Exhibit 4.1
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OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Master Servicer
and
[--------------------------------------],
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [__________]
---------------------------
[_____________________], Series [_______]
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.......................................................................
SECTION 1.02. Accounting..........................................................................
SECTION 1.03. Allocation of Certain Interest Shortfalls...........................................
SECTION 1.04. Rights of the NIMS Insurer..........................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans........................................................
SECTION 2.02. Acceptance by Trustee...............................................................
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originator......................
SECTION 2.04. Intentionally Omitted...............................................................
SECTION 2.05. Representations, Warranties and Covenants of the Master Servicer....................
SECTION 2.06. Representations and Warranties of the Depositor.....................................
SECTION 2.07. Issuance of Certificates............................................................
SECTION 2.08. Reserved............................................................................
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance of REMIC 2, REMIC 3,
REMIC 4, REMIC 5 and REMIC 6 by the Trustee; Issuance of Certificates...............
SECTION 2.10. Negative Covenants of the Trustee and the Master Servicer...........................
SECTION 2.11. Puposes and Powers of the Trust.....................................................
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer...........................................
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers..................
SECTION 3.03. Successor Sub-Servicers.............................................................
SECTION 3.04. Liability of the Master Servicer....................................................
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the
Trustee or Certificateholders.......................................................
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee....................
SECTION 3.07. Collection of Certain Mortgage Loan Payments........................................
SECTION 3.08. Sub-Servicing Accounts..............................................................
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts..............
SECTION 3.10. Collection Account and Distribution Account.........................................
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account....................
SECTION 3.12. Investment of Funds in the Collection Account and the Distribution Account..........
SECTION 3.13. [Reserved]..........................................................................
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage......
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements...........................
SECTION 3.16. Realization Upon Defaulted Mortgage Loans...........................................
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.....................................
SECTION 3.18. Servicing Compensation..............................................................
SECTION 3.19. Reports to the Trustee; Collection Account Statements...............................
SECTION 3.20. Statement as to Compliance..........................................................
SECTION 3.21. Assessments of Compliance and Attestation Reports...................................
SECTION 3.22. Access to Certain Documentation.....................................................
SECTION 3.23. Title, Management and Disposition of REO Property...................................
SECTION 3.24. Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls..........................................................................
SECTION 3.25. Commission Reporting................................................................
SECTION 3.26. Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly
Payments............................................................................
SECTION 3.27. Solicitations.......................................................................
SECTION 3.28. Net WAC Rate Carryover Reserve Account..............................................
SECTION 3.29. Advancing Facility..................................................................
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.......................................................................
SECTION 4.02. [Reserved]..........................................................................
SECTION 4.03. Statements..........................................................................
SECTION 4.04. Remittance Reports; Advances........................................................
SECTION 4.05. Swap Account........................................................................
SECTION 4.06. Distributions on the REMIC Regular Interests........................................
SECTION 4.07. Allocation of Realized Losses.......................................................
SECTION 4.08. Tax Treatment of Swap Payments and Swap Termination Payments........................
SECTION 4.09. [Reserved]..........................................................................
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates....................................................................
SECTION 5.02. Registration of Transfer and Exchange of Certificates...............................
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...................................
SECTION 5.04. Persons Deemed Owners...............................................................
SECTION 5.05. Appointment of Paying Agent.........................................................
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Master Servicer and the Depositor..................................
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Master
Servicer or the Depositor...........................................................
SECTION 6.03. Limitation on Liability of the Master Servicer and Others...........................
SECTION 6.04. Master Servicer Not to Resign.......................................................
SECTION 6.05. Delegation of Duties................................................................
SECTION 6.06. [Reserved]..........................................................................
SECTION 6.07. Inspection..........................................................................
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Termination...............................................
SECTION 7.02. Trustee to Act; Appointment of Successor............................................
SECTION 7.03. Waiver of Defaults..................................................................
SECTION 7.04. Notification to Certificateholders..................................................
SECTION 7.05. Survivability of Master Servicer Liabilities........................................
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee...................................................................
SECTION 8.02. Certain Matters Affecting the Trustee...............................................
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans...............................
SECTION 8.04. Trustee May Own Certificates........................................................
SECTION 8.05. Trustee Fee and Expenses............................................................
SECTION 8.06. Eligibility Requirements for Trustee................................................
SECTION 8.07. Resignation or Removal of Trustee...................................................
SECTION 8.08. Successor Trustee...................................................................
SECTION 8.09. Merger or Consolidation of Trustee..................................................
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.......................................
SECTION 8.11. Limitation of Liability.............................................................
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.......................
SECTION 8.13. Suits for Enforcement...............................................................
SECTION 8.14. Waiver of Bond Requirement..........................................................
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement...........................
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration................................................................
SECTION 9.02. Prohibited Transactions and Activities..............................................
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status..............
ARTICLE X
TERMINATION
SECTION 10.01. Termination.........................................................................
SECTION 10.02. Additional Termination Requirements.................................................
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment...........................................................................
SECTION 11.02. Recordation of Agreement; Counterparts..............................................
SECTION 11.03. Limitation on Rights of Certificateholders..........................................
SECTION 11.04. Governing Law; Jurisdiction.........................................................
SECTION 11.05. Notices.............................................................................
SECTION 11.06. Severability of Provisions..........................................................
SECTION 11.07. Article and Section References......................................................
SECTION 11.08. Notice to the Rating Agencies and the NIMS Insurer..................................
SECTION 11.09. Further Assurances..................................................................
SECTION 11.10. Third Party Rights..................................................................
SECTION 11.11. Benefits of Agreement...............................................................
SECTION 11.12. Acts of Certificateholders..........................................................
SECTION 11.13. No Petition.........................................................................
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class A-3 Certificates
Exhibit A-4 Form of Class A-4 Certificates
Exhibit A-5 Form of Class M-1 Certificates
Exhibit A-6 Form of Class M-2 Certificates
Exhibit A-7 Form of Class M-3 Certificates
Exhibit A-8 Form of Class M-4 Certificates
Exhibit A-9 Form of Class M-5 Certificates
Exhibit A-10 Form of Class M-6 Certificates
Exhibit A-11 Form of Class M-7 Certificates
Exhibit A-12 Form of Class M-8 Certificates
Exhibit A-13 Form of Class M-9 Certificates
Exhibit A-14 Form of Class M-10 Certificates
Exhibit A-15 Form of Class M-11 Certificates
Exhibit A-16 [Reserved]
Exhibit A-17 Form of Class C Certificates
Exhibit A-18 Form of Class P Certificates
Exhibit A-19 Form of Class R Certificates
Exhibit A-20 Form of Class R-X Certificates
Exhibit B [Reserved]
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Loss Mitigation Procedures
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Interest Rate Swap Agreement
Exhibit J Form of Investment Letter
Exhibit K Form of Residual Certificates Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N Form of Swap Administration Agreement
Exhibit O [Reserved]
Exhibit P [Reserved]
Exhibit R-1 Form of Certification to Be Provided by the Depositor with Form 10-K
Exhibit R-2 Form of Certification to Be Provided to Depositor by the Trustee
Exhibit S Annual Statement of Compliance pursuant to Section 3.20
Schedule I Prepayment Charge Schedule
This Pooling and Servicing Agreement is dated as of [________] (the
"Agreement"), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as depositor
(the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as master servicer (the
"Master Servicer") and [___________________________________], as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of twenty one classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-4 Certificates,
(v) the Class M-1 Certificates, (vi) the Class M-2 Certificates, (vii) the Class
M-3 Certificates, (viii) the Class M-4 Certificates, (ix) the Class M-5
Certificates, (x) the Class M-6 Certificates, (xi) the Class M-7 Certificates,
(xii) the Class M-8 Certificates, (xiii) the Class M-9 Certificates, (xiv) the
Class M-10 Certificates, (xv) the Class M-11 Certificates, (xvi) the Class C
Certificates, (xvii) the Class P Certificates, (xviii) the Class R Certificates
and (xix) the Class R-X Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Group I Mortgage Loans, the Group II
Mortgage Loans and certain other related assets subject to this Agreement (but
exclusive of the Net WAC Rate Carryover Reserve Account, the Master Servicer
Prepayment Charge Payment Amounts, the Swap Account and the Interest Rate Swap
Agreement) as a real estate investment conduit (a "REMIC") for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
1." The Class R-1 Interest will represent the sole class of "residual interests"
in REMIC 1 for purposes of the REMIC Provisions under federal income tax law.
The following table irrevocably sets forth the designation, the Uncertificated
REMIC 1 Pass-Through Rate, the initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be certificated.
REMIC 1I Initial Latest Possible
Designation Remittance Rate(2) Uncertificated Balance Maturity Date(1)
----------- ------------------ ---------------------- ----------------
I Variable [$_____________] [__________, ____]
I-1-A Variable [$_____________] [__________, ____]
I-1-B Variable [$_____________] [__________, ____]
I-2-A Variable [$_____________] [__________, ____]
I-2-B Variable [$_____________] [__________, ____]
I-3-A Variable [$_____________] [__________, ____]
I-3-B Variable [$_____________] [__________, ____]
I-4-A Variable [$_____________] [__________, ____]
I-4-B Variable [$_____________] [__________, ____]
I-5-A Variable [$_____________] [__________, ____]
I-5-B Variable [$_____________] [__________, ____]
I-6-A Variable [$_____________] [__________, ____]
I-6-B Variable [$_____________] [__________, ____]
I-7-A Variable [$_____________] [__________, ____]
I-7-B Variable [$_____________] [__________, ____]
I-8-A Variable [$_____________] [__________, ____]
I-8-B Variable [$_____________] [__________, ____]
I-9-A Variable [$_____________] [__________, ____]
I-9-B Variable [$_____________] [__________, ____]
I-10-A Variable [$_____________] [__________, ____]
I-10-B Variable [$_____________] [__________, ____]
I-11-A Variable [$_____________] [__________, ____]
I-11-B Variable [$_____________] [__________, ____]
I-12-A Variable [$_____________] [__________, ____]
I-12-B Variable [$_____________] [__________, ____]
I-13-A Variable [$_____________] [__________, ____]
I-13-B Variable [$_____________] [__________, ____]
I-14-A Variable [$_____________] [__________, ____]
I-14-B Variable [$_____________] [__________, ____]
I-15-A Variable [$_____________] [__________, ____]
I-15-B Variable [$_____________] [__________, ____]
I-16-A Variable [$_____________] [__________, ____]
I-16-B Variable [$_____________] [__________, ____]
I-17-A Variable [$_____________] [__________, ____]
I-17-B Variable [$_____________] [__________, ____]
I-18-A Variable [$_____________] [__________, ____]
I-18-B Variable [$_____________] [__________, ____]
I-19-A Variable [$_____________] [__________, ____]
I-19-B Variable [$_____________] [__________, ____]
I-20-A Variable [$_____________] [__________, ____]
I-20-B Variable [$_____________] [__________, ____]
I-21-A Variable [$_____________] [__________, ____]
I-21-B Variable [$_____________] [__________, ____]
I-22-A Variable [$_____________] [__________, ____]
I-22-B Variable [$_____________] [__________, ____]
I-23-A Variable [$_____________] [__________, ____]
I-23-B Variable [$_____________] [__________, ____]
I-24-A Variable [$_____________] [__________, ____]
I-24-B Variable [$_____________] [__________, ____]
I-25-A Variable [$_____________] [__________, ____]
I-25-B Variable [$_____________] [__________, ____]
I-26-A Variable [$_____________] [__________, ____]
I-26-B Variable [$_____________] [__________, ____]
I-27-A Variable [$_____________] [__________, ____]
I-27-B Variable [$_____________] [__________, ____]
I-28-A Variable [$_____________] [__________, ____]
I-28-B Variable [$_____________] [__________, ____]
I-29-A Variable [$_____________] [__________, ____]
I-29-B Variable [$_____________] [__________, ____]
I-30-A Variable [$_____________] [__________, ____]
I-30-B Variable [$_____________] [__________, ____]
I-31-A Variable [$_____________] [__________, ____]
I-31-B Variable [$_____________] [__________, ____]
I-32-A Variable [$_____________] [__________, ____]
I-32-B Variable [$_____________] [__________, ____]
I-33-A Variable [$_____________] [__________, ____]
I-33-B Variable [$_____________] [__________, ____]
I-34-A Variable [$_____________] [__________, ____]
I-34-B Variable [$_____________] [__________, ____]
I-35-A Variable [$_____________] [__________, ____]
I-35-B Variable [$_____________] [__________, ____]
I-36-A Variable [$_____________] [__________, ____]
I-36-B Variable [$_____________] [__________, ____]
I-37-A Variable [$_____________] [__________, ____]
I-37-B Variable [$_____________] [__________, ____]
I-38-A Variable [$_____________] [__________, ____]
I-38-B Variable [$_____________] [__________, ____]
I-39-A Variable [$_____________] [__________, ____]
I-39-B Variable [$_____________] [__________, ____]
I-40-A Variable [$_____________] [__________, ____]
I-40-B Variable [$_____________] [__________, ____]
I-41-A Variable [$_____________] [__________, ____]
I-41-B Variable [$_____________] [__________, ____]
I-42-A Variable [$_____________] [__________, ____]
I-42-B Variable [$_____________] [__________, ____]
I-43-A Variable [$_____________] [__________, ____]
I-43-B Variable [$_____________] [__________, ____]
I-44-A Variable [$_____________] [__________, ____]
I-44-B Variable [$_____________] [__________, ____]
I-45-A Variable [$_____________] [__________, ____]
I-45-B Variable [$_____________] [__________, ____]
P Variable [$_____________] [__________, ____]
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the third 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 1
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC 1 Remittance
Rate" herein.
