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NOMURA ASSET ACCEPTANCE CORPORATION,
Depositor
NOMURA CREDIT & CAPITAL, INC.,
Seller
GMAC MORTGAGE CORPORATION
Servicer
and
JPMORGAN CHASE BANK, N.A.
Trustee and Custodian
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
----------------------------------------
NOMURA ASSET ACCEPTANCE CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-AR1
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS..................................................................................4
Section 1.01 Defined
Terms...............................................................................4
Section 1.02 Allocation of Certain Interest
Shortfalls..................................................42
ARTICLE II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND
WARRANTIES.....................................44
Section 2.01 Conveyance of Trust
Fund...................................................................44
Section 2.02 Acceptance of the Mortgage
Loans...........................................................45
Section 2.03 Representations, Warranties and Covenants of the
Servicer and the Seller...................48
Section 2.04 Representations and Warranties of the
Depositor............................................53
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases............54
Section 2.06 Issuance of the REMIC I Regular Interests and the
Class R Certificates.....................55
Section 2.07 Conveyance of the REMIC I Regular Interests
...............................................55
Section 2.08 Issuance of Residual
Certificates..........................................................56
Section 2.09 Establishment of
Trust.....................................................................56
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE
LOANS..........................................57
Section 3.01 The Servicer to Act as
Servicer............................................................57
Section 3.02 Due-on-Sale Clauses; Assumption
Agreements.................................................58
Section 3.03
Subservicers...............................................................................59
Section 3.04 Documents, Records and Funds in Possession of the
Servicer To Be Held for Trustee..........60
Section 3.05 Maintenance of Hazard
Insurance............................................................61
Section 3.06 Presentment of Claims and Collection of
Proceeds...........................................62
Section 3.07 Maintenance of Insurance
Policies..........................................................62
Section 3.08
Reserved...................................................................................63
Section 3.09 Realization Upon Defaulted Mortgage Loans;
Determination of Excess
Liquidation Proceeds and Realized Losses; Repurchases of Certain
Mortgage Loans............63
Section 3.10 Servicing
Compensation.....................................................................65
Section 3.11 REO
Property...............................................................................65
Section 3.12 Liquidation
Reports........................................................................66
Section 3.13 Annual Certificate as to
Compliance........................................................66
Section 3.14 Annual Independent Certified Public Accountants'
Servicing Report..........................67
Section 3.15 Books and
Records..........................................................................67
Section 3.16 The
Trustee................................................................................68
Section 3.17 REMIC-Related
Covenants....................................................................68
Section 3.18 Reimbursement of Costs and
Expenses........................................................69
Section 3.19 Release of Mortgage
Files..................................................................69
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Section 3.20 Documents, Records and Funds in Possession of the
Servicer to be held for Trustee..........70
Section 3.21 Possession of Certain Insurance Policies and
Documents.....................................70
Section 3.22 Annual Certificate as to
Compliance........................................................70
Section 3.23
UCC........................................................................................72
Section 3.24 Optional Purchase of Defaulted Mortgage
Loans..............................................72
ARTICLE IV
ACCOUNTS....................................................................................73
Section 4.01 Collection of Mortgage Loan Payments; Custodial
Account....................................73
Section 4.02 Permitted Withdrawals From the Custodial
Account...........................................75
Section 4.03 Reports to
Trustee.........................................................................76
Section 4.04 Collection of Taxes; Assessments and Similar Items;
Escrow Accounts........................77
Section 4.05 Adjustments to Mortgage Rate and Scheduled
Payment.........................................78
Section 4.06 Distribution
Account.......................................................................78
Section 4.07 Permitted Withdrawals and Transfers from the
Distribution Account..........................79
Section 4.08 Duties of the Credit Risk Manager;
Termination.............................................81
Section 4.09 Limitation Upon Liability of the Credit Risk
Manager.......................................82
ARTICLE V ADVANCES AND
DISTRIBUTIONS..................................................................83
Section 5.01 Advances; Advance
Facility.................................................................83
Section 5.02 Compensating Interest
Payments.............................................................86
Section 5.03 REMIC
Distributions........................................................................86
Section 5.04
Reserved...................................................................................86
Section 5.05
Reserved...................................................................................86
Section 5.06 Distributions on the
Certificates..........................................................87
Section 5.07 Allocation of Realized Losses
.............................................................93
Section 5.08 Prepayment
Charges.........................................................................95
Section 5.09 Monthly Statements to
Certificateholders...................................................96
Section 5.10
Reserved...................................................................................98
Section 5.11 REMIC I
Allocations........................................................................98
Section 5.12 Class P Certificate
Account...............................................................100
Section 5.13 Basis Risk Shortfall Reserve
Fund.........................................................100
ARTICLE VI THE
CERTIFICATES...........................................................................102
Section 6.01 The
Certificates..........................................................................102
Section 6.02 Certificate Register; Registration of Transfer and
Exchange of Certificates...............103
Section 6.03 Mutilated, Destroyed, Lost or Stolen
Certificates.........................................106
Section 6.04 Persons Deemed
Owners.....................................................................106
Section 6.05 Access to List of Certificateholders' Names and
Addresses.................................107
Section 6.06 Book-Entry
Certificates...................................................................107
Section 6.07 Notices to
Depository.....................................................................108
Section 6.08 Definitive
Certificates...................................................................108
Section 6.09 Maintenance of Office or
Agency...........................................................108
ARTICLE VII THE DEPOSITOR AND THE
SERVICER.............................................................110
Section 7.01 Liabilities of the Depositor and the
Servicer.............................................110
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Section 7.02 Merger or Consolidation of the Depositor or the
Servicer..................................110
Section 7.03 Indemnification of Depositor and the
Servicer.............................................110
Section 7.04 Limitations on Liability of the Depositor, the
Servicer and Others........................111
Section 7.05 Servicer Not to
Resign....................................................................112
Section 7.06 Termination of Servicer Without Cause; Appointment
of Special Servicer....................112
ARTICLE VIII DEFAULT; TERMINATION OF
SERVICER...........................................................114
Section 8.01 Servicer
Default..........................................................................114
Section 8.02 Trustee to Act; Appointment of
Successor..................................................115
Section 8.03 Notification to
Certificateholders........................................................117
Section 8.04 Waiver of Servicer
Defaults...............................................................117
ARTICLE IX CONCERNING THE TRUSTEE AND THE
CUSTODIAN...................................................118
Section 9.01 Duties of
Trustee.........................................................................118
Section 9.02 Certain Matters Affecting the
Trustee.....................................................119
Section 9.03 Trustee Not Liable for Certificates or Mortgage
Loans.....................................121
Section 9.04 Trustee May Own
Certificates..............................................................122
Section 9.05 Trustee's Compensation and Expenses;
Indemnification......................................122
Section 9.06 Eligibility Requirements for
Trustee......................................................123
Section 9.07
Insurance.................................................................................123
Section 9.08 Resignation and Removal of
Trustee........................................................123
Section 9.09 Successor
Trustee.........................................................................124
Section 9.10 Merger or Consolidation of
Trustee........................................................124
Section 9.11 Appointment of Co-Trustee or Separate
Trustee.............................................125
Section 9.12 Tax
Matters...............................................................................126
Section 9.13 Custodian's Fees and
Expenses.............................................................128
Section 9.14 Indemnification of
Custodian..............................................................128
Section 9.15 Reliance of
Custodian.....................................................................129
ARTICLE X
TERMINATION................................................................................131
Section 10.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans..........................131
Section 10.02 Final Distribution on the
Certificates....................................................131
Section 10.03 Additional Termination
Requirements.......................................................133
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................................................134
Section 11.01
Amendment.................................................................................134
Section 11.02 Recordation of Agreement;
Counterparts....................................................135
Section 11.03 GOVERNING
LAW.............................................................................135
Section 11.04 Intention of
Parties......................................................................135
Section 11.05
Notices...................................................................................136
Section 11.06 Severability of
Provisions................................................................137
Section 11.07
Assignment................................................................................137
Section 11.08 Limitation on Rights of
Certificateholders................................................137
Section 11.09 Certificates Nonassessable and Fully
Paid.................................................138
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EXHIBITS
Exhibit A-1 Form of Class I-A-1, Class I-A-2, Class II-A-1,
Class II-A-2
and Class II-A-3 Certificates
Exhibit A-2 Form of Class M-[1][2][3][4][5] Certificates
Exhibit A-3 Form of Class X Certificates
Exhibit A-4 Form of Class P Certificates
Exhibit A-5 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Initial Certification
Exhibit C-2 Form of Interim Certification
Exhibit C-3 Form of Final Certification
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Request for Release
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Prepayment Charge Schedule
Exhibit L Form of Servicer's Certification
Exhibit M Form of Trustee's Certification
Exhibit N Appendix E of the Standard & Poor's Glossary For
File
Format For LEVELS(R) Version 5.6 Revised
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<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of February 1, 2005,
among
NOMURA ASSET ACCEPTANCE CORPORATION, a Delaware corporation, as
depositor (the
"Depositor"), NOMURA CREDIT & CAPITAL, INC., a Delaware
corporation, as seller
(in such capacity, the "Seller"), GMAC MORTGAGE CORPORATION, a
Pennsylvania
corporation, as servicer (the "Servicer") and JPMORGAN CHASE
BANK, N.A., a
national banking association, not in its individual capacity,
but solely as
trustee (the "Trustee") and as custodian (the "Custodian").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates.
REMIC I
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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 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 R-I Interest will
represent the sole
class of "residual interests" in REMIC I for purposes of the
REMIC Provisions
(as defined herein) under federal income tax law. The following
table
irrevocably sets forth the designation, the Uncertificated REMIC
I Pass-Through
Rate, the Initial Uncertificated Principal Balance, and for
purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible
maturity date" for each of the REMIC I Regular Interests. None
of the REMIC I
Regular Interests will be certificated.
<TABLE>
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Uncertificated
Initial Uncertificated REMIC I Assumed Final Distribution
Designation Principal Balance Pass-Through Rate Date(1)
----------- ----------------- ----------------- -------
<S> <C> <C> <C>
LTI-AA $ 182,564,967.98 (2) February 25, 2035
LTI-IA1 $ 348,645.00 (2) February 25, 2035
LTI-IA2 $ 38,740.00 (2) February 25, 2035
LTI-IIA1 $ 579,000.00 (2) February 25, 2035
LTI-IIA2 $ 567,055.00 (2) February 25, 2035
LTI-IIA3 $ 127,340.00 (2) February 25, 2035
LTI-M1 $ 106,185.00 (2) February 25, 2035
LTI-M2 $ 32,600.00 (2) February 25, 2035
LTI-M3 $ 18,630.00 (2) February 25, 2035
LTI-M4 $ 16,765.00 (2) February 25, 2035
LTI-M5 $ 15,838.94 (2) February 25, 2035
LTI-ZZ $ 1,875,016.74 (2) February 25, 2035
LTI-P $ 100.00 (2) February 25, 2035
LTI-1SUB $ 942.96 (2) February 25, 2035
LTI-1GRP $ 8,690.67 (2) February 25, 2035
LTI-2SUB $ 3,099.59 (2) February 25, 2035
LTI-2GRP $ 28,567.49 (2) February 25, 2035
LTI-XX $ 186,249,482.95 (2) February 25, 2035
</TABLE>
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date in the month following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
I
Regular Interest.
(2) Calculated in accordance with the definition of
"Uncertificated REMIC I
Pass-Through Rate" herein.
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REMIC II
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As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as "REMIC II". The 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 Class designation,
Pass-Through Rate
and Initial Certificate Principal Balance for each Class of
Certificates and
uncertificated REMIC II Regular Interests that represents one or
more of the
"regular interests" in REMIC II created hereunder:
<TABLE>
<CAPTION>
Initial Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate
Distribution Date(1)
----------------- ----------------- -----------------
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<S> <C> <C> <C>
Class I-A-1 $ 69,729,000.00 Class I-A-1 Pass Through Rate
February 25, 2035
Class I-A-2 $ 7,748,000.00 Class I-A-2 Pass Through Rate
February 25, 2035
Class II-A-1 $ 115,800,000.00 Class II-A-1 Pass Through Rate
February 25, 2035
Class II-A-2 $ 113,411,000.00 Class II-A-2 Pass Through Rate
February 25, 2035
Class II-A-3 $ 25,468,000.00 Class II-A-3 Pass Through Rate
February 25, 2035
Class M-1 $ 21,237,000.00 Class M-1 Pass Through Rate February
25, 2035
Class M-2 $ 6,520,000.00 Class M-2 Pass-Through Rate February
25, 2035
Class M-3 $ 3,726,000.00 Class M-3 Pass Through Rate February
25, 2035
Class M-4 $ 3,353,000.00 Class M-4 Pass Through Rate February
25, 2035
Class M-5 $ 3,167,787.00 Class M-5 Pass Through Rate February
25, 2035
Class X(2) $ 2,421,780.00 Class X Pass Through Rate February 25,
2035
Class P $ 100.00 N/A(3) February 25, 2035
</TABLE>
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date in the month following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each Class
of
Certificates.
(2) The Class X Certificates will not accrue interest on their
Certificate
Principal Balance, but will accrue interest at the Class X
Pass-Through
Rate on the Certificate Notional Balance of the Class X
Certificates
outstanding from time to time which shall equal the aggregate of
the
Uncertificated Principal Balances of the REMIC I Regular
Interests
(other than REMIC I Regular Interest LTI-P).
(3) The Class P Certificates will not be entitled to
distributions of interest.
In consideration of the mutual agreements herein contained,
the
Depositor, the Servicer, the Seller and the Trustee agree as
follows:
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<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS
In addition to those terms defined in Section 1.02, whenever
used in
this Agreement, the following words and phrases, unless the
context otherwise
requires, shall have the following meanings:
ACCOUNT: Either the Distribution Account or the Custodial
Account.
ACCRUAL PERIOD: With respect to the Group I Certificates and the
Class
X Certificates and any Distribution Date, the calendar month
immediately
preceding such Distribution Date. With respect to the Group II
Certificates and
Subordinate Certificates and any Distribution Date, the period
commencing on the
immediately preceding Distribution Date (or with respect to the
first Accrual
Period, the Closing Date) and ending on the day immediately
preceding the
related Distribution Date. All calculations of interest on the
Group I
Certificates and the Class X Certificates will be based on a
360-day year
consisting of twelve 30-day months. All calculations of interest
on the Group II
Certificates and Subordinate Certificates will be made based on
a 360-day year
and the actual number of days elapsed in the related Accrual
Period.
ADJUSTMENT DATE: With respect to each Mortgage Loan, the first
day of
the month in which the Mortgage Rate of the Mortgage Loan
changes pursuant to
the related Mortgage Note. The first Adjustment Date following
the Cut-Off Date
as to each Mortgage Loan is set forth in the Loan Schedule.
ADVANCE: An advance of delinquent payments of principal or
interest in
respect of a Mortgage Loan required to be made by the Servicer
pursuant to
Section 5.01 or by the Trustee in its capacity as Successor
Servicer pursuant to
Section 5.01.
ADVANCE FACILITY: As defined in Section 5.01(b)(i).
ADVANCE FACILITY NOTICE: As defined in Section 5.01(b)(ii).
ADVANCE FINANCING PERSON: As defined in Section 5.01(b)(i).
ADVANCE REIMBURSEMENT AMOUNT: As defined in Section
5.01(b)(ii).
AGGREGATE LOAN BALANCE: With respect to the Mortgage Loans and
any
Distribution Date, the aggregate of the Stated Principal
Balances of the
Mortgage Loans as of the last day of the related Due Period.
AGGREGATE LOAN GROUP BALANCE: With respect to a Loan Group and
any
Distribution Date, the aggregate of the Stated Principal
Balances of the
Mortgage Loans in such Loan Group as of the last day of the
related Due Period.
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AGREEMENT: This Pooling and Servicing Agreement and any and
all
amendments or supplements hereto made in accordance with the
terms herein.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the
aggregate amount held in the Custodial Account at the close of
business on the
immediately preceding Determination Date on account of (i) all
Scheduled
Payments or portions thereof received in respect of the Mortgage
Loans due after
the related Due Period and (ii) Principal Prepayments and
Liquidation Proceeds
received in respect of the Mortgage Loans after the last day of
the related
Prepayment Period.
APPLIED LOSS AMOUNT: With respect to the Publicly Offered
Certificates
and any Distribution Date, the excess of the aggregate
Certificate Principal
Balance of the Publicly Offered Certificates over the Aggregate
Loan Balance of
the Mortgage Loans after giving effect to all Realized Losses
incurred with
respect to the Mortgage Loans during the related Due Period and
payments of
principal to the Publicly Offered Certificates on such
Distribution Date.
APPRAISED VALUE: With respect to any Mortgage Loan originated
in
connection with a refinancing, the appraised value of the
Mortgaged Property
based upon the appraisal made at the time of such refinancing
or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised
value of the
Mortgaged Property based upon the appraisal made by a fee
appraiser at the time
of the origination of the Mortgage Loan, and (y) the sales price
of the
Mortgaged Property at the time of such origination.
ASSUMED FINAL DISTRIBUTION DATE: The Distribution Date in
February
2035.
AUTHORIZED SERVICER REPRESENTATIVE: Those Servicer
representatives,
authorized to execute a Request for Release on behalf of the
Servicer, whose
name and facsimile signature appear on a list furnished to the
Trustee by the
Servicer on the Closing Date pursuant to this Agreement, as such
list may be
amended by the Servicer from time-to-time.
BANKRUPTCY CODE: Title 11 of the United States Code.
BASIS RISK SHORTFALL RESERVE FUND: The segregated non-interest
bearing
trust account created and maintained by the Trustee pursuant to
Section 5.13
hereof.
BASIS RISK SHORTFALL: With respect to any Class of Group II
Certificates or Subordinate Certificates and any Distribution
Date, the sum of
(i) the excess, if any, of the related Current Interest
(calculated without
regard to the Net Funds Cap) over the related Current Interest
for the
applicable Distribution Date; (ii) any amount described in
clause (i) remaining
unpaid from prior Distribution Dates; and (iii) interest on the
amount in clause
(ii) for the related Accrual Period calculated without regard to
the Net Funds
Cap.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall
be
registered in the name of the Depository or its nominee, the
ownership of which
is reflected on the books of the Depository or on the books of a
person
maintaining an account with the Depository (directly, as a
"Depository
Participant", or indirectly, as an indirect participant in
accordance with the
rules of the Depository and as described in Section 6.06). As of
the Closing
Date, each Class of Publicly Offered Certificates constitutes a
Class of
Book-Entry Certificates.
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BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or
(ii) a
day on which banking institutions in The City of New York, New
York, the
Commonwealth of Pennsylvania, the city in which the Corporate
Trust Office of
the Trustee is located or the States in which the Servicer's
servicing
operations are located are authorized or obligated by law or
executive order to
be closed.
CAP CONTRACT: Shall mean the cap contract between the Trustee
and the
counterparty named thereunder, for the benefit of the Holders of
the Class
II-A-2 Certificates.
CAP RATE: With respect to the Group II Certificates and
Subordinate
Certificates, 11.00%.
CARRYFORWARD INTEREST: With respect to any Class of Publicly
Offered
Certificates and any Distribution Date, the sum of (i) the
amount, if any, by
which (x) the sum of (A) Current Interest for that Class of
Certificates for the
immediately preceding Distribution Date and (B) any unpaid
Carryforward Interest
for such Class from previous Distribution Dates exceeds (y) the
actual amount
distributed on such Class in respect of interest on the
immediately preceding
Distribution Date and (ii) interest on such amount for the
related Accrual
Period at the applicable Pass-Through Rate.
CERTIFICATE: Any one of the certificates of any Class executed
and
authenticated by the Trustee in substantially the forms attached
hereto as
Exhibits A-1 through A-5.
