgage;
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(b)
to reimburse the Servicer for any Servicing Advances made by
the
Servicer pursuant to Section 4.9 with respect to a related Mortgage
Loan, but
only from amounts received on the related Mortgage Loan which
represent late
collections of Escrow Payments thereunder;
(c)
to refund to any Mortgagor any funds found to be in excess of
the
amounts required under the terms of the related Mortgage Loan;
(d)
for transfer to the Custodial Account for application to reduce
the
principal balance of the Mortgage Loan in accordance with the terms
of the
related Mortgage and Mortgage Note;
(e)
for application to the restoration or repair of the Mortgaged
Property
in accordance with the procedures outlined in Section 4.15;
(f)
to pay to the Servicer, or any Mortgagor to the extent required by
law,
any interest paid on the funds deposited in the Escrow Account;
(g)
to remove funds inadvertently placed in the Escrow Account by
the
Servicer; or
(h)
to clear and terminate the Escrow Account on the termination of
this
Agreement.
SECTION 4.9 Payment of Taxes, Insurance and Other Charges.
With
respect to each Mortgage Loan, the Servicer shall maintain
accurate
records reflecting the status of ground rents, taxes, assessments,
water rates,
sewer rents, and other charges which are or may become a lien upon
the Mortgaged
Property and the status of fire and hazard insurance coverage and
shall obtain,
from time to time, all bills for the payment of such charges
(including renewal
premiums) and shall effect payment thereof prior to the applicable
penalty or
termination date, employing for such purpose deposits of the
Mortgagor in the
Escrow Account which shall have been estimated and accumulated by
the Servicer
in amounts sufficient for such purposes, as allowed under the terms
of the
Mortgage. The Servicer assumes full responsibility for the timely
payment of all
such bills and shall effect timely payment of all such charges
irrespective of
each Mortgagor's faithful performance in the payment of same of the
making of
the Escrow Payments, and the Servicer shall make advances from its
own funds to
effect such payments, which advances shall constitute Servicing
Advances
hereunder; provided, however, that the Servicer shall be required
to so advance
only to the extent that the Servicer, in its reasonable good faith
judgment,
believes the Servicing Advance to be recoverable from Insurance
Proceeds or
Liquidation Proceeds or otherwise. To the extent that a Mortgage
does not
provide for Escrow Payments, the Servicer shall use its reasonable
efforts in
accordance with Accepted Servicing Practices to determine whether
any such
payments are made by the Mortgagor at the time they first become
due. The
Servicer shall make Servicing Advances from its own funds to effect
such
delinquent payments within such time period as will avoid the loss
of the
related Mortgaged Property by foreclosure of a tax or other lien.
The costs
incurred by the Servicer, if any, in effecting the timely payments
of taxes and
assessments on the Mortgaged Properties and related insurance
premiums shall not
be added to the Scheduled Principal Balances of the related
Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
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SECTION 4.10 Transfer of Custodial Account or Escrow Account.
The
Servicer may transfer the Custodial Account or the Escrow Account
to a
different Eligible Account from time to time; provided, however,
that the
Servicer shall give notice to the Master Servicer of any proposed
change of the
location of either Account not later than ten Business Days prior
to any change
thereof.
SECTION 4.11 Mortgaged Property Insurance.
(a)
The Servicer shall cause to be maintained for each Mortgage Loan
hazard
insurance such that all buildings upon the Mortgaged Property are
insured by a
generally acceptable insurer acceptable under Accepted Servicing
Practices
against loss by fire, hazards of extended coverage and such other
hazards as are
customary or required by law in the area where the Mortgaged
Property is
located, in an amount which is at least equal to the lesser of (a)
100% of the
maximum insurable value of the improvements securing such Mortgage
Loan and (b)
the greater of (i) the outstanding principal balance of the
Mortgage Loan and
(ii) an amount such that the proceeds thereof shall be sufficient
to prevent the
Mortgagor or the loss payee from becoming a co-insurer. In the
event a hazard
insurance policy shall be in danger of being terminated, or in the
event the
insurer shall cease to be acceptable under Accepted Servicing
Practices, the
Servicer shall notify the related Mortgagor, and shall use its
commercially
reasonable best efforts, as permitted by applicable law, to obtain
from another
qualified insurer a replacement hazard insurance policy
substantially and
materially similar in all respects to the original policy. In no
event, however,
shall a Mortgage Loan be without a hazard insurance policy at any
time, subject
only to Section 4.12.
(b)
If the related Mortgaged Property is located in an area identified
by
the Flood Emergency Management Agency as having special flood
hazards (and such
flood insurance has been made available), the Servicer will cause
to be
maintained a flood insurance policy meeting the requirements of the
current
guidelines of the Federal Insurance Administration in effect with a
generally
acceptable insurance carrier acceptable under Accepted Servicing
Practices in an
amount representing coverage equal to the lesser of (a) the minimum
amount
required, under the terms of coverage, to compensate for any damage
or loss on a
replacement cost basis (or the unpaid balance of the mortgage if
replacement
cost coverage is not available for the type of building insured)
and (b) the
maximum amount of insurance which is available under the Flood
Disaster
Protection Act of 1973, as amended. If at any time during the term
of the
Mortgage Loan, the Servicer determines in accordance with
applicable law and
under Accepted Servicing Practices that a Mortgaged Property is
located in a
special flood hazard area and is not covered by flood insurance or
is covered in
an amount less than the amount required by the Flood Disaster
Protection Act of
1973, as amended, the Servicer shall notify the related Mortgagor
to obtain such
flood insurance coverage, and if said Mortgagor fails to obtain the
required
flood insurance coverage within 45 days after such notification,
the Servicer
shall immediately force place the required flood insurance on the
Mortgagor's
behalf. Any out-of-pocket expenses or advance made by the Servicer
on such
force-placed flood insurance coverage shall be deemed a Servicing
Advance.
(c)
If a Mortgage is secured by a unit in a condominium project,
the
Servicer shall verify that the coverage required of the owner's
association,
including hazard, flood, liability,
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and fidelity coverage, is being maintained in accordance with
Accepted Servicing
Practices, and secure from the owner's association its agreement to
notify the
Servicer promptly of any change in the insurance coverage or of any
condemnation
or casualty loss that may have a material effect on the value of
the Mortgaged
Property as security.
(d)
In the event that the Servicer shall determine that the
Mortgaged
Property should be insured against loss or damage by hazards and
risks not
covered by the insurance required to be maintained by the Mortgagor
pursuant to
the terms of the Mortgage, the Servicer shall communicate and
consult with the
Mortgagor with respect to the need for such insurance and bring to
the
Mortgagor's attention the desirability of protection of the
Mortgaged Property.
