CITIGROUP MORTGAGE LOAN TRUST INC.
Depositor
NEW CENTURY MORTGAGE CORPORATION
Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
Carrington Mortgage Loan Trust, Series 2005-NC1
Asset Backed Pass-Through Certificates
Series 2005-NC1
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
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SECTION 1.01
Defined
Terms.............................................................................4
SECTION 1.02
Allocation of Certain Interest
Shortfalls................................................47
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01
Conveyance of the Mortgage
Loans.........................................................48
SECTION 2.02
Acceptance of REMIC I by
Trustee.........................................................51
SECTION 2.03
Repurchase or Substitution of Mortgage Loans
by the Originators and the
Seller......................................................52
SECTION 2.04
Reserved.................................................................................54
SECTION 2.05
Representations, Warranties and Covenants of the
Servicer................................54
SECTION 2.06
Issuance of the REMIC I Regular Interests and the Class R-I
Interest.....................56
SECTION 2.07
Conveyance of the REMIC I Regular Interests;
Acceptance of REMIC II by the
Trustee.................................................57
SECTION 2.08
Issuance of Class R
Certificates.........................................................57
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01
Servicer to Act as
Servicer..............................................................58
SECTION 3.02
Sub-Servicing Agreements Between Servicer and
Sub-Servicers..............................60
SECTION 3.03
Successor
Sub-Servicers..................................................................61
SECTION 3.04
Liability of the
Servicer................................................................61
SECTION 3.05
No Contractual Relationship Between Sub-Servicers, the Trustee or
the
Certificateholders.......................................................................62
SECTION 3.06
Assumption or Termination of Sub-Servicing Agreements by the
Trustee.....................62
SECTION 3.07
Collection of Certain Mortgage Loan
Payments.............................................62
SECTION 3.08
Sub-Servicing
Accounts...................................................................63
SECTION 3.09
Collection of Taxes, Assessments and Similar Items; Servicing
Accounts...................63
SECTION 3.10
Collection Account and Distribution
Account..............................................64
SECTION 3.11
Withdrawals from the Collection Account and Distribution
Account.........................67
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SECTION 3.12
Investment of Funds in the Collection Account and the Distribution
Account...............68
SECTION 3.13
[Reserved]...............................................................................70
SECTION 3.14
Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage...........70
SECTION 3.15
Enforcement of Due-On-Sale Clauses; Assumption
Agreements................................71
SECTION 3.16
Realization Upon Defaulted Mortgage
Loans................................................72
SECTION 3.17
Trustee to Cooperate; Release of Mortgage
Files..........................................74
SECTION 3.18
Servicing
Compensation...................................................................75
SECTION 3.19
Reports to the Trustee and Others; Collection Account
Statements.........................76
SECTION 3.20
Statement as to
Compliance...............................................................76
SECTION 3.21
Independent Public Accountants' Servicing
Report.........................................76
SECTION 3.22
Access to Certain
Documentation..........................................................77
SECTION 3.23
Title, Management and Disposition of REO
Property........................................77
SECTION 3.24
Obligations of the Servicer in Respect of Prepayment Interest
Shortfalls.................80
SECTION 3.25
Obligations of the Servicer in Respect of Mortgage Rates and
Monthly Payments............81
SECTION 3.26
Advance
Facility.........................................................................81
SECTION 3.27
[Reserved]...............................................................................82
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01
Distributions............................................................................84
SECTION 4.02
Statements to
Certificateholders.........................................................90
SECTION 4.03
Remittance Reports;
Advances.............................................................93
SECTION 4.04
Allocation of Realized
Losses............................................................94
SECTION 4.05
Compliance with Withholding
Requirements.................................................96
SECTION 4.06
Exchange Commission; Additional
Information..............................................97
ARTICLE V
THE CERTIFICATES
SECTION 5.01
The
Certificates........................................................................100
SECTION 5.02
Registration of Transfer and Exchange of
Certificates...................................102
SECTION 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates.......................................107
SECTION 5.04
Persons Deemed
Owners...................................................................107
SECTION 5.05
Certain Available
Information...........................................................107
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01
Liability of the Depositor and the
Servicer.............................................109
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SECTION 6.02
Merger or Consolidation of the Depositor or the
Servicer................................109
SECTION 6.03
Limitation on Liability of the Depositor, the Servicer and
Others.......................109
SECTION 6.04
Limitation on Resignation of the
Servicer...............................................110
SECTION 6.05
Rights of the Depositor in Respect of the
Servicer......................................111
ARTICLE VII
DEFAULT
SECTION 7.01
Servicer Events of
Default..............................................................112
SECTION 7.02
Trustee to Act; Appointment of
Successor................................................114
SECTION 7.03
Notification to
Certificateholders......................................................115
SECTION 7.04
Waiver of Servicer Events of
Default....................................................115
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01
Duties of
Trustee.......................................................................116
SECTION 8.02
Certain Matters Affecting the
Trustee...................................................117
SECTION 8.03
Trustee Not Liable for Certificates or Mortgage
Loans...................................118
SECTION 8.04
Trustee May Own
Certificates............................................................118
SECTION 8.05
Trustee's Fees and
Expenses.............................................................119
SECTION 8.06
Eligibility Requirements for
Trustee....................................................119
SECTION 8.07
Resignation and Removal of the
Trustee..................................................120
SECTION 8.08
Successor
Trustee.......................................................................120
SECTION 8.09
Merger or Consolidation of
Trustee......................................................121
SECTION 8.10
Appointment of Co-Trustee or Separate
Trustee...........................................121
SECTION 8.11
Reserved................................................................................122
SECTION 8.12
Appointment of Office or
Agency.........................................................122
SECTION 8.13
Representations and Warranties of the
Trustee...........................................122
ARTICLE IX
TERMINATION
SECTION 9.01
Termination Upon Repurchase or Liquidation of All Mortgage
Loans........................124
SECTION 9.02
Additional Termination
Requirements.....................................................126
ARTICLE X
REMIC PROVISIONS
SECTION 10.01
REMIC
Administration....................................................................127
SECTION 10.02
Prohibited Transactions and
Activities..................................................129
SECTION 10.03
Servicer and Trustee
Indemnification....................................................130
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ARTICLE XI
MISCELLANEOUS PROVISIONS
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SECTION 11.01
Amendment...............................................................................131
SECTION 11.02
Recordation of Agreement;
Counterparts..................................................132
SECTION 11.03
Limitation on Rights of
Certificateholders..............................................132
SECTION 11.04
Governing
Law...........................................................................133
SECTION 11.05
Notices.................................................................................133
SECTION 11.06
Severability of
Provisions..............................................................134
SECTION 11.07
Notice to Rating
Agencies...............................................................134
SECTION 11.08
Article and Section
References..........................................................135
SECTION 11.09 Grant of Security
Interest..............................................................135
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<PAGE>
EXHIBITS
--------
Exhibit A-1 Form
of Class A-1A Certificate
Exhibit A-2 Form
of Class A-1B Certificate
Exhibit A-3 Form
of Class A-1C1 Certificate
Exhibit A-4 Form
of Class A-1C2 Certificate
Exhibit A-5 Form
of Class A-2 Certificate
Exhibit A-6 Form
of Class A-3 Certificate
Exhibit A-7
Form, of Class M-1 Certificate
Exhibit A-8 Form
of Class M-2 Certificate
Exhibit A-9 Form
of Class M-3 Certificate
Exhibit A-10 Form of
Class M-4 Certificate
Exhibit A-11 Form of
Glass M-5 Certificate
Exhibit A-12 Form of
Class M-6 Certificate
Exhibit A-13 Form of
Class M-7 Certificate
Exhibit A-14 Form of
Class M-8 Certificate
Exhibit A-15 Form of
Class M-9 Certificate
Exhibit A-16 Form of
Class CE Certificate
Exhibit A-17 Form of
Class P Certificate
Exhibit A-18 Form of
Class R Certificate
Exhibit B
[Reserved]
Exhibit C-1 Form
of Trustee's Initial Certification
Exhibit C-2 Form
of Trustee's Final Certification
Exhibit D
Form of Mortgage Loan Purchase Agreement
Exhibit E
Request for Release
Exhibit F-1 Form
of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with Transfer
of the Private Certificates Pursuant to Rule 144A Under the
1933 Act
Exhibit F-2 Form
of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of Residual
Certificates
Exhibit G
Form of Certification with respect to ERISA and the Code
Exhibit H
Form of Lost Note Affidavit
Exhibit I-1 Form
of Certification to Be Provided by the Depositor with
Form 10-K
Exhibit I-2 Form
of Certification to Be Provided to Depositor by the
Trustee
Exhibit I-3 Form
of Certification to Be Provided to Depositor by the
Servicer
Exhibit J
Form of Annual Statement as to Compliance
Exhibit K
Form of Cap Contracts
Schedule 1
Mortgage Loan Schedule
Schedule 2
Prepayment Charge Schedule
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<PAGE>
This Pooling and Servicing Agreement, is dated and effective
as of February 1, 2005, among CITIGROUP
MORTGAGE LOAN TRUST INC. as Depositor,
NEW CENTURY MORTGAGE CORPORATION as
Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY as Trustee.
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes, which
in the aggregate will evidence the
entire beneficial ownership interest in
each REMIC (as defined herein) created
hereunder. The Trust Fund will consist of a
segregated pool of assets comprised
of the Mortgage Loans and certain other
related assets subject to this
Agreement.
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REMIC I
-------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the
Mortgage Loans and certain other
related assets (other than the Servicer
Prepayment Charge Payment Amount, the
Net WAC Rate Carryover Reserve Account and
the Cap Contracts) subject to this
Agreement as a REMIC for federal income tax
purposes, and such segregated pool
of assets will be designated as "REMIC I."
The Class R-I Interest will be the
sole class of "residual interests" in REMIC
I for purposes of the REMIC
Provisions (as defined herein). The
following table irrevocably sets forth the
designation, the REMIC I Remittance Rate,
the initial Uncertificated 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
(as defined herein). None of the REMIC I
Regular Interests will be certificated.
REMIC I
INITIAL
LATEST POSSIBLE
DESIGNATION REMITTANCE RATE
UNCERTIFICATED BALANCE MATURITY
DATE(1)
----------- ---------------
----------------------
----------------
I-LTAA
Variable(2) $
1,009,311,031.75
January 25, 2035
I-LTA1A
Variable(2) $
3,388,910.00
January 25, 2035
I-LTA1B
Variable(2) $
1,543,530.00
January 25, 2035
I-LTA1C1
Variable(2) $
849,400.00
January 25, 2035
I-LTA1C2
Variable(2) $
200,000.00
January 25, 2035
I-LTA2
Variable(2) $
1,368,570.00
January 25, 2035
I-LTA3
Variable(2) $
816,719.00
January 25, 2035
I-LTM1
Variable(2) $
355,320.00
January 25, 2035
I-LTM2
Variable(2) $
324,430.00
January 25, 2035
I-LTM3
Variable(2) $
205,990.00
January 25, 2035
I-LTM4
Variable(2) $
278,080.00
January 25, 2035
I-LTM5
Variable(2) $
169,940.00
January 25, 2035
I-LTM6
Variable(2) $
159,640.00
January 25, 2035
I-LTM7
Variable(2) $
128,740.00
January 25, 2035
I-LTM8
Variable(2) $
103,000.00
January 25, 2035
I-LTM9
Variable(2) $
103,000.00
January 25, 2035
I-LTZZ
Variable(2) $
10,602,915.32
January 25, 2035
I-LTP
Variable(2) $
100.00
January 25, 2035
---------------
(1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution
Date immediately following the maturity date for the
Mortgage Loan
with the latest maturity date has been designated as the
"latest possible
maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the
definition of "REMIC I Remittance Rate"
herein.
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REMIC II
--------
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the
REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such
segregated pool of assets will be
designated as "REMIC II." The Class R-II
Interest will evidence the sole class
of "residual interests" in REMIC II for
purposes of the REMIC Provisions under
federal income tax law. The following table
irrevocably sets forth the
designation, the Pass-Through Rate, the
initial aggregate Certificate Principal
Balance and, for purposes of satisfying
Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible
maturity date" for the indicated
Classes of Certificates.
INITIAL AGGREGATE
CERTIFICATE PRINCIPAL
LATEST POSSIBLE MATURITY
DESIGNATION PASS-THROUGH RATE
BALANCE
DATE(1)
----------- ----------------- ---------------------
------------------------
Class A-1A
Variable(2)
$338,891,000.00 January
25, 2035
Class A-1B
Variable(2)
$154,353,000.00
January 25, 2035
Class A-1C1 Variable(2)
$ 84,940,000.00
January 25, 2035
Class A-1C2 Variable(2)
$ 20,000,000.00
January 25, 2035
Class A-2
Variable(2)
$136,857,000.00
January 25, 2035
Class A-3
Variable(2)
$ 81,671,900.00
January 25, 2035
Class M-1
Variable(2)
$ 35,532,000.00
January 25, 2035
Class M-2
Variable(2)
$ 32,443,000.00
January 25, 2035
Class M-3
Variable(2)
$ 20,599,000.00
January 25, 2035
Class M-4
Variable(2)
$ 27,808,000.00
January 25, 2035
Class M-5
Variable(2)
$ 16,994,000.00
January 25, 2035
Class M-6
Variable(2)
$ 15,964,000.00
January 25, 2035
Class M-7
Variable(2)
$ 12,874,000.00
January 25, 2035
Class M-8
Variable(2)
$ 10,300,000.00
January 25, 2035
Class M-9
Variable(2)
$ 10,300,000.00
January 25, 2035
Class CE
Variable(3)
$ 30,382,316.07
January 25, 2035
Class P
N/A(4)
$
100.00
January 25, 2035
---------------
(1) For purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution
Date immediately following the maturity date for the
Mortgage Loans
with the latest maturity date has been designated as the
"latest possible
maturity date" for each Class of Certificates.
(2) Calculated in accordance with the
definition of "Pass-Through Rate" herein.
(3) The Class CE Certificates will
accrue interest at its variable Pass-Through
Rate on the
Notional Amount of the Class CE Certificates outstanding from
time to time
which shall equal the Uncertificated Balance of the REMIC I
Regular
Interests (other than REMIC I Regular Interest I-LTP). The Class
CE
Certificates
will not accrue interest on its Certificate Principal Balance.
(4) The Class P Certificates will not
accrue interest.
As of the Cut-off Date, the Mortgage Loans had an aggregate
principal balance equal to
$1,029,909,316.07.
In consideration of the mutual agreements herein contained,
the Depositor, the Servicer and the Trustee
agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms.
Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement
hereto, the following words and
phrases, unless the context otherwise
requires, shall have the meanings
specified in this Article. Unless otherwise
specified, all calculations
described herein shall be made on the basis
of a 360-day year consisting of
twelve 30-day months.
"Accepted Servicing Practices": The servicing standards set
forth in Section 3.01.
"Accrued Certificate Interest": With respect to any Class A
Certificate, Mezzanine Certificate and the
Class CE Certificates and each
Distribution Date, interest accrued during
the related Interest Accrual Period
at the Pass-Through Rate for such
Certificate for such Distribution Date on the
Certificate Principal Balance, in the case
of the Class A Certificates and the
Mezzanine Certificates, or on the Notional
Amount, in the case of the Class CE
Certificates, of such Certificate
immediately prior to such Distribution Date.
The Class P Certificates is not entitled to
distributions in respect of interest
and, accordingly, will not accrue interest.
All distributions of interest on the
Class A Certificates and the Mezzanine
Certificates will be calculated on the
basis of a 360-day year and the actual
number of days in the applicable Interest
Accrual Period. All distributions of
interest on the Class CE Certificates will
be based on a 360-day year consisting of
twelve 30-day months. Accrued
Certificate Interest with respect to each
Distribution Date, as to any Class A
Certificate, Mezzanine Certificate or the
Class CE Certificates, shall be
reduced by an amount equal to the portion
allocable to such Certificate pursuant
to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest
Shortfall, if any, for such Distribution
Date to the extent not covered by
payments pursuant to Section 3.24 and (b)
the aggregate amount of any Relief Act
Interest Shortfall, if any, for such
Distribution Date. In addition, Accrued
Certificate Interest with respect to each
Distribution Date, as to the Class CE
Certificates shall be reduced by an amount
equal to the portion allocable to the
Class CE Certificates of Realized Losses,
if any, pursuant to Section 4.04
hereof.
"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as
having a Mortgage Rate that is
subject to adjustment.
"Adjustment Date": With respect to each Adjustable-Rate
Mortgage Loan, the first day of the month
in which the Mortgage Rate of such
Mortgage Loan changes pursuant to the
related Mortgage Note. The first
Adjustment Date following the Cut-off Date
as to each Adjustable-Rate Mortgage
Loan is set forth in the Mortgage Loan
Schedule.
"Advance": As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of
any Distribution Date pursuant to
Section 4.03.
"Advancing Person": As defined in Section 3.26(a) hereof.
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"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or
under common control with such specified
Person. For the purposes of this
definition, "control" when used with respect to
any specified Person means the power to
direct the management and policies of
such Person, directly or indirectly,
whether through the ownership of voting
securities, by contract or otherwise, and
the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements
hereto.
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of
Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of
Certificates on such Distribution
Date and (ii) the amount of any Allocated
Realized Loss Amount for such Class of
Certificates remaining unpaid from the
previous Distribution Date minus the
amount of the increase in the related
Certificate Principal Balance due to the
receipt of Subsequent Recoveries as
provided in Section 4.01.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form
(excepting therefrom, if applicable,
the mortgage recordation information which
has not been required pursuant to
Section 2.01 hereof or returned by the
applicable recorder's office), which is
sufficient under the laws of the
jurisdiction wherein the related Mortgaged
Property is located to reflect of record
the sale of the Mortgage, which
assignment, notice of transfer or
equivalent instrument may be in the form of
one or more blanket assignments covering
Mortgages secured by Mortgaged
Properties located in the same county, if
permitted by law.
"Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1)
the sum of (a) the aggregate of the
amounts on deposit in the Collection
Account and Distribution Account as of the
close of business on the related
Determination Date, (b) the aggregate of any
amounts received in respect of an REO
Property withdrawn from any REO Account
and deposited in the Distribution Account
for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any
amounts deposited in the Distribution
Account by the Servicer in respect of
Prepayment Interest Shortfalls for such
Distribution Date pursuant to Section 3.24,
(d) the aggregate of any Advances
made by the Servicer for such Distribution
Date pursuant to Section 4.03 and (e)
the aggregate of any advances made by the
Trustee as successor Servicer or any
other successor Servicer for such
Distribution Date pursuant to Section 7.02,
reduced (to not less than zero), by (2) the
portion of the amount described in
clause (1)(a) above that represents (i)
Monthly Payments on the Mortgage Loans
received from a Mortgagor on or prior to
the Determination Date but due during
any Due Period subsequent to the related
Due Period, (ii) Principal Prepayments
on the Mortgage Loans received after the
related Prepayment Period (together
with any interest payments received with
such Principal Prepayments to the
extent they represent the payment of
interest accrued on the Mortgage Loans
during a period subsequent to the related
Prepayment Period) (other than
Prepayment Charges), (iii) Liquidation
Proceeds and Insurance Proceeds received
in respect of the Mortgage Loans after the
related Prepayment Period, (iv)
amounts reimbursable or payable to the
Depositor, the Servicer, the Trustee, the
Seller or any Sub-Servicer pursuant to
Section 3.11, Section 3.12, Section 8.05
or
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otherwise payable in respect of
Extraordinary Trust Fund Expenses, (v) the
Trustee Fee payable from the Distribution
Account pursuant to Section 8.05, (vi)
amounts deposited in the Collection Account
or the Distribution Account in error
and (vii) the amount of any Prepayment
Charges collected by the Servicer in
connection with the Principal Prepayment of
any of the Mortgage Loans or any
Servicer Prepayment Charge Payment
Amount.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient
Valuation or Debt Service Reduction.
"Book-Entry Certificate": The Class A Certificates and the
Mezzanine Certificates for so long as the
Certificates of such Class shall be
registered in the name of the Depository or
its nominee.
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan
institutions in the State of
California, the State of New York or in the
city in which the Corporate Trust
Office of the Trustee is located, are
authorized or obligated by law or
executive order to be closed.
"Cap Contract": The cap contract between the Trustee and the
counterparty thereunder for the benefit of
the Holders of the Class A
Certificates and the Mezzanine Certificates
in the form attached hereto as
Exhibit K.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than a nominal
amount in excess of the principal
balance of any existing first mortgage or
subordinate mortgage on the related
Mortgaged Property and related closing
costs.
"Certificate": Any one of the Carrington Mortgage Loan Trust,
Series 2005-NC1, Asset Backed Pass-Through
Certificates, Class A-1A, Class A-1B,
Class A-1C1, Class A-1C2, Class A-2, Class
A-3, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class CE,
Class P and Class R issued under this
Agreement.
"Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a
fraction, expressed as a decimal
carried to six places, the numerator of
which is the aggregate Certificate
Principal Balance (or the Notional Amount,
in the case of the Class CE
Certificates) of such Class of Certificates
on such Distribution Date (after
giving effect to any distributions of
principal and in the case of the Mezzanine
Certificates and the Class CE Certificates,
the allocations of Realized Losses
in reduction of the Certificate Principal
Balance (or the Notional Amount, in
the case of the Class CE Certificates) of
such Class of Certificates to be made
on such Distribution Date), and the
denominator of which is the initial
aggregate Certificate Principal Balance (or
the Notional Amount, in the case of
the Class CE Certificates) of such Class of
Certificates as of the Closing Date.
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"Certificate Margin": With respect to the Class A-1A
Certificates, 0.130% in the case of each
Distribution Date through and including
the Distribution Date on which the
aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in
respect thereof) remaining in the
Trust Fund is reduced to less than 10% of
the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off
Date and 0.260% in the case of each
Distribution Date thereafter.
With respect to the Class A-1B Certificates, 0.260% in the
case of each Distribution Date through and
including the Distribution Date on
which the aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.520% in the
case of each Distribution Date
thereafter.
With respect to the Class A-1C1 Certificates, 0.380% in the
case of each Distribution Date through and
including the Distribution Date on
which the aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.760% in the
case of each Distribution Date
thereafter.
With respect to the Class A-1C2 Certificates, 0.380% in the
case of each Distribution Date through and
including the Distribution Date on
which the aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.760% in the
case of each Distribution Date
thereafter.
With respect to the Class A-2 Certificates, 0..280% in the
case of each Distribution Date through and
including the Distribution Date on
which the aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated
Principal Balance of the Mortgage Loans
as of the Cut-off Date and 0.560% in the
case of each Distribution Date
thereafter.
With respect to the Class A-3 Certificates, 0.360% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 0.720% in the case of each
Distribution Date thereafter.
With respect to the Class M-1 Certificates, 0.490% in the
case of each Distribution Date through and
including the Distribution Date on
which the aggregate Stated Principal
Balance of the Mortgage Loans (and
properties acquired in respect thereof)
remaining in the Trust Fund is reduced
to less than 10% of the aggregate Stated
Principal Balance of the
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Mortgage Loans as of the Cut-off Date and
0.735% in the case of each
Distribution Date thereafter.
With respect to the Class M-2 Certificates, 0.520% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 0.780% in the case of each
Distribution Date thereafter.
With respect to the Class M-3 Certificates, 0.550% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 0.825% in the case of each
Distribution Date thereafter.
With respect to the Class M-4 Certificates, 0.780% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 1.170% in the case of each
Distribution Date thereafter.
With respect to the Class M-5 Certificates, 0.820% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 1.230% in the case of each
Distribution Date thereafter.
With respect to the Class M-6 Certificates, 1.370% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 2.055% in the case of each
Distribution Date thereafter.
With respect to the Class M-7 Certificates, 1.450% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 2.175% in the case of each
Distribution Date thereafter.
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<PAGE>
With respect to the Class M-8 Certificates, 2.250% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 3.375% in the case of each
Distribution Date thereafter.
With respect to the Class M-9 Certificates, 2.250% in the case
of each Distribution Date through and
including the Distribution Date on which
the aggregate Stated Principal Balance of
the Mortgage Loans (and properties
acquired in respect thereof) remaining in
the Trust Fund is reduced to less than
10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date and 3.375% in the case of each
Distribution Date thereafter.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the
Certificate Register, except that a
Disqualified Organization or a Non-United
States Person shall not be a Holder of
a Residual Certificate for any purposes
hereof and, solely for the purposes of
giving any consent pursuant to this
Agreement, any Certificate registered in the
name of the Depositor or the Servicer or
any Affiliate thereof shall be deemed
not to be outstanding and the Voting Rights
to which it is entitled shall not be
taken into account in determining whether
the requisite percentage of Voting
Rights necessary to effect any such consent
has been obtained, except as
otherwise provided in Section 11.01. The
Trustee may conclusively rely upon a
certificate of the Depositor or the
Servicer in determining whether a
Certificate is held by an Affiliate
thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the
rights of Certificate Owners as they
may indirectly exercise such rights through
the Depository and participating
members thereof, except as otherwise
specified herein; provided, however, that
the Trustee shall be required to recognize
as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate
is registered in the Certificate
Register.
"Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of
such Certificate as reflected on the
books of the Depository or on the books of
a Depository Participant or on the
books of an indirect participating
brokerage firm for which a Depository
Participant acts as agent.
"Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class
P Certificate as of any date of
determination, the Certificate Principal
Balance of such Certificate on the
Distribution Date immediately prior to such
date of determination plus any
Subsequent Recoveries added to the
Certificate Principal Balance of such
Certificate pursuant to Section 4.01, minus
all distributions allocable to
principal made thereon and, in the case of
the Mezzanine Certificates, Realized
Losses allocated thereto on such
immediately prior Distribution Date (or, in the
case of any date of determination up to and
including the first Distribution
Date, the initial Certificate Principal
Balance of such Certificate, as stated
on the face thereof). With respect to each
Class CE Certificates as of any date
of determination, an amount equal to the
Percentage Interest evidenced by such
Certificate times the excess, if any, of
(A) the then aggregate Uncertificated
Balance of the REMIC I Regular
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<PAGE>
Interests over (B) the then aggregate
Certificate Principal Balance of the Class
A Certificates, the Mezzanine Certificates
and the Class P Certificates then
outstanding.
"Certificate Register": The register maintained pursuant to
Section 5.02.
"Class": Collectively, all of the Certificates bearing the
same class designation.
"Class A-1A Certificates": Any one of the Class A-1A
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-1A
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A-1B Certificates": Any one of the Class A-1B
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-1B
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A-1C1 Certificates": Any one of the Class A-1C1
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-1C1
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A-1C2 Certificates": Any one of the Class A-1C2
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-1C2
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A-2 Certificates": Any one of the Class A-2
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-2
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A-3 Certificates": Any one of the Class A-3
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-4
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class A Certificates": Collectively, the Class A-1A
Certificates, the Class A-1B Certificates,
the Class A-1C1 Certificates, the
Class A-1C2 Certificates, the Class A-2
Certificates, the Class A-3
Certificates.
"Class A-1 Certificates": Collectively, the Class A-1A
Certificates, the Class A-1B Certificates,
the Class A-1C1 Certificates and the
Class A-1C2 Certificates.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
aggregate Certificate Principal Balance
of the Class A Certificates immediately
prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 58.60%
and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due
Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as
of the last day of the related Due Period
minus $5,149,546.58.
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<PAGE>
"Class CE Certificate": Any one of the Class CE Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M Certificates": Collectively, the Class M-1
Certificates, the Class M-2 Certificates,
the Class M-3 Certificates, the Class
M-4 Certificates, the Class M-5
Certificates, the Class M-6 Certificates, the
Class M-7 Certificates, the Class M-8
Certifiactes and the Class M-9
Certificates.
"Class M-1 Certificate": Any one of the Class M-1
Certificates executed, authenticated and
delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-5
and evidencing a Regular Interest in
REMIC II for purposes of the REMIC
Provisions.
"Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date) and (ii) the Certificate Principal
Balance of the Class M-1 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 65.50% and (ii) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of
the related Due Period minus
$5,149,546.58.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date) and (iii) the Certificate
Principal Balance of the Class M-2
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 71.80% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period minus $5,149,546.58.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-7 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution
-11-
<PAGE>
Amount on such Distribution Date), (iii)
the Certificate Principal Balance of
the Class M-2 Certificates (after taking
into account the distribution of the
Class M-2 Principal Distribution Amount on
such Distribution Date) and (iv) the
Certificate Principal Balance of the Class
M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser
of (A) the product of (i) 75.80% and
(ii) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last
day of the related Due Period and (B) the
aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of
the related Due Period minus
$5,149,546.58.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-8 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date) and (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date over (y) the lesser of (A) the product
of (i) 81.20% and (ii) the aggregate
Stated Principal Balance of the Mortgage
Loans as of the last day of the related
Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans
as of the last day of the related Due
Period minus $5,149,546.58.
"Class M-5 Certificate": Any one of the Class M-5 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-9 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-4 Principal
Distribution Amount on such Distribution
Date) and (vi) the Certificate
Principal Balance of the Class M-5
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 84.50% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period and
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<PAGE>
(B) the aggregate Stated Principal Balance
of the Mortgage Loans as of the last
day of the related Due Period minus
$5,149,546.58.
"Class M-6 Certificate": Any one of the Class M-6 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-10 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-6 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-5 Principal
Distribution Amount on such Distribution
Date) and (vii) the Certificate
Principal Balance of the Class M-6
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 87.60% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period minus $5,149,546.58.
"Class M-7 Certificate": Any one of the Class M-7 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-7 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
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<PAGE>
immediately prior to such Distribution Date
(after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal Balance of
the Class M-6 Certificates
immediately prior to such Distribution Date
(after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date) and (viii) the Certificate Principal
Balance of the Class M-7 Certificates
immediately prior to such Distribution Date
over (y) the lesser of (A) the
product of (i) 90.10% and (ii) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of
the related Due Period minus
$5,149,546.58.
"Class M-8 Certificate": Any one of the Class M-8 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-12 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-8 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal
Balance of the Class M-6 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-7 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal
Balance of the Class M-7 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-7 Principal
Distribution Amount on such Distribution
Date), and (ix) the Certificate
Principal Balance of the Class M-8
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 92.10% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period minus $5,149,546.58.
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<PAGE>
"Class M-9 Certificate": Any one of the Class M-9 Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class M-9 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the
sum of (i) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account the
distribution of the Class A Principal
Distribution Amount on such Distribution
Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates
(after taking into account the distribution
of the Class M-1 Principal
Distribution Amount on such Distribution
Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates
(after taking into account the
distribution of the Class M-2 Principal
Distribution Amount on such Distribution
Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates
(after taking into account the distribution
of the Class M-3 Principal
Distribution Amount on such Distribution
Date), (v) the Certificate Principal
Balance of the Class M-4 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-4 Principal
Distribution Amount on such Distribution
Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-5 Principal
Distribution Amount on such Distribution
Date), (vii) the Certificate Principal
Balance of the Class M-6 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal
Balance of the Class M-6 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-6 Principal
Distribution Amount on such Distribution
Date), (viii) the Certificate Principal
Balance of the Class M-7 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-7 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal
Balance of the Class M-7 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-7 Principal
Distribution Amount on such Distribution
Date), (ix) the Certificate Principal
Balance of the Class M-8 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-8 Principal
Distribution Amount on such Distribution
Date), the Certificate Principal
Balance of the Class M-8 Certificates
immediately prior to such Distribution
Date (after taking into account the
distribution of the Class M-8 Principal
Distribution Amount on such Distribution
Date), and (x) the Certificate
Principal Balance of the Class M-9
Certificates immediately prior to such
Distribution Date over (y) the lesser of
(A) the product of (i) 94.10% and (ii)
the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day
of the related Due Period and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the
related Due Period minus $5,149,546.58.
"Class P Certificate": Any one of the Class P Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and
evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.
"Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by
the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and
evidencing the ownership of the Class R-I
Interest and the Class R-II Interest.
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<PAGE>
"Class R-I
Interest": The uncertificated Residual Interest in
REMIC I.
"Class R-II Interest": The uncertificated Residual Interest in
REMIC II.
"Closing Date": February 3, 2005.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and
maintained, or caused to be created and
maintained, by the Servicer pursuant to
Section 3.10(a), which shall be entitled
"New Century Mortgage Corporation, as
Servicer for Deutsche Bank National Trust
Company, as Trustee, in trust for the
registered holders of Carrington Mortgage
Loan Trust, Series 2005-NC1, Asset
Backed Pass-Through Certificates." The
Collection Account must be an Eligible
Account.
"Commission": The Securities and Exchange Commission.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular
time its corporate trust business in
connection with this Agreement shall be
administered, which office at the date
of the execution of this instrument is
located at 1761 East St. Andrew Place,
Santa Ana, CA 92705-4934, Attn: CA0501, or
at such other address as the Trustee
may designate from time to time by notice
to the Certificateholders, the
Depositor and the Servicer.
"Corresponding Certificate": With respect to each REMIC I
Regular Interest set forth below, the
Regular Certificate set forth in the table
below:
REMIC I REGULAR INTEREST
CERTIFICATE
---------------------------------------------------
I-LTA1A
Class A-1A
I-LTA1B
Class A-1B
I-LTA1C1
Class
A-1C1
I-LTA1C2
Class A-1C2
I-LTA2
Class A-2
I-LTA3
Class A-3
I-LTM1
Class M-1
I-LTM2
Class M-2
I-LTM3
Class M-3
I-LTM4
Class M-4
I-LTM5
Class M-5
I-LTM6
Class M-6
I-LTM7
Class M-7
I-LTM8
Class M-8
I-LTM9
Class M-9
I-LTP
Class P
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction,
the numerator of which is the sum of
the aggregate Certificate Principal
Balances of the Mezzanine Certificates and
the Class CE Certificates calculated after
taking into account payments of
principal on the Mortgage Loans and
distribution of the Principal
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<PAGE>
Distribution Amount to the Certificates
then entitled to distributions of
principal on such Distribution Date, and
the denominator of which is the
aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of
the related Due Period.
"Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a
fraction, the numerator of which is the
aggregate amount of Realized Losses
incurred from the Cut-off Date to the last
day of the preceding calendar month and the
denominator of which is the
aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
"Cut-off Date": With respect to each Original Mortgage Loan,
February 1, 2005. With respect to all
Qualified Substitute Mortgage Loans, their
respective dates of substitution.
References herein to the "Cut-off Date," when
used with respect to more than one Mortgage
Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment
for such Mortgage Loan by a court of
competent jurisdiction in a proceeding
under the Bankruptcy Code, except such a
reduction resulting from a Deficient
Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property
by a court of competent jurisdiction
in an amount less than the then outstanding
Stated Principal Balance of the
Mortgage Loan, which valuation results from
a proceeding initiated under the
Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage
Loan.
"Delinquency Percentage": As of the last day of the related
Due Period, the percentage equivalent of a
fraction, the numerator of which is
the aggregate Stated Principal Balance of
the Mortgage Loans that, as of the
last day of the previous calendar month,
are 60 or more days delinquent, are in
foreclosure, have been converted to REO
Properties or have been discharged by
reason of bankruptcy, and the denominator
of which is the aggregate Stated
Principal Balance of the Mortgage Loans and
REO Properties as of the last day of
the previous calendar month; provided,
however, that any Mortgage Loan purchased
by the Servicer pursuant to Section 3.16(c)
shall not be included in either the
numerator or the denominator for purposes
of calculating the Delinquency
Percentage.
"Depositor": Citigroup Mortgage Loan Trust Inc., a Delaware
corporation, or its successor in
interest.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of
the initial Depository, for purposes
of registering those Certificates that are
to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform
Commercial
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<PAGE>
Code of the State of New York and a
"clearing agency" registered pursuant to the
provisions of Section 17A of the Securities
Exchange Act of 1934, as amended.
"Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is
incorporated under the laws of the
United States of America or any State
thereof, (b) is subject to supervision and
examination by federal or state banking
authorities and (c) has outstanding
unsecured commercial paper or other
short-term unsecured debt obligations (or,
in the case of a depository institution
that is the principal subsidiary of a
holding company, such holding company has
unsecured commercial paper or other
short-term unsecured debt obligations) that
are rated at least P-1 by Moody's,
F-1 by Fitch (if rated by Fitch) and A-1+
by S&P.