CERTIFICATE MARGIN: With respect to each Distribution Date on or
prior
to the first possible Optional Termination Date, 0.28%, 0.26%,
0.35%, 0.57%,
0.75%, 0.80%, 1.25% and 1.90%, for the Class II-A-1, Class
II-A-2, Class II-A-3,
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates,
respectively. With respect to each Distribution Date following
the first
possible Optional Termination Date, 0.56%, 0.52%, 0.70%, 1.07%,
1.25%, 1.30%,
1.75% and 2.40%, for the Class II-A-1, Class II-A-2, Class
II-A-3, Class M-1,
Class M-2, Class M-3, Class M-4 and Class M-5 Certificates,
respectively.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Publicly Offered
Certificate
or Class P Certificate and as of any Distribution Date, the
Initial Certificate
Principal Balance of such Certificate less the sum of (i) all
amounts
distributed with respect to such Certificate in reduction of the
Certificate
Principal Balance thereof on previous Distribution Dates, (ii)
with respect to
any Class I-A-2 Certificate, Class II-A-3 Certificate or any
Class of
Subordinate Certificates, any reductions in the Certificate
Principal Balance of
such Certificate deemed to have occurred in connection with the
allocations of
Realized Losses, if any and (iii) with respect to the Class
I-A-2 Certificates,
Class II-A-3 Certificates or Subordinate Certificates,
Subsequent Recoveries
added to the Certificate Principal Balance of any such
Certificate pursuant to
Section 5.07(d), in each case up to the amount of Applied Loss
Amounts but only
to the extent that any such Applied Loss Amount has not been
paid to any Class
of Certificates as a Deferred Amount. As in any Class X
Certificate and any date
of determination, the excess, if any, of (i) the Aggregate Loan
Balance over
(ii) the then aggregate Certificate Principal Balance of the
Publicly Offered
Certificates. References herein to the Certificate Principal
Balance of a Class
of Certificates shall mean the Certificate Principal Balances of
all
Certificates in such Class.
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<PAGE>
CERTIFICATE REGISTER: The register maintained pursuant to
Section 6.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a
Certificate is
registered in the Certificate Register (initially, Cede &
Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as
set forth
in Section 6.01.
CLASS I-A-1 CERTIFICATE: Any Certificate designated as a "Class
I-A-1
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class I-A-1 Certificates as set forth herein and evidencing
a Regular
Interest in REMIC II.
CLASS I-A-1 PASS-THROUGH RATE: With respect to each Distribution
Date,
a per annum rate equal to the weighted average Net Mortgage Rate
of the Group I
Mortgage Loans minus 0.53% per annum.
CLASS I-A-2 CERTIFICATE: Any Certificate designated as a "Class
I-A-2
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class I-A-2 Certificates as set forth herein and evidencing
a Regular
Interest in REMIC II.
CLASS I-A-2 PASS-THROUGH RATE: With respect to each Distribution
Date,
a per annum rate equal to the weighted average Net Mortgage Rate
of the Group I
Mortgage Loans minus 0.30% per annum.
CLASS II-A-1 CERTIFICATE: Any Certificate designated as a "Class
II-A-1
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class II-A-1 Certificates as set forth herein and evidencing
a Regular
Interest in REMIC II.
CLASS II-A-1 PASS-THROUGH RATE: With respect to each
Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.28% or (B) after the first possible Optional
Termination
Date, 0.56%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
CLASS II-A-2 CERTIFICATE: Any Certificate designated as a "Class
II-A-2
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class II-A-2 Certificates as set forth herein and evidencing
a Regular
Interest in REMIC II.
CLASS II-A-2 PASS-THROUGH RATE: With respect to each
Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.26% or (B) after the first possible Optional
Termination
Date, 0.52%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
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CLASS II-A-3 CERTIFICATE: Any Certificate designated as a "Class
II-A-3
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class II-A-3 Certificates as set forth herein and evidencing
a Regular
Interest in REMIC II.
CLASS II-A-3 PASS-THROUGH RATE: With respect to each
Distribution Date,
a per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.35% or (B) after the first possible Optional
Termination
Date, 0.70%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-1 PASS-THROUGH RATE: With respect to each Distribution
Date, a
per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.57% or (B) after the first possible Optional
Termination
Date, 1.07%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
CLASS M-1 PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution
Date on or after the Stepdown Date and as long as a Trigger
Event is not in
effect with respect to such Distribution Date, the amount, if
any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior
Certificates, in
each case, after giving effect to payments on such Distribution
Date and (ii)
the Certificate Principal Balance of the Class M-1 Certificates
immediately
prior to such Distribution Date exceeds (y) the lesser of (A)
the product of (i)
approximately 89.70% and (ii) the Aggregate Loan Balance for
such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of
the Cut-off Date.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-2 PASS-THROUGH RATE: With respect to each Distribution
Date, a
per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.75% or (B) after the first possible Optional
Termination
Date, 1.25%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
CLASS M-2 PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution
Date on or after the Stepdown Date and as long as a Trigger
Event is not in
effect with respect to such Distribution Date, the amount, if
any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior
Certificates and
the Class M-1 Certificates, in each case, after giving effect to
payments on
such Distribution Date and (ii) the Certificate Principal
Balance of the
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Class M-2 Certificates immediately prior to such Distribution
Date exceeds (y)
the lesser of (A) the product of (i) approximately 93.20% and
(ii) the Aggregate
Loan Balance for such Distribution Date and (B) the amount, if
any, by which (i)
the Aggregate Loan Balance for such Distribution Date exceeds
(ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-3 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-3 PASS-THROUGH RATE: With respect to each Distribution
Date, a
per annum rate equal to the least of (i) the sum of One-Month
LIBOR for that
Distribution Date plus (A) on or prior to the first possible
Optional
Termination Date, 0.80% or (B) after the first possible Optional
Termination
Date, 1.30%, (ii) the applicable Net Funds Cap, (iii) the
Maximum Interest Rate
and (iv) the applicable Cap Rate.
CLASS M-3 PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution
Date on or after the Stepdown Date and as long as a Trigger
Event is not in
effect with respect to such Distribution Date, the amount, if
any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior,
Class M-1 and
Class M-2 Certificates, in each case, after giving effect to
payments on such
Distribution Date and (ii) the Certificate Principal Balance of
the Class M-3
Certificates immediately prior to such Distribution Date exceeds
(y) the lesser
of (A) the product of (i) approximately 95.20% and (ii) the
Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any,
by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii)
0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
CLASS M-4 CERTIFICATE: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-4 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-4 PASS-THROUGH RATE: With respect to each Distribution
Date
thereafter, a per annum rate equal to the least of (i) the sum
of One-Month
LIBOR for that Distribution Date plus (A) on or prior to the
first possible
Optional Termination Date, 1.25% or (B) after the first possible
Optional
Termination Date, 1.75%, (ii) the applicable Net Funds Cap,
(iii) the Maximum
Interest Rate and (iv) the applicable Cap Rate.
CLASS M-4 PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution
Date on or after the Stepdown Date and as long as a Trigger
Event is not in
effect with respect to such Distribution Date, the amount, if
any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior,
Class M-1,
Class M-2 and Class M-3 Certificates, in each case, after giving
effect to
payments on such Distribution Date and (ii) the Certificate
Principal Balance of
the Class M-4 Certificates immediately prior to such
Distribution Date exceeds
(y) the lesser of (A) the product of (i) approximately 97.00%
and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii)
0.50% of the Aggregate Loan Balance as of the Cut-off Date.
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CLASS M-5 CERTIFICATE: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class M-5 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-5 PASS-THROUGH RATE: With respect to each Distribution
Date
thereafter, a per annum rate equal to the least of (i) the sum
of One-Month
LIBOR for that Distribution Date plus (A) on or prior to the
first possible
Optional Termination Date, 1.90% or (B) after the first possible
Optional
Termination Date, 2.40%, (ii) the applicable Net Funds Cap,
(iii) the Maximum
Interest Rate and (iv) the applicable Cap Rate.
CLASS M-5 PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution
Date on or after the Stepdown Date and as long as a Trigger
Event is not in
effect with respect to such Distribution Date, the amount, if
any, by which (x)
the sum of (i) the Certificate Principal Balances of the Senior,
Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates, in each case,
after giving
effect to payments on such Distribution Date and (ii) the
Certificate Principal
Balance of the Class M-5 Certificates immediately prior to such
Distribution
Date exceeds (y) the lesser of (A) the product of (i)
approximately 98.70% and
(ii) the Aggregate Loan Balance for such Distribution Date and
(B) the amount,
if any, by which (i) the Aggregate Loan Balance for such
Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the
Cut-off Date.
CLASS P CERTIFICATE: Any Certificate designated as a "Class
P
Certificate" on the face thereof, in the form of Exhibit A-4
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class P Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS P CERTIFICATE ACCOUNT: The Eligible Account established
and
maintained by the Trustee pursuant to Section 5.12(a).
CLASS R CERTIFICATE: Any Certificate designated as a "Class
R"
Certificate on the face thereof in the form of Exhibit A-5
hereto, representing
the right to its Percentage Interest of distributions provided
for the Class R
Certificates as set forth herein and evidencing the Class R-I
Interest and Class
R-II Interest.
CLASS R-I INTEREST: The uncertificated Residual Interest in
REMIC I.
CLASS R-II INTEREST: The uncertificated Residual Interest in
REMIC II.
CLASS X CERTIFICATE: Any Certificate designated as a "Class
X
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class X Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution
Date and
the Class X Certificates, the sum of (i) the Excess Cap Payment,
(ii) the
Current Interest and Carryforward Interest and (iii) any
Overcollateralization
Release Amount for such Distribution Date remaining after
payments pursuant to
items 1 though 13 of clause 5.06(iii); provided, however that on
and
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after the Distribution Date on which the Certificate Principal
Balance of the
Publicly Offered Certificates has been reduced to zero, the
Class X Distribution
Amount shall include the Overcollateralization Amount.
CLASS X PASS-THROUGH RATE: On any Distribution Date, a per annum
rate
equal to the percentage equivalent of a fraction, the numerator
of which is the
sum of the amounts calculated pursuant to clauses (A) through
(L) below, and the
denominator of which is the aggregate of the Uncertificated
Principal Balances
of REMIC I Regular Interest LTI-AA, REMIC I Regular Interest
LTI-IA1, REMIC I
Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1,
REMIC I Regular
Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I
Regular Interest
LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular
Interest LTI-M3, REMIC
I Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and
REMIC I Regular
Interest LTI-ZZ. For purposes of calculating the Pass-Through
Rate for the Class
X Certificates, the numerator is equal to the sum of the
following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTII-AA minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTII-AA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-IA1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-IA1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-IA2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-IA2;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-IIA1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-IIA1;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-IIA2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-IIA2;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-IIA3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-IIA3;
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-M1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-M1;
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-M2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-M2;
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<PAGE>
(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-M3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-M3;
(J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-M4 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-M4;
(K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-M5 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-M5; and
(L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTI-ZZ minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTI-ZZ.
CLEANUP CALL: As defined in Section 10.01.
CLOSING DATE: February 28, 2005.
CODE: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COMPENSATING INTEREST: An amount to be deposited in the
Distribution
Account by the Servicer to offset a Prepayment Interest
Shortfall on a Mortgage
Loan subject to this Agreement; provided, however that the
amount of
Compensating Interest required to be paid in respect of any
Mortgage Loan shall
not exceed the Servicing Fee payable to the Servicer.
CORPORATE TRUST OFFICE: The designated office of the Trustee
where at
any particular time its corporate trust business with respect to
this Agreement
shall be administered, which office at the date of the execution
of this
Agreement is located at 4 New York Plaza, 6th Floor, New York,
New York 10004,
Attention: Institutional Trust Services/Global Debt, Nomura
Asset Acceptance
Corporation, Alternative Loan Trust, Series 2005-AR1, or at such
other address
as the Trustee may designate from time to time.
CORRESPONDING CERTIFICATE: WITH RESPECT TO:
(i) REMIC I Regular Interest LTI-IA1, the Class I-A-1
Certificates;
(ii) REMIC I Regular Interest LTI-IA2, the Class I-A-2
Certificates;
(iii) REMIC I Regular Interest LTI-IIA1, the Class II-A-1
Certificates;
(iv) REMIC I Regular Interest LTI-IIA2, the Class II-A-2
Certificates;
(v) REMIC I Regular Interest LTI-IIA3, the Class II-A-3
Certificates;
(vi) REMIC I Regular Interest LTI-M1, the Class M-1
Certificates;
(vii) REMIC I Regular Interest LTI-M2, the Class M-2
Certificates;
(viii) REMIC I Regular Interest LTI-M3, the Class M-3
Certificates;
(ix) REMIC I Regular Interest LTI-M4, the Class M-4
Certificates;
(x) REMIC I Regular Interest LTI-M5, the Class M-5
Certificates; and
(xi) REMIC I Regular Interest LTI-P, the Class P
Certificates.
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CREDIT RISK MANAGEMENT AGREEMENT: The agreement between the
Credit Risk
Manager and the Servicer, dated as of February 28, 2005.
CREDIT RISK MANAGEMENT FEE: As to each Mortgage Loan and any
Distribution Date, an amount equal to 1/12th of the Credit Risk
Management Fee
Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the
last day of the related Due Period. The Credit Risk Management
Fee shall be
payable to the Credit Risk Manager and/or the Seller pursuant to
Section
4.07(a)(vii) and 4.08(b).
CREDIT RISK MANAGEMENT FEE RATE: 0.015% per annum.
CREDIT RISK MANAGER: The Murrayhill Company, a Colorado
corporation.
CURRENT INTEREST: With respect to any Class of Publicly
Offered
Certificates and any Distribution Date, the amount of interest
accruing at the
applicable Pass-Through Rate on the related Certificate
Principal Balance during
the related Accrual Period; provided, that as to each Class of
Publicly Offered
Certificates, the Current Interest will be reduced by a pro rata
portion of any
Net Interest Shortfalls to the extent not covered by excess
interest. No Current
Interest will be payable with respect to any Class of Publicly
Offered
Certificates after the Distribution Date on which the
outstanding Certificate
Principal Balance of such Certificate has been reduced to
zero.
CUSTODIAL ACCOUNT: The account established and maintained by
the
Servicer with respect to receipts on the Mortgage Loans and
related REO
Properties in accordance with Section 4.01.
CUSTODIAN: JPMorgan Chase Bank, N.A., a national banking
association.
CUT-OFF DATE: February 1, 2005.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date after
application of all Principal Prepayments received prior to the
Cut-off Date and
scheduled payments of principal due on or before the Cut-off
Date, whether or
not received, but without giving effect to any installments of
principal
received in respect of Due Dates after the Cut-off Date.
DEBT SERVICE REDUCTION: Means a reduction in the amount of the
monthly
payment due on a Mortgage Loan as established by a bankruptcy
court in a
bankruptcy of the related Mortgagor, except a reduction
constituting a Deficient
Valuation or any reduction that results in permanent forgiveness
of principal.
DEFERRED AMOUNT: With respect to the Class I-A-2 Certificates,
Class
II-A-3 Certificates or any Class of Subordinate Certificates and
any
Distribution Date, the amount by which (x) the aggregate of the
Applied Loss
Amounts previously applied in reduction of the Certificate
Principal Balance
thereof exceeds (y) the aggregate of amounts previously paid in
reimbursement
thereof and the amount by which the Certificate Principal
Balance of any such
Class has been increased due to the collection of Subsequent
Recoveries.
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DEFICIENT VALUATION: Means the difference between the Stated
Principal
Balance of a Mortgage Loan and a reduced secured debt as a
result of a
bankruptcy court establishing the value of the Mortgaged
Property at an amount
less than the then Stated Principal Balance of the Mortgage Loan
in connection
with a bankruptcy of the related Mortgagor.
DEFINITIVE CERTIFICATES: As defined in Section 6.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a
Replacement Mortgage Loan.
DELINQUENCY RATE: With respect to the Mortgage Loans and any
calendar
month will be, generally, the fraction, expressed as a
percentage, the numerator
of which is the Aggregate Loan Balance of all Mortgage Loans
sixty (60) or more
days delinquent (including all Mortgage Loans in bankruptcy or
foreclosure and
all REO Properties) as of the close of business on the last day
of such month,
and the denominator of which is the Aggregate Loan Balance as of
the close of
business on the last day of such month.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such Mortgage Loan by the
close of business
on the day such payment is scheduled to be due. A Mortgage Loan
is "30 days
delinquent" if such payment has not been received by the close
of business on
the corresponding day of the month immediately succeeding the
month in which
such payment was due, or, if there is no such corresponding day
(e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day
of such month), then on the last day of such immediately
succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so
on.
DENOMINATION: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Certificate Principal Balance
of this
Certificate".
DEPOSITOR: Nomura Asset Acceptance Corporation, a Delaware
corporation,
or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository
Trust
Company ("DTC"), the nominee of which is Cede & Co., or any
other organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially
be the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section
8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
DEPOSITORY AGREEMENT: With respect to the Class of
Book-Entry
Certificates, the agreement among the Depositor, the Trustee and
the initial
Depository, dated as of the Closing Date, substantially in the
form of Exhibit
I.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
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DETERMINATION DATE: With respect to any Distribution Date, the
15th day
of the month of such Distribution Date or, if such 15th day is
not a Business
Day, the immediately preceding Business Day.
DISTRIBUTION ACCOUNT: Each trust account or accounts related to
the
Mortgage Loans created and maintained by the Trustee pursuant to
Section 4.06 in
the name of the Trustee for the benefit of the
Certificateholders and designated
"JPMorgan Chase Bank, N.A., in trust for registered holders of
Nomura Asset
Acceptance Corporation, Mortgage Pass-Through Certificates,
Series 2005-AR1".
Funds in the Distribution Account shall be held in trust for
the
Certificateholders for the uses and purposes set forth in this
Agreement. The
Distribution Account shall be an Eligible Account.
DISTRIBUTION DATE: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if such 25th day is not
a Business Day,
the next succeeding Business Day, commencing in March 2005.
DUE DATE: As to any Mortgage Loan, the date in each month on
which the
related Scheduled Payment is due, as set forth in the related
Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period
from the
second day of the calendar month preceding the calendar month in
which such
Distribution Date occurs through close of business on the first
day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a
federal or state chartered depository institution or trust
company, the
long-term unsecured debt obligations and short-term unsecured
debt obligations
of which are rated by each Rating Agency in one of its two
highest long-term and
its highest short-term rating categories respectively, at the
time any amounts
are held on deposit therein, or (ii) an account or accounts in a
depository
institution or trust company in which such accounts are insured
by the FDIC (to
the limits established by the FDIC) and the uninsured deposits
in which accounts
are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered
to the Trustee and to each Rating Agency, the Certificateholders
have a claim
with respect to the funds in such account or a perfected first
priority security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution or trust
company in which
such account is maintained, or (iii) a segregated, non-interest
bearing trust
account or accounts maintained with the corporate trust
department of a federal
or state chartered depository institution or trust company
having capital and
surplus of not less than $50,000,000, acting in its fiduciary
capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced
in writing by
the Rating Agencies. Eligible Accounts may bear interest, and
may include, if
otherwise qualified under this definition, accounts maintained
with the Trustee.
ESCROW ACCOUNT: Shall mean the accounts maintained by the
Servicer
pursuant to Section 4.04. Each Escrow Account shall be an
Eligible Account.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATE: Each of the Class X, Class P and
Residual
Certificates.
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EXCESS CAP PAYMENT: With respect to any Distribution Date, the
excess,
if any, of (1) the cap payments made by the counterparty under
the Cap Contract,
over (2) the amount of the Basis Risk Shortfalls attributable to
the Class
II-A-2 Certificates for such Distribution Date.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law
to be
paid to the related Mortgagor, the excess, if any, of any
Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal
Balance of such
Mortgage Loan and accrued and unpaid interest at the related
Mortgage Rate
through the last day of the month in which the Mortgage Loan has
been
liquidated.
EXEMPTION: Prohibited Transaction Exemption 93-32, as amended
from time
to time.
FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FINAL CERTIFICATION: The certification of the Custodian in the
form
attached hereto as Exhibit C-3.
FINAL RECOVERY DETERMINATION: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by the Seller or the Class X Certificateholder pursuant to or as
contemplated by
Section 2.03(c) or Section 10.01), a determination made by the
Servicer pursuant
to this Agreement that all Insurance Proceeds, Liquidation
Proceeds and other
payments or recoveries which the Servicer, in its reasonable
good faith
judgment, expects to be finally recoverable in respect thereof
have been so
recovered. The Trustee shall maintain records, based solely on
information
provided by the Servicer, of each Final Recovery Determination
made thereby.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989, as amended.
FREDDIE MAC: Federal Home Loan Mortgage Corporation, or any
successor
thereto.
GROSS MARGIN: With respect to each Mortgage Loan, the fixed
percentage
set forth in the related Mortgage Note that is added to the
Index on each
Adjustment Date in accordance with the terms of the related
Mortgage Note used
to determine the Mortgage Rate for such Mortgage Loan.
GROUP I CERTIFICATES: The Class I-A-1 Certificates and Class
I-A-2
Certificates.