REMIC 2
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial
Uncertificated Principal Balance, and for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular Interests
will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass-Through Rate(2) Principal Balance Maturity Date(1)
----------- -------------------- ----------------- ----------------
LTAA Variable [$_____________] [__________, ____]
LTA1 Variable [$_____________] [__________, ____]
LTA2 Variable [$_____________] [__________, ____]
LTA3 Variable [$_____________] [__________, ____]
LTA4 Variable [$_____________] [__________, ____]
LTM1 Variable [$_____________] [__________, ____]
LTM2 Variable [$_____________] [__________, ____]
LTM3 Variable [$_____________] [__________, ____]
LTM4 Variable [$_____________] [__________, ____]
LTM5 Variable [$_____________] [__________, ____]
LTM6 Variable [$_____________] [__________, ____]
LTM7 Variable [$_____________] [__________, ____]
LTM8 Variable [$_____________] [__________, ____]
LTM9 Variable [$_____________] [__________, ____]
LTM10 Variable [$_____________] [__________, ____]
LTM11 Variable [$_____________] [__________, ____]
LTZZ Variable [$_____________] [__________, ____]
LTP Variable [$_____________] [__________, ____]
LTIO Variable (3) [__________, ____]
-------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the third Distribution Date 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 2 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein. (3) REMIC 2 Regular Interest LTIO will not have
an Uncertificated Principal Balance, but will accrue interest on
its Uncertificated Notional Amount.
REMIC 3
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 3 created hereunder:
Original Class
Pass-Through Certificate Principal Assumed Final
Class Designation Rate Balance Maturity Date(1)
---------------------------- --------------------------- --------------------- ------------------
Class A-1................... Variable(2) [$_____________] [__________, ____]
Class A-2................... Variable(2) [$_____________] [__________, ____]
Class A-3................... Variable(2) [$_____________] [__________, ____]
Class A-4................... Variable(2) [$_____________] [__________, ____]
Class M-1................... Variable(2) [$_____________] [__________, ____]
Class M-2................... Variable(2) [$_____________] [__________, ____]
Class M-3................... Variable(2) [$_____________] [__________, ____]
Class M-4................... Variable(2) [$_____________] [__________, ____]
Class M-5................... Variable(2) [$_____________] [__________, ____]
Class M-6................... Variable(2) [$_____________] [__________, ____]
Class M-7................... Variable(2) [$_____________] [__________, ____]
Class M-8................... Variable(2) [$_____________] [__________, ____]
Class M-9................... Variable(2) [$_____________] [__________, ____]
Class M-10.................. Variable(2) [$_____________] [__________, ____]
Class M-11.................. Variable(2) [$_____________] [__________, ____]
Class C Interest............ Variable((3)) [$_____________] [__________, ____]
Class P Interest............ N/A(4) [$_____________] [__________, ____]
Class SWAP-IO Interest...... N/A(5) N/A(5) [__________, ____]
------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the third Distribution Date following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity date" for each Class of Certificates that represents one
or more of the "regular interests" in REMIC 3.
(2) Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3) The Class C Interest will accrue interest at its variable Pass-Through Rate
on the Notional Amount of the Class C Interest outstanding from time to
time which shall equal the aggregate of the Uncertificated Principal
Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular
Interest LTP). The Class C Interest will not accrue interest on its Class
Certificate Principal Balance.
(4) The Class P Interest will not accrue interest.
(5) The Class SWAP-IO Interest will not have a Pass-Through Rate or a
Certificate Principal Balance, but will be entitled to [____]% of amounts
distributed on REMIC 2 Regular Interest LTIO.
REMIC 4
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class C Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 for purposes of the REMIC Provisions under
federal income tax law.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 4 created hereunder:
Original Class
Pass-Through Certificate Principal Assumed Final
Class Designation Rate Balance Maturity Date(1)
---------------------------- --------------------------- --------------------- ------------------
Class C .................... Variable(2) [$_____________] [__________, ____]
------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the third Distribution Date following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity date" for each Class of Certificates that represents one
or more of the "regular interests" in REMIC 4.
(2) The Class C Certificates will receive [____]% of amounts received in
respect of the Class C Interest.
REMIC 5
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 5." The Class R-5 Interest represents the sole class of
"residual interests" in REMIC 5 for purposes of the REMIC Provisions under
federal income tax law.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 5 created hereunder:
Original Class
Pass-Through Certificate Principal Assumed Final
Class Designation Rate Balance Maturity Date(1)
---------------------------- --------------------------- --------------------- ------------------
Class P .................... Variable(2) [$_____________] [__________, ____]
------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the third Distribution Date following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity date" for each Class of Certificates that represents one
or more of the "regular interests" in REMIC 5
(2) The Class P Certificates will receive [____]% of amounts received in
respect of the Class P Interest
REMIC 6
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class SWAP-IO Interest as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 6." The Class R-6 Interest represents the sole class of
"residual interests" in REMIC 6 for purposes of the REMIC Provisions under
federal income tax law.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 6 created hereunder, which will be uncertificated:
Original Class
Pass-Through Certificate Principal Assumed Final
Class Designation Rate Balance Maturity Date(1)
---------------------------- --------------------------- --------------------- ------------------
SWAP-IO .................... Variable(2) [$_____________] [__________, ____]
------------------
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the third Distribution Date following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest
possible maturity date" for REMIC 6 regular Interest SWAP-IO
(2) REMIC 6 Regular Interest SWAP-IO will receive [____]% of amounts received
in respect of the Class SWAP-IO Interest
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates and the
Mezzanine Certificates shall be made on the basis of the actual number of days
elapsed on the basis of a 360-day year and all calculations in respect of
interest on the Class C Certificates and all other calculations of interest
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months. The Class P Certificates and the Residual Certificates are
not entitled to distributions in respect of interest and, accordingly, will not
accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account or Distribution Account.
"Accrual Period": With respect to the Class A Certificates and the
Mezzanine Certificates and each Distribution Date, the period commencing on the
preceding Distribution Date (or in the case of the first such Accrual Period,
commencing on the Closing Date) and ending on the day preceding the current
Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.
"Adjustable Rate Mortgage Loan": A first lien Mortgage Loan which
provides at any period during the life of such loan for the adjustment of the
Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans are
identified as such on the Mortgage Loan Schedule.
"Adjusted Net Maximum Mortgage Rate": With respect to any Distribution
Date and any Mortgage Loan (or the related REO Property) in the Trust Fund as of
the close of business on the last day of the preceding calendar month, a per
annum rate of interest equal to the applicable Maximum Mortgage Rate for such
Mortgage Loan (or the Mortgage Rate in the case of any Fixed Rate Mortgage Loan)
as of the first day of the month preceding the month in which the Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the Servicing Fee
Rate.
"Adjusted Net Mortgage Rate": With respect to any Distribution Date and
any Mortgage Loan (or the related REO Property) in the Trust Fund as of the
close of business on the last day of the preceding prepayment period, a per
annum rate of interest equal to the applicable Mortgage Rate for such Mortgage
Loan as of the first day of the month preceding the month in which the related
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan,
each adjustment date, on 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 Master Servicer in respect of any Distribution Date pursuant to Section
4.04.
"Advancing Facility": As defined in Section 3.29 hereof.
"Advancing Person": As defined in Section 3.29 hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall 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 the 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 as reduced by an amount equal to the
increase in the related Certificate Principal Balance due to the receipt of
Subsequent Recoveries.
"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 and if the
assignment has been delivered in blank, the name of the Assignee), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on or prior to the related Determination Date, including any
Subsequent Recoveries, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Mortgage Loans received during the related Prepayment Period, (c)
the aggregate of any amounts received in respect of a related REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date, (e) the aggregate of any Advances made by
the Master Servicer for such Distribution Date, (f) the aggregate of any related
advances made by the Trustee for such Distribution Date pursuant to Section
7.02, (g) [reserved] (h) [reserved], (i) [reserved] and (j) the amount of any
Prepayment Charges collected by the Master Servicer in connection with the full
or partial prepayment of any of the Mortgage Loans and any Master Servicer
Prepayment Charge Payment Amount over (ii) the sum of (a) amounts reimbursable
or payable to the Master Servicer pursuant to Section 3.11(a) or the Trustee
pursuant to Section 3.11(b), (b) amounts deposited in the Collection Account or
the Distribution Account pursuant to clauses (a) through (j) above, as the case
may be, in error, (c) the amount of any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount, (d) the
Trustee Fee payable from the Distribution Account pursuant to Section 8.05, (e)
any Net Swap Payment or Swap Termination Payment owed to the Swap Provider but
excluding any Swap Termination Payment owed to the Swap Provider resulting from
a Swap Provider Trigger Event (after taking into account any upfront payment
received from the counterparty to a replacement swap agreement) and (f) any
indemnification payments or expense reimbursements made by the Trust Fund
pursuant to Section 8.05.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Delaware, the State of New
York, the State of Maryland, the State of California, the Commonwealth of
Pennsylvania, the State of Florida, the State of Minnesota or any city in which
the Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Residual Certificate for any
purpose 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
Master 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 and the NIMS Insurer may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to
"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 and the NIMS Insurer shall be required to recognize as a
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"Certificate Margin": With respect to each Class of Adjustable-Rate
Certificates and for purposes of the Marker Rate and the Maximum LTZZ
Uncertificated Interest Deferral Amount, the specified REMIC 2 Regular Interest,
as follows:
REMIC 2 Regular Certificate Margin
Class Interest
(1) (%) (2) (%)
A-1 LTA1 [____]% [____]%
A-2 LTA2 [____]% [____]%
A-3 LTA3 [____]% [____]%
A-4 LTA4 [____]% [____]%
M-1 LTM1 [____]% [____]%
M-2 LTM2 [____]% [____]%
M-3 LTM3 [____]% [____]%
M-4 LTM4 [____]% [____]%
M-5 LTM5 [____]% [____]%
M-6 LTM6 [____]% [____]%
M-7 LTM7 [____]% [____]%
M-8 LTM8 [____]% [____]%
M-9 LTM9 [____]% [____]%
M-10 LTM10 [____]% [____]%
M-11 LTM11 [____]% [____]%
----------
(1) For the Accrual Period for each Distribution Date on or prior to the
Optional Termination Date.