"Depository Participant": A broker, dealer, bank or other
financial institution or other Person for
whom from time to time a Depository
effects book-entry transfers and pledges of
securities deposited with the
Depository.
"Determination Date": With respect to each Distribution Date,
the 15th day of the calendar month in which
such Distribution Date occurs or, if
such 15th day is not a Business Day, the
Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the
tenants thereof, the management or
operation of such REO Property, the holding
of such REO Property primarily for
sale to customers, the performance of any
construction work thereon or any use
of such REO Property in a trade or business
conducted by REMIC I other than
through an Independent Contractor;
provided, however, that the Trustee (or the
Servicer on behalf of the Trustee) shall
not be considered to Directly Operate
an REO Property solely because the Trustee
(or the Servicer on behalf of the
Trustee) establishes rental terms, chooses
tenants, enters into or renews
leases, deals with taxes and insurance, or
makes decisions as to repairs or
capital expenditures with respect to such
REO Property.
"Disqualified Organization": Any of the
following: (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 (other than an
instrumentality which is a corporation if
all of its activities are subject to
tax and, except for Freddie Mac, a majority
of its board of directors is not
selected by such governmental unit), (ii)
any foreign government, any
international organization, or any agency
or instrumentality of any of the
foregoing, (iii) any organization (other
than certain farmers' cooperatives
described in Section 521 of the Code) which
is exempt from the tax imposed by
Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on
unrelated business taxable income), (iv)
rural electric and telephone
cooperatives described in Section
1381(a)(2)(C) of the Code, (v) an "electing
large partnership" and (vi) any other
Person as set forth in an Opinion of
Counsel delivered to the Trustee and the
Depositor to the effect that the
holding of an Ownership Interest in a
Residual Certificate by such Person may
cause any Trust REMIC or any Person having
an Ownership Interest in any Class of
Certificates (other than such Person) to
incur a liability for any federal tax
imposed under the Code that would not
otherwise be imposed but for the Transfer
of an Ownership Interest in a Residual
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<PAGE>
Certificate to such Person. The terms
"United States," "State" and
"international organization" shall have the
meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to
Section 3.10(b), which shall be
entitled "Deutsche Bank National Trust
Company, as Trustee, in trust for the
registered holders of Carrington Mortgage
Loan Trust, Series 2005-NC1, Asset
Backed Pass-Through Certificates." The
Distribution Account must be an Eligible
Account.
"Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the
Business Day immediately following such 25th
day, commencing in March 2005.
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the first day of the
calendar month in which such
Distribution Date occurs on which the
Monthly Payment for such Mortgage Loan was
due (or, in the case of any Mortgage Loan
under terms of which the Monthly
Payment for such Mortgage Loan was due on a
day other than the first day of the
calendar month in which such Distribution
Date occurs, the day during the
related Due Period on which such Monthly
Payment was due), in each case
exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the
month immediately preceding the month
in which such Distribution Date occurs and
ending on the first day of the month
of such Distribution Date.
"Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution,
(ii) an account or accounts the
deposits in which are fully insured by the
FDIC or (iii) a segregated
non-interest bearing trust account or
accounts maintained with the corporate
trust department of a federal depository
institution or state-chartered
depository institution subject to
regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of
Federal Regulation Section 9.10(b),
which, in either case, has corporate trust
powers, acting in its fiduciary
capacity.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate in a parcel of
land.
"Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine
Certificates and any Distribution Date, the
excess, if any, of (i) the
Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after
assuming that 100% of the Principal
Remittance Amount on such Distribution Date
has been distributed) over (ii) the
Overcollateralization Target Amount for
such Distribution Date.
"Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO
Property), as of any date of determination, a
per annum rate of interest equal to the
applicable Maximum Mortgage Rate (or the
applicable Mortgage Rate in the case of any
Fixed-Rate Mortgage Loan) thereon as
of the first day of the related Due Period
minus the sum of (i) the Trustee Fee
Rate and (ii) the Servicing Fee Rate.
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<PAGE>
"Expense Adjusted Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of
any date of determination, a per annum
rate of interest equal to the applicable
Mortgage Rate thereon as of the first
day of the related Due Period minus the sum
of (i) the Trustee Fee Rate and (ii)
the Servicing Fee Rate.
"Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee or any director, officer,
employee or agent of the Trustee from
the Trust Fund pursuant to Section 8.05 or
Section 10.01(c) and any amounts
payable from the Distribution Account in
respect of taxes pursuant to Section
10.01(g)(iii) and any costs of the Trustee
for the recording of the Assignments
pursuant to Section 2.01 (to the extent the
Seller is unable to pay such costs).
"Fannie Mae": Fannie Mae, formally known as the Federal
National Mortgage Association, or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other
than a Mortgage Loan or REO Property
purchased by the Responsible Party, the
Depositor or the Servicer pursuant to or
as contemplated by Section 2.03, Section
3.16(c) or Section 9.01), a
determination made by the Servicer that all
Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries
which the Servicer, in its reasonable
good faith judgment, expects to be finally
recoverable in respect thereof have
been so recovered. The Servicer shall
maintain records, prepared by a Servicing
Officer, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
"Fixed-Rate Mortgage Loan": Each of the Mortgage Loans
identified on the Mortgage Loan Schedule as
having a fixed Mortgage Rate.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine
Certificates, the lesser of (i) One-Month LIBOR
plus the related Certificate Margin and
(ii) the Maximum Cap Rate.
"Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor
thereto.
"Gross Margin": With respect to each Adjustable-Rate 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 Adjustable-Rate
Mortgage Loan.
"Highest Priority": As of any date of determination, the Class
of Mezzanine Certificates then outstanding
with a Certificate Principal Balance
greater than zero, with the highest
priority for payments pursuant to Section
4.01, in the following order: Class M-1,
Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates.
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<PAGE>
"Independent": When used with respect to any specified Person,
any such Person who (a) is in fact
independent of the Depositor, the Servicer,
the Seller and their respective Affiliates,
(b) does not have any direct
financial interest in or any material
indirect financial interest in the
Depositor, the Servicer, the Seller or any
Affiliate thereof, and (c) is not
connected with the Depositor, the Servicer,
the Seller or any Affiliate thereof
as an officer, employee, promoter,
underwriter, trustee, partner, director or
Person performing similar functions;
provided, however, that a Person shall not
fail to be Independent of the Depositor,
the Servicer, the Seller or any
Affiliate thereof merely because such
Person is the beneficial owner of 1% or
less of any class of securities issued by
the Depositor, the Servicer, the
Seller or any Affiliate thereof, as the
case may be.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent
contractor" with respect to REMIC I
within the meaning of Section 856(d)(3) of
the Code if REMIC I were a real
estate investment trust (except that the
ownership tests set forth in that
section shall be considered to be met by
any Person that owns, directly or
indirectly, 35% or more of any Class of
Certificates), so long as REMIC I does
not receive or derive any income from such
Person and provided that the
relationship between such Person and REMIC
I is at arm's length, all within the
meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person
(including the Servicer) if the Trustee has
received an Opinion of Counsel to
the effect that the taking of any action in
respect of any REO Property by such
Person, subject to any conditions therein
specified, that is otherwise herein
contemplated to be taken by an Independent
Contractor will not cause such REO
Property to cease to qualify as
"foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined
without regard to the exception
applicable for purposes of Section 860D(a)
of the Code), or cause any income
realized in respect of such REO Property to
fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan
and each related Adjustment Date, the index
specified in the related Mortgage
Note.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a
Mortgage Loan, to the extent such
proceeds are not to be applied to the
restoration of the related Mortgaged
Property or released to the Mortgagor in
accordance with the procedures that the
Servicer would follow in servicing mortgage
loans held for its own account,
subject to the terms and conditions of the
related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates and the
Mezzanine Certificates, the period
commencing on the Distribution Date of the
month immediately preceding the month
in which such Distribution Date occurs (or,
in the case of the first
Distribution Date, commencing on the
Closing Date) and ending on the day
preceding such Distribution Date. With
respect to any Distribution Date and the
Class CE Certificates and the REMIC I
Regular Interests, the one-month period
ending on the last day of the calendar
month preceding the month in which such
Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any
Distribution Date and the Class A
Certificates or the Mezzanine Certificates,
the sum of (i) the amount, if any, by
which
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(a) the Interest Distribution Amount for
such Class of Certificates as of the
immediately preceding Distribution Date
exceeded (b) the actual amount
distributed on such Class of Certificates
in respect of interest on such
immediately preceding Distribution Date,
(ii) the amount of any Interest Carry
Forward Amount for such Class of
Certificates remaining unpaid from the previous
Distribution Date and (iii) accrued
interest on the sum of (i) and (ii) above
calculated at the related Pass-Through Rate
for the most recently ended Interest
Accrual Period.
"Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates,
REMIC I Regular Interest I-LTA1A,
REMIC I Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA1C1, REMIC I
Regular Interest I-LTA1C2, REMIC I Regular
Interest I-LTA2, REMIC I Regular
Interest I-LTA3, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3,
REMIC I Regular Interest I-LTM4, REMIC
I Regular Interest I-LTM5, REMIC I Regular
Interest I-LTM6, REMIC I Regular
Interest I-LTM7, REMIC I Regular Interest
I-LTM8 and REMIC I Regular Interest
I-LTM9 and any Interest Accrual Period
therefor, the second London Business Day
preceding the commencement of such Interest
Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and the Class A
Certificates, the Mezzanine Certificates and
the Class CE Certificates, the aggregate
Accrued Certificate Interest on the
Certificates of such Class for such
Distribution Date.
"Interest Remittance Amount": For any Distribution Date, that
portion of the Available Distribution
Amount for the related Distribution Date
that represents interest received or
advanced on the Mortgage Loans.
"Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent
to the Determination Date
immediately following such Due Period,
whether as late payments of Monthly
Payments or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which
represent late payments or collections of
principal and/or interest due (without
regard to any acceleration of payments
under the related Mortgage and Mortgage
Note) but delinquent for such Due Period
and not previously recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage
Loan is paid in full; (ii) a Final
Recovery Determination is made as to such
Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I, by reason of
its being purchased, sold or replaced
pursuant to or as contemplated by Section
2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of
the following events: (i) a Final
Recovery Determination is made as to such
REO Property; or (ii) such REO
Property is removed from REMIC I by reason
of its being purchased pursuant to
Section 9.01.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of
the rental of any REO Property prior
to REO Disposition) received by the
Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by
exercise of the power of eminent
domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale
or otherwise, or (iii) the
repurchase, substitution or sale
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of a Mortgage Loan or an REO Property
pursuant to or as contemplated by Section
2.03, Section 3.16(c), Section 3.23 or
Section 9.01.
"Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the
numerator of which is the principal
balance of the related Mortgage Loan at
such date and the denominator of which
is the Value of the related Mortgaged
Property.
"London Business Day": Any day on which banks in the City of
London and New York are open and conducting
transactions in United States
dollars.
"Marker Rate": With respect to the Class CE Certificates and
any Distribution Date, a per annum rate
equal to two (2) times the weighted
average of the REMIC I Remittance Rate for
each of the REMIC I Regular Interests
(other than REMIC I Regular Interest
I-LTP), with the rate on each such REMIC I
Regular Interest (other than REMIC I
Regular Interest I-LTZZ) subject to a cap
equal to the lesser of (i) One-Month LIBOR
plus the related Certificate Margin
for the related Corresponding Certificate
and (ii) the Net WAC Pass-Through Rate
for the purpose of this calculation for
such Distribution Date and with the rate
on REMIC I Regular Interest I-LTZZ subject
to a cap of zero for the purpose of
this calculation; provided, however, each
cap shall be multiplied by a fraction,
the numerator of which is the actual number
of days elapsed in the related
Interest Accrual Period and the denominator
of which is 30.
"Maximum Cap Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine
Certificates, a per annum rate equal to the
product of (x) the weighted average of the
Expense Adjusted Maximum Mortgage
Rates of the Mortgage Loans, weighted based
on their Principal Balances as of
the first day of the related Due Period and
(y) a fraction, the numerator of
which is 30 and the denominator of which is
the actual number of days elapsed in
the related Interest Accrual Period.
"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the
excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC
I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the
Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I
Overcollateralized Amount, in each
case for such Distribution Date, over (ii)
Uncertificated Interest on REMIC I
Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular
Interest I-LTA1C1, REMIC I Regular Interest
I-LTA1C2, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3,
REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7,
REMIC I Regular Interest I-LTM8 and
REMIC I Regular Interest I-LTM9 subject to
a cap equal to the lesser of (i)
One-Month LIBOR plus the related
Certificate Margin for the related
Corresponding Certificate and (ii) the Net
WAC Pass-Through Rate; provided,
however, each cap shall be multiplied by a
fraction, the numerator of which is
the actual number of days elapsed in the
related Interest Accrual Period and the
denominator of which is 30.
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"Maximum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in
the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Mezzanine Certificates": The Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3
Certificates, the Class M-4 Certificates,
the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7
Certificates, the Class M-8 Certificates
and the Class M-9 Certificates.
"Minimum Mortgage Rate": With respect to each Adjustable-Rate
Mortgage Loan, the percentage set forth in
the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and
interest on such Mortgage Loan which
is payable by the related Mortgagor from
time to time under the related Mortgage
Note, determined: (a) after giving effect
to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction
in the amount of interest collectible from
the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to
any extension granted or agreed to by
the Servicer pursuant to Section 3.07 and
(c) on the assumption that all other
amounts, if any, due under such Mortgage
Loan are paid when due.
"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 or second lien on, or
first or second priority security
interest in, a Mortgaged Property securing
a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan
and any additional documents required
to be added to the Mortgage File pursuant
to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee and delivered to the Trustee
pursuant to Section 2.01 or Section
2.03(b) of this Agreement, as held from
time to time as a part of the Trust
Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement among the
Seller, the Responsible Party and the
Depositor, regarding the sale of the
Mortgage Loans by the Seller to the
Depositor, substantially in the form of
Exhibit D annexed hereto.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date,
attached hereto as Schedule 1. The
Mortgage Loan Schedule shall set forth the
following information with respect to
each Mortgage Loan:
(i) the Mortgage Loan identifying number;
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(ii) [reserved];
(iii) the state and zip code of the Mortgaged Property;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the Cut-off
Date based on the original amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) (A) the date on which the first Monthly Payment was due on
the Mortgage Loan and (B) if such date is not consistent with the
Due
Date currently in effect, such Due Date;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment due on the first Due
Date after the Cut-off Date;
(xiv) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date;
(xvii) with respect to each Adjustable-Rate Mortgage Loan, the
Adjustment Dates, the Gross Margin, the Maximum Mortgage Rate,
the
Minimum Mortgage Rate, the Periodic Rate Cap, the maximum first
Adjustment Date Mortgage Rate adjustment, the first Adjustment
Date
immediately following the origination date and the rounding code
(i.e.,
nearest 0.125%, next highest 0.125%);
(xviii) a code indicating the purpose of the Mortgage Loan
(i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xix) the Mortgage Rate at origination;
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(xx) a code indicating the documentation program (i.e., Full
Documentation, Limited Documentation, Stated Income
Documentation);
(xxi) the risk grade;
(xxii) the Value of the Mortgaged Property;
(xxiii) the sale price of the Mortgaged Property, if
applicable;
(xxiv) the actual unpaid principal balance of the Mortgage
Loan as of the Cut-off Date;
(xxv) the type and term of the related Prepayment Charge;
(xxvi) the program code; and
(xxviii) the total amount of points and fees charged such
Mortgage Loan.
The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage
Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage
Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the
Mortgage Loans and (4) the weighted average
maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended
from time to time by the Depositor in
accordance with the provisions of this
Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut-off Date
shall refer to the related Cut-off
Date for such Mortgage Loan, determined in
accordance with the definition of
Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a
Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 and existing from time to time
thereafter, and any REO Properties
acquired in respect thereof.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on
such Mortgage Loan from time to time in
accordance with the provisions of the
related Mortgage Note, which rate (i) with
respect to each Fixed-Rate Mortgage Loan
shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with
respect to the Adjustable-Rate Mortgage
Loans, (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 Mortgage 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 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 Adjustable-Rate 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
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related Maximum Mortgage 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 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, including any REO Property,
consisting of an Estate in Real
Property improved by a Residential
Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any
Overcollateralization Reduction Amount and
(ii) the excess of (x) the Available
Distribution Amount for such Distribution
Date over (y) the sum for such Distribution
Date of (A) the Senior Interest
Distribution Amount distributable to the
holders of the Class A Certificates and
the Interest Distribution Amount
distributable to the holders of the Mezzanine
Certificates and (B) the Principal
Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of
determination, a per annum rate of
interest equal to the then applicable
Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net WAC Pass-Through Rate": With respect to the Class A
Certificates and the Mezzanine Certificates
and any Distribution Date, a rate
per annum equal to the product of (x) the
weighted average of the Expense
Adjusted Mortgage Rates of the Mortgage
Loans, weighted based on their Stated
Principal Balances as of the first day of
the related Due Period and (y) a
fraction, the numerator of which is 30 and
the denominator of which is the
actual number of days elapsed in the
related Interest Accrual Period. For
federal income tax purposes, the equivalent
of the foregoing shall be expressed
as the weighted average of the REMIC I
Remittance Rate on the REMIC I Regular
Interests, weighted on the basis of the
aggregate Uncertificated Balance of such
REMIC I Regular Interests. With respect to
each REMIC I Regular Interest and any
Distribution Date, a rate per annum equal
to the weighted average of the Expense
Adjusted Mortgage Rates of the Mortgage
Loans, weighted based on their Stated
Principal Balances as of the first day of
the related Due Period.
"Net WAC Rate Carryover Amount": With respect to any Class of
the Class A Certificates and the Mezzanine
Certificates and any Distribution
Date, the sum of (A) the positive excess of
(i) the amount of interest accrued
on such Class of Certificates for such
Distribution Date calculated at the
related Formula Rate for such Distribution
Date over (ii) the amount of interest
accrued on such Class of Certificates at
the applicable Net WAC Pass-Through
Rate for such Distribution Date and (B) the
related Net WAC Rate Carryover
Amount for the previous Distribution Date
not previously distributed, together
with interest thereon at a rate equal to
the related Formula Rate for such Class
of Certificates for such Distribution
Date.