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GROUP I ALLOCATION AMOUNT: With respect to any Distribution
Date, the
product of the Senior Principal Payment Amount for that
distribution date and a
fraction the numerator of which is the Principal Remittance
Amount derived from
the Group I Mortgage Loans and the denominator of which is the
Principal
Remittance Amount, in each case for that Distribution Date.
GROUP I EXCESS INTEREST AMOUNT: With respect to any Distribution
Date,
the product of the Monthly Excess Interest required to be
distributed on that
Distribution Date pursuant to Section 5.06(iii)(1)(A) and a
fraction the
numerator of which is the Principal Remittance Amount derived
from the Group I
Mortgage Loans and the denominator of which is Principal
Remittance Amount, in
each case for that Distribution Date.
GROUP I MORTGAGE LOANS: Those Mortgage Loans identified on the
Mortgage
Loan Schedule as Group I Mortgage Loans.
GROUP II CERTIFICATES: The Class II-A-1, Class II-A-2 and Class
II-A-3
Certificates.
GROUP II ALLOCATION AMOUNT: With respect to any Distribution
Date, the
product of the Senior Principal Payment Amount for that
distribution date and a
fraction the numerator of which is the Principal Remittance
Amount derived from
the Group II Mortgage Loans and the denominator of which is the
Principal
Remittance Amount, in each case for that Distribution Date.
GROUP II EXCESS INTEREST AMOUNT: With respect to any
Distribution Date,
the product of the Monthly Excess Interest required to be
distributed on that
Distribution Date pursuant to Section 5.06(iii)(1)(A) and a
fraction the
numerator of which is the Principal Remittance Amount derived
from the Group II
Mortgage Loans and the denominator of which is Principal
Remittance Amount, in
each case for that Distribution Date.
GROUP II MORTGAGE LOANS: Those Mortgage Loans identified on
the
Mortgage Loan Schedule as Group II Mortgage Loans.
INDEMNIFIED PERSONS: The Trustee, the Servicer (including any
successor
to the Servicer), the Custodian, the Trust Fund and their
officers, directors,
agents and employees and, with respect to the Trustee, any
separate co-trustee
and its officers, directors, agents and employees.
INDEX: As of any Adjustment Date, the index applicable to
the
determination of the Mortgage Rate on each Mortgage Loan which
will generally be
based on Six-Month LIBOR, One-Year LIBOR or One-Year CMT.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate,
the Certificate Principal Balance of such Certificate or any
predecessor
Certificate on the Closing Date.
INITIAL CERTIFICATION: The certification of the Custodian in the
form
attached hereto as Exhibit C-1.
INSURANCE POLICY: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including all riders and
endorsements thereto
in effect with respect to such Mortgage Loan, including any
replacement policy
or policies for any Insurance Policies.
INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any other insurance policy
covering a
Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under
the Mortgage, the Servicer or the trustee under the deed of
trust and are not
applied to the restoration of the related Mortgaged Property or
released
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to the Mortgagor in accordance with the servicing standard set
forth in Section
3.01 other than any amount included in such Insurance Proceeds
in respect of
Insured Expenses.
INSURED EXPENSES: Expenses covered by any Insurance Policy with
respect
to the Mortgage Loans.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR
Business Day
preceding the commencement of each Accrual Period.
INTEREST REMITTANCE AMOUNT: With respect to any Distribution
Date, (i)
the sum, without duplication, of (a) all scheduled interest
during the related
Due Period with respect to the Mortgage Loans less the Servicing
Fee and the fee
payable to any provider of lender-paid mortgage insurance, if
any, (b) all
Advances relating to interest with respect to the Mortgage Loans
made on or
prior to the related Remittance Date, (c) all Compensating
Interest with respect
to the Mortgage Loans and required to be remitted by the
Servicer pursuant to
this Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds
and Subsequent Recoveries with respect to the Mortgage Loans
collected during
the related Prepayment Period (to the extent such Liquidation
Proceeds and
Subsequent Recoveries relate to interest), (e) all amounts
relating to interest
with respect to each Mortgage Loan repurchased by the Seller
pursuant to
Sections 2.02 and 2.03 and (f) all amounts in respect of
interest paid by the
Class X Certificateholder pursuant to Section 10.01 to the
extent remitted by
the Servicer to the Distribution Account pursuant to this
Agreement, minus (ii)
all amounts relating to interest required to be reimbursed
pursuant to Sections
4.02, 4.04, 4.06, 4.07 and 9.05 or as otherwise set forth in
this Agreement.
INTEREST SHORTFALL: With respect to any Distribution Date,
the
aggregate shortfall, if any, in collections of interest
(adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a)
Principal Prepayments
in full received during the related Prepayment Period, (b)
partial Principal
Prepayments received during the related Prepayment Period to the
extent applied
prior to the Due Date in the month of the Distribution Date and
(c) interest
payments on certain of the Mortgage Loans being limited pursuant
to the
provisions of the Relief Act.
INTERIM CERTIFICATION: The certification of the Custodian in the
form
attached hereto as Exhibit C-2.
LATEST POSSIBLE MATURITY DATE: The Distribution Date following
the
final scheduled maturity date of the Mortgage Loan in the Trust
Fund having the
latest scheduled maturity date as of the Cut-off Date. For
purposes of the
Treasury Regulations under Code section 860A through 860G, the
latest possible
maturity date of each regular interest issued by REMIC I and
REMIC II shall be
the Latest Possible Maturity Date.
LIBOR BUSINESS DAY: Shall mean a day on which banks are open
for
dealing in foreign currency and exchange in London.
LIBOR DETERMINATION DATE: The second LIBOR Business Day before
the
first day of the related Accrual Period.
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LIQUIDATED LOAN: With respect to any Distribution Date, a
defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure,
foreclosure sale, trustee's sale or other realization as
provided by applicable
law governing the real property subject to the related Mortgage
and any security
agreements and as to which the Servicer has certified in the
related Prepayment
Period that it has received all amounts it expects to receive in
connection with
such liquidation.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds,
received
in connection with the partial or complete liquidation of a
Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise,
or in connection
with any condemnation or partial release of a Mortgaged Property
and any other
proceeds received with respect to an REO Property, less the sum
of related
unreimbursed Advances, Servicing Fees and Servicing Advances and
all expenses of
liquidation, including property protection expenses and
foreclosure and sale
costs, including court and reasonable attorneys fees.
LOAN GROUP: Any of Loan Group I or Loan Group II. "Loan Group I"
refers
to the Group I Mortgage Loans and "Loan Group II" refers to the
Group II
Mortgage Loans.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage,
the
numerator of which is the original principal balance of the
Mortgage Loan and
the denominator of which is the Appraised Value of the related
Mortgaged
Property.
MAJORITY CLASS X CERTIFICATEHOLDER: The Holder of a 50.01% or
greater
Percentage Interest in the Class X Certificates.
MARKER RATE: With respect to the Offered Certificates and
any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the Uncertificated REMIC I Pass-Through Rates for REMIC I
Regular Interest
LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular
Interest LTI-IIA1,
REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest
LTI-IIA3, REMIC I
Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC
I Regular
Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC I
Regular Interest
LTI-M5 and REMIC I Regular Interest LTI-ZZ, with the per annum
rate on REMIC I
Regular Interest LTI-IA1 subject to a cap equal to the excess of
(i) the
weighted average Net Mortgage Rate of the Group I Mortgage Loans
over (ii) 0.53%
for the purpose of this calculation; with the per annum rate on
REMIC I Regular
Interest LTI-IA2 subject to a cap equal to the excess of (i) the
weighted
average Net Mortgage Rate of the Group I Mortgage Loans over
(ii) 0.30% for the
purpose of this calculation; with the per annum rate on REMIC I
Regular Interest
LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I Regular
Interest LTI-IIA3,
REMIC I Regular Interest LTI-MI, REMIC I Regular Interest
LTI-M2, REMIC I
Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4 and
REMIC I Regular
Interest LTI-M5 subject to a cap equal to the least of (w)
One-Month LIBOR plus
the Certificate Margin for the Corresponding Certificate, (x)
the applicable Net
Funds Cap for the Corresponding Certificate, (y) the Maximum
Interest Rate for
the Corresponding Certificate and (z) the applicable Cap Rate
for the
Corresponding Certificate for the purpose of this calculation;
and with the per
annum rate on REMIC I Regular Interest LTI-ZZ subject to a cap
of zero for the
purpose of this calculation; provided, however, that for this
purpose, the
calculation of the Uncertificated REMIC I Pass-Through Rate and
the related cap
with respect to each such REMIC I Regular Interest (other
than
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REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest
LTI-IA2 and REMIC I
Regular Interest LTI-ZZ) shall be multiplied by a fraction, the
numerator of
which is the actual number of days in the Accrual Period and the
denominator of
which is 30.
MAXIMUM INTEREST RATE: With respect to any Distribution Date and
the
related Accrual Period and the Group II Certificates, an annual
rate equal to
the weighted average of the Maximum Mortgage Interest Rates of
the Mortgage
Loans in Loan Group II minus the weighted average expense rate
of the Mortgage
Loans in Loan Group II. With respect to any Distribution Date
and the
Subordinate Certificates, an annual rate equal to the weighted
average of the
Maximum Mortgage Interest Rates of the Mortgage Loans minus the
weighted average
expense fee rate of the Mortgage Loans.
MAXIMUM MORTGAGE INTEREST RATE: With respect to each Mortgage
Loan, the
percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate
thereunder.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MINIMUM MORTGAGE INTEREST RATE: With respect to each Mortgage
Loan, the
percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate
thereunder.
MOM LOAN: Any Mortgage Loan as to which MERS is acting as the
mortgagee
of such Mortgage Loan, solely as nominee for the originator of
such Mortgage
Loan and its successors and assigns, at the origination
thereof.
MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date,
means
the sum of (a) the Monthly Excess Interest, (b) the
Overcollateralization
Release Amount, if any, for such Distribution Date, and (c) the
Principal
Remittance Amount remaining following payments of the Principal
Payment Amount
to the Senior Certificates and Subordinate Certificates.
MONTHLY EXCESS INTEREST: With respect to any Distribution Date,
the
excess of (x) the Interest Remittance Amount for such
Distribution Date over (y)
the sum of Current Interest and Carryforward Interest on the
Senior Certificates
and Subordinate Certificates for such Distribution Date.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders
pursuant to Section 5.09.
MOODY'S: Moody's Investors Service, Inc. or its successor in
interest.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a
first lien on or first priority ownership interest in an estate
in fee simple in
real property securing a Mortgage Note.
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MORTGAGE FILE: The mortgage documents listed in Section 2.01
pertaining
to a particular Mortgage Loan and any additional documents
delivered to the
Trustee to be added to the Mortgage File pursuant to this
Agreement.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and
assigned to
the Trustee pursuant to the provisions hereof, as from time to
time are held as
a part of the Trust Fund (including any REO Property), the
mortgage loans so
held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure
or other acquisition of title of the related Mortgaged
Property.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase
Agreement
dated as of February 28, 2005, between the Seller, as seller and
the Depositor,
as purchaser.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time
to
time amended by the Servicer to reflect the deletion of Deleted
Mortgage Loans
and the addition of Replacement Mortgage Loans pursuant to the
provisions of
this Agreement) transferred to the Trustee as part of the Trust
Fund and from
time to time subject to this Agreement, the initial Mortgage
Loan Schedule being
attached hereto as Exhibit B, setting forth the following
information with
respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off
Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
(x) the property type;
(xi) with respect to each MOM Loan, the related MIN;
(xii) the Servicer;
(xiii) a code indicating whether the Mortgage Loan is
subject to a Prepayment Charge, the term of such
Prepayment Charge and the amount of such Prepayment
Charge;
(xiv) the first Adjustment Date;
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(xv) the Gross Margin;
(xvi) the Maximum Mortgage Interest Rate under the terms of
the Mortgage Note;
(xvii) the Minimum Mortgage Interest Rate under the terms of
the Mortgage Note;
(xviii) the Periodic Rate Cap;
(xix) the first Adjustment Date immediately following the
Cut-off Date;
(xx) the Index; and
(xxi) the related Loan Group.
Such schedule shall also set forth the aggregate Cut-off Date
Principal Balance
for all of the Mortgage Loans.
MORTGAGE NOTE: The original executed note or other evidence
of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note
which rate (A) as of any date of determination until the first
Adjustment Date
following the Cut-off Date shall be the rate set forth in the
Loan Schedule as
the Mortgage Rate in effect immediately following the Cut-off
Date and (B) as of
any date of determination thereafter shall be the rate as
adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest
0.125% as
provided in the Mortgage Note, of the Index, as most recently
available as of a
date prior to the Adjustment Date as set forth in the related
Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate
on such Mortgage
Loan on any Adjustment Date shall never be more than the lesser
of (i) the sum
of the Mortgage Rate in effect immediately prior to the
Adjustment Date plus the
related Periodic Rate Cap, if any, and (ii) the related Maximum
Mortgage
Interest Rate, and shall never be less than the greater of (i)
the Mortgage Rate
in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap,
if any, and (ii) the related Minimum Mortgage Interest Rate.
With respect to
each Mortgage Loan that becomes an REO Property, as of any date
of
determination, the annual rate determined in accordance with the
immediately
preceding sentence as of the date such Mortgage Loan became an
REO Property.
MORTGAGED PROPERTY: The underlying property securing a Mortgage
Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET FUNDS CAP: With respect to any Distribution Date and the
Group II
Certificates, (a) a fraction expressed as a percentage, the
numerator of which
is the product of (1) the related Optimal Interest Remittance
Amount and (2) 12,
and the denominator of which is the Aggregate Loan Group Balance
for Loan Group
II for the immediately preceding Distribution Date, multiplied
by (b) a
fraction, expressed as a percentage, the numerator of which is
30 and the
denominator of which is the actual number of days elapsed in the
immediately
preceding Accrual
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Period. For federal income tax purposes, the equivalent of the
foregoing shall
be expressed as the weighted average of the Uncertificated REMIC
I Pass-Through
Rate on REMIC I Regular Interest LTI-2GRP, weighted on the basis
of the
Uncertificated Principal Balance of such REMIC I Regular
Interest. With respect
to any Distribution Date and the Subordinate Certificates, (a) a
fraction
expressed as a percentage, the numerator of which is the product
of (1) the
related Optimal Interest Remittance Amount and (2) 12, and the
denominator of
which is the Aggregate Loan Group Balance of Loan Group I and
Loan Group II for
the immediately preceding Distribution Date, weighted, in each
case, on the
basis of the Aggregate Loan Group Balance of Loan Group I and
Loan Group II for
the immediately preceding Distribution Date, less the
Certificate Principal
Balance of the related Senior Certificates, multiplied by (b) a
fraction,
expressed as a percentage, the numerator of which is 30 and the
denominator of
which is the actual number of days elapsed in the immediately
preceding Accrual
Period. For federal income tax purposes, the equivalent of the
foregoing shall
be expressed as the weighted average of the Uncertificated REMIC
I Pass-Through
Rates on REMIC I Regular Interest LTI-1SUB and REMIC I Regular
Interest
LTI-2SUB, in each case subject to a cap and a floor equal to the
weighted
average Net Mortgage Rate of the Group I Mortgage Loans and
Group II Mortgage
Loans, respectively, weighted in each case on the basis of the
Uncertificated
Principal Balance of each such REMIC I Regular Interest.
NET INTEREST SHORTFALLS means Interest Shortfalls net of
payments by
the Servicer in respect of Compensating Interest.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
the per
annum rate equal to the related Mortgage Rate less the sum of
(i) the Servicing
Fee Rate and (ii) the rate at which the fee payable to any
provider of
lender-paid mortgage insurance is calculated, if applicable.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance or Servicing
Advance
previously made or proposed to be made by the Servicer pursuant
to this
Agreement or the Trustee as Successor Servicer, that, in the
good faith judgment
of the Servicer or the Trustee as Successor Servicer, will not
or, in the case
of a proposed Advance or Servicing Advance, would not, be
ultimately recoverable
by it from the related Mortgagor, related Liquidation Proceeds,
Insurance
Proceeds or otherwise.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman
of the
Board, the Vice Chairman of the Board, the President, a Vice
President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor or the
Trustee (or any other officer customarily performing functions
similar to those
performed by any of the above designated officers and also to
whom, with respect
to a particular matter, such matter is referred because of such
officer's
knowledge of and familiarity with a particular subject) or (ii),
if provided for
in this Agreement, signed by a Authorized Servicer
Representative, as the case
may be, and delivered to the Depositor, the Seller and/or the
Trustee, as the
case may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period (other than
the
first Accrual Period), the rate determined by the Trustee on the
related
Interest Determination Date on the
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basis of the rate for U.S. dollar deposits for one month that
appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest
Determination Date. If such rate does not appear on such page
(or such other
page as may replace that page on that service, or if such
service is no longer
offered, such other service for displaying One-Month LIBOR or
comparable rates
as may be reasonably selected by the Trustee), One-Month LIBOR
for the
applicable Accrual Period will be the Reference Bank Rate. If no
such quotations
can be obtained by the Trustee and no Reference Bank Rate is
available,
One-Month LIBOR will be One-Month LIBOR applicable to the
preceding Accrual
Period. The establishment of One-Month LIBOR on each Interest
Determination Date
by the Trustee and the Trustee's calculation of the rate of
interest applicable
to the Publicly Offered Certificates (other than the Group I
Certificates) for
the related Accrual Period shall, in the absence of manifest
error, be final and
binding. With respect to the first Accrual Period, One-Month
LIBOR shall equal
2.67000% per annum.
ONE-YEAR CMT: The per annum rate equal to the weekly average
yield on
U.S. Treasury securities adjusted to a constant maturity of one
year as reported
by the Federal Reserve Board in statistical Release No.
H.15(519) as most
recently available as of the date forty-five days, thirty-five
days or thirty
days prior to the adjustment date or on the adjustment date, as
published in the
place specified in the related mortgage note and as made
available as of the
date specified in the related mortgage note.
ONE-YEAR LIBOR: The per annum rate equal to the average of
interbank
offered rates for one-year U.S. dollar-denominated deposits in
the London market
based on quotations of major banks as published in The Wall
Street Journal and
most recently available as of the time specified in the related
Mortgage Note
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel
for the Seller, the Depositor or the Servicer, reasonably
acceptable to each
addressee of such opinion; provided that with respect to Section
2.05, 7.05 or
11.01, or the interpretation or application of the REMIC
Provisions, such
counsel must (i) in fact be independent of the Seller, Depositor
and the
Servicer, (ii) not have any direct financial interest in the
Seller, Depositor
or the Servicer or in any affiliate of either, and (iii) not be
connected with
the Seller, Depositor or the Servicer as an officer, employee,
promoter,
underwriter, trustee, partner, director or person performing
similar functions.
OPTIMAL INTEREST REMITTANCE AMOUNT: With respect to any
Distribution
Date will be equal to the excess of (i) the product of (1) (x)
the weighted
average Net Mortgage Rates of the Mortgage Loans as of the first
day of the
related Due Period minus, with respect to Loan Group 1, the sum
of (A) the
product of (x) 0.53% and (y) the Certificate Principal Balance
of the Class
I-A-1 Certificates divided by the aggregate Certificate
Principal Balance of the
Group I Certificates and (B) the product of (x) 0.30% and (y)
the Certificate
Principal Balance of the Class I-A-2 Certificates divided by the
aggregate
Certificate Principal Balance of the Group I Certificates,
divided by (y) 12 and
(2) the Aggregate Loan Balance for the immediately preceding
Distribution Date,
over (ii) any expenses that reduce the Interest Remittance
Amount that did not
arise as a result of a default or delinquency of the Mortgage
Loans or were not
taken into account in computing the expense fee rate.
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OPTIONAL TERMINATION: The termination of the Trust Fund as a
result of
the purchase of all of the Mortgage Loans and any related REO
Property pursuant
to the last paragraph of Section 10.01.
OPTIONAL TERMINATION DATE: The first Distribution Date on which
the
Class X Certificateholder (so long as it is not an affiliate of
the Seller) may
purchase, at its option, the Mortgage Loans and related REO
Properties as
described in Section 10.01.
OTS: The Office of Thrift Supervision or any successor
thereto.
OUTSTANDING: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or
delivered to
the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to this
Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a
Mortgage
Loan with a Stated Principal Balance greater than zero that was
not the subject
of a Principal Prepayment in full, and that did not become a
Liquidated Loan,
prior to the end of the related Prepayment Period.
OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution
Date,
the excess, if any, of (a) the Aggregate Loan Balance for such
Distribution Date
over (b) the aggregate Certificate Principal Balance of the
Publicly Offered
Certificates on such Distribution Date (after taking into
account the payment of
100% of the Principal Remittance Amount on such Distribution
Date).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which (x) the
Targeted
Overcollateralization Amount for such Distribution Date exceeds
(y) the
Overcollateralization Amount for such Distribution Date,
calculated for this
purpose after giving effect to the reduction on such
Distribution Date of the
aggregate Certificate Principal Balance of the Publicly Offered
Certificates
resulting from the payment of the Principal Remittance Amount on
such
Distribution Date, but prior to allocation of any Applied Loss
Amount on such
Distribution Date.
OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Distribution
Date, the lesser of (x) the Principal Remittance Amount for such
Distribution
Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount
for such date exceeds (2) the Targeted Overcollateralization
Amount for such
Distribution Date.
OWNERSHIP INTEREST: As to any Certificate, any ownership
interest in
such Certificate including any interest in such Certificate as
the Holder
thereof and any other interest therein, whether direct or
indirect, legal or
beneficial.
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PASS-THROUGH RATE: The Class I-A-1, Class I-A-2, Class II-A-1,
Class
II-A-2, Class II-A-3, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and
Class X Pass-Through Rate, as applicable.
PAYAHEAD: Any Scheduled Payment intended by the related
Mortgagor to be
applied in a Due Period subsequent to the Due Period in which
such payment was
received.
PERCENTAGE INTEREST: With respect to any Certificate of a
specified
Class, the Percentage Interest set forth on the face thereof or
the percentage
obtained by dividing the Denomination of such Certificate by the
aggregate of
the Denominations of all Certificates of such Class. With
respect to any
Residual Certificate, the undivided percentage ownership in such
Class evidenced
by such Certificate, as set forth on the face of such
Certificate. The Residual
Certificates are issuable in Percentage Interests of 20% and
integral multiples
of 5% in excess thereof.
PERIODIC RATE CAP: With respect the Adjustment Date for an
Mortgage
Loan, the fixed percentage set forth in the related Mortgage
Note, which is the
maximum amount by which the Mortgage Rate for such Mortgage Loan
may increase or
decrease (without regard to the Maximum Mortgage Interest Rate
or the Minimum
Mortgage Interest Rate) on such Adjustment Date from the
Mortgage Rate in effect
immediately prior to such Adjustment Date.
PERMITTED INVESTMENTS: At any time, any one or more of the
following
obligations and securities:
(i) direct obligations of, or obligations fully guaranteed
as
to timely payment of principal and interest by, the United
States or
any agency thereof, provided such obligations are
unconditionally
backed by the full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the
highest long-term debt rating of each Rating Agency, or such
lower
rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency,
as
evidenced by a signed writing delivered by each Rating
Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as will not result in
the
downgrading or withdrawal of the ratings then assigned to
the
Certificates by each Rating Agency, as evidenced by a signed
writing
delivered by each Rating Agency;
(v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities (including the Trustee in
its
commercial banking capacity), provided that the commercial paper
and/or
long term unsecured debt obligations of such depository
institution or
trust company are then rated one of the two highest long-term
and the
highest short-term ratings of each such Rating Agency for
such
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<PAGE>
securities, or such lower ratings as will not result in the
downgrading
or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency, as evidenced by a signed writing delivered by
each
Rating Agency;
(vi) demand or time deposits or certificates of deposit
issued
by any bank or trust company or savings institution to the
extent that
such deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time
of the
issuance of such agreements, such terms and conditions as will
not
result in the downgrading or withdrawal of the rating then
assigned to
the Certificates by any such Rating Agency, as evidenced by a
signed
writing delivered by each Rating Agency;
(viii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (v) above;
(ix) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the
face
amount thereof) bearing interest or sold at a discount issued by
any
corporation incorporated under the laws of the United States or
any
state thereof which, at the time of such investment, have one of
the
two highest long term ratings of each Rating Agency, or such
lower
rating as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by any Rating Agency,
as
evidenced by a signed writing delivered by each Rating
Agency;
(x) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or
advised by
the Trustee or an affiliate thereof having a rating by S&P
of AAAm-G,
AAA-m, or AA-m, and if rated by Moody's, rated Aaa, Aa1 or
Aa2;
(xi) short term investment funds sponsored by any trust
company or banking association incorporated under the laws of
the
United States or any state thereof (including any such fund
managed or
advised by the Trustee or any affiliate thereof) which on the
date of
acquisition has been rated by each Rating Agency in their
respective
highest applicable rating category or such lower rating as will
not
result in the downgrading or withdrawal of the ratings then
assigned to
the Certificates by each Rating Agency, as evidenced by a
signed
writing delivered by each Rating Agency; and
(xii) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable
to each
Rating Agency as will not result in the downgrading or
withdrawal of
the rating then assigned to the Certificates by any Rating
Agency, as
evidenced by a signed writing delivered by each Rating Agency,
as
evidenced by a signed writing delivered by each Rating
Agency;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the
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interest and principal payments with respect to such instrument
provide a yield
to maturity at par greater than 120% of the yield to maturity at
par of the
underlying obligations.
PERMITTED TRANSFEREE: Any person other than (i) the United
States, any
State or political subdivision thereof, any possession of the
United States or
any agency or instrumentality of any of the foregoing, (ii) a
foreign
government, International Organization or any agency or
instrumentality of
either of the foregoing, (iii) an organization (except certain
farmers'
cooperatives described in section 521 of the Code) that is
exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of
the Code on unrelated business taxable income) on any excess
inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any
Residual
Certificate, (iv) rural electric and telephone cooperatives
described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the
United States, a corporation, partnership (other than a
partnership that has any
direct or indirect foreign partners) or other entity (treated as
a corporation
or a partnership for federal income tax purposes), created or
organized in or
under the laws of the United States, any state thereof or the
District of
Columbia, an estate whose income from sources without the United
States is
includible in gross income for United States federal income tax
purposes
regardless of its connection with the conduct of a trade or
business within the
United States, or a trust if a court within the United States is
able to
exercise primary supervision over the administration of the
trust and one or
more United States persons have authority to control all
substantial decisions
of the trustor and (vi) any other Person based upon an Opinion
of Counsel (which
shall not be an expense of the Trustee) that states that the
Transfer of an
Ownership Interest in a Residual Certificate to such Person may
cause any REMIC
to fail to qualify as a REMIC at any time that any Certificates
are Outstanding.
The terms "United States," "State" and "International
Organization" shall have
the meanings set forth in section 7701 of the Code or successor
provisions. A
corporation will not be treated as an instrumentality of the
United States or of
any State or political subdivision thereof for these purposes if
all of its
activities are subject to tax and, with the exception of Freddie
Mac, a majority
of its board of directors is not selected by such government
unit.
PERSON: Any individual, corporation, partnership, joint
venture,
association, joint-stock company, limited liability company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
PREPAYMENT ASSUMPTION: The assumed rate of prepayment, as
described in
the Prospectus Supplement relating to each Class of Publicly
Offered
Certificates.
PREPAYMENT CHARGE: With respect to any Principal Prepayment,
any
prepayment premium, penalty or charge payable by a Mortgagor in
connection with
any Principal Prepayment on a Mortgage Loan pursuant to the
terms of the related
Mortgage Note (other than any Servicer Prepayment Charge Payment
Amount).
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PREPAYMENT CHARGE SCHEDULE: As of any date, the list of Mortgage
Loans
providing for a Prepayment Charge included in the Trust Fund on
such date,
attached hereto as Exhibit K (including the prepayment charge
summary attached
thereto). The Depositor shall deliver or cause the delivery of
the Prepayment
Charge Schedule to the Servicer and the Trustee on the Closing
Date. The
Prepayment Charge Schedule shall set forth the following
information with
respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the date on which the first Monthly Payment was due
on the related Mortgage Loan;
(iv) the term of the related Prepayment Charge;
(v) the original Stated Principal Balance of the related
Mortgage Loan; and
(vi) the Stated Principal Balance of the related Mortgage
Loan as of the Cut-off Date.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment in full
during the related Prepayment Period, (other than a Principal
Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03,
3.24 or 10.01 hereof), the amount, if any, by which (i) one
month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance
of such
Mortgage Loan immediately prior to such prepayment exceeds (ii)
the amount of
interest paid or collected in connection with such Principal
Prepayment less the
sum of (a) the related Servicing Fee (b) the Credit Risk
Management Fee Rate and
(c) the fee payable to any provider of lender-paid mortgage
insurance, if any.
PREPAYMENT PERIOD: With respect to any Distribution Date, the
calendar
month immediately preceding the month in which such Distribution
Date occurs.
PRINCIPAL PAYMENT AMOUNT: With respect to each Distribution
Date, the
Principal Remittance Amount for such date minus the
Overcollateralization
Release Amount, if any, for such Distribution Date.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan
(including loans
purchased or repurchased under Sections 2.02, 2.03, 3.24 and
10.01 hereof) that
is received in advance of its scheduled Due Date and is not
accompanied by an
amount as to interest representing scheduled interest due on any
Due Date in any
month or months subsequent to the month of prepayment. Partial
Principal
Prepayments shall be applied by the Servicer in accordance with
the terms of the
related Mortgage Note.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution
Date, (i)
the sum, without duplication, of (a) the principal portion of
all Scheduled
Payments on the Mortgage Loans due
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during the related Due Period whether or not received on or
prior to the related
Determination Date, (b) the principal portion of all unscheduled
collections
(other than Payaheads) including Insurance Proceeds,
Condemnation Proceeds,
Subsequent Recoveries and all full and partial Principal
Prepayments exclusive
of prepayment charges or penalties collected during the related
Prepayment
Period, to the extent applied as recoveries of principal on the
Mortgage Loans,
(c) the Stated Principal Balance of each Mortgage Loan that was
repurchased by
the Seller during the related Prepayment Period pursuant to
Sections 2.02, 2.03
and 3.24, (d) the aggregate of all Substitution Adjustment
Amounts received
during the related Prepayment Period for the related
Determination Date in
connection with the substitution of Mortgage Loans pursuant to
Section 2.03(b),
(e) amounts in respect of principal on the Mortgage Loans paid
by the Class X
Certificateholder pursuant to Section 10.01, (f) all Liquidation
Proceeds and
Subsequent Recoveries with respect to the Mortgage Loans
collected during the
related Prepayment Period (to the extent such Liquidation
Proceeds and
Subsequent Recoveries relate to principal), in each case to the
extent remitted
by the Servicer to the Distribution Account pursuant to this
Agreement and (g)
the principal portion of Payaheads previously received of the
Mortgage Loans and
intended for application in the related Due Period minus (ii)
all amounts
required to be reimbursed pursuant to Sections 4.02, 4.05, 4.07,
5.10 and 9.05
or as otherwise set forth in this Agreement.
PRIVATE CERTIFICATE: Each of the Class X, Class P and Class
R
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated February
24,
2005 relating to the offering of the Publicly Offered
Certificates.
PUBLICLY OFFERED CERTIFICATES: Any Certificates other than the
Private
Certificates.
PUD: A planned unit development.
PURCHASE PRICE: With respect to any Mortgage Loan required to
be
repurchased by the Seller pursuant to Section 2.02, 2.03 or 3.24
hereof and as
confirmed by an Officer's Certificate from the Seller to the
Trustee, an amount
equal to the sum of (i) 100% of the outstanding principal
balance of the
Mortgage Loan as of the date of such purchase plus (ii) (ii) 30
days accrued
interest thereon at the applicable Net Mortgage Rate, plus any
portion of the
Servicing Fee, Servicing Advances and Advances payable to the
Servicer of the
Mortgage Loan plus (iii) any costs and damages of the Trust Fund
in connection
with any violation by such Mortgage Loan of any abusive or
predatory lending
law, including any expenses incurred by the Trustee with respect
to such
Mortgage Loan prior to the purchase thereof.
RATING AGENCY: Each of S&P and Moody's. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall
be given to the
Trustee. References herein to a given rating category of a
Rating Agency shall
mean such rating category without giving effect to any
modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a
Final
Recovery Determination has been made, an amount (not less than
zero) equal to
(i) the Stated Principal Balance of such Mortgage Loan as of the
commencement of
the calendar month in which the Final Recovery Determination was
made, plus (ii)
accrued interest from the Due Date as to
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which interest was last paid by the Mortgagor through the end of
the calendar
month in which such Final Recovery Determination was made,
calculated in the
case of each calendar month during such period (A) at an annual
rate equal to
the annual rate at which interest was then accruing on such
Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance
of such Mortgage
Loan as of the close of business on the Distribution Date during
such calendar
month, minus (iii) the proceeds, if any, received in respect of
such Mortgage
Loan during the calendar month in which such Final Recovery
Determination was
made, net of amounts that are payable therefrom to the Servicer
pursuant to this
Agreement. To the extent the Servicer receives Subsequent
Recoveries and respect
to any Mortgage Loan, the amount of the Realized Loss with
respect to that
Mortgage Loan will be reduced to the extent that Subsequent
Recoveries are
applied to reduce the Certificate Principal Balance of any Class
of Certificates
on any Distribution Date.
With respect to any REO Property as to which a Final
Recovery
Determination has been made, an amount (not less than zero)
equal to (i) the
Stated Principal Balance of the related Mortgage Loan as of the
date of
acquisition of such REO Property on behalf of REMIC I, plus (ii)
accrued
interest from the Due Date as to which interest was last paid by
the Mortgagor
in respect of the related Mortgage Loan through the end of the
calendar month
immediately preceding the calendar month in which such REO
Property was
acquired, calculated in the case of each calendar month during
such period (A)
at an annual rate equal to the annual rate at which interest was
then accruing
on the related Mortgage Loan and (B) on a principal amount equal
to the Stated
Principal Balance of the related Mortgage Loan as of the close
of business on
the Distribution Date during such calendar month, minus (iii)
the aggregate of
all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject
of a
Deficient Valuation, the difference between the principal
balance of the
Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the
principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
With respect to each Mortgage Loan which has become the subject
of a
Debt Service Reduction, the portion, if any, of the reduction in
each affected
Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a
court of competent jurisdiction. Each such Realized Loss shall
be deemed to have
been incurred on the Due Date for each affected Monthly
Payment.
In addition, to the extent the Servicer receives Subsequent
Recoveries
with respect to any Mortgage Loan, the amount of the Realized
Loss with respect
to that Mortgage Loan will be reduced to the extent such
Subsequent Recoveries
are applied to reduce the Certificate Principal Balance of any
Class of
Certificates on any Distribution Date.
RECORD DATE: With respect to the Certificates (other than the
Group II
Certificates and Subordinate Certificates) and any Distribution
Date, the close
of business on the last Business Day of the month preceding the
month in which
such Distribution Date occurs. With respect to the Group II
Certificates and
Subordinate Certificates and any Distribution Date, so long as
the Group II
Certificates and Subordinate Certificates are Book-Entry
Certificates, the
Business Day
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preceding such Distribution Date, and otherwise, the close of
business on the
last Business Day of the month preceding the month in which such
Distribution
Date occurs.
REFERENCE BANKS: Shall mean leading banks selected by the
Trustee and
engaged in transactions in Eurodollar deposits in the
international Eurocurrency
market (i) with an established place of business in London, (ii)
which have been
designated as such by the Trustee and (iii) which are not
controlling,
controlled by, or under common control with, the Depositor, the
Seller or the
Servicer.
REFERENCE BANK RATE: With respect to any Accrual Period shall
mean the
arithmetic mean, rounded upwards, if necessary, to the nearest
whole multiple of
0.03125%, of the offered rates for United States dollar deposits
for one month
that are quoted by the Reference Banks as of 11:00 a.m., New
York City time, on
the related Interest Determination Date to prime banks in the
London interbank
market for a period of one month in an amount approximately
equal to the
aggregate Certificate Principal Balance of the Publicly Offered
Certificates
(other than the Group I Certificates) for such Accrual Period,
provided that at
least two such Reference Banks provide such rate. If fewer than
two offered
rates appear, the Reference Bank Rate will be the arithmetic
mean, rounded
upwards, if necessary, to the nearest whole multiple of
0.03125%, of the rates
quoted by one or more major banks in New York City, selected by
the Trustee, as
of 11:00 a.m., New York City time, on such date for loans in
United States
dollars to leading European banks for a period of one month in
amounts
approximately equal to the aggregate Certificate Principal
Balance of the
Publicly Offered Certificates (other than the Group I
Certificates) for such
Accrual Period.
REGULAR CERTIFICATE: Any Certificate other than a Residual
Certificate.
RELIEF ACT: The Servicemembers Civil Relief Act of 2003, as
amended
from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets subject hereto,
constituting the
primary trust created hereby and to be administered hereunder,
with respect to
which a REMIC election is to be made, consisting of (i) the
Mortgage Loans and
all interest accruing and principal due with respect thereto
after the Cut-off
Date to the extent not applied in computing the Cut-off Date
Principal Balance
thereof and all related Prepayment Charges; (ii) the related
Mortgage Files,
(iii) the Custodial Account (other than any amounts representing
any Servicer
Prepayment Charge Payment Amount), the Distribution Account, the
Class P
Certificate Account and such assets that are deposited therein
from time to
time, together with any and all income, proceeds and payments
with respect
thereto; (iv) property that secured a Mortgage Loan and has been
acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the
mortgagee's
rights under the Insurance Policies with respect to the Mortgage
Loans; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all
proceeds of the
foregoing, including proceeds of conversion, voluntary or
involuntary, of any of
the foregoing into cash or other liquid property.
Notwithstanding the foregoing,
however, REMIC I specifically excludes (i) all payments and
other collections of
principal and interest due on the Mortgage Loans on or before
the Cut-off Date,
(ii) all Prepayment Charges payable in connection with Principal
Prepayments
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on the Mortgage Loans made before the Cut-off Date, and (iii)
the Basis Risk
Shortfall Reserve Fund.
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) the Uncertificated REMIC I Pass-Through
Rate for REMIC I
Regular Interest LTI-AA minus the Marker Rate, divided by (b)
12.
REMIC I MARKER ALLOCATION PERCENTAGE: 0.50% of any amount
payable or
loss attributable from the Mortgage Loans, which shall be
allocated to REMIC I
Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC
I Regular
Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I
Regular Interest
LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular
Interest LTI-M1,
REMIC I Regular Interest LTI-M2, REMIC I Regular Interest
LTI-M3, REMIC I
Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5 and
REMIC I Regular
Interest LTI-ZZ.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date
of
determination, (i) 0.50% of the aggregate Uncertificated
Principal Balances of
the REMIC I Regular Interests minus (ii) the aggregate of the
Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I
Regular Interest
LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular
Interest LTI-IIA2,
REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest
LTI-M1, REMIC I
Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC
I Regular
Interest LTI-M4 and REMIC I Regular Interest LTI-M5, 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 (a) the product of (i) 50%
of the
aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the
aggregate of the Uncertificated Principal Balances of REMIC I
Regular Interest
LTI-IA1, REMIC I Regular Interest LTI-IA2, REMIC I Regular
Interest LTI-IIA1,
REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest
LTI-IIA3, REMIC I
Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC
I Regular
Interest LTI-M3, REMIC I Regular Interest LTI-M4 and REMIC I
Regular Interest
LTI-M5 and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC I Regular Interest LTI-IA1, REMIC I
Regular Interest
LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I Regular
Interest LTI-IIA2,
REMIC I Regular Interest LTI-M1, REMIC I Regular Interest
LTI-M2, REMIC I
Regular Interest LTI-M3, REMIC I Regular Interest LTI-M4, REMIC
I Regular
Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest LTI-AA,
REMIC I
Regular Interest LTI-IA1, REMIC I Regular Interest LTI-IA2,
REMIC I Regular
Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2, REMIC I
Regular Interest
LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I Regular
Interest LTI-M2,
REMIC I Regular Interest LTI-M3, REMIC I Regular Interest
LTI-M4, REMIC I
Regular Interest LTI-M5, REMIC I Regular Interest LTI-ZZ, REMIC
I Regular
Interest LTI-P, REMIC I Regular Interest LT1-1SUB, REMIC I
Regular Interest
LTI-1GRP, REMIC I Regular Interest LT1-2SUB, REMIC I Regular
Interest LTI-2GRP
and REMIC I Regular Interest LT1-XX.