(2) For each other Accrual Period.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class C Certificates) immediately prior to any
Distribution Date, will be equal to the Initial Certificate Principal Balance
thereof (A) increased, in the case of a Mezzanine Certificate by the amount of
any Subsequent Recoveries added to the Certificate Principal Balance of such
Class pursuant to Section 4.01, (B) reduced by the sum of all amounts actually
distributed in respect of principal of such Class and (C) further reduced, in
the case of a Mezzanine Certificate by Realized Losses allocated thereto on all
prior Distribution Dates. With respect to the Class C Certificates as of any
date of determination, an amount equal to the excess, if any, of (A) the then
aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interests over
(B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificateholder": Any Holder of a Class A Certificate.
"Class A Certificates": Any Class A-1 Certificate, Class A-2
Certificate, Class A-3 Certificate or Class A-4 Certificate.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Distribution Amount and
(ii) the Group II Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-1, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class A-2 Certificate": Any one of the Class A-2 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-2, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class A-3 Certificate": Any one of the Class A-3 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class A-4 Certificate": Any one of the Class A-4 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-4, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class C Certificate": Any one of the Class C Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-17, representing (i) a
Regular Interest in REMIC 4, (ii) the obligation to pay Net WAC Rate Carryover
Amounts and Swap Termination Payments and (iii) the right to receive the Class
IO Distribution Amount.
"Class C Interest": An uncertificated interest in the Trust held by the
Trustee on behalf of the Holders of the Class C Certificates, evidencing a
Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class IO Distribution Amount": As defined in Section 4.05 hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution Date
shall equal the amount payable to the Swap Administrator on such Distribution
Date in excess of the amount payable on the Class Swap-IO Interest on such
Distribution Date, all as further provided in Section 4.05 hereof.
"Class Swap-IO Interest": An uncertificated interest in the Trust Fund
evidencing a Regular Interest in REMIC 3.
"Class M-1 Certificate": Any one of the Class M-1 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-5, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-1 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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) [____]% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the positive difference, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-6, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-2 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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) [____]% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the positive
difference, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus the Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-7, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-3 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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) [____]% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the positive difference, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-8, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-4 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment 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) [____]% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the positive difference, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.
"Class M-5 Certificate": Any one of the Class M-5 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-9, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-5 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment 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) [____]% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the positive difference, if any, of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus the Overcollateralization
Floor.
"Class M-6 Certificate": Any one of the Class M-6 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-10, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-6 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment 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) [____]% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the positive difference, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-7 Certificate": Any one of the Class M-7 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-11, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-7 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment 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) [____]% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the positive difference, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.
"Class M-8 Certificate": Any one of the Class M-8 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-12, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-8 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment 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) [____]% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the positive difference, if any, of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus the Overcollateralization
Floor.
"Class M-9 Certificate": Any one of the Class M-9 Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-13, representing (i) a
Regular Interest in REMIC 3, (ii) the right to receive the Net WAC Rate
Carryover Amount and (iii) the obligation to pay the Class IO Distribution
Amount.
"Class M-9 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment 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) [____]% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the positive difference, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-10 Certificate": Any one of the Class M-10 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-14,
representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the
Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO
Distribution Amount.
"Class M-10 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) [____]% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the positive difference, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.
"Class M-11 Certificate": Any one of the Class M-11 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-15,
representing (i) a Regular Interest in REMIC 3, (ii) the right to receive the
Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO
Distribution Amount.
"Class M-11 Principal Distribution Amount": An amount, not less than
zero, equal to the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment 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 payment 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 payment 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
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the
Class M-5 Certificates (after taking into account the payment of the Class M-5
Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the
payment of the Class M-6 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates
(after taking into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Certificate Principal Balance of the
Class M-8 Certificates (after taking into account the payment of the Class M-8
Principal Distribution Amount on such Distribution Date), (x) the Certificate
Principal Balance of the Class M-9 Certificates (after taking into account the
payment of the Class M-9 Principal Distribution Amount on such Distribution
Date), (xi) the Certificate Principal Balance of the Class M-10 Certificates
(after taking into account the payment of the Class M-10 Principal Distribution
Amount on such Distribution Date) and (xi) the Certificate Principal Balance of
the Class M-11 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) [____]% and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the positive difference, if any, of the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) minus the Overcollateralization
Floor.
"Class P Certificate": Any one of the Class P Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-19, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 5.
"Class P Interest": An uncertificated interest in the Trust Fund held
by the Trustee on behalf of the Holders of the Class P Certificates, evidencing
a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class R Certificate": The Class R Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit A-19 and evidencing the ownership of the
Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest.
"Class R-X Certificate": The Class R-X Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-20 and evidencing the
ownership of the Class R-4 Interest, the Class R-5 Interest and the Class R-6
Interest.
"Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.
"Class R-3 Interest": The uncertificated Residual Interest in REMIC 3.
"Class R-4 Interest": The uncertificated Residual Interest in REMIC 4.
"Class R-5 Interest": The uncertificated Residual Interest in REMIC 5.
"Class R-6 Interest": The uncertificated Residual Interest in REMIC 6.
"Close of Business": As used herein, with respect to any Business Day,
5:00 p.m. (New York time).
"Closing Date": [______________].
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The segregated account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "[____________________], as Trustee, in trust for registered Holders of
[________________________________]," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Convertible Mortgage Loan": Any Adjustable-Rate Mortgage Loan which
allows the Mortgagor thereunder to convert the Mortgage Rate thereon to a fixed
Mortgage Rate.
"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 Sixth and Marquette,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: [_____________], or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Originator and the
Seller.
"Corresponding Certificate": With respect to each REMIC 2 Regular
Interest set forth below, the corresponding Regular Certificate set forth in the
table below:
REMIC 2 REGULAR INTEREST REGULAR CERTIFICATE
LTA1 Class A-1
------------------------ -------------------
AAA
LTA2 Class A-2
LTA3 Class A-3
LTA4 Class A-4
LTM1 Class M-1
LTM2 Class M-2
LTM3 Class M-3
LTM4 Class M-4
LTM5 Class M-5
LTM6 Class M-6
LTM7 Class M-7
LTM8 Class M-8
LTM9 Class M-9
LTM10 Class M-10
LTM11 Class M-11
LTP Class P
"Cumulative Realized Loss Percentage": The aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related Due
Period (after reduction for all Subsequent Recoveries received from the Cut-off
Date through the Prepayment Period) divided by the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date.
"Custodian": [____________________], as custodian of the Mortgage
Files, and any successor thereto.
"Cut-off Date": [______________].
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date, as applicable (or
as of the applicable date of substitution with respect to a Qualified Substitute
Mortgage Loan), after application of scheduled payments due thereon, whether or
not received.
"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 principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Qualified Substitute Mortgage Loans.
"Delinquency Master Servicer Termination Trigger": A Delinquency Master
Servicer Termination Trigger will have occurred with respect to the Certificates
on a Distribution Date if the Three Month Rolling Delinquency Percentage for the
Mortgage Loans exceeds [____]%.
"Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Stated Principal Balance of Mortgage
Loans Delinquent 60 days or more by (y) the aggregate Stated Principal Balance
of the Mortgage Loans, in each case, as of the last day of the previous calendar
month.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a Due Date
which is not made by the Close of Business on the next scheduled Due Date for
such Mortgage Loan. For example, a Mortgage Loan is 60 or more days Delinquent
if the Monthly Payment due on a Due Date is not made by the Close of Business on
the second scheduled Due Date after such Due Date.
"Depositor": Option One Mortgage Acceptance Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company and upon request, Clearstream Banking Luxembourg and the Euroclear
System, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"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 any 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 the REMIC other than through an
Independent Contractor; provided, however, that the Trustee (or the Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master 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": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) 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 unless such organization is subject to the tax imposed by
Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, (iv) an "electing large partnership" within the
meaning of Section 775 of the Code or (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel provided by nationally recognized
counsel to the Trustee that the holding of an ownership interest in a Residual
Certificate by such Person may cause any REMIC formed hereunder or any Person
having an ownership interest in any Class of Certificates (other than such
Person) to incur liability for any federal tax imposed under the Code that would
not otherwise be imposed but for the transfer of an ownership interest in the
Residual Certificate to such Person. A corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof, if all of its activities are subject to tax and, a majority of its
board of directors is not selected by a governmental unit. The term "United
States", "state" and "international organizations" shall have the meanings set
forth in Section 7701 of the Code.
"Distribution Account": The segregated trust account or accounts
created and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, [____________________], as Trustee, in trust for
the registered Certificateholders of [__________________________]" and which
must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in [______________].
"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 the 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), exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated P-1 by Xxxxx'x, F-1 by Fitch and A-1+ by S&P (or comparable ratings if
Xxxxx'x, Fitch and S&P are not the Rating Agencies) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the NIMS Insurer, the Trustee
and to each Rating Agency, the Certificateholders will have a claim with respect
to the funds in such account or a perfected first priority security interest
against such collateral (which shall be limited to Permitted Investments)
securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained,
(iii) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution, national banking association
or trust company acting in its fiduciary capacity or (iv) an account otherwise
acceptable to each Rating Agency without reduction or withdrawal of their then
current ratings of the Certificates as evidenced by a letter from each Rating
Agency to the Trustee and the NIMS Insurer. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"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,
assuming that [____]% of the Principal Remittance Amount is applied as a
principal payment on such Distribution Date over (ii) the Overcollateralization
Target Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Monthly Interest Distributable Amount payable on the
Class C Certificates on such Distribution Date as reduced by Realized Losses
allocated thereto with respect to such Distribution Date pursuant to Section
4.08 and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.
"Xxxxxx Xxx": 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 Originator or the Master Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Master Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Master Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The Master
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": A first or second lien Mortgage Loan which
provides for a fixed Mortgage Rate payable with respect thereto. The Fixed Rate
Mortgage Loans are identified as such on the Mortgage Loan Schedule.
"Fixed Swap Payment": With respect to any Distribution Date, the amount
calculated based on a fixed rate as set forth in the Interest Rate Swap
Agreement.
"Floating Swap Payment": With respect to any Distribution Date, a
floating amount equal to the product of (i) Swap LIBOR, (ii) the related
Notional Amount (as defined in the Interest Rate Swap Agreement), (iii) 250 and
(iv) a fraction, the numerator of which is the actual number of days elapsed
from and including the previous Floating Rate Payer Payment Date (as defined in
the Interest Rate Swap Agreement) to but excluding the current Floating Rate
Payer Payment Date (or, for the first Floating Rate Payer Payment Date, the
actual number of days elapsed from the Closing Date to but excluding the first
Floating Rate Payer Payment Date), and the denominator of which is 360.
"Formula Rate": For any Distribution Date and any Class of the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the applicable Maximum Cap Rate.
"Xxxxxxx Mac": 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 Mortgage Loan.
"Group I Allocation Percentage": With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is (i) the Group
I Principal Remittance Amount for such Distribution Date, and the denominator of
which is (ii) the Principal Remittance Amount for such Distribution Date.
"Group I Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group I Principal Remittance Amount for
such Distribution Date over (ii) the Overcollateralization Release Amount, if
any, for such Distribution Date multiplied by the Group I Allocation Percentage.
"Group I Certificates": The Class A-1 Certificates.
"Group I Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group I
Mortgage Loans minus a PRO RATA portion (based on the Certificate Principal
Balance of the Group I Certificates divided by the aggregate Certificate
Principal Balance of the Class A Certificates) of the sum of any Net Swap
Payment owed to the Swap Provider on that Distribution Date and any Swap
Termination Payment or unpaid portion thereof owed to the Swap Provider on that
Distribution Date (other than a Swap Termination Payment resulting from a Swap
Provider Trigger Event).
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group I with
a principal balance that conforms to Xxxxxx Xxx and Xxxxxxx Mac guidelines. The
aggregate principal balance of the Group I Mortgage Loans as of the Cut-off Date
is equal to [$________________]. "Group I Overcollateralization Floor": With
respect to the Group I Certificates, [$----------------].