(e)
All policies required hereunder shall name the Servicer as loss
payee
and shall be endorsed with standard mortgagee clauses, without
contribution,
which shall provide for at least 30 days prior written notice of
any
cancellation, reduction in amount or material change in
coverage.
(f)
The Servicer shall not interfere with the Mortgagor's freedom of
choice
in selecting either an insurance carrier or agent; provided,
however, that the
Servicer shall not accept any such insurance policies from
insurance companies
unless such companies are acceptable under Accepted Servicing
Practices and are
licensed to do business in the jurisdiction in which the Mortgaged
Property is
located. The Servicer shall determine that such policies provide
sufficient risk
coverage and amounts, that they insure the property owner, and that
they
properly describe the property address. The Servicer shall furnish
to the
Mortgagor a formal notice of expiration of any such insurance in
sufficient time
for the Mortgagor to arrange for renewal coverage by the expiration
date.
(g)
Pursuant to Section 4.5, any amounts collected by the Servicer
under
any such policies (other than amounts to be deposited in the Escrow
Account and
applied to the restoration or repair of the related Mortgaged
Property, or
property acquired in liquidation of the Mortgage Loan, or to be
released to the
Mortgagor, in accordance with the Servicer's normal servicing
procedures as
specified in Section 4.14) shall be deposited in the Custodial
Account, subject
to withdrawal pursuant to Section 4.6.
SECTION 4.12 Blanket Mortgage Hazard Insurance.
In
the event that the Servicer shall obtain and maintain a blanket
policy
insuring against losses arising from fire and hazards covered under
extended
coverage on all of the Mortgage Loans, then, to the extent such
policy (a) names
the Servicer or the Issuing Entity as loss payee, (b) provides
coverage in an
amount equal to the amount required pursuant to Section 4.11
without coinsurance
and (c) otherwise complies with Accepted Servicing Practices and
all other
requirements of Section 4.11, it shall conclusively be deemed to
have satisfied
its obligations as set forth in Section 4.11. The Servicer shall
prepare and
make any claims on the blanket policy as deemed necessary by the
Servicer in
accordance with prudent servicing practices. Any amounts collected
by the
Servicer under any such policy relating to a Mortgage Loan shall be
deposited in
the Custodial Account subject to withdrawal pursuant to Section
4.6. Such policy
may contain a deductible clause, in which case, in the event that
there shall
not have been maintained on the related Mortgaged Property a policy
complying
with Section 4.11, and there
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shall have been a loss which would have been covered by such
policy, the
Servicer shall deposit in the Custodial Account at the time of such
loss the
amount not otherwise payable under the blanket policy because of
such deductible
clause, such amount to be deposited from the Servicer's funds,
without
reimbursement therefor. Upon request of the Master Servicer or the
Trustee, the
Servicer shall cause to be delivered to the Master Servicer or the
Trustee, as
the case may be, a certified true copy of any such policy.
SECTION 4.13 Fidelity Bond and Errors and Omissions Insurance.
The
Servicer shall maintain with responsible companies, at its own
expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad
coverage on all officers, employees and other Persons acting in any
capacity
requiring such persons to handle funds, money, documents or papers
relating to
the Mortgage Loans. Any such Fidelity Bond and Errors and Omissions
Insurance
Policy shall be in the form of the Mortgage Banker's Blanket Bond
and shall
protect and insure the Servicer against losses, including forgery,
theft,
embezzlement, fraud, errors and omissions and negligent acts of
such persons.
Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall protect
and insure the Servicer against losses in connection with the
release or
satisfaction of a Mortgage Loan without having obtained payment in
full of the
indebtedness secured thereby. No provision of this Section 4.13
requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or
relieve the Servicer from its duties and obligations as set forth
in this
Agreement. The minimum coverage under any such Fidelity Bond and
Errors and
Omissions Insurance Policy shall be at least equal to the amounts
acceptable to
Fannie Mae and Freddie Mac. Upon the request of the Master Servicer
or the
Trustee, the Servicer shall cause to be delivered to the Master
Servicer or the
Trustee, as the case may be, a certificate of insurance for such
Fidelity Bond
and Errors and Omissions Insurance Policy.
SECTION 4.14 Restoration of Mortgaged Property.
The
Servicer need not obtain the approval of the Master Servicer or
the
Trustee prior to releasing any Insurance Proceeds or Condemnation
Proceeds to
any Mortgagor to be applied to the restoration or repair of any
Mortgaged
Property if such release is in accordance with Accepted Servicing
Practices. For
claims greater than $15,000, at a minimum the Servicer shall comply
with the
following conditions in connection with any such release of
Insurance Proceeds
or Condemnation Proceeds:
(a)
the Servicer shall receive satisfactory independent verification
of
completion of repairs and issuance of any required approvals with
respect
thereto;
(b)
the Servicer shall take all steps necessary to preserve the
priority of
the lien of the Mortgage, including, but not limited to requiring
waivers with
respect to mechanics' and materialmen's liens;
(c)
the Servicer shall verify that the Mortgage Loan is not in default;
and
(d)
pending repairs or restoration, the Servicer shall place the
Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.
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If
the Issuing Entity is named as an additional loss payee, the
Servicer is
hereby empowered to endorse any loss draft issued in respect of
such a claim in
the name of the Issuing Entity.
SECTION 4.15 Title, Management and Disposition of REO Property.
(a)
In the event that title to any Mortgaged Property is acquired
in
foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale
shall be taken in the name of the Issuing Entity, or in the event
the Issuing
Entity is not authorized or permitted to hold title to real
property in the
state where the REO Property is located, or would be adversely
affected under
the "doing business" or tax laws of such state by so holding title,
the deed or
certificate of sale shall be taken in the name of such Person or
Persons as
shall be consistent with an Opinion of Counsel obtained by the
Servicer from any
attorney duly licensed to practice law in the state where the REO
Property is
located. The Person or Persons holding such title other than the
Issuing Entity
shall acknowledge in writing that such title is being held as
nominee for the
Issuing Entity.
(b)
The Servicer shall manage, conserve, protect and operate each
REO
Property for the Issuing Entity solely for the purpose of its
prompt disposition
and sale. The Servicer, either itself or through an agent selected
by the
Servicer, shall manage, conserve, protect and operate the REO
Property
consistent with Accepted Servicing Practices. The Servicer shall
attempt to sell
the same (and may temporarily rent the same for a period not
greater than one
year, except as otherwise provided below) on such terms and
conditions as the
Servicer deems to be in the best interest of the Issuing
Entity.