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REMIC I REGULAR INTEREST LTI-AA: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-AA
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-IA1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IA1
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-IA2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IA2
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-IIA1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA1
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-IIA2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA2
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-IIA3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-IIA3
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-M1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M1
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,
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subject to the terms and conditions hereof, in an aggregate
amount equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
REMIC I REGULAR INTEREST LTI-M2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M2
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-M3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M3
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-M4: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M4
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-M5: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-M5
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-1SUB: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1SUB
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-1GRP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-1GRP
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-2SUB: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-2SUB
shall accrue
interest at the related Uncertificated REMIC
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I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-2GRP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-2GRP
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-P: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-P
shall be entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST LTI-XX: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-XX
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-ZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest LTI-ZZ
shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST LTI-ZZ MAXIMUM 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 REMIC I
Regular Interest
LTI-ZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of REMIC I Regular Interest LTI-ZZ minus the
REMIC I
Overcollateralization Amount, in each case for such Distribution
Date, over (ii)
Uncertificated Accrued Interest on REMIC I Regular Interest
LTI-IA1, REMIC I
Regular Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1,
REMIC I Regular
Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I
Regular Interest
LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular
Interest LTI-M3, REMIC
I Regular Interest LTI-M4 and REMIC I Regular Interest LTI-M5
for such
Distribution Date, with the rate on each such REMIC I Regular
Interest subject
to a cap equal to the related Pass-Through Rate.
REMIC I SUB WAC ALLOCATION PERCENTAGE: 0.50% of any amount
payable or
loss attributable from the Mortgage Loans, which shall be
allocated to REMIC I
Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-1GRP,
REMIC I Regular
Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP and REMIC I
Regular
Interest LTI-XX.
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REMIC I SUBORDINATED BALANCE RATIO: The ratio among the
Uncertificated
Principal Balances of each REMIC I Regular Interest ending with
the designation
"SUB,", equal to the ratio between, with respect to each such
REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal
Balance of the Group
I Mortgage Loans or Group II Mortgage Loans, as applicable over
(y) the current
Certificate Principal Balance of related Senior
Certificates.
REMIC I TARGETED OVERCOLLATERALIZATION AMOUNT: 1% of the
Targeted
Overcollateralization Amount.
REMIC II: The segregated pool of assets consisting of all of the
REMIC
I Regular Interests conveyed in trust to the Trustee, for the
benefit of the
REMIC II Certificateholders pursuant to Section 2.07, and all
amounts deposited
therein, with respect to which a separate REMIC election is to
be made.
REMIC II CERTIFICATE: Any Regular Certificate.
REMIC OPINION: Shall mean an Opinion of Counsel to the effect
that the
proposed action will not have an adverse affect on any REMIC
created hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
proposed, temporary and final regulations and published rulings,
notices and
announcements promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
REMIC REGULAR INTEREST: Any REMIC I Regular Interest or a
Regular
Certificate.
REMITTANCE DATE: Shall mean the 18th day of the month and if
such day
is not a Business Day, the immediately succeeding Business
Day.
REO PROPERTY: A Mortgaged Property acquired by the Servicer
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in
the
aggregate substituted by the Seller for a Deleted Mortgage Loan,
which must, on
the date of such substitution, as confirmed in a Request for
Release, (i) have a
Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in
excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted
Mortgage Loan;
(ii) have an adjustable Mortgage Rate not less than or more than
1% per annum
higher than the Mortgage Rate of the Deleted Mortgage Loan;
(iii) have the same
or higher credit quality characteristics than that of the
Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the
Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and
not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not
permit
conversion of the Mortgage Rate from a fixed rate to a variable
rate; (vii) be
secured by a first lien on the related Mortgaged Property;
(viii) constitute the
same occupancy type as the Deleted Mortgage Loan or be owner
occupied; (ix) have
a Maximum Mortgage Interest Rate not less than the Maximum
Mortgage Interest
Rate on the Deleted Loan; (x) have a Minimum Mortgage Interest
Rate not less
than the Minimum Mortgage Interest Rate of the Deleted Loan;
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(xi) have a Gross Margin equal to the Gross Margin of the
Deleted Loan; (xii)
have a next Adjustment Date not more than two months later than
the next
Adjustment Date on the Deleted Loan; and (xiii) comply with each
representation
and warranty set forth in the Mortgage Loan Purchase
Agreement.
REQUEST FOR RELEASE: The Request for Release to be submitted by
the
Seller or the Servicer to the Custodian substantially in the
form of Exhibit H.
Each Request for Release furnished to the Custodian by the
Seller or the
Servicer shall be in duplicate and shall be executed by an
officer of such
Person or a Authorized Servicer Representative (or, if furnished
electronically
to the Custodian, shall be deemed to have been sent and executed
by an officer
of such Person or a Authorized Servicer Representative) of the
Servicer.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under this
Agreement.
RESIDUAL CERTIFICATES: The Class R Certificates.
RESPONSIBLE OFFICER: With respect to the Trustee, any Vice
President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust
Officer, any other officer customarily performing functions
similar to those
performed by any of the above designated officers or other
officers of the
Trustee specified by the Trustee having direct responsibility
over this
Agreement and customarily performing functions similar to those
performed by any
one of the designated officers, as to whom, with respect to a
particular matter,
such matter is referred because of such officer's knowledge of
and familiarity
with the particular subject.
ROLLING THREE MONTH DELINQUENCY RATE: With respect to any
Distribution
Date and the Mortgage Loans will be the fraction, expressed as a
percentage,
equal to the average of the Delinquency Rates for each of the
three (or one and
two, in the case of the first and second Distribution Dates)
immediately
preceding months.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
or its successor in interest.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: Nomura Credit & Capital, Inc., a Delaware
corporation, and its
successors and assigns, in its capacity as seller of the
Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class II-A-1,
Class
II-A-2 and Class II-A-3 Certificates.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution
Date
will be the fraction, expressed as a percentage, the numerator
of which is the
sum of the aggregate Certificate Principal Balance of the
Subordinate
Certificates and the Overcollateralization Amount, in each case
after giving
effect to payments on such Distribution Date (assuming no
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<PAGE>
Trigger Event is in effect), and the denominator of which is the
Aggregate Loan
Balance for such Distribution Date.
SENIOR PRINCIPAL PAYMENT AMOUNT: With respect to any
Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is
not in effect
with respect to such Distribution Date, the amount, if any, by
which (x) the
Certificate Principal Balances of the Senior Certificates, in
each case,
immediately prior to such Distribution Date exceed (y) the
lesser of (A) the
product of (i) approximately 78.30% and (ii) the Aggregate Loan
Balance for such
Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan
Balance as of the Cut-off Date.
SERVICER: GMAC Mortgage Corporation or any successor thereto
appointed
hereunder in connection with the servicing and administration of
the Mortgage
Loans.
SERVICER'S ASSIGNEE: As defined in Section 5.01(b)(ii).
SERVICER DEFAULT: As defined in Section 8.01.
SERVICER PREPAYMENT CHARGE PAYMENT AMOUNT: The amount payable by
the
Servicer in respect of any waived Prepayment Charges pursuant to
Section 3.01.
SERVICING ADVANCES: All customary, reasonable and necessary "out
of
pocket" costs and expenses (including reasonable legal fees)
incurred in the
performance by the Servicer of its servicing obligations
hereunder, including,
but not limited to, the cost of (i) the preservation,
restoration, inspection,
valuation and protection of a Mortgaged Property, (ii) any
enforcement or
judicial proceedings, including foreclosures, and including any
expenses
incurred in relation to any such proceedings that result from
the Mortgage Loan
being registered in the MERS(R) System, (iii) the management and
liquidation of
any REO Property (including, without limitation, realtor's
commissions), (iv)
compliance with any obligations under Section 3.07 hereof to
cause insurance to
be maintained and (v) payment of taxes.
SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by
the Stated
Principal Balance of such Mortgage Loan as of the last day of
the related Due
Period or, in the event of any payment of interest that
accompanies a Principal
Prepayment in full during the related Due Period made by the
Mortgagor
immediately prior to such prepayment, interest at the Servicing
Fee Rate on the
same Stated Principal Balance of such Mortgage Loan used to
calculate the
payment of interest on such Mortgage Loan.
SERVICING FEE RATE: 0.25% per annum.
SIX-MONTH LIBOR: The per annum rate equal to the average of
interbank
offered rates for Six-Month U.S. dollar-denominated deposits in
the London
market based on quotations of major banks as published in The
Wall Street
Journal and most recently available as of the time specified in
the related
Mortgage Note.
STARTUP DAY: The Startup Day for each REMIC formed hereunder
shall be
the Closing Date.
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STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related
REO Property and any Distribution Date, the Cut-off Date
Principal Balance
thereof minus the sum of (i) the principal portion of the
Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending
prior to such
Distribution Date (and irrespective of any delinquency in their
payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan
received prior to
or during the related Prepayment Period, and all Liquidation
Proceeds to the
extent applied by the Servicer as recoveries of principal in
accordance with
Section 3.09 of this Agreement with respect to such Mortgage
Loan, that were
received by the Servicer as of the close of business on the last
day of the
Prepayment Period related to such Distribution Date and (iii)
any Realized
Losses on such Mortgage Loan incurred during the related
Prepayment Period. The
Stated Principal Balance of a Liquidated Loan equals zero.
STEPDOWN DATE: The earlier to occur of (i) the first
Distribution Date
following the Distribution Date in which the Certificate
Principal Balances of
the Senior Certificates have been reduced to zero and (ii) the
later to occur of
(x) the Distribution Date in March 2008 and (y) the first
Distribution Date on
which the Senior Enhancement Percentage (calculated for this
purpose only after
taking into account distributions of principal on the Mortgage
Loans, but prior
to any distributions to the holders of the Publicly Offered
Certificates on such
Distribution Date) is greater than or equal to approximately
21.70%.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class M-3,
Class
M-4 and Class M-5 Certificates.
SUBSEQUENT RECOVERIES: With respect to each Mortgage Loan, the
amount
recovered by the Servicer (net of reimbursable expenses) with
respect to a
defaulted Mortgage Loan with respect to which a Realized Loss
was incurred,
after the liquidation or disposition of such Mortgage Loan.
SUBSERVICING AGREEMENT: Any agreement entered into between the
Servicer
and a subservicer with respect to the subservicing of any
Mortgage Loan subject
to this Agreement by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term
pursuant to Section 2.03(d).
SUCCESSOR SERVICER: The Trustee or any successor to the
Servicer
appointed pursuant to Section 8.02 after the occurrence of a
Servicer Default or
upon the resignation of the Servicer pursuant to this
Agreement.
TARGETED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution
Date prior to the Stepdown Date, approximately 0.65% of the
Aggregate Loan
Balance as of the Cut-off Date; with respect to any Distribution
Date on or
after the Stepdown Date and with respect to which a Trigger
Event is not in
effect, the greater of (a) 1.30% of the Aggregate Loan Balance
for such
Distribution Date, or (b) 0.50% of the Aggregate Loan Balance as
of the Cut-off
Date; with respect to any Distribution Date on or after the
Stepdown Date with
respect to which a Trigger Event is in effect, the Targeted
Overcollateralization Amount for the last Distribution Date on
which a Trigger
Event was not in effect. Notwithstanding the foregoing, on and
after any
Distribution Date following the reduction of the aggregate
Certificate Principal
Balance of the
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Group I Certificates, the Group II Certificates and the
Subordinate Certificates
to zero, the Targeted Overcollateralization Amount shall be
zero.
TAX MATTERS PERSON: The person designated as "tax matters
person" in
the manner provided under Treasury regulation ss. 1.860F-4(d)
and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the
greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax
Matters Person for
the related REMIC. The Trustee, or any successor thereto or
assignee thereof
shall serve as tax administrator hereunder and as agent for the
related Tax
Matters Person.
TERMINATION PRICE: The price, calculated as set forth in Section
10.01,
to be paid in connection with the purchase of the Mortgage Loans
pursuant to
Section 10.01.
TRANSFER AFFIDAVIT: As defined in Section 6.02(c).
TRANSFER: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
TRIGGER EVENT: With respect to any Distribution Date, a Trigger
Event
is in effect if either (i) the Rolling Three Month Delinquency
Rate as of the
last day of the related Due Period equals or exceeds 28.00% of
the Senior
Enhancement Percentage for such Distribution Date or (ii) the
cumulative
Realized Losses as a percentage of the original Aggregate Loan
Balance on the
Closing Date for such Distribution Date is greater than the
percentage set forth
in the following table:
RANGE OF DISTRIBUTION DATES Cumulative Loss Percentage
--------------------------- --------------------------
March 2008 - February 2009 1.10%
March 2009 - February 2010 1.55%
March 2010 - February 2011 2.05%
March 2011 and thereafter 2.40%
*The cumulative loss percentages set forth above are applicable
to the
first Distribution Date in the corresponding range of
Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date
in a range
increases incrementally by 1/12 of the positive difference
between the
percentage applicable to the first Distribution Date in that
range and the
percentage applicable to the first Distribution Date in the
succeeding range.
TRUST FUND: Collectively, the assets of REMIC I, REMIC II, and
the
Basis Risk Shortfall Reserve Fund.
TRUSTEE: JPMorgan Chase Bank, N.A., a national banking
association, not
in its individual capacity, but solely in its capacity as
trustee for the
benefit of the Certificateholders under this Agreement, and any
successor
thereto, and any corporation or national banking association
resulting from or
surviving any consolidation or merger to which it or its
successors may be a
party and any successor trustee as may from time to time be
serving as successor
trustee hereunder.
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UNCERTIFICATED ACCRUED INTEREST: With respect to each
Uncertificated
REMIC Regular Interest on each Distribution Date, an amount
equal to one month's
interest at the related Uncertificated Pass-Through Rate on the
Uncertificated
Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated
Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and
shortfalls resulting from application of the Relief Act
(allocated to such REMIC
Regular Interests as set forth in Sections 1.02 and 5.07).
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC
Regular
Interest, the principal amount of such REMIC Regular Interest
outstanding as of
any date of determination. As of the Closing Date, the
Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount
set forth in the
Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of
each REMIC
Regular Interest shall be reduced by all distributions of
principal made on such
REMIC Regular Interest on such Distribution Date pursuant to
Section 5.07 and,
if and to the extent necessary and appropriate, shall be further
reduced on such
Distribution Date by Realized Losses as provided in Section
5.07. The
Uncertificated Principal Balance of each REMIC Regular Interest
shall never be
less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to REMIC
I
Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA1, REMIC
I Regular
Interest LTI-IA2, REMIC I Regular Interest LTI-IIA1, REMIC I
Regular Interest
LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular
Interest LTI-M1,
REMIC I Regular Interest LTI-M2, REMIC I Regular Interest
LTI-M3, REMIC I
Regular Interest LTI-M4, REMIC I Regular Interest LTI-M5, REMIC
I Regular
Interest LTI-ZZ, REMIC I Regular Interest LT1-1SUB, REMIC I
Regular Interest
LT1-2SUB and REMIC I Regular Interest LT1-XX, the weighted
average Net Mortgage
Rate of the Mortgage Loans. With respect to REMIC I Regular
Interest LTI-1GRP,
the weighted average Net Mortgage Rate of the Group I Mortgage
Loans. With
respect to REMIC I Regular Interest LTI-2GRP, the weighted
average Net Mortgage
Rate of the Group II Mortgage Loans. REMIC I Regular Interest
LTI-P will not
accure interest.
VOTING RIGHTS: The portion of the voting rights of all the
Certificates
that is allocated to any Certificate for purposes of the voting
provisions
hereunder. Voting Rights shall be allocated (i) 98% to the
Certificates (other
than the Class X, Class P and the Residual Certificates) and
(ii) 1% to each of
the Class X Certificates and Class P Certificates. Voting rights
will be
allocated among the Certificates of each such Class in
accordance with their
respective Percentage Interests. The Residual Certificates will
not be allocated
any voting rights.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of the Interest
Remittance
Amount for any Distribution Date, (1) the aggregate amount of
any Net Interest
Shortfalls in respect of the Mortgage Loans for any Distribution
Date shall
reduce the Interest Remittance Amount on a PRO RATA basis based
on, and to the
extent of, one month's interest at the then applicable
respective Pass-Through
Rate on the respective Certificate Principal Balance of each
class of Publicly
Offered Certificates and (2) the aggregate amount of any
Realized Losses
allocated to the Class I-A-2, Class II-A-3 and Subordinate
Certificates and
Basis Risk Shortfalls allocated to the Publicly Offered
Certificates for any
Distribution Date shall be allocated to the Class X
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Certificates based on, and to the extent of, one month's
interest at the then
applicable respective Pass-Through Rate on the Certificate
Principal Balance
thereof on any Distribution Date.
For purposes of calculating the amount of Uncertificated
Accrued
Interest for the REMIC I Regular Interests for any Distribution
Date:
The REMIC I Marker Allocation Percentage of the aggregate amount
of any
Net Interest Shortfalls incurred in respect of the Mortgage
Loans for any
Distribution Date shall be allocated among REMIC I Regular
Interest LTI-AA,
REMIC I Regular Interest LTI-IA1, REMIC I Regular Interest
LTI-IA2, REMIC I
Regular Interest LTI-IIA1, REMIC I Regular Interest LTI-IIA2,
REMIC I Regular
Interest LTI-IIA3, REMIC I Regular Interest LTI-M1, REMIC I
Regular Interest
LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular
Interest LTI-M4, REMIC
I Regular Interest LTI-M5 and REMIC I Regular Interest LTI-ZZ,
PRO RATA based
on, and to the extent of, one month's interest at the then
applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective
Uncertificated
Principal Balance of each such REMIC I Regular Interest; and
The REMIC I Sub WAC Allocation Percentage of the aggregate
amount of
any Net Interest Shortfalls incurred in respect of the Mortgage
Loans for any
Distribution Date shall be allocated to Uncertificated Accrued
Interest payable
to REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest
LTI-1GRP, REMIC I
Regular Interest LTI-2SUB, REMIC I Regular Interest LTI-2GRP and
REMIC I Regular
Interest LTI-XX, PRO RATA based on, and to the extent of, one
month's interest
at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on
the respective Uncertificated Principal Balance of each such
REMIC I Regular
Interest.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
The Seller hereby sells, transfers, assigns, sets over and
otherwise
conveys to the Depositor, without recourse, all the right, title
and interest of
the Seller in and to the assets in the Trust Fund.
The Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans by the Depositor and has agreed
to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery
hereof,
hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee
for the use and benefit of the Certificateholders, without
recourse, all the
right, title and interest of the Depositor in and to the Trust
Fund.
In connection with such sale, the Depositor has delivered to,
and
deposited with, the Trustee or the Custodian, as its agent, the
following
documents or instruments with respect to each Mortgage Loan so
assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed
without recourse
to the order of "JPMorgan Chase Bank, N.A., as Trustee for
certificateholders of
Nomura Asset Acceptance Corporation, Mortgage Pass-Through
Certificates, Series
2005-AR1," and showing to the extent available to the Seller an
unbroken chain
of endorsements from the original payee thereof to the Person
endorsing it to
the Trustee, (ii) the original Mortgage and, if the related
Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating
that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or
if the original
is not available, a copy), with evidence of such recording
indicated thereon (or
if clause (x) in the proviso below applies, shall be in
recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either
an original or a
copy, which may be in the form of a blanket assignment if
permitted in the
jurisdiction in which the Mortgaged Property is located) to the
Trustee of the
Mortgage with respect to each Mortgage Loan in the name of
"JPMorgan Chase Bank,
N.A., as Trustee for certificateholders of Nomura Asset
Acceptance Corporation,
Mortgage Pass-Through Certificates, Series 2005-AR1," which
shall have been
recorded (or if clause (x) in the proviso below applies, shall
be in recordable
form), (iv) an original or a copy of all intervening assignments
of the
Mortgage, if any, to the extent available to the Seller, with
evidence of
recording thereon, (v) the original policy of title insurance or
mortgagee's
certificate of title insurance or commitment or binder for title
insurance, if
available, or a copy thereof, or, in the event that such
original title
insurance policy is unavailable, a photocopy thereof, or in lieu
thereof, a
current lien search on the related Mortgaged Property and (vi)
originals or
copies of all available assumption, modification or substitution
agreements, if
any; provided, however, that in lieu of the foregoing, the
Seller may deliver
the following documents, under the circumstances set forth
below: (x) if any
Mortgage, assignment thereof to the Trustee or intervening
assignments thereof
have been delivered or are being delivered to recording offices
for recording
and have not been returned in time to permit
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their delivery as specified above, the Depositor may deliver a
true copy thereof
with a certification by the Seller or the title company issuing
the commitment
for title insurance, on the face of such copy, substantially as
follows:
"Certified to be a true and correct copy of the original, which
has been
transmitted for recording"; and (y) in lieu of the Mortgage
Notes relating to
the Mortgage Loans identified in the list set forth in Exhibit
J, the Depositor
may deliver a lost note affidavit and indemnity and a copy of
the original note,
if available; and provided, further, that in the case of
Mortgage Loans which
have been prepaid in full after the Cut-Off Date and prior to
the Closing Date,
the Depositor, in lieu of delivering the above documents, may
deliver to the
Trustee a certification of a Authorized Servicer Representative
to such effect
and in such case shall deposit all amounts paid in respect of
such Mortgage
Loans, in the Distribution Account on the Closing Date. In the
case of the
documents referred to in clause (x) related above, the Depositor
shall deliver
such documents to the Trustee promptly after they are received.