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Group I Allocation
Percentage.
"Group I Principal Remittance Amount": With respect to any Distribution
Date, the sum of (i) each scheduled payment of principal collected or advanced
on the Group I Mortgage Loans by the Master Servicer that were due during the
related Due Period, (ii) the principal portion of all partial and full principal
prepayments of the Group I Mortgage Loans received by the Master Servicer during
the related Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds received
during such Prepayment Period with respect to the Group I Mortgage Loans, (iv)
that portion of the Purchase Price, representing principal of any repurchased
Group I Mortgage Loan, deposited to the Collection Account during such
Prepayment Period, (v) the principal portion of any related Substitution
Adjustments deposited in the Collection Account during such Prepayment Period
with respect to the Group I Mortgage Loans and (vi) on the Distribution Date on
which the Trust Fund is to be terminated pursuant to Section 10.01, that portion
of the Termination Price, in respect of principal on the Group I Mortgage Loans.
"Group I Senior Principal Distribution Amount": An amount, not less
than zero, equal to the excess of (x) the aggregate Certificate Principal
Balance of the Group I Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) [____]% and (ii) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the positive difference, if any, of the aggregate Stated
Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the Group I Overcollateralization Floor.
"Group II Allocation Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is (i) the
Group II Principal Remittance Amount for such Distribution Date, and the
denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Group II Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group II Principal Remittance Amount
for such Distribution Date over (ii) the Overcollateralization Release Amount,
if any, for such Distribution Date multiplied by the Group II Allocation
Percentage.
"Group II Certificates": The Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates.
"Group II Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the Group II
Mortgage Loans minus a pro rata portion (based on the aggregate Certificate
Principal Balance of the Group II Certificates divided by the aggregate
Certificate Principal Balance of the Class A Certificates) of the sum of any Net
Swap Payment owed to the Swap Provider on that Distribution Date and any Swap
Termination Payment or unpaid portion thereof owed to the Swap Provider on that
Distribution Date (other than a Swap Termination Payment resulting from a Swap
Provider Trigger Event).
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group II
with a principal balance that may or may not conform to Xxxxxx Mae and Xxxxxxx
Mac guidelines. The aggregate principal balance of the Group II Mortgage Loans
as of the Cut-off Date is equal to [$________________].
"Group II Overcollateralization Floor": With respect to the Group II
Certificates, [$________________].
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Group II Allocation
Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group II Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) the principal portion of all partial and
full principal prepayments of the Group II Mortgage Loans received by the Master
Servicer during the related Prepayment Period, (iii) the principal portion of
all related Net Liquidation Proceeds, Subsequent Recoveries and Insurance
Proceeds received during such Prepayment Period with respect to the Group II
Mortgage Loans, (iv) that portion of the Purchase Price, representing principal
of any repurchased Group II Mortgage Loan, deposited to the Collection Account
during such Prepayment Period, (v) the principal portion of any related
Substitution Adjustments deposited in the Collection Account during such
Prepayment Period with respect to the Group II Mortgage Loans and (vi) on the
Distribution Date on which the Trust Fund is to be terminated pursuant to
Section 10.01, that portion of the Termination Price, in respect of principal on
the Group II Mortgage Loans.
"Group II Senior Principal Distribution Amount": An amount, not less
than zero, equal to the excess of (x) the Certificate Principal Balance of the
Group II Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) [____]% and (ii) the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the positive difference, if any, of the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the Group II
Overcollateralization Floor.
"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 X-0, Xxxxx X-0, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates.
"Holder": See "Certificateholder."
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer 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 or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of [___]% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to any of the
REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if
such REMIC 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, [____]% or more of any Class of Certificates), so long
as each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC 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 Master 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.
"Indenture": An indenture relating to the issuance of notes secured by
the Class C Certificates, the Class P Certificates and/or Residual Certificates
(or any portion thereof) which may or may not be guaranteed by the NIMS Insurer.
"Index": With respect to each Adjustable Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
received by the Master Servicer and 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 Master 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 Determination Date": With respect to the Class A Certificates
and the Mezzanine Certificates and each related Accrual Period, the second LIBOR
Business Day preceding the commencement of such Accrual Period.
"Interest Rate Swap Agreement": The 1992 ISDA Master Agreement
(Multicurrency-Cross Border) dated as of [______________] (together with the
schedule thereto, the Master Agreement) between the Swap Provider and the
Trustee (in its capacity as Supplemental Interest Trust Trustee) and a
confirmation of the same date, which supplements and forms part of the Master
Agreement.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds, Subsequent Recoveries 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 on a contractual basis for such Due Period and not
previously recovered.
"LIBOR": With respect to each Accrual Period for the Class A
Certificates and the Mezzanine Certificates, the rate determined by the Trustee
on the related Interest Determination Date on the basis of the London interbank
offered rate for one-month United States dollar deposits, as such rate appears
on the Telerate Page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date. If such rate does not appear on Telerate Page 3750, the rate
for such Interest Determination Date will be determined on the basis of the
offered rates of the Reference Banks for one-month United States dollar
deposits, as of 11:00 a.m. (London time) on such Interest Determination Date.
The Trustee will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. On such Interest Determination Date,
LIBOR for the related Accrual Period for the Class A Certificates and the
Mezzanine Certificates will be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the related
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 1/16 of
1%); and
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
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, LIBOR for the Class A and Mezzanine
Certificates for the first Accrual Period will be [____]%.
"LIBOR Business Day": Any day on which banks in London, England and The
City of New York are open and conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been 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 the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. 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 the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master 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 by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Principal
Balance of the Mortgage Loan (and, with respect to any second lien Mortgage
Loan, the Principal Balance of the related first lien Mortgage Loan plus the
Principal Balance of such second lien Mortgage Loan), and the denominator of
which is the Value of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
"Loan Group I": The group of Mortgage Loans with principal balances
that conform to Xxxxxx Xxx and Xxxxxxx Mac guidelines identified in the Mortgage
Loan Schedule as having been assigned to Loan Group I. "Loan Group II": The
group of Mortgage Loans with principal balances that may or may not conform to
Xxxxxx Mae and Xxxxxxx Mac guidelines identified in the Mortgage Loan Schedule
as having been assigned to Loan Group II.
"Losses": As defined in Section 9.03.
"Loss Mitigation Procedures": The policies and procedures set forth in
Exhibit G hereto relating to the realization on delinquent Mortgage Loans.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost, misplaced or destroyed and
has not been replaced, an affidavit from the Originator certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note) and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least [____]% of the Voting Rights.
"Marker Rate": With respect to the Class C Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 2 Regular Interest
LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular Interest LTA3, REMIC 2
Regular Interest LTA4, REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest
LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4, REMIC 2
Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular Interest
LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9, REMIC 2
Regular Interest LTM10, REMIC 2 Regular Interest LTM11 and REMIC 2 Regular
Interest LTZZ, with the rates on such REMIC 2 Regular Interests (other than
REMIC 2 Regular Interest LTZZ) subject to a cap equal to lesser of (i) LIBOR
plus the related Certificate Margin and (ii) the Net WAC Rate for the purpose of
this calculation; and with the rate on REMIC 2 Regular Interest LTZZ subject to
a cap of zero for the purpose of this calculation; provided, however, that for
this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and
the related caps with respect to each such REMIC 2 Regular Interest shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Master Servicer": Option One Mortgage Corporation, a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Master Servicer hereunder.
"Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer or which is [____]% or more owned
by the Master Servicer and (ii) which is qualified to service residential
mortgage loans.
"Master Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Master Servicer Optional Purchase Delinquency Trigger": A Master
Servicer Optional Purchase Delinquency Trigger has occurred with respect to a
Distribution Date if the Delinquency Percentage exceeds [____]% of the Senior
Credit Enhancement Percentage.
"Master Servicer Prepayment Charge Payment Amount": The amounts payable
by the Master Servicer in respect of any Prepayment Charges pursuant to Section
2.05 or Section 3.01.
"Master Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.
"Maximum Cap Rate": For any Distribution Date, a per annum rate equal
to the sum of (i) the product of (x) the weighted average of the Adjusted Net
Maximum Mortgage Rates of the Mortgage Loans 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 Accrual Period and (ii) an amount, expressed as a percentage,
equal to a fraction, the numerator of which is equal to the Net Swap Payment
made by the Swap Provider and the denominator of which is equal to the aggregate
Stated Principal Balance of the Mortgage Loans, multiplied by 12 minus (a) an
amount, expressed as a percentage, equal to the product of (i) the Net Swap
Payment, if any, paid by the Trust for such Distribution Date divided by the
aggregate Stated Principal Balance of the Mortgage Loans and (ii) 12 and (b) an
amount, expressed as a percentage, equal to the product of (x) the Swap
Termination Payment, if any, due from the Trust (other than any Swap Termination
Payment resulting from a Swap Provider Trigger Event) for such Distribution Date
divided by the aggregate Stated Principal Balance of the Mortgage Loans and (y)
12.
"Maximum LTZZ Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LTZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LTZZ minus the REMIC 2
Overcollateralization Amount, in each case for such Distribution Date, over (ii)
Uncertificated Interest on REMIC 2 Regular Interest LTA1, REMIC 2 Regular
Interest LTA2, REMIC 2 Regular Interest LTA3, REMIC 2 Regular Interest LTA4,
REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular
Interest LTM3, REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5,
REMIC 2 Regular Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular
Interest LTM8, REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10 and
REMIC 2 Regular Interest LTM11 for such Distribution Date, with the rate on each
such REMIC 1 Regular Interest subject to a cap equal to the lesser of (i) LIBOR
plus the related Certificate Margin and (ii) the related Net WAC Rate provided,
however, that solely for this purpose, calculations of the Uncertificated REMIC
1 Pass-Through Rate and the related caps with respect to each such REMIC 1
Regular Interest shall be multiplied by a fraction, the numerator of which is
the actual number of days in the Accrual Period and the denominator of which is
30.
"Maximum 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 Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M-3 Certificate, Class M-4 Certificate, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates, Class M-9 Certificates, Class M-10 Certificates or the Class M-11
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 Interest Distributable Amount": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class C Certificates and any
Distribution Date the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls as allocated to such
Certificate as provided in Section 1.03 and based on its respective entitlements
to interest irrespective of any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls for such Distribution Date).
"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 Master Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x 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 pursuant to Section 2.01, Section 2.03(d) or Section 2.08 as from time
to time held 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 Master
Servicer, in its capacity as Originator, the Sellers and the Depositor,
regarding the transfer of the Mortgage Loans by the Seller to or at the
direction of the Depositor, substantially in the form attached hereto as Exhibit
C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Exhibit D. The
Mortgage Loan Schedule shall be prepared by the Originator and shall set forth
the following information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) [reserved];
(3) the state and zip code of the Mortgaged Property;
(4) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of origination, as
being owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
(7) the stated remaining months to maturity from the Cut-off Date
based on the original amortization schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate in effect immediately following the Cut-off
Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment due on the first Due Date
after the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the
Close of Business on the Cut-off Date;
(17) a code indicating the purpose of the Mortgage Loan (I.E.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(18) the Mortgage Rate at origination;
(19) a code indicating the documentation program (I.E., full
documentation, limited documentation, stated income
documentation);
(20) the risk grade;
(21) the Value of the Mortgaged Property;
(22) the sale price of the Mortgaged Property, if applicable;
(23) the actual unpaid principal balance of the Mortgage Loan as of
the Cut-off Date;
(24) the type and term of the related Prepayment Charge;
(25) the rounding code;
(26) the program code;
(27) a code indicating the lien priority for Mortgage Loans;
(28) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate;
(29) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Rate;
(30) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(31) with respect to each Adjustable Rate Mortgage Loan, the next
Adjustment Date;
(32) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap;
(33) the credit score ("FICO") of such Mortgage Loan;
(34) the total amount of points and fees charged such Mortgage
Loan;
(35) [reserved]; and (36) [reserved].