(c)
In the event that the Trust Fund acquires any REO Property as
aforesaid
or otherwise in connection with a default or imminent default on a
Mortgage
Loan, the Servicer shall dispose of such REO Property before the
end of the
third calendar year beginning after the year of its acquisition by
the Trust
Fund for purposes of Section 860G(a)(8) of the Code or, at the
expense of the
Trust Fund, request from the Internal Revenue Service, more than 60
days before
the day on which the above-mentioned grace period would otherwise
expire, an
extension of the above-mentioned grace period, unless the Servicer
obtains an
Opinion of Counsel, addressed to the Servicer and the Trustee, to
the effect
that the holding by the Trust Fund of such REO Property subsequent
to such
period will not: (i) result in the imposition of any tax on
"prohibited
transactions" as defined in Section 860F of the Code; or (ii) cause
any REMIC
constituting any part of the Trust Fund 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 REO Property (subject to any conditions
contained in such
Opinion of Counsel). The Servicer shall be entitled to be
reimbursed from the
Custodial Account for any costs incurred in obtaining such Opinion
of Counsel,
as provided in Section 4.6.
(d)
Subject to compliance with applicable laws and regulations as shall
at
any time be in force, and notwithstanding any other provisions of
this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or
allowed to continue to be rented) or otherwise used by or on behalf
of the Trust
Fund in such a manner or pursuant to any terms that would: (i)
cause such REO
Property to fail to qualify as "foreclosure property" within the
meaning of
Section 860G(a)(8) of the Code; or (ii) subject any Trust REMIC to
the
imposition of any federal income taxes on the income earned from
such REO
Property, including any taxes imposed by reason of
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Sections 860F or 860G(c) of the Code, unless the Servicer has
agreed to
indemnify and hold harmless the Trust Fund with respect to the
imposition of any
such taxes.
(e)
The Servicer shall manage, conserve, protect and operate each
REO
Property for the Certificateholders solely for the purpose of its
prompt
disposition and sale in a manner which does not cause such REO
Property to fail
to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of
the Code or result in the receipt by the related REMIC of any
"income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code,
or any "net income from foreclosure property" which is subject to
taxation under
the REMIC Provisions. The Servicer shall cause each REO Property to
be inspected
promptly upon the acquisition of title thereto and shall cause each
REO Property
to be inspected at least annually thereafter. The Servicer shall
make or cause
to be made a written or electronic report of each such inspection.
Such reports
shall be forwarded by the Servicer to the Trustee upon request. The
Servicer
shall attempt to sell the same (and may temporarily rent the same)
on such terms
and conditions as the Servicer deems to be in the best interest of
the
Certificateholders.
(f)
The Servicer shall also maintain on each REO Property fire and
hazard
insurance with extended coverage in amount which is at least equal
to the
maximum insurable value of the improvements which are a part of
such property,
liability insurance and, to the extent required and available under
the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the
amount
required above.
(g)
The disposition of REO Property shall be carried out by the
Servicer at
such price, and upon such terms and conditions, as the Servicer
deems to be in
the best interests of the Issuing Entity; provided, however, that
any REO
disposition shall be for cash only (unless changes in the REMIC
Provisions made
subsequent to the Startup Day allow a sale for other consideration
and an
Opinion of Counsel is obtained by the Servicer to the effect that
such sale
shall not cause any Trust REMIC to fail to qualify as a REMIC). The
proceeds of
sale of the REO Property ("REO DISPOSITION PROCEEDS") shall be
promptly
deposited in the Custodial Account. As soon as practical thereafter
the expenses
of such sale shall be paid and the Servicer shall reimburse itself
for any
related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed
Monthly Advances. On the Servicer Remittance Date immediately
following the
Prepayment Period in which such sale proceeds are received, the net
cash
proceeds of such sale remaining in the Custodial Account shall be
remitted to
the Securities Administrator.
(h)
The Servicer shall withdraw from the Custodial Account funds
necessary
for the proper operation management and maintenance of the REO
Property,
including the cost of maintaining any hazard insurance pursuant to
Section 4.11.
The Servicer shall make monthly remittances on each Servicer
Remittance Date to
the Securities Administrator of the net cash flow from the REO
Property (which
shall equal the revenues from such REO Property net of the expenses
described in
this Section 4.15 and of any reserves reasonably required from time
to time to
be maintained to satisfy anticipated liabilities for such
expenses). With
respect to each REO Property, the Servicer shall account separately
for each REO
Property with respect to all funds collected and received in
connection with the
operation of such REO Property.
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SECTION 4.16 Mortgage Loan Reports; Real Estate Owned Reports.
(a)
Not later than the tenth calendar day (or if such day is not a
Business
Day, the succeeding Business Day) of each month, the Servicer shall
furnish to
the Depositor, the Master Servicer and the Securities Administrator
(i) a
monthly remittance advice in the format agreed upon by the Servicer
and the
Master Servicer and a monthly defaulted loan report with the
reporting criteria
set forth in Exhibit E (or in such other format mutually agreed to
among the
Servicer, the Master Servicer and the Securities Administrator) in
respect of
the prior Due Period and related Prepayment Period, and information
on realized
losses and gains in the form attached as Exhibit D (or other format
agreed to by
the Master Servicer and the Servicer), (ii) all such information
required above
on a magnetic tape or other similar media reasonably acceptable to
the
Depositor, the Master Servicer and the Securities Administrator,
and with
supporting documentation with respect to the report on Exhibit D,
and (iii) such
other information with respect to the Mortgage Loans (to the extent
such
information is available on the systems of the Servicer) as the
Securities
Administrator may reasonably require to perform its obligations
under the Owner
Trust Agreement. In addition, by no later than the third Business
Day following
the end of each Prepayment Period, the Servicer shall furnish to
the Master
Servicer and the Securities Administrator a monthly remittance
advice, in form
and substance satisfactory to them, with respect to all Principal
Prepayments in
full received during the related Prepayment Period.
(b)
The Servicer, upon written request of the Depositor or its agent,
shall
on an ongoing basis from information obtained through its servicing
of the
Mortgage Loans, provide the Depositor with any information
necessary to enable
the Depositor to perform its obligations in connection with any
United States
federal, state or local income tax return required to be filed on
behalf of the
Issuing Entity by the Depositor. Without limiting the foregoing,
the Servicer
shall, following the foreclosure sale or abandonment of any
Mortgaged Property,
report such foreclosure or abandonment as required pursuant to
Section 6050J of
the Code. The Servicer shall file information reports with respect
to the
receipt of mortgage interest received in a trade or business and
information
returns relating to cancellation of indebtedness income with
respect to any
Mortgaged Property as required by the Code. Such reports shall be
in form and
substance sufficient to meet the reporting requirements imposed by
the Code.