The Seller shall
cause, at its expense, the Mortgage and intervening assignments,
if any, and to
the extent required in accordance with the foregoing, the
assignment of the
Mortgage to the Trustee to be submitted for recording promptly
after the Closing
Date; provided that the Seller need not cause to be recorded any
assignment (a)
in any jurisdiction under the laws of which, as evidenced by an
Opinion of
Counsel delivered by the Seller to the Trustee and the Rating
Agencies, the
recordation of such assignment is not necessary to protect the
Trustee's
interest in the related Mortgage Loan or (b) if MERS is
identified on the
Mortgage or on a properly recorded assignment of the Mortgage as
mortgagee of
record solely as nominee for Seller and its successors and
assigns. In the event
that the Seller or the Depositor gives written notice to the
Trustee that a
court has recharacterized the sale of the Mortgage Loans as a
financing, the
Seller shall submit or cause to be submitted for recording as
specified above
or, should the Seller fail to perform such obligations, the
Trustee shall cause
each such previously unrecorded assignment to be submitted for
recording as
specified above at the expense of the Trust pursuant to Section
9.05. In the
event a Mortgage File is released to the Servicer as a result of
such Person
having completed a Request for Release, the Trustee shall, if
not so completed,
complete the assignment of the related Mortgage in the manner
specified in
clause (iii) above.
In connection with the assignment of any Mortgage Loan
registered on
the MERS(R) System, the Seller further agrees that it will
cause, at the
Seller's own expense, within 30 days after the Closing Date, the
MERS(R) System
to indicate that such Mortgage Loans have been assigned by the
Seller to the
Depositor and by the Depositor to the Trustee in accordance with
this Agreement
for the benefit of the related Certificateholders by including
(or deleting, in
the case of Mortgage Loans which are repurchased in accordance
with this
Agreement) in such computer files (a) the code in the field
which identifies the
specific Trustee and (b) the code in the field "Pool Field"
which identifies the
series of the Certificates issued in connection with such
Mortgage Loans. The
Seller further agrees that it will not, and will not permit any
Servicer to
alter the codes referenced in this paragraph with respect to any
Mortgage Loan
during the term of this Agreement unless and until such Mortgage
Loan is
repurchased in accordance with the terms of this Agreement.
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the Initial Certification received by it from
the
Custodian, the Trustee acknowledges receipt of, subject to the
further review
and exceptions reported by the Custodian pursuant to the
procedures described
below, the documents (or certified copies thereof) delivered
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to the Trustee or the Custodian on its behalf pursuant to
Section 2.01 and
declares that it holds and will continue to hold directly or
through a custodian
those documents and any amendments, replacements or supplements
thereto and all
other assets of the Trust Fund delivered to it in trust for the
use and benefit
of all present and future Holders of the Certificates. On the
Closing Date, the
Custodian on the Trustee's behalf will deliver an Initial
Certification in the
form annexed hereto as Exhibit C-1, confirming whether or not it
has received
the Mortgage File for each Mortgage Loan, but without review of
such Mortgage
File, except to the extent necessary to confirm whether such
Mortgage File
contains the original Mortgage Note or a lost note affidavit and
indemnity in
lieu thereof. No later than 90 days after the Closing Date, the
Custodian on the
Trustee's behalf shall, for the benefit of the
Certificateholders, review each
Mortgage File delivered to it and execute and deliver to the
Seller and the
Trustee an Interim Certification substantially in the form
annexed hereto as
Exhibit C-2. In conducting such review, the Custodian on the
Trustee's behalf
will ascertain whether all required documents have been executed
and received
and whether those documents relate, determined on the basis of
the Mortgagor
name, original principal balance and loan number, to the
Mortgage Loans
identified in Exhibit B to this Agreement, as supplemented
(provided, however,
that with respect to those documents described in subclauses
(iv) and (vi) of
Section 2.01, such obligations shall extend only to documents
actually delivered
pursuant to such subclauses). In performing any such review, the
Custodian may
conclusively rely on the purported due execution and genuineness
of any such
document and on the purported genuineness of any signature
thereon. If the
Custodian finds any document constituting part of the Mortgage
File not to have
been executed or received, or to be unrelated to the Mortgage
Loans identified
in Exhibit B, determined on the basis of the Mortgagor's name,
the original
principal balance and the Mortgage Loan number, or to appear to
be defective on
its face, the Custodian shall include such information in the
exception report
attached to the Interim Certification. The Seller shall correct
or cure any such
defect or, if prior to the end of the second anniversary of the
Closing Date,
the Seller may substitute for the related Mortgage Loan a
Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and
subject to the
conditions set forth in Section 2.03 or shall deliver to the
Trustee an Opinion
of Counsel to the effect that such defect does not materially or
adversely
affect the interests of the Certificateholders in such Mortgage
Loan within 60
days from the date of notice from the Trustee of the defect and
if the Seller
fails to correct or cure the defect or deliver such opinion
within such period,
the Seller will, subject to Section 2.03, within 90 days from
the notification
of the Trustee purchase such Mortgage Loan at the Purchase
Price; provided,
however, that if such defect relates solely to the inability of
the Seller to
deliver the Mortgage, assignment thereof to the Trustee, or
intervening
assignments thereof with evidence of recording thereon because
such documents
have been submitted for recording and have not been returned by
the applicable
jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if
the Seller delivers such documents promptly upon receipt, but in
no event later
than 360 days after the Closing Date.
(b) No later than 180 days after the Closing Date, the Custodian
on the
Trustee's behalf will review, for the benefit of the
Certificateholders, the
Mortgage Files and will execute and deliver or cause to be
executed and
delivered to the Seller and the Trustee, a Final Certification
substantially in
the form annexed hereto as Exhibit C-3. In conducting such
review, the Custodian
on the Trustee's behalf will ascertain whether each document
required to be
recorded has been returned from the recording office with
evidence of recording
thereon and the Custodian on the Trustee's behalf has received
either an
original or a copy thereof, as required
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<PAGE>
in Section 2.01 (provided, however, that with respect to those
documents
described in subclauses (iv) and (vi) of Section 2.01, such
obligations shall
extend only to documents actually delivered pursuant to such
subclauses). If the
Custodian finds any document with respect to a Mortgage Loan has
not been
received, or to be unrelated, determined on the basis of the
Mortgagor name,
original principal balance and loan number, to the Mortgage
Loans identified in
Exhibit B or to appear defective on its face, the Custodian
shall note such
defect in the exception report attached to the Final
Certification and the
Trustee shall promptly notify the Seller. The Seller shall
correct or cure any
such defect or, if prior to the end of the second anniversary of
the Closing
Date, the Seller may substitute for the related Mortgage Loan a
Replacement
Mortgage Loan, which substitution shall be accomplished in the
manner and
subject to the conditions set forth in Section 2.03 or shall
deliver to the
Trustee an Opinion of Counsel to the effect that such defect
does not materially
or adversely affect the interests of Certificateholders in such
Mortgage Loan
within 60 days from the date of notice from the Trustee of the
defect and if the
Seller is unable within such period to correct or cure such
defect, or to
substitute the related Mortgage Loan with a Replacement Mortgage
Loan or to
deliver such opinion, the Seller shall, subject to Section 2.03,
within 90 days
from the notification of the Trustee, purchase such Mortgage
Loan at the
Purchase Price; provided, however, that if such defect relates
solely to the
inability of the Seller to deliver the Mortgage, assignment
thereof to the
Trustee or intervening assignments thereof with evidence of
recording thereon,
because such documents have not been returned by the applicable
jurisdiction,
the Seller shall not be required to purchase such Mortgage Loan,
if the Seller
delivers such documents promptly upon receipt, but in no event
later than 360
days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller
in
accordance with subsections 2.02(a) or (b) above or Section
2.03, the Seller
shall remit the applicable Purchase Price to the Trustee for
deposit in the
Distribution Account and shall provide written notice to the
Trustee detailing
the components of the Purchase Price, signed by an authorized
officer. Upon
deposit of the Purchase Price in the Distribution Account and
upon receipt of a
Request for Release with respect to such Mortgage Loan, the
Trustee will release
to the Seller the related Mortgage File and the Trustee shall
execute and
deliver all instruments of transfer or assignment, without
recourse, furnished
to it by the Seller, as are necessary to vest in the Seller
title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the
date on which the deposit into the Distribution Account was
made. The Trustee
shall promptly notify the Rating Agencies of such repurchase.
The obligation of
the Seller to cure, repurchase or substitute for any Mortgage
Loan as to which a
defect in a constituent document exists shall be the sole
remedies respecting
such defect available to the Certificateholders or to the
Trustee on their
behalf. The Seller shall promptly reimburse the Trustee for any
expenses
incurred by the Trustee in respect of enforcing the remedies for
such breach.
(d) The Seller shall deliver to the Trustee, and Trustee agrees
to
accept the Mortgage Note and other documents constituting the
Mortgage File with
respect to any Replacement Mortgage Loan, which the Custodian
will review as
provided in subsections 2.02(a) and 2.02(b), provided, that the
Closing Date
referred to therein shall instead be the date of delivery of the
Mortgage File
with respect to each Replacement Mortgage Loan.
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Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER
AND THE SELLER.
(a) The Servicer hereby represents and warrants to, and
covenants with,
the Seller, the Depositor and the Trustee as follows, as of the
Closing Date:
(i) It is duly organized and is validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania and
is duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by it in any state in which
a
Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event,
is in
compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to service the Mortgage
Loans in
accordance with the terms of this Agreement and to perform any
of its
other obligations under this Agreement in accordance with the
terms
hereof.
(ii) It has the full corporate power and authority to
service
each Mortgage Loan, and to execute, deliver and perform, and to
enter
into and consummate the transactions contemplated by this
Agreement and
has duly authorized by all necessary corporate action on its
part the
execution, delivery and performance of this Agreement; and
this
Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes its legal, valid
and
binding obligation, enforceable against it in accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other
similar laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief
may be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought and further subject
to
public policy with respect to indemnity and contribution
under
applicable securities law.
(iii) The execution and delivery of this Agreement by it,
the
servicing of the Mortgage Loans by it under this Agreement,
the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in its ordinary course of business and will not (A) result
in a
material breach of any term or provision of its charter or
by-laws or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the
terms of
any other material agreement or instrument to which it is a
party or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to it of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction
over it; and it is not in breach or violation of any material
indenture
or other material agreement or instrument, or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over it
which breach or violation may materially impair its ability to
perform
or meet any of its obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage
loans
for Fannie Mae or Freddie Mac and is a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to sections
203 and
211 of the National Housing Act.
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<PAGE>
(v) No litigation is pending or, to the best of its
knowledge,
threatened in writing, against it that would materially and
adversely
affect the execution, delivery or enforceability of this
Agreement or
its ability to service the Mortgage Loans or to perform any of
its
other obligations under this Agreement in accordance with the
terms
hereof.
(vi) No consent, approval, authorization or order of any
court
or governmental agency or body is required for its execution,
delivery
and performance of, or compliance with, this Agreement or
the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, it has
obtained
the same.
(vii) The Servicer has accurately and fully reported, and
will
continue to accurately and fully report its borrower credit
files to
each of the credit repositories in a timely manner materially
in
accordance with the Fair Credit Reporting Act and its
implementing
legislation.
(viii) The Servicer is a member of MERS in good standing,
and
will comply in all material respects with the rules and
procedures of
MERS in connection with the servicing of the Mortgage Loans that
are
registered with MERS.
(ix) The Servicer will not waive any Prepayment Charge with
respect to a Mortgage Loan unless it is waived in accordance
with the
standard set forth in Section 3.01.
If the covenant of the Servicer set forth in Section 2.03(a)(ix)
above is
breached by the Servicer, the Servicer will pay the amount of
such waived
Prepayment Charge, for the benefit of the Holders of the Class P
Certificates by
depositing such amount into the Custodial Account within 90 days
of the earlier
of discovery by the Servicer or receipt of notice by the
Servicer of such
breach. Notwithstanding the foregoing, or anything to the
contrary contained in
this Agreement, the Servicer shall have no liability for a
waiver of any
Prepayment Charge in the event that the Servicer's determination
to make such a
waiver was made by the Servicer in reliance on information
properly received by
the Servicer from any Person in accordance with the terms of
this Agreement.
(b) The Seller hereby represents and warrants to and covenants
with,
the Depositor, the Servicer and the Trustee as follows, as of
the Closing Date:
(i) The Seller is duly organized, validly existing and in
good
standing under the laws of the State of Delaware and is duly
authorized
and qualified to transact any and all business contemplated by
this
Agreement to be conducted by the Seller in any state in which
a
Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event,
is in
compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to sell the Mortgage Loans in accordance with the terms of
this
Agreement and to perform any of its other obligations under
this
Agreement in accordance with the terms hereof.
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(ii) The Seller has the full corporate power and authority
to
sell each Mortgage Loan, and to execute, deliver and perform,
and to
enter into and consummate the transactions contemplated by
this
Agreement and has duly authorized by all necessary corporate
action on
the part of the Seller the execution, delivery and performance
of this
Agreement; and this Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes
a legal, valid and binding obligation of the Seller,
enforceable
against the Seller in accordance with its terms, except that (a)
the
enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought and further subject to public
policy
with respect to indemnity and contribution under applicable
securities
law.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under
this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or
compliance
with the terms hereof are in the ordinary course of business of
the
Seller and will not (A) result in a material breach of any term
or
provision of the charter or by-laws of the Seller or (B)
materially
conflict with, result in a material breach, violation or
acceleration
of, or result in a material default under, the terms of any
other
material agreement or instrument to which the Seller is a party
or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to the Seller of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Seller; and the Seller is not in breach
or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation
of any
court, regulatory body, administrative agency or governmental
body
having jurisdiction over it which breach or violation may
materially
impair the Seller's ability to perform or meet any of its
obligations
under this Agreement.
(iv) The Seller is an approved seller of conventional
mortgage
loans for Fannie Mae or Freddie Mac and is a mortgagee approved
by the
Secretary of Housing and Urban Development pursuant to sections
203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or the ability of the Seller to sell the Mortgage
Loans or to
perform any of its other obligations under this Agreement in
accordance
with the terms hereof.
(vi) No consent, approval, authorization or order of any
court
or governmental agency or body is required for the execution,
delivery
and performance by the Seller of, or compliance by the Seller
with,
this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or order
is
required, the Seller has obtained the same.
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(vii) The representations and warranties set forth in
Section
8 of the Mortgage Loan Purchase Agreement are true and correct
as of
the Closing Date.
(viii) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994 or any comparable law and no
Mortgage
Loan is classified and/or defined as a "high cost", "covered",
"high
risk home" or "predatory" loan under any other state, federal or
local
law or regulation or ordinance (or a similarly classified loan
using
different terminology under a law imposing heightened
regulatory
scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees).
(ix) No loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in Appendix E of the
Standard &
Poor's Glossary For File Format For LEVELS(R) Version 5.6
Revised
(attached hereto as Exhibit N.) and no Mortgage Loan originated
on or
after October 1, 2002 through March 6, 2003 is governed by the
Georgia
Fair Lending Act.
(x) Any and all requirements of any federal, state or local
law including, without limitation, usury, truth in lending, real
estate
settlement procedures, consumer credit protection, equal
credit
opportunity, fair housing, predatory, abusive lending or
disclosure
laws applicable to the origination and servicing of the Mortgage
Loans
have been complied with in all material respects.
(c) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty set forth in Section 2.03(b)(viii),
(ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that
materially and adversely
affects the interests of the Certificateholders in any Mortgage
Loan, the party
discovering such breach shall give prompt written notice thereof
to the other
parties. The Seller hereby covenants with respect to the
representations and
warranties set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the
Mortgage Loan Purchase Agreement, that within ninety (90) days
of the discovery
of a breach of any representation or warranty set forth therein
that materially
and adversely affects the interests of the Certificateholders in
any Mortgage
Loan, it shall cure such breach in all material respects and, if
such breach is
not so cured, (i) prior to the second anniversary of the Closing
Date, remove
such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust
Fund and
substitute in its place a Replacement Mortgage Loan, in the
manner and subject
to the conditions set forth in this Section; or (ii) repurchase
the affected
Mortgage Loan or Mortgage Loans from the Trustee at the Purchase
Price in the
manner set forth below; provided that any such substitution
pursuant to (i)
above or repurchase pursuant to (ii) above shall not be effected
prior to the
delivery to the Trustee of an Opinion of Counsel if required by
Section 2.05 and
any such substitution pursuant to (i) above shall not be
effected prior to the
additional delivery to the Trustee of a Request for Release. The
Seller shall
promptly reimburse the Trustee for any expenses reasonably
incurred by the
Trustee in respect of enforcing the remedies for such breach. To
enable the
Servicer to amend the Mortgage Loan Schedule, the Seller shall,
unless it cures
such breach in a timely fashion pursuant to this Section 2.03,
promptly notify
the Trustee whether it intends either to repurchase, or to
substitute for, the
Mortgage Loan affected by such breach. With respect to the
representations and
warranties in Section 8 of the Mortgage Loan Purchase Agreement
that are made to
the best of the Seller's knowledge, if it is discovered by any
of the Depositor,
the Seller
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or the Trustee that the substance of such representation and
warranty is
inaccurate and such inaccuracy materially and adversely affects
the value of the
related Mortgage Loan, notwithstanding the Seller's lack of
knowledge with
respect to the substance of such representation or warranty, the
Seller shall
nevertheless be required to cure, substitute for or repurchase
the affected
Mortgage Loan in accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Seller
shall deliver to the Trustee for the benefit of the related
Certificateholders
such documents and agreements as are required by Section 2.01.
No substitution
will be made in any calendar month after the Determination Date
for such month.
Scheduled Payments due with respect to Replacement Mortgage
Loans in the Due
Period related to the Distribution Date on which such proceeds
are to be
distributed shall not be part of the Trust Fund and will be
retained by the
Seller. For the month of substitution, distributions to
Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan
for the related
Due Period and thereafter the Seller shall be entitled to retain
all amounts
received in respect of such Deleted Mortgage Loan. The Servicer
shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the
removal of such Deleted Mortgage Loan and the substitution of
the Replacement
Mortgage Loan or Loans and shall deliver the amended Mortgage
Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage
Loan or Loans
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 Replacement
Mortgage Loan or
Loans, as of the date of substitution, the representations and
warranties set
forth in Section 8 of the Mortgage Loan Purchase Agreement with
respect to such
Mortgage Loan. Upon any such substitution and the deposit into
the Distribution
Account of the amount required to be deposited therein in
connection with such
substitution as described in the following paragraph and receipt
by the Trustee
of a Request for Release for such Mortgage Loan, the Trustee
shall release to
the Seller the Mortgage File relating to such Deleted Mortgage
Loan and held for
the benefit of the related Certificateholders and shall execute
and deliver at
the Seller's direction such instruments of transfer or
assignment as have been
prepared by the Seller, in each case without recourse, as shall
be necessary to
vest in the Seller, or its respective designee, title to the
Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03. The
Trustee shall not have any further responsibility with regard to
such Mortgage
File.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Trustee will
determine the
amount (if any) by which the aggregate principal balance of all
the Replacement
Mortgage Loans as of the date of substitution is less than the
Stated Principal
Balance (after application of the principal portion of the
Scheduled Payment due
in the month of substitution) of such Deleted Mortgage Loan. An
amount equal to
the aggregate of such deficiencies, described in the preceding
sentence for any
Distribution Date (such amount, the "Substitution Adjustment
Amount") shall be
remitted to the Servicer for deposit in the Custodial Account,
by the Seller
delivering such Replacement Mortgage Loan on or before the
Determination Date
for the Distribution Date relating to the Prepayment Period
during which the
related Mortgage Loan was required to be purchased or replaced
hereunder.
