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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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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
-------
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>
<CAPTION>
Uncertificated
Initial Uncertificated
REMIC I
Assumed Final Distribution
Designation
Principal Balance
Pass-Through Rate
Date(1)
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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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<PAGE>
REMIC II
--------
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the
REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such
segregated pool of assets will be
designated as "REMIC II". The 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:
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Initial Certificate
Assumed Final
Class Designation
Principal Balance
Pass-Through Rate
Distribution Date(1)
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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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<PAGE>
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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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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
(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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
(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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<PAGE>
(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
Certificateholders, the FDIC, and the
supervisory agents and examiners of the
FDIC, such acces