(c)
The Servicer shall furnish to the Master Servicer on or before
the
Servicer Remittance Date each month a statement with respect to any
REO Property
covering the operation of such REO Property for the previous month
and the
Servicer's efforts in connection with the sale of such REO Property
and any
rental of such REO Property incidental to the sale thereof for the
previous
month. That statement shall be accompanied by such other
information as the
Master Servicer shall reasonably request.
SECTION 4.17 Adjustable Rate Mortgage Loans.
(a)
With respect to each Mortgage Loan, the Servicer shall adjust
the
Mortgage Rate on the related Adjustment Date in compliance with the
requirements
of applicable law and the related Mortgage and Mortgage Note. The
Servicer shall
execute and deliver any and all necessary notices required under
applicable law
and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage
Rate adjustments. Upon the discovery by the Servicer or the
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receipt of notice from the Master Servicer that the Servicer has
failed to
adjust a Mortgage Rate in accordance with the terms of the related
Mortgage
Note, the Servicer shall immediately deposit in the Custodial
Account from its
own funds the amount of any interest loss or deferral caused
thereby.
(b)
In the event that the Index for any Mortgage Loan, as specified in
the
related Mortgage Note, becomes unavailable for any reason, the
Servicer shall
select an alternative index in accordance with the terms of such
Mortgage Note
or, if such Mortgage Note does not make provision for the selection
of an
alternative index in such event, the Depositor shall, subject to
applicable law,
select an alternative index based on information comparable to that
used in
connection with the original Index and, in either case, such
alternative index
shall thereafter be the Index for such Mortgage Loan.
SECTION 4.18 Prepayment Premiums.
(a)
Notwithstanding anything in this Agreement to the contrary, in
the
event of a Principal Prepayment in full or in part of a Mortgage
Loan, the
Seller may not waive any Prepayment Premium or portion thereof
required by the
terms of the related Mortgage Note unless (i) the enforceability
thereof shall
have been limited by bankruptcy, insolvency, moratorium,
receivership and other
similar laws relating to creditors' rights generally or (ii) the
collectability
thereof shall have been limited due to acceleration in connection
with a
foreclosure or other involuntary payment, or (iii) in the Seller's
reasonable
judgment as described herein, (x) such waiver relates to a default
or a
reasonably foreseeable default, (y) such waiver would maximize
recovery of total
proceeds taking into account the value of such Prepayment Premium
and related
Mortgage Loan and (z) doing so is standard and customary in
servicing similar
Mortgage Loans (including any waiver of a Prepayment Premium in
connection with
a refinancing of a Mortgage Loan that is related to a default or a
reasonably
foreseeable default). In no event will the Servicer waive a
Prepayment Premium
in connection with a refinancing of a Mortgage Loan that is not
related to a
default or a reasonably foreseeable default.
(b)
If the Servicer waives or does not collect all or a portion of
Prepayment Premium relating to a Principal Prepayment in full or in
part due to
any action or omission of the Servicer, other than as provided
above, the
Servicer shall deposit the amount of such Prepayment Premium (or
such portion
thereof as had been properly waived) into the Custodial Account for
distribution
in accordance with the terms of this Agreement. The rights of the
Holders of the
Class P Certificates to any such Non-Mortgagor Prepayment Premium
Payment Amount
shall not be an asset of any Trust REMIC.
SECTION 4.19 Credit Reporting; Gramm Leach Bliley Act.
(a)
The Servicer agrees to fully furnish, in accordance with the
Fair
Credit Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its mortgagor
credit files to
Equifax, Experian, and Trans Union Credit Information Servicer on a
monthly
basis.
(b)
The Servicer agrees to transmit full-file credit reporting data
for
each Mortgage Loan pursuant to Exhibit G. For each Mortgage Loan,
the Servicer
shall report one of the
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following statuses each month: new origination; current; delinquent
(30-, 60-,
90-days, etc.); foreclosed or charged-off.
(c)
The Servicer shall comply with Title V of the Gramm-Leach-Bliley
Act of
1999 and all applicable regulations promulgated thereunder,
relating to the
Mortgage Loans and the related Mortgagors and shall provide all
required notices
thereunder.
SECTION 4.20 Transfers of Mortgaged Property.
(a)
The Servicer shall use its commercially reasonable best efforts
to
enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note
and to deny assumption by the person to whom the Mortgaged Property
has been or
is about to be sold whether by absolute conveyance or by contract
of sale, and
whether or not the Mortgagor remains liable on the Mortgage and the
Mortgage
Note. When the Mortgaged Property has been conveyed by the
Mortgagor, the
Servicer shall, to the extent it has knowledge of such conveyance,
exercise its
rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale"
clause applicable thereto; provided, however, that the Servicer
shall not
exercise such rights if prohibited by law from doing so.
(b)
If the Servicer reasonably believes it is unable under applicable
law
to enforce such "due-on-sale" clause, the Servicer shall enter into
(a) an
assumption and modification agreement with the person to whom such
property has
been conveyed, pursuant to which such person becomes liable under
the Mortgage
Note and the original Mortgagor remains liable thereon or (b) in
the event the
Servicer is unable under applicable law to require that the
original Mortgagor
remain liable under the Mortgage Note and the Servicer has the
prior consent of
the primary mortgage guaranty insurer, if any, a substitution of
liability
agreement with the purchaser of the Mortgaged Property pursuant to
which the
original Mortgagor is released from liability and the purchaser of
the Mortgaged
Property is substituted as Mortgagor and becomes liable under the
Mortgage Note.
If an assumption fee is collected by the Servicer for entering into
an
assumption agreement the fee will be retained by the Servicer as
additional
servicing compensation. In connection with any such assumption,
neither the
Mortgage Rate borne by the related Mortgage Note, the term of the
Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other
material
terms shall be changed unless such change would be consistent with
Accepted
Servicing Practices.
(c)
To the extent that any Mortgage Loan is assumable, the Servicer
shall
inquire diligently into the credit-worthiness of the proposed
transferee, and
shall use the underwriting criteria for approving the credit of the
proposed
transferee which are used with respect to underwriting mortgage
loans by the
Seller of the same type as the Mortgage Loans. If the
credit-worthiness of the
proposed transferee does not meet such underwriting criteria, the
Servicer
diligently shall, to the extent permitted by the Mortgage or the
Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage
Loan.
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SECTION 4.21 Satisfaction and Release of Mortgage Files.
(a)
Upon the payment in full of any Mortgage Loan, or the receipt by
the
Servicer of a notification that payment in full will be escrowed in
a manner
customary for such purposes, the Servicer shall request the release
of any
Mortgage Loan Documents.