In the event that the Seller shall be required to repurchase a
Mortgage
Loan, the Purchase Price therefor shall be remitted to the
Servicer for deposit
in the Custodial Account, on or before
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the Determination Date immediately following the date on which
the Seller was
required to repurchase such Mortgage Loan. The Purchase Price
shall be remitted
by the Servicer to the Trustee on the Remittance Date occurring
in the month
immediately following the month in which the Purchase Price was
deposited in the
Custodial Account. In addition, upon such deposit of the
Purchase Price, the
delivery of an Officer's Certificate by the Servicer to the
Trustee certifying
that the Purchase Price has been deposited in the Custodial
Account, the
delivery of an Opinion of Counsel if required by Section 2.05
and the receipt of
a Request for Release, the Trustee shall release the related
Mortgage File held
for the benefit of the related Certificateholders to the Seller,
and the Trustee
shall execute and deliver at such Person's direction the related
instruments of
transfer or assignment prepared by the Seller, in each case
without recourse, as
shall be necessary to transfer title from the Trustee for the
benefit of the
Certificateholders and transfer the Trustee's interest to the
Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and
agreed that the obligation under this Agreement of the Seller to
cure,
repurchase or replace any Mortgage Loan as to which a breach has
occurred and is
continuing shall constitute the sole remedies against the Seller
respecting such
breach available to Certificateholders, the Depositor or the
Trustee.
(d) The representations and warranties set forth in Section 2.03
shall
survive delivery of the respective Mortgage Loans and Mortgage
Files to the
Trustee or the Custodian for the benefit of the
Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR.
The Depositor hereby represents and warrants to, and covenants,
with
the Servicer, the Seller and the Trustee as follows, as of the
date hereof and
as of the Closing Date:
(i) The Depositor is duly organized and is validly existing
as
a corporation in good standing under the laws of the State of
Delaware
and has full power and authority (corporate and other) necessary
to own
or hold its properties and to conduct its business as now
conducted by
it and to enter into and perform its obligations under this
Agreement.
(ii) The Depositor has the full corporate power and
authority
to execute, deliver and perform, and to enter into and
consummate the
transactions contemplated by, this Agreement and has duly
authorized,
by all necessary corporate action on its part, the execution,
delivery
and performance of this Agreement; and this Agreement, assuming
the due
authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with
its
terms, subject, as to enforceability, to (i) bankruptcy,
insolvency,
moratorium receivership and other similar laws relating to
creditors'
rights generally and (ii) the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought and further subject to public
policy
with respect to indemnity and contribution under applicable
securities
law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by
this
Agreement, and the fulfillment of
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or compliance with the terms hereof are in the ordinary course
of
business of the Depositor and will not (A) result in a material
breach
of any term or provision of the charter or by-laws of the
Depositor or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the
terms of
any other material agreement or instrument to which the
Depositor is a
party or by which it may be bound or (C) constitute a
material
violation of any statute, order or regulation applicable to
the
Depositor of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over the Depositor; and
the
Depositor is not in breach or violation of any material
indenture or
other material agreement or instrument, or in violation of any
statute,
order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it which
breach or
violation may materially impair the Depositor's ability to
perform or
meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with
the
terms hereof.
(v) No consent, approval, authorization or order of any
court
or governmental agency or body is required for the execution,
delivery
and performance by the Depositor of, or compliance by the
Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as
of the
Closing Date, following the transfer of the Mortgage Loans to it
by the Seller,
the Depositor had good title to the Mortgage Loans and the
related Mortgage
Notes were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties set
forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the
Trustee or the Custodian for the benefit of the
Certificateholders. Upon
discovery by the Depositor, the Servicer or the Trustee of a
breach of such
representations and warranties, the party discovering such
breach shall give
prompt written notice to the others and to each Rating
Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION
WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this Agreement,
with
respect to any Mortgage Loan that is not in default or as to
which default is
not imminent, no repurchase or substitution pursuant to Sections
2.02 or 2.03
shall be made unless the Seller delivers to the Trustee an
Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or
substitution
would not (i) result in the imposition of the tax on "prohibited
transactions"
of REMIC I or REMIC II or contributions after the Closing Date,
as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or
(ii) cause any
REMIC to fail to qualify as a REMIC at any time that any
Certificates are
outstanding. Any Mortgage Loan as to which repurchase or
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substitution was delayed pursuant to this paragraph shall be
repurchased or the
substitution therefor shall occur (subject to compliance with
Sections 2.02 or
2.03) upon the earlier of (a) the occurrence of a default or
imminent default
with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion
of Counsel to the effect that such repurchase or substitution,
as applicable,
will not result in the events described in clause (i) or clause
(ii) of the
preceding sentence.
(b) Upon discovery by the Depositor or the Seller that any
Mortgage
Loan does not constitute a "qualified mortgage" within the
meaning of section
860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in
any event within 5 Business Days of discovery) give written
notice thereof to
the other parties and the Trustee. In connection therewith, the
Seller, at the
its option, shall either (i) substitute, if the conditions in
Section 2.03(c)
with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage
Loan within 90
days of such discovery in the same manner as it would a Mortgage
Loan for a
breach of representation or warranty contained in Section 2.03.
The Trustee
shall reconvey to the Seller the Mortgage Loan to be released
pursuant hereto in
the same manner, and on the same terms and conditions, as it
would a Mortgage
Loan repurchased for breach of a representation or warranty
contained in Section
2.03.
Section 2.06 ISSUANCE OF THE REMIC I REGULAR INTERESTS AND THE
CLASS R
CERTIFICATES.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and
the delivery to the Custodian on its behalf of the related
Mortgage Files,
subject to the provisions of Section 2.01 and Section 2.02,
together with the
assignment to it of all other assets included in REMIC I, the
receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I
Interest,
together with the REMIC I Regular Interests, constitute the
entire beneficial
ownership interest in REMIC I. The rights of the Holders of the
Class R-I
Interest and REMIC I (as holder of the REMIC I Regular
Interests) to receive
distributions from the proceeds of REMIC I in respect of the
Class R-I Interest
and the REMIC I Regular Interests, respectively, and all
ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC
I Regular
Interests, shall be as set forth in this Agreement.
Section 2.07 CONVEYANCE OF THE REMIC I REGULAR INTERESTS .
The Depositor, concurrently with the execution and delivery
hereof,
does hereby transfer, assign, set over and otherwise convey to
the Trustee,
without recourse all the right, title and interest of the
Depositor in and to
the REMIC I Regular Interests for the benefit of the Class R-II
Interest and
REMIC II (as holder of the REMIC I Regular Interests). The
Trustee acknowledges
receipt of the REMIC I Regular Interests and declares that it
holds and will
hold the same in trust for the exclusive use and benefit of all
present and
future Holders of the Class R-II Interest and REMIC II (as
holder of the REMIC I
Regular Interests). The rights of the Holder of the Class R-II
Interest and
REMIC II (as holder of the REMIC I Regular Interests) to receive
distributions
from the proceeds of REMIC II in respect of the Class R-II
Interest and Regular
Certificates, respectively, and all ownership interests
evidenced or constituted
by the Class R-II Interest and the Regular Certificates, shall
be as set forth
in this Agreement. The Class R-II Interest and the Regular
Certificates shall
constitute the entire beneficial ownership interest in REMIC
II.
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Section 2.08 ISSUANCE OF RESIDUAL CERTIFICATES.
The Trustee acknowledges the assignment to it of the REMIC I
Regular
Interests and, concurrently therewith and in exchange therefor,
pursuant to the
written request of the Depositor executed by an officer of the
Depositor, the
Trustee has executed, authenticated and delivered to or upon the
order of the
Depositor, the Class R Certificates in authorized
denominations.
Section 2.09 ESTABLISHMENT OF TRUST.
The Depositor does hereby establish, pursuant to the further
provisions
of this Agreement and the laws of the State of New York, an
express trust to be
known, for convenience, as "Nomura Asset Acceptance Corporation,
Alternative
Loan Trust, Series 2005-AR1" and does hereby appoint JPMorgan
Chase Bank, N.A.,
as Trustee in accordance with the provisions of this
Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01 THE SERVICER TO ACT AS SERVICER.
The Servicer shall service and administer the Mortgage Loans on
behalf
of the Trust and in the best interest of and for the benefit of
the
Certificateholders (as determined by the Servicer in its
reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage
Loans and to the
extent consistent with such terms and in accordance with and
exercising the same
care in performing those practices that the Servicer customarily
employs and
exercises in servicing and administering mortgage loans for its
own account
(including, compliance with all applicable federal, state and
local laws).
To the extent consistent with the foregoing, the Servicer shall
seek
the timely and complete recovery of principal and interest on
the Mortgage Notes
related to the Mortgage Loans and shall waive a Prepayment
Charge only under the
following circumstances: (i) such waiver is standard and
customary in servicing
similar mortgage loans and (ii) either (A) such waiver is
related to a default
or reasonably foreseeable default and would, in the reasonable
judgment of the
Servicer, maximize recovery of total proceeds taking into
account the value of
such Prepayment Charge and the related Mortgage Loan and, if
such waiver is made
in connection with a refinancing of the related Mortgage Loan,
such refinancing
is related to a default or a reasonably foreseeable default or
(B) such waiver
is made in connection with a refinancing of the related Mortgage
Loan unrelated
to a default or a reasonably foreseeable default where (x) the
related Mortgagor
has stated to the Servicer an intention to refinance the related
Mortgage Loan
and (y) the Servicer has concluded in its reasonable judgment
that the waiver of
such Prepayment Charge would induce such Mortgagor to refinance
with the
Servicer or (iii) the Servicer reasonably believes such
Prepayment Charge is
unenforceable in accordance with applicable law or the
collection of such
related Prepayment Charge would otherwise violate applicable
law. If a
Prepayment Charge is waived as permitted by meeting both of the
standards
described in clauses (i) and (ii)(B) above, then the Servicer is
required to pay
the amount of such waived Prepayment Charge (the "Servicer
Prepayment Charge
Payment Amount"), for the benefit of the Holders of the Class P
Certificates, by
depositing such amount into the Custodial Account within 90 days
of notice or
discovery of such waiver meeting the standard set forth in both
clauses (i) and
(ii)(B) above; provided, however, that the Servicer shall not
waive more than 5%
of the Prepayment Charges (by number of Prepayment Charges) set
forth on the
Prepayment Charge Schedule in accordance with clauses (i) and
(ii)(B) above.
Notwithstanding any other provisions of this Agreement, any
payments made by the
Servicer in respect of any waived Prepayment Charges pursuant to
clauses (i) and
(ii)(B) above and the preceding sentence shall be deemed to be
paid outside of
the Trust Fund.
Subject only to the above-described applicable servicing
standards (the
"Accepted Servicing Practices") and the terms of this Agreement
and of the
respective Mortgage Loans, the Servicer shall have full power
and authority,
acting alone and/or through subservicers as provided in Section
3.03, to do or
cause to be done any and all things that it may deem necessary
or desirable in
connection with such servicing and administration, including but
not limited to,
the power and authority, subject to the terms hereof (i) to
execute and deliver,
on behalf of the
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Certificateholders and the Trustee, customary consents or
waivers and other
instruments and documents, (ii) to consent to transfers of any
related Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance
Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to
effectuate
foreclosure or other conversion of the ownership of the
Mortgaged Property
securing any Mortgage Loan.
Without limiting the generality of the foregoing, the Servicer,
in its
own name or in the name of the Trust, the Depositor or the
Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the
Trustee, when the
Servicer believes it appropriate in its reasonable judgment, to
execute and
deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any
of them, any and all instruments of satisfaction or
cancellation, or of partial
or full release or discharge and all other comparable
instruments, with respect
to the Mortgage Loans, and with respect to the related Mortgaged
Properties held
for the benefit of the Certificateholders. The Servicer shall
prepare and
deliver to the Depositor and/or the Trustee such documents
requiring execution
and delivery by any or all of them as are necessary or
appropriate to enable the
Servicer to service and administer the Mortgage Loans. Upon
receipt of such
documents, the Depositor and/or the Trustee shall execute such
documents and
deliver them to the Servicer. In addition, the Trustee shall
execute, at the
written request of the Servicer, and furnish to the Servicer any
special or
limited powers of attorney agreeable to the Trustee and its
counsel for each
county in which a Mortgaged Property is located and other
documents necessary or
appropriate to enable the Servicer to carry out its servicing
and administrative
duties hereunder, provided such limited powers of attorney or
other documents
shall be prepared by the Servicer and submitted to the Trustee
for review prior
to execution.
In accordance with the standards of the first paragraph of this
Section
3.01, the Servicer shall advance or cause to be advanced funds
as necessary for
the purpose of effecting the payment of taxes and assessments on
the Mortgaged
Properties relating to the Mortgage Loans in order to preserve
the lien on the
Mortgaged Property, which advances shall be reimbursable in the
first instance
from related collections from the Mortgagors pursuant to Section
4.04, and
further as provided in Section 4.02. All costs incurred by the
Servicer, if any,
in effecting the payments of such taxes and assessments on the
related Mortgaged
Properties and related insurance premiums shall not, for the
purpose of
calculating monthly distributions to the Certificateholders, be
added to the
Stated Principal Balance under the related Mortgage Loans,
notwithstanding that
the terms of such Mortgage Loans so permit.
Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02, when
any
Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the
Servicer shall to the extent that it has knowledge of such
conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent
permitted under applicable law and governmental regulations, but
only to the
extent that such enforcement will not adversely affect or
jeopardize coverage
under any Required Insurance Policy. Notwithstanding the
foregoing, the Servicer
shall not be required to exercise such rights with respect to a
Mortgage Loan if
the Person to whom the related Mortgaged Property has been
conveyed or is
proposed to be conveyed satisfies the terms and conditions
contained in the
Mortgage Note and Mortgage related thereto and the consent of
the
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mortgagee under such Mortgage Note or Mortgage is not otherwise
so required
under such Mortgage Note or Mortgage as a condition to such
transfer. In the
event that the Servicer is prohibited by law from enforcing any
such due-on-sale
clause, or if coverage under any Required Insurance Policy would
be adversely
affected, or if nonenforcement is otherwise permitted hereunder,
the Servicer is
authorized, subject to Section 3.02(b), to take or enter into an
assumption and
modification agreement from or with the person to whom such
property has been or
is about to be conveyed, pursuant to which such person becomes
liable under the
Mortgage Note and, unless prohibited by applicable state law,
the Mortgagor
remains liable thereon, provided that the related Mortgage Loan
shall continue
to be covered (if so covered before the Servicer enters such
agreement) by the
applicable Required Insurance Policies. The Servicer, subject to
Section
3.02(b), is also authorized with the prior approval of the
insurers under any
Required Insurance Policies to enter into a substitution of
liability agreement
with such Person, pursuant to which the original Mortgagor is
released from
liability and such Person is substituted as Mortgagor and
becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer
shall not be
deemed to be in default under this Section 3.02(a) by reason of
any transfer or
assumption that the Servicer reasonably believes it is
restricted by law from
preventing.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause to
the extent set forth in Section 3.02(a), in any case in which a
related
Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person
is to enter into an assumption agreement or modification
agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of
the Trustee, or
if an instrument of release signed by the Trustee is required
releasing the
Mortgagor from liability on the related Mortgage Loan, the
Servicer shall
prepare and deliver or cause to be prepared and delivered to the
Trustee for
signature and shall direct, in writing, the Trustee to execute
the assumption
agreement with the Person to whom the Mortgaged Property is to
be conveyed and
such modification agreement or supplement to the Mortgage Note
or Mortgage or
other instruments as are reasonable or necessary to carry out
the terms of the
Mortgage Note or Mortgage or otherwise to comply with any
applicable laws
regarding assumptions or the transfer of the Mortgaged Property
to such Person.
In connection with any such assumption, no material term of the
Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of
the Scheduled
Payment, the Index, Gross Margin, Periodic Rate Cap, Adjustment
Date, Maximum
Mortgage Interest Rate or Minimum Mortgage Interest Rate and any
other term
affecting the amount or timing of payment on the related
Mortgage Loan) may be
changed. In addition, the substitute Mortgagor and the Mortgaged
Property must
be acceptable to the Servicer in accordance with the servicing
standard set
forth in Section 3.01. The Servicer shall notify the Trustee
that any such
substitution or assumption agreement has been completed by
forwarding to the
Trustee the original of such substitution or assumption
agreement, which in the
case of the original shall be added to the related Mortgage File
and shall, for
all purposes, be considered a part of such Mortgage File to the
same extent as
all other documents and instruments constituting a part thereof.
Any fee
collected by the Servicer for entering into an assumption or
substitution of
liability agreement will be retained by the Servicer as
additional servicing
compensation.
Section 3.03 SUBSERVICERS.
The Servicer shall perform all of its servicing
responsibilities
hereunder or may cause a subservicer to perform any such
servicing
responsibilities on its behalf, but the use by the
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Servicer of a subservicer shall not release the Servicer from
any of its
obligations hereunder with respect to the related Mortgage
Loans. The Servicer
shall pay all fees of each of its subservicers from its own
funds, and a
subservicer's fee shall not exceed the Servicing Fee payable to
the Servicer
hereunder.
At the cost and expense of the Servicer, without any right
of
reimbursement from the Custodial Account, the Servicer shall be
entitled to
terminate the rights and responsibilities of a subservicer and
arrange for any
servicing responsibilities to be performed by a successor
subservicer; provided,
however, that nothing contained herein shall be deemed to
prevent or prohibit
the Servicer, at its option, from electing to service the
related Mortgage Loans
itself. In the event that the Servicer's responsibilities and
duties under this
Agreement are terminated pursuant to Section 8.03, the Servicer
shall at its own
cost and expense terminate the rights and responsibilities of
each subservicer
with respect to the Mortgage Loans effective as of the date of
the Servicer's
termination. The Servicer shall pay all fees, expenses or
penalties necessary in
order to terminate the rights and responsibilities of each
subservicer from the
Servicer's own funds without reimbursement from the Trust
Fund.
Notwithstanding the foregoing, the Servicer shall not be
relieved of
its obligations hereunder with respect to the Mortgage Loans and
shall be
obligated to the same extent and under the same terms and
conditions as if it
alone were servicing and administering the Mortgage Loans. The
Servicer shall be
entitled to enter into an agreement with a subservicer for
indemnification of
the Servicer by the subservicer and nothing contained in this
Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or
services
relating to the Mortgage Loans involving a subservicer shall be
deemed to be
between such subservicer and the Servicer alone, and the Trustee
shall not have
any obligations, duties or liabilities with respect to such
subservicer
including any obligation, duty or liability of the Trustee to
pay such
subservicer's fees and expenses or any differential in the
amount of the
servicing fee paid hereunder and the amount necessary to induce
any successor
servicer to act as successor servicer under this Agreement and
the transactions
provided for in this Agreement. For purposes of remittances to
the Trustee
pursuant to this Agreement, the Servicer shall be deemed to have
received a
payment on a Mortgage Loan when a subservicer has received such
payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
THE
SERVICER TO BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the
Servicer
shall transmit to the Trustee as required by this Agreement all
documents and
instruments in respect of a related Mortgage Loan coming into
the possession of
the Servicer from time to time and shall account fully to the
Trustee for any
funds received by the Servicer or that otherwise are collected
by the Servicer
as Liquidation Proceeds or Insurance Proceeds in respect of any
such Mortgage
Loan. All Mortgage Files and funds collected or held by, or
under the control
of, the Servicer in respect of any Mortgage Loans, whether from
the collection
of principal and interest payments or from Liquidation Proceeds,
including but
not limited to, any funds on deposit in the Custodial Account,
shall be held by
the Servicer for and on behalf of the Trustee and shall be and
remain the sole
and exclusive property of the Trustee, subject to the applicable
provisions of
this
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Agreement. The Servicer also agrees that it shall not create,
incur or subject
any Mortgage File or any funds that are deposited in the
Custodial Account, the
Distribution Account or in any Escrow Account, or any funds that
otherwise are
or may become due or payable to the Trustee for the benefit of
the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or
otherwise any
claim or right of set off against any Mortgage File or any funds
collected on,
or in connection with, a Mortgage Loan, except, however, that
the Servicer shall
be entitled to set off against and deduct from any such funds
any amounts that
are properly due and payable to the Servicer under this
Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
(a) The Servicer shall cause to be maintained for each Mortgage
Loan
hazard insurance with extended coverage on the Mortgaged
Property in an amount
which is at least equal to the lesser of (i) the Stated
Principal Balance of
such Mortgage Loan and (ii) the amount necessary to fully
compensate for any
damage or loss to the improvements that are a part of such
property on a
replacement cost basis, in each case in an amount not less than
such amount as
is necessary to avoid the application of any coinsurance clause
contained in the
related hazard insurance policy. The Servicer shall also cause
to be maintained
hazard insurance with extended coverage on each REO Property in
an amount which
is at least equal to the lesser of (i) the maximum insurable
value of the
improvements which are a part of such REO Property and (ii) the
Stated Principal
Balance of the related Mortgage Loan at the time it became an
REO Property. The
Servicer will comply in the performance of this Agreement with
all reasonable
rules and requirements of each insurer under any such hazard
policies. Any
amounts collected by the Servicer under any such policies (other
than amounts to
be applied to the restoration or repair of the property subject
to the related
Mortgage or amounts to be released to the Mortgagor in
accordance with the
procedures that the Servicer would follow in servicing loans
held for its own
account, subject to the terms and conditions of the related
Mortgage and
Mortgage Note and in accordance with the servicing standard set
forth in Section
3.01) shall be deposited in the Custodial Account, subject to
withdrawal
pursuant to Section 4.02. Any cost incurred by the Servicer in
maintaining any
such insurance shall not, for the purpose of calculating
distributions to
Certificateholders, be added to the Stated Principal Balance of
the related
Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan so permit.