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"Net WAC Rate Carryover Reserve Account": As defined in
Section 3.28.
"New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or
extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the
terms of such lease.
"Nonrecoverable Advance": Any Advance previously made or
proposed to be made in respect of a
Mortgage Loan or REO Property that, in the
good faith business judgment of the
Servicer, will not or, in the case of a
proposed Advance, would not be ultimately
recoverable from related Late
Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
"Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in
respect of a Mortgage Loan or REO
Property that, in the good faith business
judgment of the Servicer, will not or,
in the case of a proposed Servicing
Advance, would not be ultimately recoverable
from related Late Collections, Insurance
Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as
provided herein.
"Non-United States Person": Any Person other than a United
States Person.
"Notional Amount": With respect to the Class CE Certificates
and any Distribution Date, the aggregate
Uncertificated Balance of the REMIC I
Regular Interests (other than REMIC I
Regular Interest I-LTP) for such
Distribution Date.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the
Board, the President or a vice president
(however denominated), and by the
Treasurer, the Secretary, or one of the
assistant treasurers or assistant
secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates and for purposes
of the Marker Rate and Maximum
I-LTZZ Uncertificated Interest Deferral
Amount, REMIC I Regular Interest
I-LTA1A, REMIC I Regular Interest I-LTA1B,
REMIC I Regular Interest I-LTA1C1,
REMIC I Regular Interest I-LTA1C2, REMIC I
Regular Interest I-LTA2, REMIC I
Regular Interest I-LTA3, REMIC I Regular
Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5,
REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8 and REMIC I Regular
Interest I-LTM9 and any Interest Accrual
Period therefor, the rate determined by
the Trustee on the related Interest
Determination Date on the basis of the
offered rate for one-month U.S. dollar
deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London
time) on such Interest Determination
Date; provided that if such rate does not
appear on Telerate Page 3750, the rate
for such date will be determined on the
basis of the offered rates of the
Reference Banks for one-month U.S. dollar
deposits, as of 11:00 a.m. (London
time) on such Interest Determination Date.
In such event, the Trustee will
request the principal London office of each
of the Reference Banks to provide a
quotation of its rate. If on such Interest
Determination Date, two or more
Reference Banks provide such offered
quotations, One-Month LIBOR for the related
Interest
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Accrual Period shall be the arithmetic mean
of such offered quotations (rounded
upwards if necessary to the nearest whole
multiple of 1/16%). If on such
Interest Determination Date, fewer than two
Reference Banks provide such offered
quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the
previous Interest Determination Date
and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an
Interest Determination Date would be
based on LIBOR for the previous Interest
Determination Date for the third
consecutive Interest Determination Date,
the Trustee, after consultation with
the Depositor, shall select an alternative
comparable index (over which the
Trustee has no control), used for
determining one-month Eurodollar lending rates
that is calculated and published (or
otherwise made available) by an independent
party.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for
the Depositor or the Servicer,
acceptable to the Trustee, if such opinion
is delivered to the Trustee, except
that any opinion of counsel relating to (a)
the qualification of any Trust REMIC
as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of
Independent counsel.
"Original Mortgage Loan": Any of the Mortgage Loans included
in REMIC I as of the Closing Date.
"Originator": New Century Mortgage Corporation, or its
successor in interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of
(a) the Overcollateralization Target
Amount applicable to such Distribution Date
over (b) the Overcollateralized
Amount applicable to such Distribution Date
(calculated for this purpose only
after assuming that 100% of the Principal
Remittance Amount on such Distribution
Date has been distributed).
"Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the
Overcollateralization Deficiency Amount
as of such Distribution Date (calculated
for this purpose only after assuming
that 100% of the Principal Remittance
Amount on such Distribution Date has been
distributed) and (b) the amount of Accrued
Certificate Interest payable on the
Class CE Certificates on such Distribution
Date as reduced by Realized Losses
allocated thereto with respect to such
Distribution Date pursuant to Section
4.04.
"Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the
lesser of (a) the Principal Remittance
Amount on such Distribution Date and (b)
the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any
Distribution Date, (i) prior to the
Stepdown Date, an amount equal to 2.95% of
the aggregate outstanding Stated Principal
Balance of the Mortgage Loans as of
the Cut-off Date, (ii) on or after the
Stepdown Date provided a Trigger Event is
not in effect, the greater of (x) 5.90% of
the then current aggregate
outstanding Stated Principal Balance of the
Mortgage Loans as of the last day of
the related Due Period and (y)
$5,149,546.58, or (iii) on or after the Stepdown
Date and if a Trigger
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Event is in effect, the
Overcollateralization Target
Amount for the immediately preceding
Distribution Date. Notwithstanding the
foregoing, on and after any Distribution
Date following the reduction of the
aggregate Certificate Principal Balance of
the Class A Certificates and the
Mezzanine Certificates to zero, the
Overcollateralization Target Amount shall be
zero.
"Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the
aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties as of the
last day of the related Due Period
over (b) the sum of the aggregate
Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates
and the Class P Certificates after
giving effect to distributions to be made
on such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate,
including any interest in such
Certificate as the Holder thereof and any
other interest therein, whether direct
or indirect, legal or beneficial, as owner
or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any
Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution
Date and (y) the Net WAC Rate for
such Distribution Date. With respect to the
Class CE Interest and any
Distribution Date, (i) a per annum rate
equal to the percentage equivalent of a
fraction, the numerator of which is (x) the
interest on the Uncertificated
Principal Balance of each REMIC I Regular
Interest listed in clause (y) below at
a rate equal to the related REMIC I
Remittance Rate minus the Marker Rate and
the denominator of which is (y) the
aggregate Uncertificated Balance of REMIC I
Regular Interest I-LTAA, I-LTA1A, I-LTA1B,
I-LTA1C, I-LTM1, I-LTM2, I-LTM3,
I-LTM4, I-LTM5, I-LTM6, I-LTM7, I-LTM8,
I-LTM9, I-LTTZZ and (ii) 100% of the
interest on REMIC I Regular Interest I-LTP,
expressed as a per annum rate.
"Percentage Interest": With respect to any Class of
Certificates (other than the Residual
Certificates), the undivided percentage
ownership in such Class evidenced by such
Certificate, expressed as a
percentage, the numerator of which is the
initial Certificate Principal Balance
or Notional Amount represented by such
Certificate and the denominator of which
is the aggregate initial Certificate
Principal Balance or initial Notional
Amount of all of the Certificates of such
Class. The Class A Certificates and
the Mezzanine Certificates are issuable
only in minimum Percentage Interests
corresponding to minimum initial
Certificate Principal Balances of $25,000 and
integral multiples of $1.00 in excess
thereof. The Class P Certificates are
issuable only in Percentage Interests
corresponding to initial Certificate
Principal Balances of $20 and integral
multiples thereof. The Class CE
Certificates are issuable only in minimum
Percentage Interests corresponding to
minimum initial Certificate Principal
Balances of $100,000 and integral
multiples of $1.00 in excess thereof;
provided, however, that a single
Certificate of each such Class of
Certificates may be issued having a Percentage
Interest corresponding to the remainder of
the aggregate initial Certificate
Principal Balance or Notional Amount of
such Class or to an otherwise authorized
denomination for such Class plus such
remainder. With respect to any Residual
Certificate, the undivided percentage
ownership in such Class evidenced by such
Certificate, as set forth on the face of
such Certificate. The Residual
Certificates are issuable in Percentage
Interests of 20% and multiples thereof.
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<PAGE>
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date
therefor, 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 Rate or the Minimum
Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately
prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a
purchase price of not greater than par,
regardless of whether issued by the
Depositor, the Servicer, the Trustee or any
of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States
or
any agency or instrumentality thereof, provided such obligations
are
backed by the full faith and credit of the United States;
(ii)
demand and time deposits in, certificates of deposit of,
or bankers' acceptances issued by, any Depository Institution;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United
States of America or any state thereof and that are rated by
each
Rating Agency that rates such securities in its highest
long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that
rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds that have been rated "AAA" by
Fitch (if rated by Fitch) and "AAAm" or "AAAm-G" by S&P or
"Aaa" by
Moody's; and
(viii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other
obligation,
security or investment, as may be acceptable to the Rating Agencies
as
a permitted investment of funds backing securities having
ratings
equivalent to its highest initial rating of the Class A
Certificates;
provided, however, that no instrument
described hereunder shall evidence either
the right to receive (a) only interest with
respect to the obligations
underlying such instrument or (b) both
principal and interest payments derived
from obligations underlying such instrument
and the interest and principal
payments with respect to such instrument
provide a yield to maturity at par
greater than 120% of the yield to maturity
at par of the underlying obligations.
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<PAGE>
"Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified
Organization or Non-United States Person.
"Person": Any individual, corporation, partnership, limited
liability company, joint venture,
association, joint-stock company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including
individual retirement accounts and annuities,
Keogh plans and bank collective investment
funds and insurance company general
or separate accounts in which such plans,
accounts or arrangements are invested,
that are subject to ERISA or Section 4975
of the Code.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Prepayment Period,
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).
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust
Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge
summary attached thereto). 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, during the related
Prepayment Period, the subject of a
Principal Prepayment in full or in part that
was applied by the Servicer to reduce the
outstanding principal balance of such
loan on a date preceding the Due Date in
the succeeding Prepayment Period, an
amount equal to one month's interest at the
applicable Net Mortgage Rate less
any payments made by the Mortgagor. The
obligations of the Servicer in respect
of any Prepayment Interest Shortfall are
set forth in Section 3.24.
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"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar
month in which such Distribution Date
occurs.
"Principal Distribution Amount": With respect to any
Distribution Date, the sum of:
(i) the principal portion of each Monthly Payment on the
Mortgage Loans due during the related Due Period, whether or
not
received on or prior to the related Determination Date;
(ii) the Stated Principal Balance of any Mortgage Loan that
was purchased during the related Prepayment Period pursuant to or
as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01 and
the
amount of any shortfall deposited in the Collection Account in
connection with the substitution of a Deleted Mortgage Loan
pursuant to
Section 2.03 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled
collections (including, without limitation, Principal
Prepayments,
Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and
REO
Principal Amortization) received during the related Prepayment
Period,
net of any portion thereof that represents a recovery of principal
for
which an Advance was made by the Servicer pursuant to Section 4.03
in
respect of a preceding Distribution Date; and
(iv) the amount of any Overcollateralization Increase Amount
for such Distribution Date; minus
(v) the amount of any Overcollateralization Reduction Amount
for such
Distribution Date.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is
received in advance of its scheduled Due
Date and which is not accompanied by an
amount of interest representing the full
amount of scheduled interest due on any Due
Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": The sum of the amounts set
forth in (i) through (iii) of the
definition of Principal Distribution Amount.
"Private Certificates": As defined in Section 5.02(b).
"Prospectus Supplement": The Prospectus Supplement, dated
February 1, 2005, relating to the public
offering of the Class A Certificates
and the Mezzanine Certificates (other than
the Class A-1C2 Certificates, Class
M-8 Certificates and Class M-9
Certificates).
"PTCE": A Prohibited Transaction Class Exemption issued by the
United States Department of Labor which
provides that exemptive relief is
available to any party to any transaction
which satisfies the conditions of the
exemption.
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"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as
contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed
by a certification from a Servicing
Officer to the Trustee, an amount equal to
the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of
purchase (or such other price as
provided in Section 9.01), (ii) in the case
of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance
at the applicable Net Mortgage Rate in
effect from time to time from the Due Date
as to which interest was last covered
by a payment by the Mortgagor or an Advance
by the Servicer, which payment or
Advance had as of the date of purchase been
distributed pursuant to Section
4.01, through the end of the calendar month
in which the purchase is to be
effected plus and (y) an REO Property, the
sum of (1) accrued interest on such
Stated Principal Balance at the applicable
Net Mortgage Rate in effect from time
to time from the Due Date as to which
interest was last covered by a payment by
the Mortgagor or an Advance by the Servicer
through the end of the calendar
month immediately preceding the calendar
month in which such REO Property was
acquired, plus (2) REO Imputed Interest for
such REO Property for each calendar
month commencing with the calendar month in
which such REO Property was acquired
and ending with the calendar month in which
such purchase is to be effected, net
of the total of all net rental income,
Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of
purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section
4.01, (iii) any unreimbursed Servicing
Advances and Advances (including
Nonrecoverable Advances and Nonrecoverable
Servicing Advances) and any unpaid
Servicing Fees allocable to such Mortgage
Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection
Account in respect of such Mortgage Loan or
REO Property pursuant to Section
3.11(a)(ix) and Section 3.16(b), and (v) in
the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be
incurred by the Servicer or the Trustee in
respect of the breach or defect
giving rise to the purchase obligation
including any costs and damages incurred
by the Trust Fund in connection with any
violation by such loan of any predatory
or abusive lending law.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan
pursuant to the terms of this Agreement
which must, on the date of such
substitution, (i) have an outstanding Stated
Principal Balance, after application of all
scheduled payments of principal and
interest due during or prior to the month
of substitution, not in excess of the
Stated Principal Balance of the Deleted
Mortgage Loan as of the Due Date in the
calendar month during which the
substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one
percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii)
with respect to any Adjustable-Rate
Mortgage Loan, have a Maximum Mortgage Rate
not less than the Maximum Mortgage
Rate on the Deleted Mortgage Loan, (iv)
with respect to any Adjustable-Rate
Mortgage Loan, have a Minimum Mortgage Rate
not less than the Minimum Mortgage
Rate of the Deleted Mortgage Loan, (v) with
respect to any Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to
the Gross Margin of the Deleted
Mortgage Loan, (vi) with respect to any
Adjustable-Rate Mortgage Loan, have a
next Adjustment Date not more than two
months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vii)
have a remaining term to maturity not
greater than (and not more than one year
less than) that of the Deleted Mortgage
Loan, (viii) have the same Due Date as the
Due Date on the Deleted Mortgage
Loan, (ix) have a Loan-to-Value Ratio as of
the date of substitution equal to or
lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date,
(x) have a risk grading
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determined by the Originator at least equal
to the risk grading assigned on the
Deleted Mortgage Loan and (xi) conform to
each representation and warranty set
forth in Section 6 of the Mortgage Loan
Purchase Agreement applicable to the
Deleted Mortgage Loan. In the event that
one or more mortgage loans are
substituted for one or more Deleted
Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on
the basis of aggregate principal
balances, the Mortgage Rates described in
clause (ii) hereof shall be determined
on the basis of weighted average Mortgage
Rates, the terms described in clause
(vii) hereof shall be determined on the
basis of weighted average remaining term
to maturity, the Loan-to-Value Ratios
described in clause (ix) hereof shall be
satisfied as to each such mortgage loan,
the risk gradings described in clause
(x) hereof shall be satisfied as to each
such mortgage loan and, except to the
extent otherwise provided in this sentence,
the representations and warranties
described in clause (xi) hereof must be
satisfied as to each Qualified
Substitute Mortgage Loan or in the
aggregate, as the case may be.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than a
nominal amount in excess of the existing
first mortgage loan and any subordinate
mortgage loan on the related Mortgaged
Property and related closing costs, and
were used exclusively (except for such
nominal amount) to satisfy the then
existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor
on the related Mortgaged Property and
to pay related closing costs.
"Rating Agency or Rating Agencies": Fitch, Moody's and S&P
or
their successors. If such agencies or their
successors are no longer in
existence, "Rating Agencies" shall be such
nationally recognized statistical
rating agencies, or other comparable
Persons, designated by the Depositor,
notice of which designation shall be given
to the Trustee and the Servicer.
"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 unpaid principal
balance of such Mortgage Loan as of the
commencement of the calendar month in which
the Final Recovery Determination was
made, plus (ii) accrued interest from the
Due Date as to which interest was last
paid by the Mortgagor through the end of
the calendar month in which such Final
Recovery Determination was made, calculated
in the case of each calendar month
during such period (A) at an annual rate
equal to the annual rate at which
interest was then accruing on such Mortgage
Loan and (B) on a principal amount
equal to the Stated Principal Balance of
such Mortgage Loan as of the close of
business on the Distribution Date during
such calendar month, plus (iii) any
amounts previously withdrawn from the
Collection Account in respect of such
Mortgage Loan pursuant to Section
3.11(a)(ix) and Section 3.16(b), minus (iv)
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 with respect to such Mortgage
Loan pursuant to Section 3.11(a)(iii).
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
unpaid 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
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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, plus (iii) REO Imputed
Interest for such REO Property for each
calendar month commencing with the
calendar month in which such REO Property
was acquired and ending with the
calendar month in which such Final Recovery
Determination was made, plus (iv)
any amounts previously withdrawn from the
Collection Account in respect of the
related Mortgage Loan pursuant to Section
3.11(a)(ix) and Section 3.16(b), minus
(v) the aggregate of all Advances and
Servicing Advances (in the case of
Servicing Advances, without duplication of
amounts netted out of the rental
income, Insurance Proceeds and Liquidation
Proceeds described in clause (vi)
below) made by the Servicer in respect of
such REO Property or the related
Mortgage Loan for which the Servicer has
been or, in connection with such Final
Recovery Determination, will be reimbursed
pursuant to Section 3.23 out of
rental income, Insurance Proceeds and
Liquidation Proceeds received in respect
of such REO Property, minus (vi) the total
of all net rental income, Insurance
Proceeds and Liquidation Proceeds received
in respect of such REO Property that
has been, or in connection with such Final
Recovery Determination, will be
transferred to the Distribution Account
pursuant to Section 3.23.
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.
If 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
recoveries are applied to principal
distributions on any Distribution Date.
"Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day
immediately preceding such Distribution
Date. With respect to each Distribution
Date and any other Certificates,
including any Definitive Certificates, the
last Business Day of the month
immediately preceding the month in which
such Distribution Date occurs.