(b)
If the Servicer satisfies or releases a Mortgage without first
having
obtained payment in full of the indebtedness secured by the
Mortgage or should
the Servicer otherwise prejudice any rights the Issuing Entity may
have under
the mortgage instruments, the Servicer shall repurchase the related
Mortgage
Loan at the Repurchase Price by deposit thereof in the Custodial
Account within
two Business Days of receipt of such written demand by the Master
Servicer or,
if earlier, the date on which the Servicer has knowledge of such
improper
release. The Servicer shall maintain the Fidelity Bond and Errors
and Omissions
Insurance Policy as provided for in Section 4.13 insuring the
Servicer against
any loss it may sustain with respect to any Mortgage Loan not
satisfied in
accordance with the procedures set forth herein.
(c)
Upon (i) becoming aware of the payment in full of any Mortgage Loan
or
(ii) the receipt by the Servicer of a notification that payment in
full has been
or will be escrowed in a manner customary for such purposes, the
Servicer will
promptly notify the Trustee and Custodian by a certification
(which
certification shall include a statement to the effect that all
amounts received
in connection with such payment that are required to be deposited
in the
Custodial Account maintained by the Servicer pursuant to Section
4.5 have been
or will be so deposited) of a Servicing Officer and shall request
the Custodian
to deliver to the Servicer the related Mortgage File. Upon receipt
of such
certification and Request for Release, the Custodian shall promptly
release the
related Mortgage File to the Servicer, and the Trustee shall have
no further
responsibility with regard to such Mortgage File. Upon any such
payment in full,
the Servicer is authorized to give, as agent for the Trustee, as
the mortgagee
under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction
(or assignment of mortgage without recourse) regarding the
Mortgaged Property
subject to the Mortgage, which instrument of satisfaction or
assignment, as the
case may be, shall be delivered to the Person or Persons entitled
thereto
against receipt therefor of such payment, it being understood and
agreed that no
expenses incurred in connection with such instrument of
satisfaction or
assignment, as the case may be, shall be chargeable to the
Custodial Account.
Notwithstanding anything to the contrary herein, the Trustee shall
in no way be
liable or responsible for the willful malfeasance of the Servicer,
or for any
wrongful or negligent actions taken by the Servicer, while the
Servicer is
acting pursuant to the powers granted to it in this paragraph.
(d)
From time to time and as appropriate for the servicing or
foreclosure
of any Mortgage Loan, the Trustee shall execute such documents as
shall be
prepared and furnished to the Trustee by the Servicer (in form
reasonably
acceptable to the Trustee) and as are necessary to the prosecution
of any such
proceedings. The Trustee shall, upon request of the Servicer, as
applicable, and
delivery to the Trustee, of a trust receipt signed by a Servicing
Officer, cause
the Custodian to release the related Mortgage File held in its
possession or
control to the Servicer. Such trust receipt shall obligate the
Servicer to
return the Mortgage File to the Custodian when the need therefor by
the Servicer
no longer exists unless the Mortgage Loan shall be liquidated, in
which case,
upon receipt of a certificate of a Servicing Officer similar to
that hereinabove
specified, the trust receipt shall be released by the Trustee to
the Servicer.
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(e)
The Trustee shall furnish the Servicer, upon request, with any
powers
of attorney (which are acceptable to the Trustee) empowering the
Servicer to
execute and deliver instruments of satisfaction or cancellation, or
of partial
or full release or discharge, and to foreclose upon or otherwise
liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court
action
relating to the Mortgage Loans or the Mortgaged Property, in
accordance with
this Agreement, and the Trustee shall execute and deliver such
other documents
as the Servicer may request, necessary or appropriate to enable the
Servicer to
service the Mortgage Loans and carry out its duties hereunder, in
each case in
accordance with Accepted Servicing Practices (and the Trustee shall
have no
liability for misuse of any such powers of attorney by the
Servicer).
(f)
In no event shall the Servicer, without the Trustee's written
consent,
(i) initiate any action, suit or proceeding solely under the
Trustee's name
without indicating the Servicer's representative capacity or (ii)
take any
action with the intent to cause, and which actually does cause, the
Trustee to
be registered to do business in any state. The Servicer shall
indemnify the
Trustee for any and all costs, liabilities and expenses incurred by
the Trustee
in connection with the negligent or willful misuse of such powers
of attorney by
the Servicer. In the performance of its duties hereunder, the
Servicer shall be
an independent contractor and shall not, except in those instances
where it is
taking action in the name of the Trustee, be deemed to be the agent
of the
Trustee.
SECTION 4.22 Superior Liens.
(a)
With respect to each Mortgage Loan secured by a second lien, if
any,
the Servicer shall, for the protection of the Issuing Entity's
interest, file
(or cause to be filed) of record a request for notice of any action
by a
superior lienholder where permitted by local law and whenever
applicable state
law does not require that a junior lienholder be named as a party
defendant in
foreclosure proceedings in order to foreclose such junior
lienholder's equity of
redemption. The Servicer shall also notify any superior lienholder
in writing of
the existence of the Mortgage Loan and request notification of any
action (as
described below) to be taken against the Mortgagor or the Mortgaged
Property by
the superior lienholder.
(b)
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the
superior
lien, or has declared or intends to declare a default under the
superior
mortgage or the promissory note secured thereby, or has filed or
intends to file
an election to have the Mortgaged Property sold or foreclosed, the
Servicer
shall take whatever actions are necessary to protect the interests
of the
Issuing Entity, and/or to preserve the security of the related
Mortgage Loan.
The Servicer shall make a Servicing Advance of the funds necessary
to cure the
default or reinstate the superior lien if the Servicer determines
that such
Servicing Advance is in the best interests of the Trust Fund and is
not a
Nonrecoverable Advance. The Servicer shall not make such a
Servicing Advance
except to the extent that it determines in its reasonable good
faith judgment
that such advance will be recoverable from Liquidation Proceeds on
the related
Mortgage Loan. The Servicer shall thereafter take such action as is
necessary to
recover the amount so advanced.
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SECTION 4.23 Servicer Compensation.
(a)
As compensation for its services hereunder, the Servicer shall
be
entitled to withdraw from the Custodial Account the amount of its
servicing Fee
to the extent deposited therein on or before the Servicer
Remittance Date. The
Servicing Fee shall be payable monthly. The obligation of the
Issuing Entity to
pay the Servicing Fee is limited to, and payable solely from, the
interest
portion of such Scheduled Monthly Payments with respect to the
related Mortgage
Loan, or as otherwise provided in Section 4.6. Notwithstanding the
foregoing,
with respect to the payment of the Servicing Fee for any month, the
aggregate
Servicing Fee shall be reduced (but not below zero) by an amount
equal to the
Compensating Interest Payment for the related Distribution
Date.