The Mortgage Loan Schedule shall set forth the following information,
with respect to the Mortgage Loans in the aggregate and for each Loan Group as
of the Cut-off Date: (1) the number of Mortgage Loans (separately identifying
the number of Fixed-Rate Mortgage Loans and the number of Adjustable-Rate
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 Originator in accordance with the
provisions of this Agreement. With respect to any Qualified Substitute Mortgage
Loan, 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
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed Rate Mortgage Loan, the
rate set forth in the related Mortgage Note. With respect to each Adjustable
Rate 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 (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, to equal the sum, rounded to the next
highest or nearest [____]% (as provided in the Mortgage Note), of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. 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 Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Available Funds for such Distribution Date over
(y) the sum for such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the
Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) 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 Swap Payment": In the case of payments made by the Trust, the
excess, if any, of (x) the Fixed Swap Payment over (y) the Floating Swap Payment
and in the case of payments made by the Swap Provider, the excess, if any, of
(x) the Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the
Net Swap Payment shall not be less than zero.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
"Net WAC Rate": With respect to each Distribution Date and the
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Mortgage Loans 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 Accrual Period minus an amount, expressed as a
percentage, equal to the sum of (x) the product of (i) Net Swap Payment owed to
the Swap Provider, if any, for such Distribution Date divided by the aggregate
Stated Principal Balance of the Mortgage Loans and (ii) 12 and (y) the product
of (i) the Swap Termination Payment (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event) if any, owed to the Swap Provider
for such Distribution Date, divided by the aggregate Stated Principal Balance of
the Mortgage Loans and (ii) 12. For federal income tax purposes, for any
Distribution Date with respect to the REMIC 3 Regular Interests the ownership of
which is represented by the Regular Certificates (other than the Class C
Certificates or Class P Certificates), the economic equivalent of such rate
shall be expressed as the weighted average (adjusted for the actual number of
days elapsed in the related Interest Accrual Period) of the Uncertificated REMIC
2 Pass-Through Rate on the REMIC 2 Regular Interests (other than REMIC 2 Regular
Interest LTIO), weighted on the basis of the Uncertificated Principal Balance of
each such REMIC 2 Regular Interest.
"Net WAC Rate Carryover Amount": With respect to any Class of Class A
Certificates and 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
over (ii) the amount of interest accrued on such Class of Certificates at the
related Net WAC Rate for such Distribution Date and (B) the related Net WAC Rate
Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related Formula Rate, in
each case for such Distribution Date and for such related Accrual Period.
"Net WAC Rate Carryover Reserve Account": The reserve account
established and maintained pursuant to Section 3.28.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"NIMS Insurer": Any insurer that is guaranteeing certain payments under
notes secured by collateral which includes all or a portion of the Class C
Certificates, the Class P Certificates and/or the Residual Certificates.
"Nonrecoverable Advance": Any Advance or 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 Master Servicer, will not be
ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": Immediately prior to any Distribution Date, with
respect to the Class C Interest, the aggregate of the Uncertificated Principal
Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular Interest
LTIO and REMIC 2 Regular Interest LTP).
"Offered Certificates": The Class A 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, the Class M-9 Certificates,
the Class M-10 Certificates and the Class M-11 Certificates offered to the
public pursuant to the Prospectus Supplement.
"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 or Servicing Officers of the
Master Servicer, the Originator or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer or the NIMS Insurer may opt to terminate the Trust Fund pursuant
to Section 10.01.
"Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Interest, the
Class C Certificates, the Class P Interest and the Class P Certificates, the
corresponding amounts set forth opposite such Class above in the Preliminary
Statement.
"Originator": Option One Mortgage Corporation, a California
corporation, or its successor in interest, in its capacity as originator under
the Mortgage Loan Purchase Agreement.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).
"Overcollateralization Floor": With respect to the Mezzanine
Certificates, [$________________].
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any Distribution
Date, prior to the Stepdown Date will be [____]% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date. The Overcollateralization
Target Amount on or after the Stepdown Date will be the lesser of the amount set
forth in the preceding sentence and [____]% of the aggregate Stated Principal
Balance of the Mortgage Loans for the related Distribution Date, subject to a
floor equal to [____]% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date; provided however, if a Trigger Event is in effect
on the related Distribution Date, the Overcollateralization Target Amount will
be equal to the Overcollateralization Target Amount for the previous
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": For any Distribution Date, is the amount,
equal to (i) the sum of the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus (ii) the sum of the aggregate Certificate
Principal Balance of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates as of such Distribution Date (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 any Class of the Class A and
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 C Interest and any Distribution Date, a per
annum rate equal to the percentage equivalent of a fraction, the numerator of
which is (x) the sum of (i) [____]% of the interest on REMIC 2 Regular Interest
LTP and (ii) interest on the Uncertificated Balance of each REMIC 2 Regular
Interest listed in clause (y) at a rate equal to the related Uncertificated
REMIC 2 Pass-Through Rate minus the Marker Rate and the denominator of which is
(y) the aggregate Uncertificated Balance of REMIC 1 Regular Interests XXXX,
XXX0, XXX0, XXX0, XXX0, XXX0, LTM2, LTM3, LTM4, LTM5, LTM6, LTM7, LTM8, LTM9,
LTM10, LTM11 and LTZZ.
With respect to the Class C Certificates, [____]% of the interest
distributable to the Class C Interest, expressed as a per annum rate on its
Notional Amount.
With respect to the Class Swap-IO Interest, the Class Swap IO Interest
shall not have a Pass-Through Rate, but interest for such Regular Interest and
each Distribution Date shall be an amount equal to [____]% of the amounts
distributable to REMIC 2 Regular Interest LTIO for such Distribution Date.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), a fraction, 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 Original
Class Certificate Principal Balance or initial Notional Amount of the related
Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; PROVIDED, HOWEVER, that the sum of all such percentages for each
such Class totals [____]%. -------- -------
"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 or managed by the Depositor, the Master Servicer, the NIMS
Insurer, the Trustee or any of their respective Affiliates or for which an
Affiliate of the NIMS Insurer or Trustee serves as an advisor:
(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) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company (or, if the only Rating Agency is S&P, in the case of
the principal depository institution in a depository institution
holding company, debt obligations of the depository institution holding
company) or its ultimate parent has a short-term uninsured debt rating
in the highest available rating category of Fitch, Xxxxx'x and S&P and
provided that each such investment has an original maturity of no more
than 365 days; and provided further that, if the only Rating Agency is
S&P and if the depository or trust company is a principal subsidiary of
a bank holding company and the debt obligations of such subsidiary are
not separately rated, the applicable rating shall be that of the bank
holding company; and, provided further that, if the original maturity
of such short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of S&P
if S&P is the Rating Agency; and (B) any other demand or time deposit
or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A-1+ by S&P, A2 or higher by Xxxxx'x, and F-1+ or
higher by Fitch, provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type described in
clause (i) above and must (A) be valued daily at current market prices
plus accrued interest, (B) pursuant to such valuation, be equal, at all
times, to [____]% of the cash transferred by the Trustee in exchange
for such collateral and (C) be delivered to the Trustee or, if the
Trustee is supplying the collateral, an agent for the Trustee, in such
a manner as to accomplish perfection of a security interest in the
collateral by possession of certificated securities;
(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 a Rating
Agency in its highest long-term unsecured rating category 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 a Rating Agency in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including those managed or
advised by the Trustee or its Affiliates, that have been rated "AAAm"
by S&P, "AAA" by Fitch (if rated by Fitch) and "Aaa" by Xxxxx'x; and
(vii) 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 in
writing as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of the Class A
Certificates;
provided, 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 [____]% of
the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Xxxxx
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.
"Pool Balance": As of any date of determination, the aggregate Stated
Principal Balance of the Mortgage Loans in both Loan Groups as of such date.
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges,
fees, penalties or premiums, if any, due in connection with a full or partial
prepayment of such Mortgage Loan in accordance with the terms thereof (other
than any Master Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges on the Mortgage Loans included in the Trust Fund on such date, attached
hereto as Schedule I (including the prepayment charge summary attached thereto).
The Prepayment Charge Schedule shall be prepared by the Master Servicer (in its
capacity as Originator) and 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 state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time by
the Master Servicer in accordance with the provisions of this Agreement and a
copy of such amended Prepayment Charge Schedule shall be furnished by the Master
Servicer to the NIMS Insurer.
"Prepayment Interest Excess": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day and the Determination Date of the calendar month in which such Distribution
Date occurs, an amount equal to interest (to the extent received) at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the first day of the calendar month in which such
Distribution Date occurs and ending on the date on which such prepayment is so
applied.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day of the related Prepayment Period and the last day of the calendar month
preceding the month in which such Distribution Date occurs, an amount equal to
one month's interest on the Mortgage Loan less any payments made by the
Mortgagor. The obligations of the Master Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the period
commencing on the day after the Determination Date in the calendar month
preceding the calendar month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, commencing on [______________]) and ending
on the Determination Date of the calendar month in which such Distribution Date
occurs.
"Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, MINUS
all collections credited against the Principal Balance of any such Mortgage
Loan. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the related
Mortgage Loan as of the final recovery of related Liquidation Proceeds and a
Principal Balance of zero thereafter. As to any REO Property and any day, the
Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"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": With respect to any Distribution Date,
the sum of (i) the Group I Principal Remittance Amount and (ii) the Group II
Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement dated
[______________] relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03, and as confirmed by
an Officers' Certificate from the Master Servicer to the Trustee, an amount
equal to the sum of (i) [____]% of the Stated Principal Balance thereof as of
the date of purchase, (ii) in the case of (x) a Mortgage Loan, accrued interest
on such Stated Principal Balance at the applicable 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 Master 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, and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable 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 Master Servicer through the end of the calendar
month immediately preceding the calendar month in which such REO Property was
acquired, plus (2) REO Imputed Interest for such REO Property for each calendar
month commencing with the calendar month in which such REO Property was acquired
and ending with the calendar month in which such purchase is to be effected, net
of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds
and Advances that as of the date of purchase had been distributed as or to cover
REO Imputed Interest pursuant to Section 4.04, (iii) any unreimbursed Servicing
Advances and 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
3.23 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 Master
Servicer, the NIMS Insurer 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 in connection with any violation by such loan of any predatory or
abusive lending law.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement or the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance (or in the case of a substitution of more than
one mortgage loan for a Deleted Mortgage Loan, an aggregate 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, and not more than
[____]% less than, the outstanding 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) if the Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage
Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate on
the Deleted Mortgage Loan, (iv) if the Qualified Substitute Mortgage Loan is an
Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the Qualified
Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Gross
Margin equal to or greater than the Gross Margin of the Deleted Mortgage Loan,
(vi) if the Qualified Substitute Mortgage Loan is an 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) be current as of the date of substitution, (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 determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xi) have been underwritten or
reunderwritten by the Originator in accordance with the same underwriting
criteria and guidelines as the Deleted Mortgage Loan, (xii) have a Prepayment
Charge provision at least equal to the Prepayment Charge provision of the
Deleted Mortgage Loan, (xiii) conform to each representation and warranty set
forth in Section 3.01 of the Mortgage Loan Purchase Agreement applicable to the
Deleted Mortgage Loan, (xiv) have the same Due Date as the Deleted Mortgage
Loan, (xv) [reserved] and (xvi) not be a Convertible Mortgage Loan unless that
Deleted Mortgage Loan was a Convertible 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 clauses (ii)
through (vi) hereof shall be satisfied for each such mortgage loan, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (vii) hereof shall be determined on
the basis of weighted average remaining term to maturity (provided that no such
mortgage loan may have a remaining term to maturity longer than the Deleted
Mortgage Loan), the Loan-to-Value Ratios described in clause (ix) 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 (xii) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.