"Reference Banks": Deutsche Bank AG, Barclays' Bank PLC, The
Tokyo Mitsubishi Bank and National
Westminster Bank PLC and their successors in
interest; provided, however, that if any of
the foregoing banks are not suitable
to serve as a Reference Bank, then any
leading banks selected by the Trustee,
after consultation with the Depositor,
which are
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engaged in transactions in Eurodollar
deposits in the international Eurocurrency
market (i) with an established place of
business in London and (ii) not
controlling, under the control of or under
common control with the Depositor or
any Affiliate thereof.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related
Mortgaged Property.
"Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class CE Certificate or Class
P Certificate.
"Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the
Code.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan,
any reduction in the amount of interest
collectible on such Mortgage Loan for the
most recently ended calendar month as
a result of the application of the Relief
Act.
"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) such
Mortgage Loans and Prepayment Charges
related thereto as from time to time are
subject to this Agreement, together with
the Mortgage Files relating thereto,
and together with all collections thereon
and proceeds thereof; (ii) any REO
Property, together with all collections
thereon and proceeds thereof; (iii) the
Trustee's rights with respect to the
Mortgage Loans under all insurance policies
required to be maintained pursuant to this
Agreement and any proceeds thereof;
(iv) the Depositor's rights under the
Mortgage Loan Purchase Agreement
(including any security interest created
thereby); and (v) the Collection
Account (other than any amounts
representing any Servicer Prepayment Charge
Payment Amount), the Distribution Account
(other than any amounts representing
any Servicer Prepayment Charge Payment
Amount) and any REO Account, and such
assets that are deposited therein from time
to time and any investments thereof,
together with any and all income, proceeds
and payments with respect thereto.
Notwithstanding the foregoing, however,
REMIC I specifically excludes all
payments and other collections of principal
and interest due on the Mortgage
Loans on or before the Cut-off Date, all
Prepayment Charges payable in
connection with Principal Prepayments on
the Mortgage Loans made before the
Cut-off Date, the Net WAC Rate Carryover
Reserve Account and the Cap Contracts.
"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 REMIC I Remittance
Rate for REMIC I Regular Interest
I-LTAA minus the Marker Rate, divided by
(b) 12.
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"REMIC I Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate
Uncertificated Balance of the REMIC I
Regular Interests minus (ii) the aggregate
Uncertificated Balance of REMIC I
Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular
Interest I-LTA1C1, REMIC I Regular Interest
I-LTA1C2, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3,
REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7,
REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9 and REMIC I
Regular Interest I-LTP, in each case as of
such date of determination.
"REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to
the product of (i) 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 Uncertificated Balance of REMIC I
Regular Interest I-LTA1A, REMIC I
Regular Interest I-LTA1B, REMIC I Regular
Interest I-LTA1C1, REMIC I Regular
Interest I-LTA1C2, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular
Interest I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest
I-LTM7, REMIC I Regular Interest I-LTM8 and
REMIC I Regular Interest I-LTM9 and
the denominator of which is the aggregate
Uncertificated Balance of REMIC I
Regular Interest I-LTA1A, REMIC I Regular
Interest I-LTA1B, REMIC I Regular
Interest I-LTA1C1, REMIC I Regular Interest
I-LTA1C2, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTA3,
REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular
Interest I-LTM4, REMIC I Regular Interest
I-LTM5, REMIC I Regular Interest
I-LTM6, REMIC I Regular Interest I-LTM7,
REMIC I Regular Interest I-LTM8, REMIC
I Regular Interest I-LTM9 and REMIC I
Regular Interest I-LTZZ.
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC
I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time or shall otherwise be entitled to
interest as set forth herein, and
shall be entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Balance as set forth in the Preliminary
Statement hereto. The designations for
the respective REMIC I Regular Interests
are set forth in the Preliminary
Statement hereto.
"REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership
interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC
I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC
I Remittance Rate in effect from time
to time or shall otherwise be entitled to
interest as set forth herein, and
shall be entitled to distributions of
principal, subject to the terms and
conditions hereof, in an aggregate amount
equal to its initial Uncertificated
Balance as set forth in the Preliminary
Statement hereto. The REMIC I Regular
Interests are as follows: REMIC I Regular
Interest I-LTAA, REMIC I Regular
Interest I-LTA1A, REMIC I Regular Interest
I-LTA1B,
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REMIC I Regular Interest I-LTA1C1, REMIC I
Regular Interest I-LTA1C2, REMIC I
Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest
I-LTM4, REMIC I Regular Interest I-LTM5,
REMIC I Regular Interest I-LTM6, REMIC
I Regular Interest I-LTM7, REMIC I Regular
Interest I-LTM8, REMIC I Regular
Interest I-LTM9, REMIC I Regular Interest
I-LTZZ and REMIC I Regular Interest
I-LTP.
"REMIC I Remittance Rate": With respect to each REMIC I
Regular Interest and any Distribution Date,
the Net WAC Pass-Through Rate.
"REMIC I Required Overcollateralized Amount": 1% of the
Overcollateralization Target 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 Class A Certificates, the Mezzanine
Certificates, the Class CE
Certificates, the Class P Certificates and
the Class R-II Interest and all
amounts deposited therein, with respect to
which a separate REMIC election is to
be made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment
conduits, which appear at Section
860A through 860G 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.
"Remittance Report": A report in form and substance acceptable
to the Trustee on an electronic data file
or tape prepared by the Servicer
pursuant to Section 4.03 with such
additions, deletions and modifications as
agreed to by the Trustee and the
Servicer.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in
Section 856(d) of the Code as being
included in the term "rents from real
property."
"REO Account": The account or accounts maintained, or caused
to be maintained, by the Servicer in
respect of an REO Property pursuant to
Section 3.23.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.
"REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO
Property was at any time part of REMIC I,
one month's interest at the applicable Net
Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the
case of the first such calendar month,
of the related Mortgage Loan, if
appropriate) as of the close of business on the
Distribution Date in such calendar
month.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the
excess, if any, of (a) the aggregate of
all amounts received in respect of such
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REO Property during such calendar month,
whether in the form of rental income,
sale proceeds (including, without
limitation, that portion of the Termination
Price paid in connection with a purchase of
all of the Mortgage Loans and REO
Properties pursuant to Section 9.01 that is
allocable to such REO Property) or
otherwise, net of any portion of such
amounts (i) payable pursuant to Section
3.23(c) in respect of the proper operation,
management and maintenance of such
REO Property or (ii) payable or
reimbursable to the Servicer pursuant to Section
3.23(d) for unpaid Servicing Fees in
respect of the related Mortgage Loan and
unreimbursed Servicing Advances and
Advances in respect of such REO Property or
the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such
REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of REMIC I through foreclosure or
deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached
hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that
the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if
necessary to the nearest whole
multiple of 1/16%) of the one-month U.S.
dollar lending rates which New York
City banks selected by the Trustee, after
consultation with the Depositor, are
quoting on the relevant Interest
Determination Date to the principal London
offices of leading banks in the London
interbank market or (ii) in the event
that the Trustee can determine no such
arithmetic mean, the lowest one-month
U.S. dollar lending rate which New York
City banks selected by the Trustee,
after consultation with the Depositor, are
quoting on such Interest
Determination Date to leading European
banks.
"Residential Dwelling": Any one of the following: (i) an
attached, detached or semi-detached
one-family dwelling, (ii) an attached,
detached or semi-detached two-to
four-family dwelling, (iii) a one-family
dwelling unit in a Fannie Mae eligible
condominium project, or (iv) an attached,
detached or semi-detached one-family
dwelling in a planned unit development,
none of which is a co-operative or mobile
home (as defined in 42 United States
Code, Section 5402(6)).
"Residual Certificates": The Class R Certificates.
"Residual
Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section
860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
any vice president, managing director,
director, any assistant vice president,
the Secretary, any assistant secretary, the
Treasurer, any assistant treasurer,
any associate, any trust officer or
assistant trust officer or any other officer
of the Trustee having direct responsibility
over this Agreement or otherwise
engaged in performing functions similar to
those performed by any of the above
designated officers and, with respect to a
particular matter, to whom such
matter is referred because of such
officer's knowledge of and familiarity with
the particular subject.
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"Responsible Party": NC Capital Corporation, in its capacity
as responsible party under the Mortgage
Loan Purchase Agreement.
"S&P": Standard & Poor's Ratings Services, a division of
the
McGraw-Hill Companies, Inc., or its
successor in interest.
"Seller": Stanwich Asset Acceptance Company, L.L.C. or its
successor in interest, in its capacity as
seller under the Mortgage Loan
Purchase Agreement.
"Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the
sum of (i) the Interest Distribution
Amount for such Distribution Date for the
Class A Certificates and (ii) the
Interest Carry Forward Amount, if any, for
such Distribution Date for the Class
A Certificates.
"Sequential Trigger Event": A Sequential Trigger Event is in
effect on any Distribution Date if, before
the Stepdown Date, the aggregate
amount of Realized Losses incurred since
the Cut-off Date through the last day
of the related Due Period (after giving
effect to scheduled payments received or
advanced on or before the related
Determination Date and principal prepayments
received during the related Prepayment
Period) divided by the aggregate
principal balance of the Mortgage Loans as
of the Cut-off Date exceeds 3.00%, or
if, on or after the Stepdown Date, a
Trigger Event is in effect.
"Servicer": New Century Mortgage Corporation or any successor
servicer appointed as herein provided, in
its capacity as Servicer hereunder.
"Servicer Event of Default": One or more of the events
described in Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amounts
payable by the Servicer in respect of any
waived Prepayment Charges pursuant to
Section 3.01.
"Servicer Remittance Date": With respect to any Distribution
Date, by 3:00 p.m. New York time on the
Business Day preceding the related
Distribution Date.
"Servicer Termination Test": The Servicer Termination Test
will be failed with respect to any
Distribution Date if the aggregate amount of
Realized Losses incurred since the Cut-off
Date through the last day of the
related Due Period (reduced by the
aggregate amount of Subsequent Recoveries
received from the Cut-off Date through the
last day of the related Due Period)
divided by aggregate Stated Principal
Balance of the Mortgage Loans as of the
Cut-off Date exceeds the applicable
percentages set forth below with respect to
such Distribution Date:
PAYMENT DATE OCCURRING IN
PERCENTAGE
----------------------------------------------- ---------------
March 2008 through February 2009
3.00%
March 2009 through February 2010
6.00%
March 2010 through February 2011
5.75%
March 2011 and thereafter
6.75%
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"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.
"Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Servicer in
connection with a default, delinquency or
other unanticipated event by the Servicer
in the performance of its servicing
obligations, including, but not limited to,
the cost of (i) the preservation,
restoration and protection of a Mortgaged
Property, (ii) any enforcement or
judicial proceedings, including but not
limited to foreclosures, in respect of a
particular Mortgage Loan, (iii) the
management (including reasonable fees in
connection therewith) and liquidation of
any REO Property and (iv) the
performance of its obligations under
Section 3.01, Section 3.09, Section 3.14,
Section 3.16 and Section 3.23. The Servicer
shall not be required to make any
Nonrecoverable Servicing Advances.
"Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to the
Servicing Fee Rate accrued for one
month (or in the event of any payment of
interest which accompanies a Principal
Prepayment in full or in part made by the
Mortgagor during such calendar month,
interest for the number of days covered by
such payment of interest) on the same
principal amount on which interest on such
Mortgage Loan accrues for such
calendar month, calculated on the basis of
a 360-day year consisting of twelve
30-day months. A portion of such Servicing
Fee may be retained by any
Sub-Servicer as its servicing
compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and
servicing of Mortgage Loans, whose
name and specimen signature appear on a
list of Servicing Officers furnished by
the Servicer to the Trustee and the
Depositor on the Closing Date, as such list
may from time to time be amended.
"Servicing Transfer Costs": Shall mean all reasonable costs
and expenses incurred by the Trustee in
connection with the transfer of
servicing from a predecessor servicer,
including, without limitation, any
reasonable costs or expenses associated
with the complete transfer of all
servicing data and the completion,
correction or manipulation of such servicing
data as may be required by the Trustee to
correct any errors or insufficiencies
in the servicing data or otherwise to
enable the Trustee (or any successor
servicer appointed pursuant to Section
7.02) to service the Mortgage Loans
properly and effectively.
"Single Certificate": With respect to any Class of
Certificates (other than the Class P
Certificates and the Residual
Certificates), a hypothetical Certificate
of such Class evidencing a Percentage
Interest for such Class corresponding to an
initial Certificate Principal
Balance of $1,000. With respect to the
Class P Certificates and the Residual
Certificates, a hypothetical Certificate of
such Class evidencing a 100%
Percentage Interest in such Class.
"Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section
10.01(b) hereof.
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"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to
but not including the Distribution
Date on which the proceeds, if any, of a
Liquidation Event with respect to such
Mortgage Loan would be distributed, the
principal balance of such Mortgage Loan
as of the Cut-off Date, as shown in the
Mortgage Loan Schedule, minus the sum of
(i) the principal portion of each Monthly
Payment due on a Due Date subsequent
to the Cut-off Date, to the extent received
from the Mortgagor or advanced by
the Servicer and distributed pursuant to
Section 4.01 on or before such date of
determination, (ii) all Principal
Prepayments received after the Cut-off Date,
to the extent distributed pursuant to
Section 4.01 on or before such date of
determination, (iii) all Liquidation
Proceeds and Insurance Proceeds applied by
the Servicer as recoveries of principal in
accordance with the provisions of
Section 3.16, to the extent distributed
pursuant to Section 4.01 on or before
such date of determination, and (iv) any
Realized Loss incurred with respect
thereto as a result of a Deficient
Valuation made during or prior to the
Prepayment Period for the most recent
Distribution Date coinciding with or
preceding such date of determination; and
(b) as of any date of determination
coinciding with or subsequent to the
Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to
such Mortgage Loan would be
distributed, zero. With respect to any REO
Property: (a) as of any date of
determination up to but not including the
Distribution Date on which the
proceeds, if any, of a Liquidation Event
with respect to such REO Property would
be distributed, an amount (not less than
zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of
the date on which such REO Property
was acquired on behalf of REMIC I, minus
the sum of (i) if such REO Property was
acquired before the Distribution Date in
any calendar month, the principal
portion of the Monthly Payment due on the
Due Date in the calendar month of
acquisition, to the extent advanced by the
Servicer and distributed pursuant to
Section 4.01 on or before such date of
determination, and (ii) the aggregate
amount of REO Principal Amortization in
respect of such REO Property for all
previously ended calendar months, to the
extent distributed pursuant to Section
4.01 on or before such date of
determination; and (b) as of any date of
determination coinciding with or subsequent
to the Distribution Date on which
the proceeds, if any, of a Liquidation
Event with respect to such REO Property
would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate
Principal Balance of the Class A
Certificates has been reduced to zero and
(ii) the later to occur of (a) the
Distribution Date occurring in March 2008
and (b) the first Distribution Date on
which the Credit Enhancement Percentage
(calculated for this purpose only prior
to any distribution of the Principal
Distribution Amount to the Certificates
then entitled to distributions of principal
on such Distribution Date) is equal
to or greater than 41.40%.
"Sub-Servicer": Any Person with which the Servicer has entered
into a Sub-Servicing Agreement and which
meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Agreement": The written contract between the
Servicer and a Sub-Servicer relating to
servicing and administration of certain
Mortgage Loans as provided in Section
3.02.
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"Subsequent Recoveries": As of any Distribution Date,
unexpected amounts received by the Servicer
(net of any related expenses
permitted to be reimbursed to the Servicer)
specifically related to a Mortgage
Loan that was the subject of a liquidation
or an REO Disposition prior to the
related Prepayment Period that resulted in
a Realized Loss.
"Substitution Shortfall Amount": As defined in Section
2.03(b).
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate
Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto,
Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss
Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due
to the classification of portions
thereof as REMICs under the REMIC
Provisions, together with any and all other
information reports or returns that may be
required to be furnished to the
Certificateholders or filed with the
Internal Revenue Service or any other
governmental taxing authority under any
applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on
the Dow Jones Telerate Capital Markets
Report (or such other page as may replace
page 3750 on that report for the purpose of
displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 9.01.
"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment
of any Ownership Interest in a
Certificate.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"Trigger Event": A Trigger Event is in effect on any
Distribution Date on or after the Stepdown
Date if:
(a) the Delinquency Percentage exceeds 40% of the then current
Credit Enhancement Percentage; or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the
related Due Period (reduced by the
aggregate amount of Subsequent Recoveries
received since the Cut-off Date
through the last day of the related Due
Period) divided by aggregate Stated
Principal Balance of the Mortgage Loans as
of the Cut-off Date exceeds the
applicable percentages set forth below with
respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN
PERCENTAGE
----------------------------------------------- ---------------
March 2008 through February 2009
3.00%
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March 2009 through February 2010
6.00%
March 2010 through February 2011
5.75%
March 2011 and thereafter
6.75%
"Trust Fund": Collectively, all of the assets of each Trust
REMIC, the Net WAC Rate Carryover Reserve
Account, the Cap Contracts and the
other assets conveyed by the Depositor to
the Trustee pursuant to Section 2.01.
"Trust REMIC": Any of REMIC I or REMIC II.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in
interest, or any successor trustee
appointed as herein provided.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05
as compensation for all services
rendered by it in the execution of the
trust hereby created and in the exercise
and performance of any of the powers and
duties of the Trustee hereunder, which
amount shall equal the Trustee Fee Rate
accrued for one month on the aggregate
Stated Principal Balance of the Mortgage
Loans and any REO Properties as of the
first day of the related Due Period (or, in
the case of the initial Distribution
Date, as of the Cut-off Date), calculated
on the basis of a 360-day year
consisting of twelve 30-day months.
"Trustee Fee Rate": 0.01% per annum.
"Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of
determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I
Regular Interest shall equal the
amount set forth in the Preliminary
Statement hereto as its initial
uncertificated balance. On each
Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be
reduced by all distributions of principal
made on such REMIC I Regular Interest on
such Distribution Date pursuant to
Section 4.01 and, if and to the extent
necessary and appropriate, shall be
further reduced on such Distribution Date
by Realized Losses as provided in
Section 4.04. The Uncertificated Balance of
REMIC I Regular Interest I-LTZZ
shall be increased by interest deferrals as
provided in Section
4.01(a)(1)(A)(i). The Uncertificated
Balance of each REMIC I Regular Interest
shall never be less than zero.
"Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one
month's interest at the REMIC I
Remittance Rate applicable to such REMIC I
Regular Interest for such
Distribution Date, accrued on the
Uncertificated Balance thereof immediately
prior to such Distribution Date.
Uncertificated Interest in respect of any REMIC
I Regular Interest shall accrue on the
basis of a 360-day year consisting of
twelve 30-day months. Uncertificated
Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest,
shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment
Interest Shortfall, if any, for such
Distribution Date to the extent not covered
by payments pursuant to Section 3.24
and (b) the aggregate amount of any Relief
Act Interest Shortfall, if any
allocated, in each case, to such REMIC I
Regular Interest pursuant to Section
1.02. In addition, Uncertificated Interest
with respect to each Distribution
Date, as to any
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REMIC I Regular Interest shall be reduced
by Realized Losses, if any, allocated
to such REMIC I Regular Interest pursuant
to Section 1.02 and Section 4.04.
"Underwriters' Exemption": An individual exemption issued by
the United States Department of Labor,
Prohibited Transaction Exemption 91-23
(56 Fed. Reg. 15936, April 19, 1991), as
amended, to Citigroup Global Markets
Inc. (formerly known as Salomon Smith
Barney Inc.), for specific offerings in
which Citigroup Global Markets Inc. or any
person directly or indirectly,
through one or more intermediaries,
controlling, controlled by or under common
control with Citigroup Global Markets Inc.
is an underwriter, placement agent or
a manager or co-manager of the underwriting
syndicate or selling group where the
trust and the offered certificates meet
specified conditions. The Underwriters'
Exemption, as amended, provides a partial
exemption for transactions involving
certificates representing a beneficial
interest in a trust and entitling the
holder to pass-through payments of
principal, interest and/or other payments
with respect to the trust's assets.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such
property is not fully reimbursable by
the hazard insurance policies required to
be maintained pursuant to Section
3.14.
"United States Person": A citizen or resident of the United
States, a corporation, partnership (or
other entity treated as a corporation or
partnership for United States federal
income tax purposes) created or organized
in, or under the laws of, the United
States, any state thereof, or the District
of Columbia (except in the case of a
partnership, to the extent provided in
Treasury regulations) provided that, for
purposes solely of the restrictions on
the transfer of Class R Certificates, no
partnership or other entity treated as
a partnership for United States federal
income tax purposes shall be treated as
a United States Person unless all persons
that own an interest in such
partnership either directly or through any
entity that is not a corporation for
United States federal income tax purposes
are required by the applicable
operative agreement to be United States
Persons, or an estate the income of
which 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
trust. The term "United States"
shall have the meaning set forth in Section
7701 of the Code or successor
provisions.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as
determined by an appraisal made for
the Originator of the Mortgage Loan at the
time of origination of the Mortgage
Loan by an appraiser who met the minimum
requirements of Fannie Mae and Freddie
Mac and (b) the value thereof as determined
by a review appraisal conducted by
the Originator in accordance with the
Originator's underwriting guidelines, and
(ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor
with the proceeds of the Mortgage Loan;
provided, however, (A) in the case of a
Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely
upon the lesser of (1) the value determined
by an appraisal made for the
Originator of such Refinanced Mortgage Loan
at the time of origination of such
Refinanced Mortgage Loan by an appraiser
who met the
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minimum requirements of Fannie Mae and
Freddie Mac and (2) the value thereof as
determined by a review appraisal conducted
by the Originator in accordance with
the Originator's underwriting guidelines,
and (B) in the case of a Mortgage Loan
originated in connection with a
"lease-option purchase," such value of the
Mortgaged Property is based on the lower of
the value determined by an appraisal
made for the Originator of such Mortgage
Loan at the time of origination or the
sale price of such Mortgaged Property if
the "lease option purchase price" was
set less than 12 months prior to
origination, and is based on the value
determined by an appraisal made for the
Originator of such Mortgage Loan at the
time of origination if the "lease option
purchase price" was set 12 months or
more prior to origination.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any
Certificate. With respect to any date
of determination, 98% of all Voting Rights
will be allocated among the holders
of the Class A Certificates, the Mezzanine
Certificates and the Class CE
Certificates in proportion to the then
outstanding Certificate Principal
Balances of their respective Certificates,
1% of all Voting Rights will be
allocated to the holders of the Class P
Certificates and 1% of all Voting Rights
will be allocated among the holders of the
Residual Certificates. The Voting
Rights allocated to each Class of
Certificate shall be allocated among Holders
of each such Class in accordance with their
respective Percentage Interests as
of the most recent Record Date.
SECTION 1.02 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest
Distribution Amount for the Class A
Certificates, the Mezzanine Certificates
and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount
of any Prepayment Interest
Shortfalls (to the extent not covered by
payments by the Servicer pursuant to
Section 3.24) and any Relief Act Interest
Shortfall incurred in respect of the
Mortgage Loans for any Distribution Date
shall be allocated first, to the Class
CE Certificates based on, and to the extent
of, one month's interest at the then
applicable Pass-Through Rate on the
Notional Amount of the Class CE Certificates
and, thereafter, among the Class A
Certificates and the Mezzanine Certificates
on a pro rata basis based on, and to the
extent of, one month's interest at the
then applicable respective Pass-Through
Rate on the respective Certificate
Principal Balance of each such Certificate
and (2) the aggregate amount of any
Realized Losses incurred for any
Distribution Date shall be allocated to the
Class CE Certificates based on, and to the
extent of, one month's interest at
the then applicable Pass-Through Rate on
the Notional Amount of the Class CE
Certificates.
For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests
for any Distribution Date, the
aggregate amount of any Prepayment Interest
Shortfalls (to the extent not
covered by payments by the Servicer
pursuant to Section 3.24) and any Relief Act
Interest Shortfalls incurred in respect of
the Mortgage Loans for any
Distribution Date shall be allocated among
REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTA1A, REMIC I
Regular Interest I-LTA1B, REMIC I
Regular Interest I-LTA1C1, REMIC I Regular
Interest I-LTA1C2, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest
I-LTA3, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2,
REMIC I Regular Interest I-LTM3, REMIC
I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5,
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REMIC I Regular Interest I-LTM6, REMIC I
Regular Interest I-LTM7, REMIC I
Regular Interest I-LTM8 and REMIC I Regular
Interest I-LTM9 and REMIC I Regular
Interest I-LTZZ pro rata based on, and to
the extent of, one month's interest at
the then applicable respective Pass-Through
Rate on the respective
Uncertificated Balance of each such REMIC I
Regular Interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01 Conveyance of the Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set
over and otherwise convey to the
Trustee without recourse, for the benefit
of the Certificateholders, all the
right, title and interest of the Depositor,
including any security interest
therein for the benefit of the Depositor,
in and to the Mortgage Loans
identified on the Mortgage Loan Schedule,
the rights of the Depositor under the
Mortgage Loan Purchase Agreement, and all
other assets included or to be
included in REMIC I. Such assignment
includes all interest and principal
received by the Depositor or the Servicer
on or with respect to the Mortgage
Loans (other than payments of principal and
interest due on such Mortgage Loans
on or before the Cut-off Date). The
Depositor herewith delivers to the Trustee
an executed copy of the Mortgage Loan
Purchase Agreement.
In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and
deposit with the Trustee the following
documents or instruments with respect to
each Mortgage Loan so transferred and
assigned (in each case, a "Mortgage
File"):
(i) the original Mortgage Note, endorsed in blank or in the
following form "Pay to the order of Deutsche Bank National
Trust
Company, as Trustee under the applicable agreement, without
recourse,"
with all prior and intervening endorsements showing a complete
chain of
endorsement from the originator to the Person so endorsing to
the
Trustee;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage
was
executed pursuant to a power of attorney, with evidence of
recording
thereon;
(iii) an original Assignment in blank;
(iv) the original recorded Assignment or Assignments showing a
complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii);
(v) the original
or copies of each assumption, modification or
substitution agreement, if any; and
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(vi) the original
lender's title insurance policy or, if the original title
policy has not been issued, the irrevocable commitment to issue
the
same.
With respect to a maximum of approximately 2.0% of the
Original Mortgage Loans, by outstanding
principal balance of the Original
Mortgage Loans as of the Cut-off Date, if
any original Mortgage Note referred to
in Section 2.01(i) above cannot be located,
the obligations of the Depositor to
deliver such documents shall be deemed to
be satisfied upon delivery to the
Trustee of a photocopy of such Mortgage
Note, if available, with a lost note
affidavit substantially in the form of
Exhibit H attached hereto. If any of the
original Mortgage Notes for which a lost
note affidavit was delivered to the
Trustee is subsequently located, such
original Mortgage Note shall be delivered
to the Trustee within three Business
Days.
If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has, as of the Closing
Date, been submitted for recording
but either (x) has not been returned from
the applicable public recording office
or (y) has been lost or such public
recording office has retained the original
of such document, the obligations of the
Depositor to deliver such documents
shall be deemed to be satisfied upon (1)
delivery to the Trustee of a copy of
each such document certified by the
Originator in the case of (x) above or the
applicable public recording office in the
case of (y) above to be a true and
complete copy of the original that was
submitted for recording and (2) if such
copy is certified by the Originator,
delivery to the Trustee promptly upon
receipt thereof of either the original or a
copy of such document certified by
the applicable public recording office to
be a true and complete copy of the
original. Notice shall be provided to the
Trustee and the Rating Agencies by the
Depositor if delivery pursuant to clause
(2) above will be made more than 180
days after the Closing Date. If the
original lender's title insurance policy was
not delivered pursuant to Section 2.01(vi)
above, the Depositor shall deliver or
cause to be delivered to the Trustee,
promptly after receipt thereof, the
original lender's title insurance policy.
The Depositor shall deliver or cause
to be delivered to the Trustee promptly
upon receipt thereof any other original
documents constituting a part of a Mortgage
File received with respect to any
Mortgage Loan, including, but not limited
to, any original documents evidencing
an assumption or modification of any
Mortgage Loan.
The Trustee shall enforce the obligations of the Seller under
the Mortgage Loan Purchase Agreement to
promptly (within sixty Business Days
following the later of the Closing Date and
the date of receipt by the Trustee
of the recording information for a
Mortgage, but in no event later than ninety
days following the Closing Date) submit or
cause to be submitted for recording,
at the expense of the Responsible Party and
at no expense to the Trust Fund, the
Trustee or the Depositor, in the
appropriate public office for real property
records, each Assignment referred to in
Sections 2.01(iii) and (iv) above and
the Depositor shall execute each original
Assignment or cause each original
Assignment to be executed in the following
form: "Deutsche Bank National Trust
Company, as Trustee under the applicable
agreement." In the event that any such
Assignment is lost or returned unrecorded
because of a defect therein, the
Seller shall promptly prepare or cause to
be prepared (at the expense of the
Responsible Party) a substitute Assignment
or cure or cause to be cured such
defect, as the case may be, and thereafter
cause each such Assignment to be duly
recorded. If the Responsible Party is
unable to pay the cost of recording the
Assignments, such expense will be paid by
the Trustee and shall be reimbursable
to the Trustee as an Extraordinary Trust
Fund Expense. Notwithstanding the
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foregoing, the Trustee shall not be
responsible for determining whether any
Assignment delivered by the Depositor
hereunder is in recordable form.
Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing
and to reduce closing costs, the
Assignments shall not be required to be
submitted for recording (except with
respect to any Mortgage Loan located in
Maryland) unless the Trustee or the
Depositor receives written notice that such
failure to record would result in a
withdrawal or a downgrading by any Rating
Agency of the rating on any Class of
Certificates; PROVIDED, HOWEVER, the
Trustee shall enforce the obligations of
the Seller under the Mortgage Loan Purchase
Agreement to submit or cause to be
submitted each Assignment for recording in
the manner described above, at no
expense to the Trust Fund or the Trustee,
upon the earliest to occur of: (i)
reasonable direction by Holders of
Certificates entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a
Servicer Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or
foreclosure relating to the Servicer,
(iv) the occurrence of a servicing transfer
as described in Section 7.02 hereof,
(v) with respect to any one Assignment, the
occurrence of a bankruptcy,
insolvency or foreclosure relating to the
Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days
or more Delinquent. Upon receipt of
written notice by the Trustee from the
Servicer that recording of the
Assignments is required pursuant to one or
more of the conditions set forth in
the preceding sentence, the Depositor shall
be required to deliver such
Assignments or shall cause such Assignments
to be delivered within 30 days
following receipt of such notice.
All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall
be held by or on behalf of the
Seller, the Depositor or the Servicer, as
the case may be, in trust for the
benefit of the Trustee on behalf of the
Certificateholders. In the event that
any such original document is required
pursuant to the terms of this Section to
be a part of a Mortgage File, such document
shall be delivered promptly to the
Trustee. Any such original document
delivered to or held by the Depositor that
is not required pursuant to the terms of
this Section to be a part of a Mortgage
File, shall be delivered promptly to the
Servicer.
The Depositor and the Trustee hereto understand and agree that
it is not intended that any Mortgage Loan
be included in the Trust that is a
"High-Cost Home Loan" as defined by the
Homeownership and Equity Protection Act
of 1994 or any other applicable predatory
or abusive lending laws.
The Depositor hereby directs the Trustee to execute, deliver
and perform its obligations under the Cap
Contracts on the Closing Date and
thereafter on behalf of the Holders of the
Class A Certificates and the
Mezzanine Certificates. The Depositor, the
Servicer and the Holders of the Class
A Certificates and the Mezzanine
Certificates by their acceptance of such
Certificates acknowledge and agree that the
Trustee shall execute, deliver and
perform its obligations under the Cap
Contracts and shall do so solely in its
capacity as Trustee of the Trust Fund and
not in its individual capacity.
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SECTION 2.02 Acceptance of REMIC I by Trustee.
The Trustee, acknowledges receipt, subject to the provisions
of Section 2.01 and subject to any
exceptions noted on the exception report
described in the next paragraph below, of
the documents referred to in Section
2.01 (other than such documents described
in Section 2.01(v)) above and all
other assets included in the definition of
"REMIC I" under clauses (i), (iii),
(iv) and (v) (to the extent of amounts
attributable thereto deposited into the
Distribution Account) and declares that it
holds and will hold such documents
and the other documents delivered to it
constituting a Mortgage File, and that
it holds or will hold all such assets and
such other assets included in the
definition of "REMIC I" in trust for the
exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders,
to review each Mortgage File on or before
the Closing Date and to certify in
substantially the form attached hereto as
Exhibit C-1 that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in
full or any Mortgage Loan specifically
identified in the exception report
annexed thereto as not being covered by
such certification), (i) all documents
constituting part of such Mortgage File
(other than such documents described in
Section 2.01(v)) required to be delivered
to it pursuant to this Agreement are
in its possession, (ii) such documents have
been reviewed by it and appear
regular on their face and relate to such
Mortgage Loan and (iii) based on its
examination and only as to the foregoing,
the information set forth in the
Mortgage Loan Schedule that corresponds to
items (i), (iii), (xi), (xii) and
(xv) of the definition of "Mortgage Loan
Schedule" accurately reflects
information set forth in the Mortgage File.
It is herein acknowledged that, in
conducting such review, the Trustee was
under no duty or obligation (i) to
inspect, review or examine any such
documents, instruments, certificates or
other papers to determine whether they are
genuine, enforceable, valid, legally
binding, effective or appropriate for the
represented purpose or whether they
have actually been recorded or are in
recordable form or that they are other
than what they purport to be on their face,
(ii) to determine whether any
Mortgage File should include any of the
documents specified in clause (v) of
Section 2.01 or (iii) to determine the
perfection or priority of any security
interest in any such documents or
instruments. Notwithstanding the foregoing, in
conducting the review described in this
Section 2.02, the Trustee shall not be
responsible for determining (i) if an
Assignment is sufficient under the laws of
the jurisdiction wherein the related
Mortgaged Property is located to reflect of
record the sale of the Mortgage or (ii) if
a Mortgage creates a first lien on,
or first priority security interest in, a
Mortgaged Property.
Prior to the first anniversary date of this Agreement, the
Trustee shall deliver to the Depositor and
the Servicer a final certification in
the form annexed hereto as Exhibit C-2
evidencing the completeness of the
Mortgage Files, with any applicable
exceptions noted thereon, and the Servicer
shall forward a copy thereof to any
Sub-Servicer.
If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the
certifications referred to above, the
Trustee finds any document or documents
constituting a part of a Mortgage File
to be missing or defective in any material
respect, at the conclusion of its
review the Trustee shall so notify the
Depositor and the Servicer. In addition,
upon the discovery by the Depositor, the
Servicer or the Trustee of a breach of
any of the
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representations and warranties made by
either the Responsible Party or the
Seller in the related Mortgage Loan
Purchase Agreement in respect of any
Mortgage Loan which materially adversely
affects such Mortgage Loan or the
interests of the Certificateholders in such
Mortgage Loan, the party discovering
such breach shall give prompt written
notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report
to such Certificateholder of all
Mortgage Files released to the Servicer for
servicing purposes.