(b)
Additional servicing compensation in the form of Prepayment
Interest
Excess, assumption fees, late payment charges and other ancillary
income (other
than Prepayment Premiums) shall be retained by the Servicer to the
extent not
required to be deposited in the Custodial Account. The Servicer
shall be
required to pay all expenses incurred by it in connection with its
servicing
activities hereunder and shall not be entitled to reimbursement
thereof except
as specifically provided for herein.
SECTION 4.24 Servicer Remittances.
(a)
On each Servicer Remittance Date, the Servicer shall remit to
the
Securities Administrator the sum of the following (the "SERVICER
REMITTANCE
AMOUNT"):
(i) all amounts deposited in the Custodial Account as of the close
of
business on the Determination Date (net of charges against or
withdrawals
from
the Custodial Account pursuant to Section 4.6); plus
(ii) the aggregate amount of all Monthly Advances, if any, which
the
Servicer is obligated to advance on or before the Servicer
Remittance Date
pursuant to Section 4.5 with respect to the related Due Period;
minus
(iii) any amounts attributable to Principal Prepayments
received
during the applicable Prepayment Period, together with any
additional
interest required to be deposited in the Custodial Account in
connection
with
such Principal Prepayment in accordance with Section 4.5; and
minus
(iv) any amounts attributable to Scheduled Monthly Payments
collected
but
due on a Due Date or Dates subsequent to the first day of the month
in
which such Servicer Remittance Date occurs, which amounts shall be
remitted
on
the Servicer Remittance Date next succeeding the Due Period for
such
amounts.
(b)
On each Servicer Remittance Date, no later than 4:00 P.M., ET,
the
Servicer shall remit the Servicer Remittance Amount by wire
transfer of
immediately available funds to the Securities Administrator. All
remittances
required to be made to the Securities Administrator shall be made
to the
following wire account or to such other account as may be specified
by the
Securities Administrator from time to time:
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[ - ]
ABA#:
[ - ]
Account Name:
[ - ]
Account Number:
[ - ]
For further credit to: 200_-_, Account #
__________
(c)
With respect to any remittance received by the Securities
Administrator
after the Servicer Remittance Date on which such remittance was
due, the
Servicer shall pay to the Securities Administrator interest on any
such late
remittance at an annual rate equal to the Prime Rate, adjusted as
of the date of
each change, plus three percentage points, but in no event greater
than the
maximum amount permitted by applicable law, from the date such
remittance was
due until the date paid, both inclusive. The payment by the
Servicer of any such
interest shall not be deemed an extension of time for payment or a
waiver of any
Servicer Event of Default by the Servicer.
ARTICLE V
REPORTS
SECTION 5.1 Assessment of Compliance and Attestation Reports.
Each
Responsible Party shall provide to the Securities Administrator and
to
the Depositor, no later than March 1 of each year, commencing
______, an
assessment of compliance with servicing criteria ("ASSESSMENT OF
COMPLIANCE")
and related attestation report ("ATTESTATION REPORT") as of and for
the period
ending on December 31 of the preceding calendar year, which
Assessment of
Compliance and Attestation Report shall relate to each of the
servicing criteria
identified on Exhibit 1122 hereto as the responsibility of such
Responsible
Party and shall comply with the provisions of Item 1122 of
Regulation AB. Each
Assessment of Compliance provided by a Responsible Party shall
include (a) a
statement of such party's responsibility for assessing compliance
with the
servicing criteria applicable to such party, (b) a statement that
such party
used the criteria identified in Item 1122(d) of Regulation AB to
assess
compliance with the applicable servicing criteria, (c) disclosure
of any
material instance of noncompliance identified by such party, and
(d) a statement
that a registered public accounting firm has issued an Attestation
Report on
such party's Assessment of Compliance with the applicable servicing
criteria.
SECTION 5.2 Annual Compliance Statement.
Each
Responsible Party shall furnish to the Securities Administrator
and
the Depositor no later than March 1 of each year, commencing ____,
an annual
compliance statement ("COMPLIANCE STATEMENT") signed by a
Responsible Officer of
such party to the effect that (a) a review of such party's
activities during the
reporting period and the party's performance under this Agreement
have been made
under such officer's supervision and (b) to the best of such
officer's
knowledge, based on such review, such Responsible Party has
fulfilled all of its
obligations under this Agreement in all material respect throughout
the
reporting period or, if there has been a failure to fulfill any
such obligation
in any material respect, specifying each such failure and the
nature and status
thereof.
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SECTION 5.3 Back-Up SOX Certification.
Each
Responsible Party shall deliver to the Securities Administrator
and
the Depositor no later than March 1 of each year, commencing ____,
in which the
Issuing Entity is required to file an execute an Annual Report on
Form 10-K, a
certification (a "BACK-UP SOX CERTIFICATION"), signed by a
Responsible Officer
of such party, in the form of Exhibit SOX attached hereto.
SECTION 5.4 Commission Reporting.
(a)
The Master Servicer shall, in accordance with industry
standards,
prepare and file with the Commission via EDGAR, the following
reports in respect
of the Issuing Entity as and to the extent required under the
Exchange Act, each
of which reports shall be signed by the [Master Servicer].
(i) Distribution Report on Form 10-D. Within 15 days following
each
Distribution Date (or such later date as may be permissible due to
an
extension of the filing deadline), the Securities Administrator
will
prepare and file a Distribution Report on Form 10-D with respect to
the
Issuing Entity, which "Distribution Report" shall include a copy of
the
Distribution Date Statement prepared by the Securities
Administrator in
respect of the related Distribution Date detailing all data
elements
specified in Item 1121(a) of Regulation AB other than those data
elements
specified in Item 1121(a)(11), (12) and (14); provided, that,
the
Securities Administrator shall have received from the Depositor
(and the
Servicer with respect to Item 1), no later than ten days prior to
the date
such
Distribution Report on Form 10-D is required to be filed, the
following additional information, data, and materials required to
be
included in the Distribution Report on Form 10-D for such
Distribution
Date:
(A) Item 1 - Distribution and Pool Performance Information
(each
of the data elements specified in Item 1121(a)(11), (12) and (14)
of
Regulation AB);
(B) Item 2 - Legal Proceedings (information required by Item
1117
of Regulation AB);
(C) Item 3 - Sale of Securities and Use of Proceeds
(information
required by Item 2 of Part II of Form 10-Q);
(D) Item 4 - Defaults Upon Senior Securities (information
required by Item 3 of Part II of Form 10-Q);
(E) Item 5 - Submission of Matters to a Vote of Security
Holders
(information required by Item 4 of Part II of Form 10-Q);
(F) Item 6 - Significant Obligors of Pool Assets (information
required by Item 1112(b) of Regulation AB);
(G) Item 7 - Significant Enhancement Provider Information
(information required by Items 1114(b)(2) and 1115(b) of
Regulation
AB);
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(H) Item 8 - Other Information (all other information required to
be
disclosed on Form 8-K during the period covered by the report and
not yet
reported); and
(I) Item 9 - Exhibits (all exhibits required to be filed by Form
10-D
and
Item 601 of Regulation S-K other than the Distribution Date
Statement
to
be provided by the Securities Administrator).