"Rating Agency or Rating Agencies": Fitch, Xxxxx'x 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 Master Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Stated Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan. "Record Date": With respect to (i) the Class P Certificates,
the Class C Certificates and the Residual Certificates, the Close of Business on
the last Business Day of the calendar month preceding the month in which the
related Distribution Date occurs and (ii) with respect to the Class A
Certificates and the Mezzanine Certificates, the Close of Business on the
Business Day immediately preceding the related Distribution Date; PROVIDED,
HOWEVER, that following the date on which Definitive Certificates for a Class A
Certificate or a Mezzanine Certificate are available pursuant to Section 5.02,
the Record Date for such Certificates shall be the last Business Day of the
calendar month preceding the month in which the related Distribution Date
occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor, the Originator or the Master Servicer or any
affiliate thereof and (iii) which have been designated as such by the Depositor;
PROVIDED, HOWEVER, that if fewer than two of such banks provide a LIBOR rate,
then any leading banks selected by the Depositor which are engaged in
transactions in United States dollar deposits in the international Eurocurrency
market.
"Regular Certificate": Any of the Class A Certificates, Mezzanine
Certificates, Class C Certificates or Class P Certificates.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act or any similar state law, the
amount by which (i) interest collectible on such Mortgage Loan during such Due
Period is less than (ii) one month's interest on the Stated Principal Balance of
such Mortgage Loan at the Mortgage Rate for such Mortgage Loan before giving
effect to the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC 1": 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
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, the Distribution Account (subject to
the last sentence of this definition) 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, a REMIC election will not be made with
respect to the Net WAC Rate Carryover Reserve Account, the Master Servicer
Prepayment Charge Payment Amounts, the Interest Rate Swap Agreement or the Swap
Account.
"REMIC 1 Regular Interests": One of the 92 separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. Each REMIC 1 Regular Interest shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificate (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Stated Principal Balance of the Mortgage Loans and (ii) the
Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LTAA minus
the Marker Rate, divided by (b) 12.
"REMIC 2 Overcollateralization Target Amount": [____]% of the
Overcollateralization Target Amount.
"REMIC 2 Overcollateralized Amount": With respect to any date of
determination, (i) [____]% of the aggregate Uncertificated Principal Balance of
the REMIC 2 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LTA1, REMIC 2 Regular Interest
LTA2, REMIC 2 Regular Interest LTA3, REMIC 2 Regular Interest LTA4, REMIC 2
Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest
LTM3, REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2
Regular Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest
LTM8, REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2
Regular Interest LTM11 and REMIC 2 Regular Interest LTP, in each case as of such
date of determination.
"REMIC 2 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Stated Principal Balance of the Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 2
Regular Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular Interest
LTA3, REMIC 2 Regular Interest LTA4, REMIC 2 Regular Interest LTM1, REMIC 2
Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest
LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2
Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest
LTM9, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular Interest LTM11 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 2 Regular Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular
Interest LTA3, REMIC 2 Regular Interest LTA4, REMIC 2 Regular Interest LTM1,
REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular
Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6,
REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular
Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTM11
and REMIC 2 Regular Interest LTZZ.
"REMIC 2 Regular Interests": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2. Each REMIC 2 Regular Interest shall accrue interest
at the related Uncertificated REMIC 2 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal (other than REMIC 2
Regular Interest LTIO), subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto. The following is a list of each of
the REMIC 2 Regular Interests: REMIC 2 Regular Interest LTAA, REMIC 2 Regular
Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular Interest LTA3,
REMIC 2 Regular Interest LTA4, REMIC 2 Regular Interest LTM1, REMIC 2 Regular
Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4,
REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular
Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9,
REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTM11, REMIC 2 Regular
Interest LTZZ, REMIC 2 Regular Interest LTP and REMIC 2 Regular Interest LTIO,
each of which is a separate non-certificated beneficial ownership interests in
REMIC 2.
"REMIC 3": The segregated pool of assets consisting of all of the REMIC
2 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificate (in respect of
the Class R-3 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 3 Regular Interests": Any Class A Certificate, Mezzanine
Certificate, Class C Interest, Class P Interest or Class SWAP-IO Interest.
"REMIC 4": The segregated pool of assets consisting of the Class C
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificates (in respect of the Class R-4
Interest), pursuant to Section 2.07, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
"REMIC 5": The segregated pool of assets consisting of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificates (in respect of the Class R-5
Interest), pursuant to Section 2.07, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
"REMIC 6": The segregated pool of assets consisting of the Class
SWAP-IO Interest conveyed in trust to the Trustee, for the benefit of the
Holders of REMIC 6 Regular Interest SWAP-IO and the Class R-X Certificate (in
respect of the Class R-6 Interest), pursuant to Section 2.07, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 6 Regular Interest": REMIC 6 Regular Interest SWAP-IO.
"REMIC 6 Regular Interest SWAP-IO": The non-certificated beneficial
ownership interest in REMIC 6 issued hereunder and designated as a Regular
Interest in REMIC 6. REMIC 6 Regular Interest SWAP-IO shall be entitled to
[____]% of amounts distributed in respect of The Class SWAP-IO Interest.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests, REMIC 2
Regular Interests, the Class C Interest, Class P Interest or Class SWAP-IO
Interest.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee and the NIMS Insurer pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Master
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 the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, 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 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 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 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 Master Servicer on
behalf of the Trust Fund 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 1%) of the one-month United States dollar lending rates which banks in
The City of New York selected by 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, in the case of any Interest Determination Date after
the initial Interest Determination Date, the lowest one-month United States
dollar lending rate which such New York banks selected by the Depositor are
quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Xxxxxx Xxx eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a mobile home.
"Residual Certificate": Any Class R Certificates or Class R-X
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, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, any vice president, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
the Cashier, any assistant cashier, any trust officer or assistant trust
officer, the Controller and any assistant controller or any other officer of the
Trustee customarily 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.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest. "Seller": Any one or
all of: (i) Option One Mortgage Corporation, a California corporation or (ii)
Option One Owner Trust 2001-1A, Option One Owner Trust 2001-1B, Option One Owner
Trust 2001-2, Option One Owner Trust 2002-3, Option One Owner Trust 2003-4,
Option One Owner Trust 2003-5, Option One Owner Trust 2005-6 and/or Option One
Owner Trust 2005-7, each a Delaware statutory trust.
"Senior Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Mezzanine Certificates and the Class C
Certificates, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans, calculated prior to taking into account payments
of principal on the Mortgage Loans and distribution of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount to the
Holders of the Certificates then entitled to distributions of principal on such
Distribution Date.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Master Servicer in the performance of its servicing obligations,
including, but not limited to, the cost of (i) the preservation, restoration,
inspection and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property and (iv) compliance with the obligations under
Sections 3.01, 3.09, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (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) at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.
"Servicing Fee Rate": [____]% per annum for the first 10 Due Periods,
[____]% per annum for the 11th through 30th Due Periods and [____]% per annum
for all Due Periods thereafter.
"Servicing Officer": Any employee or officer of the Master 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 Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Servicing Transfer Costs": 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 to service the Mortgage Loans properly and
effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
"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 outstanding 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 Master 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 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 Due 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 the Trust Fund, minus 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 (a) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (b) the later to occur of (i) the Distribution Date
occurring in [______________] and (ii) the first Distribution Date on which the
Senior Credit Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans and distribution
of the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount to the Certificates then entitled to distributions of
principal on such Distribution Date) is equal to or greater than [____]%.
"Subsequent Recoveries": As of any Distribution Date, unexpected
amounts received by the Master Servicer (net of any related expenses permitted
to be reimbursed pursuant to Section 3.10) 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.
"Sub-Servicer": Any Person with which either Master Servicer has
entered into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the applicable Master Servicer.
"Sub-Servicing Agreement": The written contract between either Master
Servicer and a Sub-Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Supplemental Interest Trust": As defined in Section 4.05(a).
"Swap Administration Agreement": As defined in Section 4.05(b).
"Swap Account": The account or accounts created and maintained pursuant
to Section 4.05. The Swap Account must be an Eligible Account.
"Swap Administrator": [____________________], a national banking
association, or its successor in interest, or any successor Swap Administrator
appointed pursuant to the Swap Administration Agreement.
"Swap Interest Shortfall Amount": Any shortfall of interest with
respect to any Class of Certificates resulting from the application of the Net
WAC Rate due to a discrepancy between the Uncertificated Notional Amount of the
Class Swap-IO Interest and the scheduled notional amount pursuant to the Swap
Administration Agreement.
"Swap LIBOR": A per annum rate equal to the floating rate payable by
the Swap Provider under the Interest Rate Swap Agreement.
"Swap Provider": HSBC Bank USA, National Association.
"Swap Provider Trigger Event": A Swap Termination Payment that is
triggered upon: (i) an Event of Default under the Interest Rate Swap Agreement
with respect to which the Swap Provider is a Defaulting Party (as defined in the
Interest Rate Swap Agreement), (ii) a Termination Event under the Interest Rate
Swap Agreement with respect to which the Swap Provider is the sole Affected
Party (as defined in the Interest Rate Swap Agreement) or (iii) an Additional
Termination Event under the Interest Rate Swap Agreement with respect to which
the Swap Provider is the sole Affected Party.
"Swap Termination Payment": The payment due to either party under the
Interest Rate Swap Agreement upon the early termination of the Interest Rate
Swap Agreement.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Prepayment Assumption": The prepayment assumption provided by the
Depositor and as disclosed in the Prospectus Supplement.
"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 the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, 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.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01 hereof.
"Three Month Rolling Delinquency Percentage": With respect to the
Mortgage Loans and any Distribution Date, the average for the three most recent
calendar months of the fraction, expressed as a percentage, the numerator of
which is (x) the sum (without duplication) of the aggregate of the Stated
Principal Balances of all Mortgage Loans that are (i) 60 or more days
Delinquent, (ii) in bankruptcy and 60 or more days Delinquent, (iii) in
foreclosure and 60 or more days Delinquent or (iv) REO Properties, and the
denominator of which is (y) the sum of the Stated Principal Balances of the
Mortgage Loans, in the case of both (x) and (y), as of the Close of Business on
the last Business Day of each of the three most recent calendar months.
"Trigger Event": A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds [____]% of the Senior Credit
Enhancement Percentage or
(b) the Cumulative Realized Loss Percentage exceeds the applicable
percentages set forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ --------------------------------------------------
[_____________- _____________] [____]% for [______________], plus 1/12 of [____]%
for each month thereafter
[_____________- ____________ ] [____]% for [______________], plus 1/12 of [____]%
for each month thereafter
[_____________- _____________] [____]% for [______________], plus 1/12 of [____]%
for each month thereafter
[_____________- _____________] [____]% for [______________], plus 1/12 of [____]%
or each month thereafter
______________ and thereafter [____]%
"Trust": [________________], the trust created hereunder.
"Trust Fund": All of the assets of the Trust, which the trust created
hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5, REMIC 6,
the Net WAC Rate Carryover Reserve Account, the Master Servicer Prepayment
Charge Payment Amounts, distributions made to the Trustee by the Swap
Administrator under the Swap Administration Agreement and the Swap Account.
"Trust REMIC": Each of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5 and
REMIC 6.
"Trustee": [____________________], a national banking association, 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
one twelfth of the product of (i) the Trustee Fee Rate, multiplied by (ii) the
aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties
(after giving effect to scheduled payments of principal due during the Due
Period relating to the previous Distribution Date, to the extent received or
advanced) as of the first day of the calendar month prior to the month of such
Distribution Date (or, in the case of the initial Distribution Date, as of the
Cut-off Date).
"Trustee Fee Rate": [____]% per annum.
"Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass-Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC Regular Interests based on
their respective entitlements to interest irrespective of any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date).