SECTION 2.03 Repurchase or Substitution of Mortgage Loans by
the Originators and the Seller.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a document
is missing from, a Mortgage File or of
the breach by the Responsible Party or the
Seller of any representation,
warranty or covenant under the Mortgage
Loan Purchase Agreement in respect of
any Mortgage Loan that materially adversely
affects the value of such Mortgage
Loan or the interest therein of the
Certificateholders, the Trustee shall
promptly notify the Seller, the Responsible
Party and the Servicer of such
defect, missing document or breach and
request that the Responsible Party or the
Seller, as applicable, deliver such missing
document or cure such defect or
breach within 60 days from the date the
Responsible Party or the Seller, as
applicable, was notified of such missing
document, defect or breach, and if the
Responsible Party or the Seller, as
applicable, does not deliver such missing
document or cure such defect or breach in
all material respects during such
period, the Trustee shall enforce the
obligations of the Responsible Party or
the Seller, as applicable, under the
Mortgage Loan Purchase Agreement to
repurchase such Mortgage Loan from REMIC I
at the Purchase Price within 90 days
after the date on which the Responsible
Party or the Seller, as applicable, was
notified (subject to Section 2.03(c)) of
such missing document, defect or
breach, if and to the extent that the
Responsible Party or the Seller is
obligated to do so under the Mortgage Loan
Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan
shall be remitted to the Servicer for
deposit in the Collection Account and the
Trustee, upon receipt of written
certification from the Servicer of such
deposit, shall release to the
Responsible Party or the Seller, as
applicable, the related Mortgage File and
the Trustee shall execute and deliver such
instruments of transfer or
assignment, in each case without recourse,
as the Responsible Party or the
Seller, as applicable, shall furnish to it
and as shall be necessary to vest in
the Responsible Party or the Seller, as
applicable, any Mortgage Loan released
pursuant hereto. The Trustee shall not have
any further responsibility with
regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as
provided above, if so provided in the
Mortgage Loan Purchase Agreement, the
Responsible Party or the Seller, as
applicable, may cause such Mortgage Loan to
be removed from REMIC I (in which case it
shall become a Deleted Mortgage Loan)
and substitute one or more Qualified
Substitute Mortgage Loans in the manner and
subject to the limitations set forth in
Section 2.03(b). It is understood and
agreed that the obligation of the
Responsible Party and the Seller to cure or to
repurchase (or to substitute for) any
Mortgage Loan as to which a document is
missing, a material defect in a constituent
document exists or as to which such
a breach has occurred and is continuing
shall constitute the sole remedy
respecting such omission, defect or breach
available to the Trustee and the
Certificateholders.
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(b) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to
Section 2.03(a) must be effected
prior to the date which is two years after
the Startup Day for REMIC I.
As to any Deleted Mortgage Loan for which the Responsible
Party or the Seller substitutes a Qualified
Substitute Mortgage Loan or Loans,
such substitution shall be effected by the
Responsible Party or the Seller, as
applicable, delivering to the Trustee, for
such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee,
and such other documents and agreements,
with all necessary endorsements
thereon, as are required by Section 2.01,
together with an Officers' Certificate
providing that each such Qualified
Substitute Mortgage Loan satisfies the
definition thereof and specifying the
Substitution Shortfall Amount (as
described below), if any, in connection
with such substitution. The Trustee
shall acknowledge receipt for such
Qualified Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter,
shall review such documents as
specified in Section 2.02 and deliver to
the Depositor and the Servicer, with
respect to such Qualified Substitute
Mortgage Loan or Loans, a certification
substantially in the form attached hereto
as Exhibit C-1, with any applicable
exceptions noted thereon. Within one year
of the date of substitution, the
Trustee shall deliver to the Depositor and
the Servicer a certification
substantially in the form of Exhibit C-2
hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon.
Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the
month of substitution are not part of REMIC
I and will be retained by the
Responsible Party or the Seller, as
applicable. For the month of substitution,
distributions to Certificateholders will
reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due
Date in the month of substitution,
and the Responsible Party or the Seller, as
applicable, shall thereafter be
entitled to retain all amounts subsequently
received in respect of such Deleted
Mortgage Loan. The Depositor shall give or
cause to be given written notice to
the Certificateholders that such
substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from
the terms of this Agreement and the
substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a
copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such
substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute
part of the Mortgage Pool and shall be
subject in all respects to the terms of
this Agreement and the Mortgage Loan
Purchase Agreement, including, all
applicable representations and warranties
thereof included in the Mortgage Loan
Purchase Agreement.
For any month in which the Responsible Party or the Seller, as
applicable, substitutes one or more
Qualified Substitute Mortgage Loans for one
or more Deleted Mortgage Loans, the
Servicer will determine the amount (the
"Substitution Shortfall Amount"), if any,
by which the aggregate Purchase Price
of all such Deleted Mortgage Loans exceeds
the aggregate of, as to each such
Qualified Substitute Mortgage Loan, the
Stated Principal Balance thereof as of
the date of substitution, together with one
month's interest on such Stated
Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding
Advances and Servicing Advances (including
Nonrecoverable Advances and
Nonrecoverable Servicing Advances) related
thereto. On the date of such
substitution, the Responsible Party or the
Seller, as applicable, will deliver
or cause to be delivered to the Servicer
for deposit in the Collection Account
an amount equal to the Substitution
Shortfall Amount, if any, and the Trustee,
upon receipt of the related Qualified
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Substitute Mortgage Loan or Loans and
certification by the Servicer of such
deposit, shall release to the Responsible
Party or the Seller, as applicable,
the related Mortgage File or Files and the
Trustee shall execute and deliver
such instruments of transfer or assignment,
in each case without recourse, the
Responsible Party or the Seller, as
applicable, shall deliver to it and as shall
be necessary to vest therein any Deleted
Mortgage Loan released pursuant hereto.
In addition, the Responsible Party or the Seller, as
applicable, shall obtain at its own expense
and deliver to the Trustee an
Opinion of Counsel to the effect that such
substitution will not cause (a) any
federal tax to be imposed on any Trust
REMIC, including without limitation, any
federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the
Code or on "contributions after the startup
date" under Section 860G(d)(1) of
the Code, or (b) any Trust REMIC to fail to
qualify as a REMIC at any time that
any Certificate is outstanding.
(c) Upon discovery by the Depositor, the Servicer or the
Trustee 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 within two Business Days give written
notice thereof to the other parties.
In connection therewith, the Responsible
Party shall repurchase or, subject to
the limitations set forth in Section
2.03(b), substitute one or more Qualified
Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the
earlier of discovery or receipt of such
notice with respect to such affected
Mortgage Loan. Any such repurchase or
substitution shall be made in the same
manner as set forth in Section 2.03(a). The
Trustee shall reconvey to the
Responsible Party the Mortgage Loan to be
released pursuant hereto in the same
manner, and on the same terms and
conditions, as it would a Mortgage Loan
repurchased for breach of a representation
or warranty.
SECTION 2.04 Reserved.
SECTION 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of the
Certificateholders and to the Depositor that as
of the Closing Date or as of such date
specifically provided herein:
(i) The Servicer is a corporation duly organized and validly
existing under the laws of the State of California and is duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by the Servicer 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
and to service the Mortgage Loans in accordance with the terms of
this
Agreement;
(ii) The Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver
and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Servicer has duly authorized
the
execution, delivery and performance of this Agreement, has duly
executed
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and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Depositor and the
Trustee,
constitutes a legal, valid and binding obligation of the
Servicer,
enforceable against it in accordance with its terms except as
the
enforceability thereof may be limited by bankruptcy,
insolvency,
reorganization or similar laws affecting the enforcement of
creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Servicer, the servicing of the Mortgage Loans by the Servicer
hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or
compliance
with the terms hereof are in the ordinary course of business of
the
Servicer and will not (A) result in a breach of any term or
provision
of the charter or by-laws of the Servicer or (B) conflict with,
result
in a breach, violation or acceleration of, or result in a
default
under, the terms of any other material agreement or instrument to
which
the Servicer is a party or by which it may be bound, or any
statute,
order or regulation applicable to the Servicer of any court,
regulatory
body,
administrative agency or governmental body having jurisdiction
over the Servicer; and the Servicer is not a party to, bound by, or
in
breach or violation of any indenture or other agreement or
instrument,
or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental
body
having jurisdiction over it, which materially and adversely affects
or,
to the Servicer's knowledge, would in the future materially and
adversely affect, (x) the ability of the Servicer to perform
its
obligations under this Agreement or (y) the business,
operations,
financial condition, properties or assets of the Servicer taken as
a
whole;
(iv) The Servicer is a HUD approved servicer. No event has
occurred, including but not limited to a change in insurance
coverage,
that would make the Servicer unable to comply with HUD
eligibility
requirements or that would require notification to HUD;
(v) The Servicer does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every
covenant
made by it and contained in this Agreement;
(vi) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Servicer
to
service the Mortgage Loans or to perform any of its other
obligations
hereunder in accordance with the terms hereof;
(vii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its
entering
into this Agreement, (B) seeking to prevent the consummation of
the
transactions contemplated by this Agreement or (C) that might
prohibit
or materially and adversely affect the performance by the Servicer
of
its obligations under, or validity or enforceability of, this
Agreement;
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(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Servicer of, or compliance by
the
Servicer with, this Agreement or the consummation by it of the
transactions contemplated by this Agreement, except for such
consents,
approvals, authorizations or orders, if any, that have been
obtained
prior to the Closing Date;
(ix) The Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section
3.01;
and
(x) The Servicer has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and
its
implementing regulations, accurate and complete information
(e.g.,
favorable and unfavorable) on its borrower credit files to
Equifax,
Experian and Trans Union Credit Information Company or their
successors
on a
monthly basis.
It is understood and agreed that the representations,
warranties and covenants set forth in this
Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and
shall inure to the benefit of the
Trustee, the Depositor and the
Certificateholders. Upon discovery by any of the
Depositor, the Servicer or the Trustee of a
breach of any of the foregoing
representations, warranties and covenants
which materially and adversely affects
the value of any Mortgage Loan or the
interests therein of the
Certificateholders, the party discovering
such breach shall give prompt written
notice (but in no event later than two
Business Days following such discovery)
to the Trustee. Subject to Section 7.01,
unless such breach shall not be
susceptible of cure within 90 days, the
obligation of the Servicer set forth in
this Section 2.05 to cure breaches shall
constitute the sole remedy against the
Servicer available to the
Certificateholders, the Depositor and the Trustee on
behalf of the Certificateholders respecting
a breach of the representations,
warranties and covenants contained in this
Section 2.05. Notwithstanding the
foregoing, within 90 days of the earlier of
discovery by the Servicer or receipt
of notice by the Servicer of the breach of
the representation or covenant of the
Servicer set forth in Section 2.05(ix)
above, which breach materially and
adversely affects the interests of the
Holders of the Class P Certificates in
any Prepayment Charge, the Servicer shall
remedy such breach as follows: the
Seller must pay the amount of the scheduled
Prepayment Charge, for the benefit
of the Holders of the Class P Certificates,
by depositing such amount into the
Collection Account, net of any amount
previously collected by the Servicer or
paid by the Servicer, for the benefit of
the Holders of the Class P
Certificates, in respect of such Prepayment
Charge.
SECTION 2.06 Issuance of the REMIC I Regular Interests and the
Class R-I Interest.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the
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.
Concurrently with such assignment and
delivery and in exchange therefor, the
Trustee, pursuant to the written request of
the Depositor executed by an officer
of the Depositor, has executed,
authenticated and delivered to or upon the order
of the Depositor, the Class R Certificates
(in respect of the Class R-I
Interest) in authorized denominations.
The
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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 Class R-I Interest and REMIC
II (as holder of the REMIC I Regular
Interest) to receive distributions from the
proceeds of REMIC I in respect of
the Class R-I Interest and the REMIC I
Regular Interests, 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;
Acceptance of REMIC II by the Trustee.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set
over and otherwise convey to the
Trustee, without recourse all the right,
title and interest of the Depositor in
and to the REMIC I Regular Interests for
the benefit of the Class R-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 Class R-II Interest and REMIC II
(as holder of the REMIC I Regular
Interests). The rights 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 REMIC II Regular Interests,
respectively, and all ownership interests
evidenced or constituted by the Class
R-II Interest and the REMIC II Regular
Interests, shall be as set forth in this
Agreement.
SECTION 2.08 Issuance of Class R Certificates.
The Trustee acknowledges the assignment to it of the REMIC
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.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF
THE MORTGAGE LOANS
SECTION 3.01 Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans
on behalf of the Trust Fund and in the best
interests 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 respective
Mortgage Loans and, to the extent
consistent with such terms, in the same manner
in which it services and administers
similar mortgage loans for its own
portfolio, giving due consideration to
customary and usual standards of practice
of mortgage lenders and loan servicers
administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Sub-Servicer or
any Affiliate of the Servicer or any Sub-Servicer may have with
the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer (a)
shall seek to maximize the timely and
complete recovery of principal and
interest on the Mortgage Notes and (b)
shall waive (or permit a Sub-Servicer to
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 would, in the
reasonable judgement 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 or an applicable
Sub-Servicer an intention to
refinance the related Mortgage Loan and (y)
the Servicer has concluded in its
reasonable judgement that the waiver of
such Prepayment Charge would induce such
mortgagor to refinance with the Servicer or
(iii) collection of the related
Prepayment Charge would violate applicable
law. If a Prepayment Charge is waived
as permitted by meeting both of the
standards described in clauses (i) and
(ii)(B) or (iii) above, then the Servicer
is required to 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 Collection Account together
with and at the time that the amount
prepaid on the related Mortgage Loan is
required to be deposited into the
Collection Account. Notwithstanding any other
provisions of this Agreement, any payments
made by the Servicer in respect of
any
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waived Prepayment Charges pursuant to
clauses (i) and (ii)(B) shall be deemed to
be paid outside of the Trust Fund.
Subject only to the above-described servicing standards and
the terms of this Agreement and of the
respective Mortgage Loans, the Servicer
shall have full power and authority, acting
alone or through Sub-Servicers as
provided in Section 3.02, to do or cause to
be done any and all things in
connection with such servicing and
administration which it may deem necessary or
desirable. Without limiting the generality
of the foregoing, the Servicer in its
own name or in the name of a Sub-Servicer
is hereby authorized and empowered by
the Trustee when the Servicer believes it
appropriate in its best judgment in
accordance with the servicing standards set
forth above, to execute and deliver,
on behalf of the Trust Fund, the
Certificateholders and the Trustee or any of
them, and upon written notice to the
Trustee, 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 the
Mortgaged Properties and to institute
foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to
convert the ownership of such properties,
and to hold or cause to be held title to
such properties, on behalf of the
Trustee and Certificateholders. The
Servicer shall service and administer the
Mortgage Loans in accordance with
applicable state and federal law and shall
provide to the Mortgagors any reports
required to be provided to them thereby.
The Servicer shall also comply in the
performance of this Agreement with all
reasonable rules and requirements of each
insurer under any standard hazard
insurance policy. Subject to Section 3.17,
the Trustee shall execute, at the
written request of the Servicer, and
furnish to the Servicer and any
Sub-Servicer any special or limited powers
of attorney and other documents
necessary or appropriate to enable the
Servicer or any Sub-Servicer to carry out
their servicing and administrative duties
hereunder and the Trustee shall not be
liable for the actions of the Servicer or
any Sub-Servicers under such powers of
attorney.
Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the
Servicer shall advance or cause to be
advanced funds as necessary for the purpose
of effecting the timely payment of
taxes and assessments on the Mortgaged
Properties, which advances shall be
Servicing Advances reimbursable in the
first instance from related collections
from the Mortgagors pursuant to Section
3.09, and further as provided in Section
3.11. Any cost incurred by the Servicer or
by Sub-Servicers in effecting the
timely payment of taxes and assessments on
a Mortgaged Property shall not, for
the purpose of calculating distributions to
Certificateholders, be added to the
unpaid principal balance of the related
Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future
advances with respect to a Mortgage Loan
(except as provided in Section 4.03) and
the Servicer shall not (i) permit any
modification with respect to any Mortgage
Loan that would change the Mortgage
Rate, reduce or increase the principal
balance (except for reductions resulting
from actual payments of principal) or
change the final maturity date on such
Mortgage Loan (unless, as provided in
Section 3.07, the Mortgagor is in default
with respect to the Mortgage Loan or such
default is, in the judgment of the
Servicer, reasonably foreseeable) or (ii)
permit any modification, waiver or
amendment of any term of any Mortgage Loan
that would both (A) effect an
exchange or reissuance of such Mortgage
Loan under Section 1001 of the
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Code (or Treasury regulations promulgated
thereunder) and (B) cause any Trust
REMIC to fail to qualify as a REMIC under
the Code or the imposition of any tax
on "prohibited transactions" or
"contributions after the startup date" under the
REMIC Provisions.
The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such
delegation shall release the Servicer
from the responsibilities or liabilities
arising under this Agreement.
SECTION 3.02 Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and
administration of the Mortgage Loans;
provided, however, that such agreements
would not result in a withdrawal or a
downgrading by any Rating Agency of the
rating on any Class of Certificates. The
Trustee is hereby authorized to
acknowledge, at the request of the Servicer, any
Sub-Servicing Agreement that, based on an
Officers' Certificate of the Servicer
delivered to the Trustee (upon which the
Trustee can conclusively rely), meets
the requirements applicable to
Sub-Servicing Agreements set forth in this
Agreement and that is otherwise permitted
under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related
Mortgaged Properties it is to service
are situated, if and to the extent required
by applicable law to enable the
Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing
Agreement and (ii) a Freddie Mac or Fannie
Mae approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the
Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08
and provide for servicing of the
Mortgage Loans consistent with the terms of
this Agreement. The Servicer will
examine each Sub-Servicing Agreement and
will be familiar with the terms
thereof. The terms of any Sub-Servicing
Agreement will not be inconsistent with
any of the provisions of this Agreement.
The Servicer and the Sub-Servicers may
enter into and make amendments to the
Sub-Servicing Agreements or enter into
different forms of Sub-Servicing
Agreements; provided, however, that any such
amendments or different forms shall be
consistent with and not violate the
provisions of this Agreement, and that no
such amendment or different form shall
be made or entered into which could be
reasonably expected to be materially
adverse to the interests of the
Certificateholders without the consent of the
Holders of Certificates entitled to at
least 66% of the Voting Rights; provided,
further, that the consent of the Holders of
Certificates entitled to at least
66% of the Voting Rights shall not be
required (i) to cure any ambiguity or
defect in a Sub-Servicing Agreement, (ii)
to correct, modify or supplement any
provisions of a Sub-Servicing Agreement, or
(iii) to make any other provisions
with respect to matters or questions
arising under a Sub-Servicing Agreement,
which, in each case, shall not be
inconsistent with the provisions of this
Agreement. Any variation without the
consent of the Holders of Certificates
entitled to at least 66% of the Voting
Rights from the provisions set forth in
Section 3.08 relating to insurance or
priority requirements of Sub-Servicing
Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and
amount of remittances by the Sub-Servicers
to the Servicer, are conclusively
deemed to be inconsistent with this
Agreement and therefore prohibited. The
Servicer shall deliver to the Trustee, upon
its request, copies of all
Sub-Servicing Agreements,
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and any amendments or modifications
thereof, promptly upon the Servicer's
execution and delivery of such
instruments.