(ii)
Annual Report on Form 10-K. The Securities Administrator will
prepare
and file an Annual Report on Form 10-K in respect of the Issuing
Entity,
provided, that the Securities Administrator shall have received
from the
[Depositor] and other transaction parties, no later than March 1 of
each
calendar year prior to the filing deadline for such Annual Report,
all
information, data and exhibits required to be provided or filed
with such Annual
Report including information, data, and exhibits required to be
provided in
connection with the following Items and other filing requirements
of Form 10-K:
(A) Item 9B - Other Information (information required to be
reported
on
Form 8-K in the fourth quarter but not reported);
(B) Item 15 - Exhibits and Financial Statement Schedules
(including
all
exhibits required to be filed pursuant to Item 601 of Regulation
S-K
under the Exchange Act other than [the certification specified in
Item
601(b)(31)(ii) of Regulation S-K and] the Assessment of
Compliance,
Attestation Report and Compliance Statement specified in Item
601(b)(33),
(34)
and (35) of Regulation S-K with respect to those Servicing Criteria
as
to
which the Securities Administrator is the Responsible Party);
(C)
Significant Obligor Financial Information (Item 1112(b) of
Regulation AB);
(D) Significant Enhancement Provider Financial Information
(Items
1114(b)(2) and 1115(b) of Regulation AB);
(E) Legal Proceedings (Item 1117 of Regulation AB);
(F) Affiliations and Certain Relationships and Related
Transactions
(Item 1119 of Regulation AB); and
(G) Compliance with Applicable Servicing Criteria (Item 1122 of
Regulation AB).
(iii) Current Reports on Form 8-K. The Securities Administrator
will
prepare and file Current Reports on Form 8-K in respect of the
Issuing Entity at
the direction of the [Depositor] and at the expense of the Trust
Fund, provided,
that the [Depositor] shall have timely notified the Securities
Administrator of
an item reportable on a Current Report on Form 8-K and shall have
delivered to
the Securities Administrator no later than two Business Days prior
to the filing
deadline for such Current Report, all information,
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data and exhibits required to be provided or filed with such
Current Report,
including, particularly, information, data and exhibits required to
be provided
in connection with the following Items of Form 8-K, [but only to
the extent that
a Responsible Officer of the Securities Administrator does not
otherwise have
actual knowledge of same in its capacity as Securities
Administrator hereunder]:
(A) Item 1.01 - Entry into a Material Definitive Agreement;
(B) Item 1.02 - Termination of a Material Definitive Agreement;
(C) Item 1.03 - Bankruptcy or Receivership;
(D) Item 2.04 - Triggering Events that Accelerate or Increase a
Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement;
(E) Item 3.03 - Material Modification to Rights of Security
Holders;
(F) Item 5.03 - Amendments of Articles of Incorporation or
Bylaws; Change of Fiscal Year;
(G) Item 6.02 - Change in Servicer or Trustee;
(H) Item 6.03 - Change in Credit Enhancement or Other External
Support;
(I) Item 6.04 - Failure to Make a Required Distribution; and
(J) Item 6.05 - Securities Act Updating Disclosure.
(iv) Form 15. As and when permitted under the provisions of
Exchange
Act,
the Securities Administrator will prepare and file, on behalf of
the
Issuing Entity, a Form 15 to suspend the Issuing Entity's
reporting
obligations under the Exchange Act.
(b)
All information, data, and materials required to be provided by
any
Responsible Party to the Securities Administrator for incorporation
in any
report to be filed with the Commission shall be provided in a
format compatible
with Commission filing requirements, including, as appropriate,
EDGAR filing
guidelines. The Depositor acknowledges and agrees that the
Securities
Administrator may include in any Exchange Act report all relevant
information,
data and exhibits as the Securities Administrator may receive in
connection with
such report irrespective of any provision that may permit the
exclusion of such
material. For example, the Securities Administrator may file all
Assessments of
Compliance, Attestation Reports and Compliance Statements timely
received from
any Responsible Party irrespective of any applicable minimum pool
asset
percentage requirement for disclosure related to such Responsible
Party.
(c) The Depositor
agrees to furnish promptly to the Securities
Administrator from time to time upon request such additional
information, data,
reports, documents and financial statements within the Depositor's
possession or
control as the Securities Administrator
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reasonably requests as necessary or appropriate to prepare and file
the
foregoing reports. The Securities Administrator shall make
available to the
Depositor copies of all Exchange Act reports filed hereunder.
(d)
Notwithstanding Section 5.4(a)(ii) above, in the event that the
Securities Administrator has not timely received all information,
data, and
exhibits as are required to prepare and file any required Exchange
Act report,
the Depositor nevertheless hereby directs the Securities
Administrator to file
such Exchange Act report based on the information that the
Securities
Administrator has timely received and without such additional
required
information, data or exhibits not timely received. Upon subsequent
delivery to
the Securities Administrator of all information, data, and exhibits
required to
complete such Exchange Act report and upon direction of the
Depositor, the
Securities Administrator will prepare and file an amendment to the
prior
Exchange Act report filing to include such additional information.
The Depositor
shall be responsible for all costs and expenses of the Securities
Administrator
related to the preparation and filing of any such amendment.
(e)
Other than the Exchange Act reports specified above, the
Securities
Administrator shall have no responsibility to file any items or
reports with the
Commission under the Exchange Act or otherwise; provided, however,
the
Securities Administrator will cooperate with the Depositor in
connection with
any additional filings with respect to the Issuing Entity as the
Depositor deems
necessary under the Exchange Act.
(f)
The Trust Fund shall pay all costs and expenses of the
Securities
Administrator related to the preparation and filing of any Current
Report on
Form 8-K, any Distribution Report on Form 10-D (other than the
costs and expense
of the Securities Administrator associated with the preparation and
filing of
the Distribution Date Report) or any amendment to any Exchange Act
report.