"Uncertificated Notional Amount": With respect to REMIC 2 Regular
Interest LTIO and each Distribution Date listed below, the aggregate
Uncertificated Principal Balance of the REMIC 1 Regular Interests ending with
the designation "A" listed below:
DISTRIBUTION DATE REMIC 1 REGULAR INTERESTS
----------------- -------------------------
1 and 2 I-1-A through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
00 X-0-X through I-45-A
11 I-10-A through I-45-A
12 I-11-A through I-45-A
13 I-12-A through I-45-A
14 I-13-A through I-45-A
15 I-14-A through I-45-A
16 I-15-A through I-45-A
17 I-16-A through I-45-A
18 I-17-A through I-45-A
19 I-18-A through I-45-A
20 I-19-A through I-45-A
21 I-20-A through I-45-A
22 I-21-A through I-45-A
23 I-22-A through I-45-A
24 I-23-A through I-45-A
25 I-24-A through I-45-A
26 I-25-A through I-45-A
27 I-26-A through I-45-A
28 I-27-A through I-45-A
29 I-28-A through I-45-A
30 I-29-A through I-45-A
31 I-30-A through I-45-A
32 I-31-A through I-45-A
33 I-32-A through I-45-A
34 I-33-A through I-45-A
35 I-34-A through I-45-A
36 I-35-A through I-45-A
37 I-36-A through I-45-A
38 I-37-A through I-45-A
39 I-38-A through I-45-A
40 I-39-A through I-45-A
41 I-40-A through I-45-A
42 I-41-A through I-45-A
43 I-42-A through I-45-A
44 I-43-A through I-45-A
45 I-44-A and I-45-A
46 I-45-A
With respect to the Class SWAP-IO Interest and any Distribution Date,
an amount equal to the Uncertificated Notional Amount of the REMIC 2 Regular
Interest LTIO.
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC Regular
Interest (other than REMIC 2 Regular Interest LTIO), the amount of such REMIC
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Principal Balance of each REMIC Regular Interest (other
than REMIC 2 Regular Interest LTIO) shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.08 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08, and the
Uncertificated Principal Balances of REMIC 2 Regular Interest LTZZ shall be
increased by interest deferrals as provided in Section 4.08. The Uncertificated
Principal Balance of each REMIC Regular Interest shall never be less than zero.
With respect to the Class C Interest, as of any date of determination, an amount
equal to the excess, if any, of (A) the then aggregate Uncertificated Principal
Balance of the REMIC 2 Regular Interest over (B) the then aggregate Certificate
Principal Balance of the Class A Certificates, Mezzanine Certificates and the
Class P Interest then outstanding.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to each REMIC
1 Regular Interest ending with the designation "A", a per annum rate equal to
the weighted average of the Expense Adjusted Net Mortgage Rates of the Mortgage
Loans multiplied by 2, subject to a maximum rate of [____]%. With respect to
each REMIC 1 Regular Interest ending with the designation "B", the greater of
(x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the
weighted average of the Expense Adjusted Net Mortgage Rates of the Group I
Mortgage Loans over (ii) [____]% and (y) [____]%.
"Uncertificated REMIC 2 Pass-Through Rate": With respect to REMIC 2
Regular Interest LT-AA, REMIC 2 Regular Interest LTA1, REMIC 2 Regular Interest
LTA2, REMIC 2 Regular Interest LTA3, REMIC 2 Regular Interest LTA4, REMIC 2
Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest
LTM3, REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2
Regular Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest
LTM8, REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10, REMIC 2
Regular Interest LTM11 and REMIC 2 Regular Interest LT-ZZ and REMIC 2 Regular
Interest LT-P, a per annum rate (but not less than zero) equal to the weighted
average of (x) with respect to REMIC 1 Regular Intest I, the weighted average of
the Adjusted Net Mortgage Rates of the Mortgage Loans, (y) with respect to REMIC
1 Regular Interests ending with the designation "B", the weighted average of the
Uncertificated REMIC 1 Pass-Through Rates for such REMIC 1 Regular Interests,
weighted on the basis of the Uncertificated Principal Balance of such REMIC 1
Regular Interests for each such Distribution Date and (z) with respect to REMIC
1 Regular Interests ending with the designation "A", for each Distribution Date
listed below, the weighted average of the rates listed below for each such REMIC
1 Regular Interest listed below, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest for each such
Distribution Date:
DISTRIBUTION DATE REMIC 1 REGULAR INTEREST RATE
----------------- ------------------------ ---------------------------------------------------------------
1 and 2 I-1-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
3 I-2-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A Uncertificated REMIC 1 Pass-Through Rate
4 I-3-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A and I-2-A Uncertificated REMIC 1 Pass-Through Rate
5 I-4-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-3-A Uncertificated REMIC 1 Pass-Through Rate
6 I-5-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-4-A Uncertificated REMIC 1 Pass-Through Rate
7 I-6-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-5-A Uncertificated REMIC 1 Pass-Through Rate
8 I-7-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-6-A Uncertificated REMIC 1 Pass-Through Rate
9 I-8-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-7-A Uncertificated REMIC 1 Pass-Through Rate
10 I-9-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-8-A Uncertificated REMIC 1 Pass-Through Rate
11 I-10-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-9-A Uncertificated REMIC 1 Pass-Through Rate
12 I-11-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-10-A Uncertificated REMIC 1 Pass-Through Rate
13 I-12-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-11-A Uncertificated REMIC 1 Pass-Through Rate
14 I-13-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-12-A Uncertificated REMIC 1 Pass-Through Rate
15 I-14-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-13-A Uncertificated REMIC 1 Pass-Through Rate
16 I-15-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-14-A Uncertificated REMIC 1 Pass-Through Rate
17 I-16-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-15-A Uncertificated REMIC 1 Pass-Through Rate
18 I-17-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-16-A Uncertificated REMIC 1 Pass-Through Rate
19 I-18-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-17-A Uncertificated REMIC 1 Pass-Through Rate
20 I-19-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-18-A Uncertificated REMIC 1 Pass-Through Rate
21 I-20-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-19-A Uncertificated REMIC 1 Pass-Through Rate
22 I-21-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-20-A Uncertificated REMIC 1 Pass-Through Rate
23 I-22-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-21-A Uncertificated REMIC 1 Pass-Through Rate
24 I-23-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-22-A Uncertificated REMIC 1 Pass-Through Rate
25 I-24-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-23-A Uncertificated REMIC 1 Pass-Through Rate
26 I-25-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-24-A Uncertificated REMIC 1 Pass-Through Rate
27 I-26-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-25-A Uncertificated REMIC 1 Pass-Through Rate
28 I-27-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-26-A Uncertificated REMIC 1 Pass-Through Rate
29 I-28-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-27-A Uncertificated REMIC 1 Pass-Through Rate
30 I-29-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-28-A Uncertificated REMIC 1 Pass-Through Rate
31 I-30-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-29-A Uncertificated REMIC 1 Pass-Through Rate
32 I-31-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-30-A Uncertificated REMIC 1 Pass-Through Rate
33 I-32-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-31-A Uncertificated REMIC 1 Pass-Through Rate
34 I-33-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-32-A Uncertificated REMIC 1 Pass-Through Rate
35 I-34-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-33-A Uncertificated REMIC 1 Pass-Through Rate
36 I-35-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-34-A Uncertificated REMIC 1 Pass-Through Rate
37 I-36-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-35-A Uncertificated REMIC 1 Pass-Through Rate
38 I-37-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-36-A Uncertificated REMIC 1 Pass-Through Rate
39 I-38-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-37-A Uncertificated REMIC 1 Pass-Through Rate
40 I-39-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-38-A Uncertificated REMIC 1 Pass-Through Rate
41 I-40-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-39-A Uncertificated REMIC 1 Pass-Through Rate
42 I-41-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-40-A Uncertificated REMIC 1 Pass-Through Rate
43 I-42-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-41-A Uncertificated REMIC 1 Pass-Through Rate
44 I-43-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-42-A Uncertificated REMIC 1 Pass-Through Rate
45 I-44-A through I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-43-A Uncertificated REMIC 1 Pass-Through Rate
46 I-45-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC 1 Pass-Through Rate
I-1-A through I-44-A Uncertificated REMIC 1 Pass-Through Rate
thereafter I-1-A through I-45-A Uncertificated REMIC 1 Pass-Through Rate
With respect to REMIC 2 Regular Interest LT-IO, and (a) the first
Distribution Date, the excess of (i) the Uncertificated REMIC 1 Pass-Through
Rates for REMIC 1 Regular Interests ending with the designation "A", over (ii)
the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interests
ending with the designation "A", (b) the second Distribution Date through the
46th Distribution Date, the excess of (i) the Undertificated REMIC 1
Pass-Through Rates for REMIC I Regular Interest ending with the designation "A",
over (ii) 2 multiplied by Swap LIBOR, and (c) thereafter [____]%.
"Underwriters": Each of Banc of America Securities LLC, Greenwich
Capital Markets, Inc., Citigroup Global Markets Inc., HSBC Securities (USA)
Inc., X.X. Xxxxxx Securities Inc., Xxxxxx Brothers Inc. and H&R Block Financial
Advisors Inc.
"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" or "U.S. 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 Residual 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.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class
for the related Accrual Period.
"Value": With respect to any Mortgage Loan, and the related 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 Xxxxxx Xxx and Xxxxxxx Mac,
and (b) the value thereof as determined by a review appraisal
conducted by the Originator in the event any such review
appraisal determines an appraised value more than [____]%
lower than the value thereof, in the case of a Mortgaged Loan
with a Loan-to-Value Ratio less than or equal to [____]%, or
more than [____]% lower than the value thereof, in the case of
a Mortgage Loan with a Loan-to-Value Ratio greater than
[____]%, as determined by the appraisal referred to in clause
(i)(a) above; and
(ii) the purchase price paid for the related Mortgaged Property by
the Mortgagor with the proceeds of the Mortgage Loan;
provided, however, that in the case of a refinanced Mortgage
Loan (which is a Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property) or a Mortgage
Loan originated in connection with a "lease option purchase"
if the "lease option purchase price" was set 12 months or more
prior to origination, such value of the Mortgaged Property is
based solely upon clause (i) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
[____]% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class P Certificates shall have [____]% of the
Voting Rights and the Residual Certificates shall have [____]% of the Voting
Rights. The Voting Rights allocated to any Class of Certificates (other than the
Class P Certificates and the Residual Certificates) shall be allocated among all
Holders of each such Class in proportion to the outstanding Certificate
Principal Balance or Notional Amount of such Certificates and the Voting Rights
allocated to the Class P Certificates and the Residual Certificates shall be
allocated among all Holders of each such Class in proportion to such Holders'
respective Percentage Interest; PROVIDED, HOWEVER that when none of the Regular
Certificates are outstanding, [____]% of the Voting Rights shall be allocated
among Holders of the Residual Certificates in accordance with such Holders'
respective Percentage Interests in the Certificates of such Class.
SECTION 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.
SECTION 1.03. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for each of the Class A Certificates, the Mezzanine
Certificates and the Class C Certificates for any Distribution Date, (1) the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, among the Class C Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
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 and Net WAC Rate Carryover Amounts incurred for any Distribution
Date shall be allocated among the Class C Certificates on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable
Pass-Through Rate on the Notional Amount of each such Certificate after the
allocation thereto in clause (1).
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to the REMIC 1 Regular Interests
ending with the designation "B", pro rata based on, and to the extent of, one
month's interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rates on the respective Uncertificated Principal Balances of each
such REMIC 1 Regular Interest , and then, to REMIC 1 Regular Interests ending
with the designation "A", pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC 1 Pass-Through
Rates on the respective Uncertificated Principal Balances of each such REMIC 1
Regular Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated among REMIC 2 Regular Interest LTAA, REMIC
2 Regular Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular Interest
LTA3, REMIC 2 Regular Interest LTA4, REMIC 2 Regular Interest LTM1, REMIC 2
Regular Interest LTM2, REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest
LTM4, REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2
Regular Interest LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest
LTM9, REMIC 2 Regular Interest LTM10, REMIC 2 Regular Interest LTM11 and REMIC 2
Regular Interest LTZZ, PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC 2 Pass-Through
Rate on the respective Uncertificated Principal Balance of each such REMIC 2
Regular Interest.