(b) As part of its servicing activities hereunder, the
Servicer, for the benefit of the Trustee
and the Certificateholders, shall
enforce the obligations of each
Sub-Servicer under the related Sub-Servicing
Agreement, including, without limitation,
any obligation of a Sub-Servicer to
make advances in respect of delinquent
payments as required by a Sub-Servicing
Agreement. Such enforcement, including,
without limitation, the legal
prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in
such form and carried out to such an
extent and at such time as the Servicer, in
its good faith business judgment,
would require were it the owner of the
related Mortgage Loans. The Servicer
shall pay the costs of enforcing the
obligations of a Sub-Servicer at its own
expense, and shall be reimbursed therefor
only (i) from a general recovery
resulting from such enforcement, to the
extent, if any, that such recovery
exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a
specific recovery of costs, expenses or
attorneys' fees against the party
against whom such enforcement is
directed.
SECTION 3.03 Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of
any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with
the terms and conditions of such
Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer
shall be assumed simultaneously by
the Servicer without any act or deed on the
part of such Sub-Servicer or the
Servicer, and the Servicer either shall
service directly the related Mortgage
Loans or shall enter into a Sub-Servicing
Agreement with a successor
Sub-Servicer which qualifies under Section
3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately
terminated by the Trustee (if the Trustee is
acting as Servicer) without fee, in
accordance with the terms of this Agreement,
in the event that the Servicer (or the
Trustee, if it is then acting as
Servicer) shall, for any reason, no longer
be the Servicer (including
termination due to a Servicer Event of
Default).
SECTION 3.04 Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or
arrangements between the Servicer
and a Sub-Servicer or reference to actions
taken through a Sub-Servicer or
otherwise, the Servicer shall remain
obligated and primarily liable to the
Trustee and the Certificateholders for the
servicing and administering of the
Mortgage Loans in accordance with the
provisions of Section 3.01 without
diminution of such obligation or liability
by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer
and to the same extent and under the same
terms and conditions as if the
Servicer alone were servicing and
administering the Mortgage Loans. The Servicer
shall be entitled to enter into any
agreement with a Sub-Servicer for
indemnification of the Servicer by such
Sub-
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Servicer and nothing contained in this
Agreement shall be deemed to limit or
modify such indemnification.
SECTION 3.05 No Contractual Relationship Between
Sub-Servicers, the Trustee or
the Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the
Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to
be between the Sub-Servicer and the
Servicer alone, and the Trustee and the
Certificateholders shall not be deemed
parties thereto and shall have no claims,
rights, obligations, duties or
liabilities with respect to the
Sub-Servicer except as set forth in Section
3.06. The Servicer shall be solely liable
for all fees owed by it to any
Sub-Servicer, irrespective of whether the
Servicer's compensation pursuant to
this Agreement is sufficient to pay such
fees.
SECTION 3.06 Assumption or Termination of Sub-Servicing
Agreements by the Trustee.
In the event the Servicer shall for any reason no longer be
the Servicer (including by reason of the
occurrence of a Servicer Event of
Default), the Trustee, its designee or
other successor Servicer shall thereupon
assume all of the rights and obligations of
the Servicer under each
Sub-Servicing Agreement that the Servicer
may have entered into, unless the
Trustee, such designee or other successor
Servicer elects to terminate any
Sub-Servicing Agreement in accordance with
its terms as provided in Section
3.03. Upon such assumption, the Trustee,
its designee or the successor Servicer
for the Trustee appointed pursuant to
Section 7.02 shall be deemed, subject to
Section 3.03, to have assumed all of the
Servicer's interest therein and to have
replaced the Servicer as a party to each
Sub-Servicing Agreement to the same
extent as if each Sub-Servicing Agreement
had been assigned to the assuming
party, except that (i) the Servicer shall
not thereby be relieved of any
liability or obligations under any
Sub-Servicing Agreement that arose before it
ceased to be the Servicer and (ii) none of
the Trustee, its designee or any
successor Servicer shall be deemed to have
assumed any liability or obligation
of the Servicer that arose before it ceased
to be the Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all
documents and records relating to
each Sub-Servicing Agreement and the
Mortgage Loans then being serviced and an
accounting of amounts collected and held by
or on behalf of it, and otherwise
use its best efforts to effect the orderly
and efficient transfer of the
Sub-Servicing Agreements to the assuming
party.
The Servicing Fee payable to the Trustee as successor Servicer
or other successor Servicer shall be
payable from payments received on the
Mortgage Loans in the amount and in the
manner set forth in this Agreement.
SECTION 3.07 Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts to collect all
payments called for under the terms and
provisions of the Mortgage Loans, and
shall, to the extent such procedures shall
be
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consistent with this Agreement and the
terms and provisions of any applicable
insurance policies, follow such collection
procedures as it would follow with
respect to mortgage loans comparable to the
Mortgage Loans and held for its own
account. Consistent with the foregoing, the
Servicer may in its discretion (i)
waive any late payment charge or, if
applicable, any penalty interest, or (ii)
extend the due dates for the Monthly
Payments due on a Mortgage Note for a
period of not greater than 180 days;
provided, however, that any extension
pursuant to clause (ii) above shall not
affect the amortization schedule of any
Mortgage Loan for purposes of any
computation hereunder, except as provided
below. In the event of any such arrangement
pursuant to clause (ii) above, the
Servicer shall make timely advances on such
Mortgage Loan during such extension
pursuant to Section 4.03 and in accordance
with the amortization schedule of
such Mortgage Loan without modification
thereof by reason of such arrangement.
Notwithstanding the foregoing, in the event
that any Mortgage Loan is in default
or, in the judgment of the Servicer, such
default is reasonably foreseeable, the
Servicer, consistent with the standards set
forth in Section 3.01, may also
waive, modify or vary any term of such
Mortgage Loan (including modifications
that would change the Mortgage Rate,
forgive the payment of principal or
interest or extend the final maturity date
of such Mortgage Loan), accept
payment from the related Mortgagor of an
amount less than the Stated Principal
Balance in final satisfaction of such
Mortgage Loan (such payment, a "Short
Pay-off"), or consent to the postponement
of strict compliance with any such
term or otherwise grant indulgence to any
Mortgagor.
SECTION 3.08 Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub-Servicing Agreement,
the Sub-Servicer will be required to
establish and maintain one or more accounts
(collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall
be an Eligible Account and shall
comply with all requirements of this
Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in
the clearing account in which it
customarily deposits payments and
collections on mortgage loans in connection
with its mortgage loan servicing activities
on a daily basis, and in no event
more than one Business Day after the
Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the
Sub-Servicer less its servicing
compensation to the extent permitted by the
Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the
Sub-Servicing Account, in no event more
than two Business Days after the receipt of
such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the
Collection Account or remit such
proceeds to the Servicer for deposit in the
Collection Account not later than
two Business Days after the deposit of such
amounts in the Sub-Servicing
Account. For purposes of this Agreement,
the Servicer shall be deemed to have
received payments on the Mortgage Loans
when the Sub-Servicer receives such
payments.
SECTION 3.09 Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Servicer shall establish and maintain, or cause to be
established and maintained, one or more
accounts (the "Servicing Accounts"),
into which all collections from the
Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes,
assessments, hazard insurance premiums
and comparable items for the account of the
Mortgagors ("Escrow Payments") shall
be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The
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Servicer shall deposit in the clearing
account in which it customarily deposits
payments and collections on mortgage loans
in connection with its mortgage loan
servicing activities on a daily basis, and
in no event more than one Business
Day after the Servicer's receipt thereof,
all Escrow Payments collected on
account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments
in the Servicing Accounts, in no event more
than two Business Days after the
receipt of such Escrow Payments, all Escrow
Payments collected on account of the
Mortgage Loans for the purpose of effecting
the payment of any such items as
required under the terms of this Agreement.
Withdrawals of amounts from a
Servicing Account may be made only to (i)
effect payment of taxes, assessments,
hazard insurance premiums, and comparable
items in a manner and at a time that
assures that the lien priority of the
Mortgage is not jeopardized (or, with
respect to the payment of taxes, in a
manner and at a time that avoids the loss
of the Mortgaged Property due to a tax sale
or the foreclosure as a result of a
tax lien); (ii) reimburse the Servicer (or
a Sub-Servicer to the extent provided
in the related Sub-Servicing Agreement) out
of related collections for any
advances made pursuant to Section 3.01
(with respect to taxes and assessments)
and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors
any sums as may be determined to be
overages; (iv) pay interest, if required and
as described below, to Mortgagors on
balances in the Servicing Account; or (v)
clear and terminate the Servicing Account
at the termination of the Servicer's
obligations and responsibilities in respect
of the Mortgage Loans under this
Agreement in accordance with Article IX. As
part of its servicing duties, the
Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in the
Servicing Accounts, to the extent required
by law and, to the extent that
interest earned on funds in the Servicing
Accounts is insufficient, to pay such
interest from its or their own funds,
without any reimbursement therefor.
SECTION 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish
and maintain, or cause to be established
and maintained, one or more accounts
(such account or accounts, the "Collection
Account"), held in trust for the
benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund,
the Servicer shall deposit or cause to be
deposited in the clearing account in
which it customarily deposits payments and
collections on mortgage loans in
connection with its mortgage loan servicing
activities on a daily basis, and in
no event more than one Business Day after
the Servicer's receipt thereof, and
shall thereafter deposit in the Collection
Account, in no event more than two
Business Days after the Servicer's receipt
thereof, as and when received or as
otherwise required hereunder, the following
payments and collections received or
made by it subsequent to the Cut-off Date
(other than in respect of principal or
interest on the related Mortgage Loans due
on or before the Cut-off Date), or
payments (other than Principal Prepayments)
received by it on or prior to the
Cut-off Date but allocable to a Due Period
subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
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(iii) all Insurance Proceeds, Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property
and
amounts paid in connection with a purchase of Mortgage Loans and
REO
Properties
pursuant to Section 9.01) and Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted
Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of
any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03, Section 3.16 or
Section
9.01;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage
Loans
pursuant to Section 2.03; and
(viii) all Prepayment Charges collected by the Servicer in
connection with the Principal Prepayment of any of the Mortgage
Loans.
The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being
understood and agreed that, without
limiting the generality of the foregoing,
payments in the nature of late payment
charges, modification or assumption fees,
or insufficient funds charges need not
be deposited by the Servicer in the
Collection Account and may be retained by
the Servicer as additional compensation. In
the event the Servicer shall deposit
in the Collection Account any amount not
required to be deposited therein, it
may at any time withdraw such amount from
the Collection Account, any provision
herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such
account or accounts, the "Distribution
Account"), held in trust for the benefit of
the Trustee, the Trust Fund and the
Certificateholders. On behalf of the Trust
Fund, the Servicer shall deliver to
the Trustee in immediately available funds
for deposit in the Distribution
Account by 1:00 p.m. New York time (i) on
the Servicer Remittance Date, that
portion of the Available Distribution
Amount (calculated without regard to the
references in clause (2) of the definition
thereof to amounts that may be
withdrawn from the Distribution Account)
for the related Distribution Date then
on deposit in the Collection Account and
the amount of all Prepayment Charges
collected by the Servicer in connection
with the Principal Prepayment of any of
the Mortgage Loans then on deposit in the
Collection Account and the amount of
any funds reimbursable to an Advancing
Person pursuant to Section 3.26 and (ii)
on each Business Day as of the commencement
of which the balance on deposit in
the Collection Account exceeds $75,000
following any withdrawals pursuant to the
next succeeding sentence, the amount of
such excess, but only if the Collection
Account constitutes an Eligible Account
solely pursuant to clause (ii) of the
definition of "Eligible Account." If the
balance on deposit in the Collection
Account exceeds $75,000 as of the
commencement of business on any Business Day
and the Collection Account constitutes an
Eligible Account solely pursuant to
clause (ii) of
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the definition of "Eligible Account," the
Servicer shall, by 1:00 p.m. New York
time on such Business Day, withdraw from
the Collection Account any and all
amounts payable or reimbursable to the
Depositor, the Servicer, the Trustee, the
Responsible Party, the Seller or any
Sub-Servicer pursuant to Section 3.11 and
shall pay such amounts to the Persons
entitled thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted
Investments in accordance with the
provisions set forth in Section 3.12. The
Servicer shall give notice to the
Trustee of the location of the Collection
Account maintained by it when
established and prior to any change
thereof. The Trustee shall give notice to
the Servicer and the Depositor of the
location of the Distribution Account when
established and prior to any change
thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Servicer to the Trustee
for deposit in an account (which may be
the Distribution Account and must satisfy
the standards for the Distribution
Account as set forth in the definition
thereof) and for all purposes of this
Agreement shall be deemed to be a part of
the Collection Account (and in such
event, the Servicer shall provide the
Trustee with written instructions
regarding the investment of such funds);
provided, however, that the Trustee
shall have the sole authority to withdraw
any funds held pursuant to this
subsection (d). In the event the Servicer
shall deliver to the Trustee for
deposit in the Distribution Account any
amount not required to be deposited
therein, it may at any time request in
writing that the Trustee withdraw such
amount from the Distribution Account and
remit to it any such amount, any
provision herein to the contrary
notwithstanding. In no event shall the Trustee
incur liability as a result of withdrawals
from the Distribution Account at the
direction of the Servicer in accordance
with the immediately preceding sentence.
In addition, the Servicer shall deliver to
the Trustee from time to time for
deposit, and the Trustee shall so deposit,
in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.03;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 9.01; and
(iv) any amounts required to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfall.
(e) The Servicer shall deposit in the Collection Account any
amounts required to be deposited pursuant
to Section 3.12(b) in connection with
losses realized on Permitted Investments
with respect to funds held in the
Collection Account (and the Distribution
Account to the extent that funds
therein are deemed to be part of the
Collection Account).
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SECTION 3.11 Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the
following purposes or as described in
Section 4.03:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to
Section
3.10(b) or permitted to be so remitted pursuant to the first
sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for
Advances, but only to the extent of amounts received which
represent
Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such Advances
were
made in accordance with the provisions of Section 4.03;
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer, as applicable, (a) any unpaid Servicing Fees, (b)
any
unreimbursed Servicing Advances with respect to each Mortgage Loan,
but
only to the extent of any Late Collections, Liquidation
Proceeds,
Insurance Proceeds and Subsequent Recoveries received with respect
to
such Mortgage Loan and (c) any Nonrecoverable Servicing Advances
with
respect to the final liquidation of a Mortgage Loan, but only to
the
extent that Late Collections, Liquidation Proceeds, Insurance
Proceeds
and Subsequent Recoveries received with respect to such Mortgage
Loan
are insufficient to reimburse the Servicer or any Sub-Servicer
for
Servicing Advances;
(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date
any
interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Servicer, the Depositor, the Responsible
Party or the Seller, as the case may be, with respect to each
Mortgage
Loan that has previously been purchased or replaced pursuant to
Section
2.03 or Section 3.16(c) all amounts received thereon subsequent to
the
date of purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for any Advance previously made
which the Servicer has determined to be a Nonrecoverable Advance
in
accordance with the provisions of Section 4.03;
(vii) to reimburse the Servicer or the Depositor for expenses
incurred by or reimbursable to the Servicer or the Depositor, as
the
case may be, pursuant to Section 3.02(b) and Section 6.03;
(viii) to reimburse the Servicer or Trustee for expenses
reasonably incurred in connection with any breach or defect giving
rise
to the purchase obligation under Section 2.03 of this
Agreement,
including any expenses arising out of the enforcement of the
purchase
obligation;
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(ix) to pay, or to reimburse the Servicer for Servicing
Advances in
respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 9.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for
the purpose of justifying any
withdrawal from the Collection Account, to
the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii),
(iv), (v), (vi), (viii) and (ix) above.
The Servicer shall provide written
notification to the Trustee, on or prior to
the next succeeding Servicer Remittance
Date, upon making any withdrawals from
the Collection Account pursuant to
subclauses (vi) and (vii) above; provided
that an Officers' Certificate in the form
described under Section 4.03(d) shall
suffice for such written notification to
the Trustee in respect of clause (vi)
hereof.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of
the following purposes, without
priority:
(i) to make distributions to Certificateholders in accordance
with Section 4.01;
(ii) to pay to itself amounts to which it is entitled pursuant
to Section 8.05 or for Extraordinary Trust Fund Expenses;
(iii) to reimburse itself pursuant to Section 7.02;
(iv) to pay any amounts in respect of taxes pursuant to
Section 10.01(g)(iii);
(v) to pay to an Advancing Person reimbursements for Advances
and/or Servicing Advances pursuant to Section 3.26; and
(vi) to clear and terminate the Distribution Account pursuant
to Section 9.01.
SECTION 3.12 Investment of Funds in the Collection Account and
the Distribution Account.
(a) The Servicer may direct any depository institution
maintaining the Collection Account (for
purposes of this Section 3.12, an
"Investment Account") to invest the funds
in such Investment Account in one or
more Permitted Investments bearing interest
or sold at a discount, and maturing,
unless payable on demand, (i) no later than
the Business Day immediately
preceding the date on which such funds are
required to be withdrawn from such
account pursuant to this Agreement, if a
Person other than the Trustee is the
obligor thereon, and (ii) no later than the
date on which such funds are
required to be withdrawn from such account
pursuant to this Agreement, if the
Trustee is the obligor thereon. Amounts in
the Distribution Account shall be
held uninvested. All such Permitted
Investments shall be held to maturity,
unless payable on demand. Any investment of
funds in an Investment Account shall
be made in the name of the Trustee for the
benefit of the Certificateholders.
The Trustee shall be entitled to
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sole possession (except with respect to
investment direction of funds held in
the Collection Account and any income and
gain realized thereon) over each such
investment, and any certificate or other
instrument evidencing any such
investment shall be delivered directly to
the Trustee or its agent, together
with any document of transfer necessary to
transfer title to such investment to
the Trustee or its nominee. In the event
amounts on deposit in an Investment
Account are at any time invested in a
Permitted Investment payable on demand,
the party with investment discretion over
such Investment Account shall:
&