SECTION 5.5 Distribution Date Report.
(a)
On each Distribution Date, the Securities Administrator shall
make
available to the other parties hereto a report containing
information with
respect to such Distribution Date (each, a "DISTRIBUTION DATE
REPORT"),
including the following items (on the basis of information provided
with respect
to the Mortgage Loans on the Servicer Report):
(i) the Interest Proceeds;
(ii) the Principal Proceeds, including Liquidation Proceeds and
Insurance Proceeds, stating separately the amount attributable to
Scheduled
Monthly Payments of principal and unscheduled payments in the
nature of
principal;
(iii) the amount of principal distributed on each Class of
Certificates;
(iv) the Certificate Principal Balance of each class of
Certificates,
to
the extent applicable, as of such Distribution Date after giving
effect
to
payments allocated to principal reported under subclause (iii)
above;
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(v) the Pass-Through Rate, if applicable, for each Class of
Certificates for such Distribution Date;
(vi) the Net WAC Cap Carryover Amounts distributed on such
Distribution Date, the amounts remaining unpaid after giving effect
to
distributions thereof on such Distribution Date and the amounts of
all Net
WAC
Carryover Amounts covered by withdrawals from the Reserve Account
on
such
Distribution;
(vii) the amount of any Realized Losses incurred with respect to
the
Mortgage Loans (x) in the applicable Prepayment Period and (y) in
the
aggregate since the Cut-off Date;
(viii) the amount of the Servicing Fees and Master Servicing Fees
paid
during the Due Period to which such Distribution Date relates;
(ix) the number and aggregate Scheduled Principal Balance of
Mortgage
Loans, as reported to the Master Servicer and the Securities
Administrator
by
the Servicer:
(A) remaining outstanding,
(B) delinquent 30 to 59 days on a contractual basis,
(C) delinquent 60 to 89 days on a contractual basis,
(D) delinquent 90 or more days on a contractual basis,
(E) as to which foreclosure proceedings have been commenced as
of
the close of business on the last Business Day of the calendar
month
immediately preceding the month in which such Distribution Date
occurs,
(F) in bankruptcy, and
(G) that are REO Properties;
(x) the aggregate Scheduled Principal Balance of any Mortgage
Loans
with
respect to which the related Mortgaged Property became an REO
Property
as
of the close of business on the last Business Day of the calendar
month
immediately preceding the month in which such Distribution Date
occurs;
(xi) with respect to substitution of Mortgage Loans in the
preceding
calendar month, the Scheduled Principal Balance of each Deleted
Mortgage
Loan
and of each Qualified Substitute Mortgage Loan;
(xii) the aggregate amount of any Monthly Advances made by or
on
behalf of the Servicer (or the Master Servicer) solely to the
extent
reported to the Securities Administrator by the Master Servicer;
and
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(xiii) LIBOR with respect to such Distribution Date and the
following
Interest Accrual Period.
(b)
The Securities Administrator will make such report and additional
loan
level information (and, at its option, any additional files
containing the same
information in an alternative format) available each month to the
Rating
Agencies, the Trustee, the Certificateholders, the Depositor and
the Cap
Provider via the Securities Administrator's website. The
Securities
Administrator's website can be accessed at _________. Assistance in
using the
website can be obtained by calling the Securities Administrator's
customer
service desk at __________. Such parties that are unable to use the
website are
entitled to have a paper copy mailed to them via first class mail
by notifying
the Securities Administrator at the address set forth herein, and
indicating
such. The Securities Administrator shall have the right to change
the way such
statements are distributed in order to make such distribution more
convenient
and/or more accessible to the above parties and the Securities
Administrator
shall provide timely and adequate notification to all above parties
regarding
any such changes.
(c)
The foregoing information and reports shall be prepared and
determined
by the Securities Administrator based solely on Mortgage Loan data
provided to
the Master Servicer and the Securities Administrator by the
Servicer pursuant to
Section 4.16. In preparing or furnishing the foregoing information,
the
Securities Administrator shall be entitled to rely conclusively on
the accuracy
of the information or data regarding the Mortgage Loans and the
related REO
Property that have been provided to the Master Servicer and the
Securities
Administrator by the Servicer, and neither the Securities
Administrator nor the
Master Servicer shall be obligated to verify, recompute, reconcile
or
recalculate any such information or data.
(d)
Upon the reasonable advance written request of any
Certificateholder
that is a savings and loan, bank or insurance company, which
request, if
received by the Trustee shall be forwarded promptly to the
Securities
Administrator, the Securities Administrator shall provide, or cause
to be
provided (or, to the extent that such information or documentation
is not
required to be provided by the Servicer, shall use reasonable
efforts to obtain
such information and documentation from the Servicer, and provide),
to such
Certificateholder such reports and access to information and
documentation
regarding the Mortgage Loans as such Certificateholder may
reasonably deem
necessary to comply with applicable regulations of the Office of
Thrift
Supervision or its successor or other regulatory authorities with
respect to an
investment in the Certificate; provided, however, that the
Securities
Administrator shall be entitled to be reimbursed by such
Certificateholder for
actual expenses incurred in providing such reports and access.
SECTION 5.6 Subservicers and Subcontractors.
(a)
The Servicer shall:
(i) cause each Subservicer, and each Subcontractor determined by
the
Company pursuant to Section 4.2(b) to be "participating in the
servicing
function" within the meaning of Item 1122 of Regulation AB, to
deliver to
the
Master Servicer and the Depositor an Assessment of Compliance
and
Attestation Report as and when required pursuant to Section
5.1.
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(ii) deliver, and cause each Subservicer and each Subcontractor
described in clause (i) to provide, to the Depositor, the Master
Servicer
and
any other Person that will be responsible for signing the Back-Up
SOX
Certification on behalf of an asset-backed issuer with respect to
this
transaction a certification, signed by the appropriate officer of
the
Company, in the form attached hereto as Exhibit SOX.
(b)
The Servicer acknowledges that the parties identified in clause
(a)(ii)
above may rely on the certification provided by the Servicer
pursuant to such
clause in signing a Back-Up SOX Certification and filing such with
the
Commission.
(c)
Each Assessment of Compliance provided by a Subservicer pursuant
to
Section ____ shall address each of the Servicing Criteria specified
on a
certification substantially in the form of Exhibit 1122 hereto
delivered to the
Depositor concurrently with the execution of this Agreement or, in
the case of a
Subservicer subsequently appointed as such, on or prior to the date
of such
appointment. An Assessment of Compliance provided by a
Subcontractor pursuant to
Section 5.1 need not address any elements of the Servicing Criteria
other than
those specified by