It is understood and agreed that no earthquake or other
additional insurance is
to be required of any Mortgagor other than pursuant to such
applicable laws and
regulations as shall at any time be in force and as shall
require such
additional insurance. If the Mortgaged Property or REO Property
is at any time
in an area identified in the Federal Register by the Federal
Emergency
Management Agency as having special flood hazards and flood
insurance has been
made available, the Servicer shall cause to be maintained a
flood insurance
policy in respect thereof. Such flood insurance shall be in an
amount equal to
the lesser of (i) the Stated Principal Balance of the related
Mortgage Loan and
(ii) the maximum amount of such insurance available for the
related Mortgaged
Property under the national flood insurance program (assuming
that the area in
which such Mortgaged Property is located is participating in
such program).
In the event that the Servicer shall obtain and maintain a
blanket
policy with an insurer having a General Policy Rating of B:VI or
better in
Best's Key Rating Guide (or such other rating that is comparable
to such rating)
insuring against hazard losses on all of the Mortgage Loans, it
shall
conclusively be deemed to have satisfied its obligations as set
forth in the
first two
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sentences of this Section 3.05, it being understood and agreed
that such policy
may contain a deductible clause, in which case the Servicer
shall, in the event
that there shall not have been maintained on the related
Mortgaged Property or
REO Property a policy complying with the first two sentences of
this Section
3.05, and there shall have been one or more losses which would
have been covered
by such policy, deposit to the Custodial Account from its own
funds the amount
not otherwise payable under the blanket policy because of such
deductible
clause. In connection with its activities as administrator and
servicer of the
Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of itself,
the Trustee and Certificateholders, claims under any such
blanket policy in a
timely fashion in accordance with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement
a policy or policies of insurance covering errors and omissions
for failure in
the performance of the Servicer's obligations under this
Agreement, which policy
or policies shall be in such form and amount that would meet the
requirements of
Fannie Mae or Freddie Mac if it were the purchaser of the
related Mortgage
Loans, unless the Servicer has obtained a waiver of such
requirements from
Fannie Mae or Freddie Mac. The Servicer shall provide the
Trustee, upon request,
with copies of such insurance policies and fidelity bond. The
Servicer shall
also maintain a fidelity bond in the form and amount that would
meet the
requirements of Fannie Mae or Freddie Mac, unless the Servicer
has obtained a
waiver of such requirements from Fannie Mae or Freddie Mac. The
Servicer shall
be deemed to have complied with this provision if an Affiliate
of the Servicer
has such errors and omissions and fidelity bond coverage and, by
the terms of
such insurance policy or fidelity bond, the coverage afforded
thereunder extends
to the Servicer. Any such errors and omissions policy and
fidelity bond shall by
its terms not be cancelable without thirty days' prior written
notice to the
Trustee. The Servicer shall also cause its subservicers to
maintain a policy of
insurance covering errors and omissions and a fidelity bond
which would meet
such requirements.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Servicer shall prepare and present on behalf of the Trustee
and the
Certificateholders all claims under the Insurance Policies and
take such actions
(including the negotiation, settlement, compromise or
enforcement of the
insured's claim) as shall be necessary to realize recovery under
such Insurance
Policies. Any proceeds disbursed to the Servicer in respect of
such Insurance
Policies shall, within two Business Days of its receipt, be
deposited in the
Custodial Account upon receipt, except that any amounts realized
that are to be
applied to the repair or restoration of the related Mortgaged
Property as a
condition precedent to the presentation of claims on the related
Mortgage Loan
to the insurer under any applicable Insurance Policy need not be
so deposited
(or remitted).
Section 3.07 MAINTENANCE OF INSURANCE POLICIES.
The Servicer shall not take any action that would result in
noncoverage
under any applicable Insurance Policy of any loss which, but for
the actions of
the Servicer would have been covered thereunder. The Servicer
shall use its best
efforts to keep in force and effect (to the extent that the
related Mortgage
Loan requires the Mortgagor to maintain such insurance), any
applicable
Insurance Policy. The Servicer shall not cancel or refuse to
renew any Insurance
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Policy that is in effect at the date of the initial issuance of
the Mortgage
Note and is required to be kept in force hereunder.
Section 3.08 RESERVED.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS;
DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES;
REPURCHASES OF CERTAIN MORTGAGE LOANS.
(a) The Servicer shall use reasonable efforts to foreclose upon
or
otherwise comparably convert the ownership of properties
securing such of the
Mortgage Loans as come into and continue in default and as to
which no
satisfactory arrangements can be made for collection of
delinquent payments. In
connection with such foreclosure or other conversion, the
Servicer shall follow
such practices and procedures as it shall deem necessary or
advisable and as
shall be normal and usual in its general mortgage servicing
activities and the
requirements of the insurer under any Required Insurance Policy;
provided that
the Servicer shall not be required to expend its own funds in
connection with
any foreclosure or towards the restoration of any property
unless it shall
determine (i) that such restoration and/or foreclosure will
increase the
proceeds of liquidation of the related Mortgage Loan after
reimbursement to
itself of such expenses and (ii) that such expenses will be
recoverable to it
through Liquidation Proceeds (respecting which it shall have
priority for
purposes of withdrawals from the Custodial Account pursuant to
Section 4.02). If
the Servicer reasonably believes that Liquidation Proceeds with
respect to any
such Mortgage Loan would not be increased as a result of such
foreclosure or
other action, such Mortgage Loan will be charged-off and will
become a
Liquidated Loan. The Servicer will give notice of any such
charge-off to the
Trustee. The Servicer shall be responsible for all other costs
and expenses
incurred by it in any such proceedings; provided that such costs
and expenses
shall be Servicing Advances and that it shall be entitled to
reimbursement
thereof from the proceeds of liquidation of the related
Mortgaged Property, as
contemplated in Section 4.02. If the Servicer has knowledge that
a Mortgaged
Property that the Servicer is contemplating acquiring in
foreclosure or by
deed-in-lieu of foreclosure is located within a one-mile radius
of any site with
environmental or hazardous waste risks known to the Servicer,
the Servicer
shall, prior to acquiring the Mortgaged Property, consider such
risks and only
take action in accordance with its established environmental
review procedures.
With respect to any REO Property, the deed or certificate of
sale shall
be taken in the name of the Trustee for the benefit of the
Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders).
The Trustee's
name shall be placed on the title to such REO Property solely as
the Trustee
hereunder and not in its individual capacity. The Servicer shall
ensure that the
title to such REO Property references this Agreement and the
Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property,
the Servicer shall
either itself or through an agent selected by the Servicer
protect and conserve
such REO Property in the same manner and to such extent as is
customary in the
locality where such REO Property is located and may, incident to
its
conservation and protection of the interests of the
Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the
best interest of
the Servicer and the Certificateholders for the period prior to
the sale of such
REO Property. The Servicer shall prepare for and deliver to the
Trustee a
statement with respect to each REO Property that has been rented
showing the
aggregate rental income received and all expenses incurred
in
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connection with the management and maintenance of such REO
Property at such
times as is necessary to enable the Trustee to comply with the
reporting
requirements of the REMIC Provisions. The net monthly rental
income, if any,
from such REO Property shall be deposited in the Custodial
Account no later than
the close of business on each Determination Date. The Servicer
shall perform the
tax reporting and withholding related to foreclosures,
abandonments and
cancellation of indebtedness income as specified by Sections
6050H, 6050J and
6050P of the Code by preparing and filing such tax and
information returns, as
may be required.
In the event that the Trust Fund acquires any Mortgaged Property
as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged
Property prior to
three years after its acquisition by the Trust Fund or, at the
expense of the
Trust Fund, request from the Internal Revenue Service more than
60 days prior to
the day on which such three-year period would otherwise expire,
an extension of
the three-year grace period. The Trustee shall be supplied with
an Opinion of
Counsel (such opinion not to be an expense of the Trustee or the
Trust Fund) to
the effect that the holding by the Trust Fund of such Mortgaged
Property
subsequent to such three-year period will not result in the
imposition of taxes
on "prohibited transactions" of any REMIC as defined in section
860F of the Code
or cause any REMIC to fail to qualify as a REMIC at any time
that any
Certificates are outstanding, in which case the Trust Fund may
continue to hold
such Mortgaged Property (subject to any conditions contained in
such Opinion of
Counsel). Notwithstanding any other provision of this Agreement,
no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed
to continue to
be rented) or otherwise used for the production of income by or
on behalf of the
Trust Fund in such a manner or pursuant to any terms that would
(i) cause such
Mortgaged Property to fail to qualify as "foreclosure property"
within the
meaning of section 860G(a)(8) of the Code or (ii) subject any
REMIC to the
imposition of any federal, state or local income taxes on the
income earned from
such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless
the Servicer has agreed to indemnify and hold harmless the Trust
Fund with
respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted
Mortgage Loan
shall be subject to a determination by the Servicer that the
proceeds of such
foreclosure would exceed the costs and expenses of bringing such
a proceeding.
The income earned from the management of any Mortgaged
Properties acquired
through foreclosure or other judicial proceeding, net of
reimbursement to the
Servicer for expenses incurred (including any property or other
taxes) in
connection with such management and net of unreimbursed
Servicing Fees,
Advances, Servicing Advances and any management fee paid or to
be paid with
respect to the management of such Mortgaged Property, shall be
applied to the
payment of principal of, and interest on, the related defaulted
Mortgage Loans
(with interest accruing as though such Mortgage Loans were still
current) and
all such income shall be deemed, for all purposes in the
Agreement, to be
payments on account of principal and interest on the related
Mortgage Notes and
shall be deposited into the Custodial Account. To the extent the
income received
during a Prepayment Period is in excess of the amount
attributable to amortizing
principal and accrued interest at the related Mortgage Rate on
the related
Mortgage Loan, such excess shall be considered to be a partial
Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net
of any payment to the Servicer as provided above, shall be
deposited in the
Custodial Account on the next
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succeeding Determination Date following receipt thereof for
distribution on the
related Distribution Date, except that any Excess Liquidation
Proceeds shall be
retained by the Servicer as additional servicing
compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting
from a partial collection of Liquidation Proceeds or any income
from an REO
Property, shall be applied in the following order of priority:
first, to
reimburse the Servicer for any related unreimbursed Servicing
Advances and
Servicing Fees, pursuant to Section 4.02 or this Section 3.09;
second, to
reimburse the Servicer for any unreimbursed Advances, pursuant
to Section 4.02
or this Section 3.09; third, to accrued and unpaid interest (to
the extent no
Advance has been made for such amount) on the Mortgage Loan or
related REO
Property, at the Net Mortgage Rate to the first day of the month
in which such
amounts are required to be distributed; and fourth, as a
recovery of principal
of the Mortgage Loan.
(b) On each Determination Date, the Servicer shall determine
the
respective aggregate amounts of Excess Liquidation Proceeds and
Realized Losses,
if any, with respect to any Mortgage Loan for the related
Prepayment Period.
(c) The Servicer has no intent to foreclose on any Mortgage Loan
based
on the delinquency characteristics as of the Closing Date;
provided, however,
that the foregoing does not prevent the Servicer from initiating
foreclosure
proceedings on any date hereafter if the facts and circumstances
of such
Mortgage Loans including delinquency characteristics in the
Servicer's
discretion so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Servicer shall
be
entitled to retain or withdraw from the Custodial Account out of
each payment of
interest on each Mortgage Loan included in the Trust Fund an
amount equal to the
Servicing Fee. In addition, the Servicer shall be entitled to
recover unpaid
Servicing Fees out of Liquidation Proceeds, Insurance Proceeds
or condemnation
proceeds to the extent permitted by Section 4.02.
Additional servicing compensation with respect to Mortgage Loans
in the
form of any Excess Liquidation Proceeds, assumption fees, late
payment charges,
insufficient funds charges and ancillary income to the extent
such fees or
charges are received by the Servicer, all income and gain net of
any losses
realized from Permitted Investments with respect to funds in or
credited to the
Custodial Account shall be retained by the Servicer to the
extent not required
to be deposited in the Custodial Account pursuant to Section
4.02. The Servicer
shall be required to pay all expenses incurred by it in
connection with its
servicing activities hereunder (including payment of any
premiums for hazard
insurance, as required by Section 3.05 and maintenance of the
other forms of
insurance coverage required by Section 3.07) and shall not be
entitled to
reimbursement therefor except as specifically provided in
Section 4.02.
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any REO
Property
in respect of any related Mortgage Loan, the deed or certificate
of sale shall
be issued to the Trustee, or to its nominee, on behalf of the
related
Certificateholders. The Servicer shall sell any REO Property
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as expeditiously as possible and in accordance with the
provisions of this
Agreement. Pursuant to its efforts to sell such REO Property,
the Servicer shall
protect and conserve such REO Property in the manner and to the
extent required
herein, in accordance with the REMIC Provisions.
(b) The Servicer shall deposit all funds collected and received
in
connection with the operation of any REO Property into the
Custodial Account.
(c) The Servicer, upon the final disposition of any REO
Property, shall
be entitled to reimbursement for any related unreimbursed
Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds
received in
connection with the final disposition of such REO Property;
provided, that any
such unreimbursed Advances or Servicing Fees as well as any
unpaid Servicing
Fees may be reimbursed or paid, as the case may be, prior to
final disposition,
out of any net rental income or other net amounts derived from
such REO
Property.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property or the
acquisition
thereof by the Trust Fund pursuant to a deed-in-lieu of
foreclosure, the
Servicer shall submit a liquidation report to the Trustee
containing such
information as shall be mutually acceptable to the Servicer and
the Trustee with
respect to such Mortgaged Property.
Section 3.13 ANNUAL CERTIFICATE AS TO COMPLIANCE.
(a) The Servicer shall deliver to the Depositor and the Trustee
not
later than March 15th of each year commencing in 2006 (or, in
each case, if such
day is not a Business Day, the immediately preceding Business
Day), a
certificate of a Authorized Servicer Representative stating, as
to each
signatory thereof, that (i) a review of the activities of the
Servicer during
the preceding calendar year and of performance under this
Agreement has been
made under such officers' supervision, and (ii) to the best of
such officers'
knowledge, based on such review, the Servicer has fulfilled all
of its
obligations under this Agreement throughout such year, or, if
there has been a
default in the fulfillment of any such obligation, specifying
each such default
known to such officers and the nature and status thereof except
for such
defaults as such officer in its good faith judgment believes to
be immaterial.
(b) (i) The Servicer shall deliver to the Depositor and the
Trustee, on
or before March 15th of each year commencing in 2006, a
certification containing
the information set forth in Exhibit L. Such certification shall
be signed by
the senior officer in charge of servicing of the Servicer. In
addition, the
Servicer shall provide such other information with respect to
the related
Mortgage Loans and the servicing and administration thereof
within the control
of the Servicer which shall be required to enable the Depositor
and the Trustee
to comply with the reporting requirements of the Securities and
Exchange Act of
1934, as amended (the "Exchange Act").
(ii) The Servicer shall indemnify and hold harmless the
Depositor, the Trustee and their respective officers, directors,
agents
and affiliates from and against any losses, damages, penalties,
fines,
forfeitures, reasonable legal fees and related costs, judgments
and
other costs and expenses to the extent arising out of or based
upon a
breach by the Servicer or any of its officers, directors, agents
or
affiliates of its obligations under this
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Section 3.13(b), or a breach in any of the representations in
the
certification delivered pursuant to clause (b)(i) above, or
the
Servicer's gross negligence, bad faith or willful misconduct
in
connection therewith. If the indemnification provided for herein
is
unavailable to the Depositor and the Trustee as a result of a
court of
law or other administrative or regulatory body with authority
holding
such indemnification void on the basis of public policy or
similar
reason, then the Servicer agrees that it shall contribute to the
amount
paid or payable by the Depositor and the Trustee as a result of
the
losses, claims, damages or liabilities of the Depositor or the
Trustee
in such proportion as is appropriate to reflect the relative
fault of
the Trustee or the Depositor on the one hand and the Servicer on
the
other in connection with a breach of the Servicer's obligations
under
this Section 3.13(b) or the Servicer's gross negligence, bad
faith or
willful misconduct in connection therewith or a breach of any of
the
representations in the certification delivered pursuant to
clause
(b)(i) above with respect to the matters covered by this
Section
3.13(b)(ii).
Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
SERVICING
REPORT.
Not later than March 15th of each year, commencing in 2006,
the
Servicer, at its expense, shall cause a nationally recognized
firm of
independent certified public accountants to furnish to the
Servicer a report
stating that (i) it has obtained a letter of representation
regarding certain
matters from the management of the Servicer which includes an
assertion that the
Servicer has complied with certain minimum residential mortgage
loan servicing
standards, identified in the Uniform Single Attestation Program
for Mortgage
Bankers established by the Mortgage Bankers Association of
America, with respect
to the servicing of residential mortgage loans during the most
recently
completed fiscal or calendar year and (ii) on the basis of an
examination
conducted by such firm in accordance with standards established
by the American
Institute of Certified Public Accountants, such representation
is fairly stated
in all material respects, subject to such exceptions and other
qualifications
that may be appropriate. In rendering its report such firm may
rely, as to
matters relating to the direct servicing of residential mortgage
loans by
subservicers, upon comparable reports of firms of independent
certified public
accountants rendered on the basis of examinations conducted in
accordance with
the same standards (rendered within one year of such report)
with respect to
those subservicers. Promptly upon receipt of such report, the
Servicer shall
furnish a copy of such report to the Depositor, the Trustee and
each Rating
Agency. Copies of such statement shall be provided by the
Trustee to any
Certificateholder upon request at the Servicer's expense,
provided that such
statement is delivered by the Servicer to the Trustee.
Section 3.15 BOOKS AND RECORDS.
The Servicer shall be responsible for maintaining, and shall
maintain,
a complete set of books and records for the related Mortgage
Loans which shall
be appropriately identified in the Servicer's computer system to
clearly reflect
the ownership of the related Mortgage Loans by the Trust. In
particular, the
Servicer shall maintain in its possession, available for
inspection by the
Trustee and shall deliver to the Trustee upon reasonable prior
request and
during normal business hours, evidence of compliance with all
federal, state and
local laws, rules and regulations. To the extent that original
documents are not
required for purposes of realization of Liquidation Proceeds or
Insurance
Proceeds, documents maintained by the Servicer may be in the
form of
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microfilm or microfiche or such other reliable means of
recreating original
documents, including, but not limited to, optical imagery
techniques so long as
the Servicer complies with the requirements of Accepted
Servicing Practices.
The Servicer shall maintain with respect to each related
Mortgage Loan
and shall upon reasonable prior request and during normal
business hours make
available for inspection by the Trustee the related servicing
file during the
time such Mortgage Loan is subject to this Agreement and
thereafter in
accordance with applicable law.
Section 3.16 THE TRUSTEE.
The Trustee shall furnish the Servicer with any powers of
attorney and
other documents in form as mutually agreed upon and necessary or
appropriate to
enable the Servicer to service and administer the Mortgage Loans
and REO
Properties.
The Trustee shall provide access to the records and
documentation in
possession of the Trustee regarding the related Mortgage Loans
and REO Property
and the servicing thereof to the Certificat
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