SECTION 1.04. Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to an Indenture and (ii) any series of notes
issued pursuant to one or more Indentures remain outstanding or the NIMS Insurer
is owed amounts in respect of its guarantee of payment on such notes; provided,
however, the NIMS Insurer shall not have any rights hereunder (except pursuant
to Section 11.01 in the case of clause (ii) below) so long as (i) the NIMS
Insurer has not undertaken to guarantee certain payments of notes issued
pursuant to the Indenture or (ii) any default has occurred and is continuing
under the insurance policy issued by the NIMS Insurer with respect to such
notes.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust 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 (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans; (iv) the rights of the
Depositor under the Mortgage Loan Purchase Agreement, (v) all other assets
included or to be included in the Trust Fund, (vi) payments made to the Trustee
by the Swap Administrator under the Swap Administration Agreement and the Swap
Account and (vii) all proceeds of any of the foregoing. Such assignment includes
all interest and principal due and collected by the Depositor or the Master
Servicer after the Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor, does
hereby deliver to, and deposit with the Trustee, or its designated agent (the
"Custodian"), the following documents or instruments with respect to each
Mortgage Loan so transferred and assigned and the Originator, on behalf of the
Depositor,:
(i) the original Mortgage Note, endorsed either (A) in blank, in
which case the Trustee shall cause the endorsement to be
completed or (B) in the following form: "Pay to the order of
[____________________], as Trustee, without recourse", or with
respect to any lost Mortgage Note, an original Lost Note
Affidavit stating that the original mortgage note was lost,
misplaced or destroyed, together with a copy of the related
mortgage note; PROVIDED, HOWEVER, that such substitutions of
Lost Note Affidavits for -------- ------- original Mortgage
Notes may occur only with respect to Mortgage Loans, the
aggregate Cut-off Date Principal Balance, as applicable, of
which is less than or equal to [____]% of the Pool Balance as
of the Cut-off Date;
(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. The Mortgage shall be assigned either
(A) in blank or (B) to "[____________________], as Trustee,
without recourse";
(iv) an original of any intervening assignment of Mortgage showing
a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor and the NIMS Insurer on or prior to the
Closing Date an acknowledgment of receipt of the original Mortgage Note (with
any exceptions noted), substantially in the form attached as Exhibit F-3 hereto.
If any of the documents referred to in Section 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 or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Master Servicer,
in its capacity as 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 Master Servicer, in its capacity as Originator, delivery to the Trustee or
the Custodian, 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. If the original lender's title insurance
policy, or a certified copy thereof, was not delivered pursuant to Section
2.01(v) above, the Master Servicer, in its capacity as Originator, shall deliver
or cause to be delivered to the Trustee or the Custodian, the original or a copy
of a written commitment or interim binder or preliminary report of title issued
by the title insurance or escrow company or an original attorney's opinion of
title, with the original or a certified copy thereof to be delivered to the
Trustee or the Custodian, promptly upon receipt thereof. The Master Servicer or
the Depositor shall deliver or cause to be delivered to the Trustee or the
Custodian promptly upon receipt thereof any other 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.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Master
Servicer, in its capacity as Originator, shall have 120 days to cure such defect
or deliver such missing document to the Trustee or the Custodian. If the
Originator does not cure such defect or deliver such missing document within
such time period, the Master Servicer, in its capacity as Originator, shall
either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The Depositor (at the expense of the Master Servicer, in its capacity
as Originator) shall cause the Assignments which were delivered in blank to be
completed and shall cause all Assignments referred to in Section 2.01(iii)
hereof and, to the extent necessary, in Section 2.01(iv) hereof to be recorded.
The Depositor shall be required to deliver such Assignments for recording within
90 days of the Closing Date. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording (except with respect to any Mortgage Loan located in Maryland) unless
the Trustee and the Depositor receive 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, each Assignment shall be submitted
for recording by the Depositor in the manner described above, at no expense to
the Trust Fund or Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least [____]% of the Voting
Rights, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Master
Servicer, (iv) the occurrence of a servicing transfer as described in Section
7.02 hereof, (v) if the Originator is not the Master Servicer and with respect
to any one Assignment the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Mortgagor under the related Mortgage, (vi) any Mortgage Loan
that is 90 days or more Delinquent and such recordation would be necessary to
facilitate conversion of the Mortgaged Property in accordance with Section 3.16
and (vii) reasonable direction by the NIMS Insurer. Upon (a) receipt of written
notice from the Trustee that recording of the Assignments is required pursuant
to one or more of the conditions (excluding (v) and (vi) above) set forth in the
preceding sentence or (b) upon the occurrence of condition (v) or (vi) in the
preceding sentence, the Depositor shall be required to deliver such Assignments
for recording as provided above, promptly and in any event within 30 days
following receipt of such notice. Notwithstanding the foregoing, if the
Originator fails to pay the cost of recording the Assignments, such expense will
be paid by the Trustee and the Trustee shall be reimbursed for such expenses by
the Trust. To the extent not previously delivered to the Trustee by the
Depositor, the Depositor shall furnish the Trustee, or its designated agent,
with a copy of each Assignment submitted for recording. In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Depositor shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.
The Master Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Master Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Master Servicer cannot provide a copy of such document certified by the
public recording office within such 365 day period, an Officers' Certificate of
the Master Servicer which shall (A) identify the recorded document, (B) state
that the recorded document has not been delivered to the Custodian due solely to
a delay caused by the public recording office, (C) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation, if known and (D) specify the date the
applicable recorded document is expected to be delivered to the Custodian, and,
upon receipt of a copy of such document certified by the public recording
office, the Master Servicer shall immediately deliver such document to the
Custodian. In the event the appropriate public recording office will not certify
as to the accuracy of such document, the Master Servicer shall deliver a copy of
such document certified by an officer of the Master Servicer to be a true and
complete copy of the original to the Custodian.
The parties 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 HOEPA or any other applicable predatory or abusive lending laws.
SECTION 2.02. Acceptance by Trustee.
Subject to the provisions of Section 2.01 and subject to the review
described below and any exceptions noted on the exception report described in
the next paragraph below, the Trustee acknowledges receipt of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" 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 "Trust Fund" 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, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Mortgage
Loan (or, with respect to any document delivered after the Startup Day, within
45 days of receipt and with respect to any Qualified Substitute Mortgage, within
45 days after the assignment thereof). The Trustee further agrees, for the
benefit of the Certificateholders, to certify to the Depositor, the Master
Servicer and the NIMS Insurer in substantially the form attached hereto as
Exhibit F-1, within 45 days after the Closing Date, with respect to each
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof) 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 required
to be delivered to it pursuant Section 2.01 of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn 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 (1) and (2) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File. It
is herein acknowledged that, in conducting such review, the Trustee (or the
Custodian, as applicable) is under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver (or cause the Custodian to deliver) to the Depositor, the Master
Servicer and the NIMS Insurer a final certification in the form annexed hereto
as Exhibit F-2 evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon.
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
(or the Custodian, as applicable) 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 Originator the
Depositor, the NIMS Insurer and the Master Servicer. In addition, upon the
discovery by the Originator, the Depositor, the NIMS Insurer or the Master
Servicer (or upon receipt by the Trustee of written notification of such breach)
of a breach of any of the representations and warranties made by the Originator
in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties to this Agreement.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free and
clear of any liens and encumbrances, from the Depositor to the Trustee in trust
for the benefit of the Certificateholders and that such property not be part of
the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the
Originator.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Originator of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the
Originator, the NIMS Insurer and the Master Servicer of such defect, missing
document or breach and request that the Originator deliver such missing document
or cure such defect or breach within 120 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or cure such defect or breach in all material
respects during such period, the Trustee shall enforce the Originator's
obligation under the Mortgage Loan Purchase Agreement and cause the Originator
to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such 120 day period
(subject to Section 2.03(e)). The Purchase Price for the repurchased Mortgage
Loan shall be deposited in the Collection Account, and the Trustee, upon receipt
of written certification from the Master Servicer of such deposit, shall release
to the Originator the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Originator shall furnish to it and as shall be necessary to vest in the
Originator any Mortgage Loan released pursuant hereto and the Trustee shall have
no further responsibility with regard to such Mortgage File (it being understood
that the Trustee shall have no responsibility for determining the sufficiency of
such assignment for its intended purpose). In lieu of repurchasing any such
Mortgage Loan as provided above, the Originator may cause such Mortgage Loan to
be removed from the Trust Fund (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d). It is
understood and agreed that the obligation of the Originator 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 against
the Originator respecting such omission, defect or breach available to the
Trustee on behalf of the Certificateholders.
(b) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation, warranty
or covenant of the Depositor set forth in Section 2.06 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Depositor shall cure such breach in all material respects.
(c) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.05 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the
last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and 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 Adjustment
(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 Master Servicer and the NIMS
Insurer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Master Servicer and the NIMS
Insurer a certification substantially in the form of Exhibit F-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 the Trust
Fund and will be retained by the Originator. For the month of substitution,
distributions to Certificateholders will reflect the collections and recoveries
in respect of such Deleted Mortgage Loan in the Due Period preceding the month
of substitution and the Originator shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. The
Originator shall give or cause to be given written notice to the
Certificateholders and the NIMS Insurer 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 NIMS Insurer and the Trustee. Upon such
substitution by the Originator, 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 as of the date of substitution.
For any month in which the Originator substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (the "Substitution Adjustment"), if any, by
which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds
the aggregate, as to each such Qualified Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage Rate.
On the date of such substitution, the Originator will deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment, if any, and the Trustee, upon receipt of
the related Qualified Substitute Mortgage Loan or Loans and certification by the
Master Servicer of such deposit, shall release to the Originator the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Originator shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.
In addition, the Originator shall obtain at its own expense and deliver
to the Trustee and the NIMS Insurer an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
Upon discovery by the Originator, the Master Servicer, the NIMS Insurer
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 Originator or the Depositor, as the case
may be, shall repurchase or, subject to the limitations set forth in Section
2.03(d), 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. Such repurchase or
substitution shall be made (i) by the Originator if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator under the Mortgage
Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of any representation or warranty
of the Depositor set forth in Section 2.06, or if its status as a non-qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a),
if made by the Originator, or Section 2.03(b), if made by the Depositor. The
Trustee shall reconvey to the Depositor or the Originator, as the case may be,
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. Intentionally Omitted.
SECTION 2.05. Representations, Warranties and Covenants of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
formation and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business
of the type conducted by the Master Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Master Servicer
has the power and authority to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to
be delivered pursuant to this Agreement) by the Master Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Master Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and all
requisite corporate action has been taken by the Master Servicer to
make this Agreement valid and binding upon the Master Servicer in
accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the
charter or by-laws of the Master Servicer or result in the breach of
any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Master Servicer or its property is subject;
(iii) The execution and delivery of this Agreement by the
Master Servicer and the performance and compliance with its obligations
and covenants hereunder do not require the consent or approval of any
governmental authority or, if such consent or approval is required, it
has been obtained;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Master
Servicer, constitute and will constitute valid, legal and binding
obligations of the Master Servicer, enforceable in accordance with
their respective terms, except as the enforcement thereof may be
limited by applicable bankruptcy laws and general principles of equity;
(v) [Reserved];
(vi) The Master Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vii) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Master Servicer
that, either individually or in the aggregate, (A) may result in any
change in the business, operations, financial condition, properties or
assets of the Master Servicer that might prohibit or materially and
adversely affect the performance by such Master Servicer of its
obligations under, or validity or enforceability of, this Agreement, or
(B) may result in any material impairment of the right or ability of
the Master Servicer to carry on its business substantially as now
conducted, or (C) may result in any material liability on the part of
the Master Servicer, or (D) would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Master Servicer contemplated
herein, or (E) would otherwise be likely to impair materially the
ability of the Master Servicer to perform under the terms of this
Agreement;
(viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee by the Master Servicer in connection with the transactions
contemplated hereby contains any untrue statement of a material fact;
(ix) The Master Servicer covenants that its computer and other
systems used in servicing the Mortgage Loans operate in a manner such
that the Master Servicer can service the Mortgage Loans in accordance
with the terms of this Agreement;
(x) The information set forth in the Prepayment Charge
Schedule (including the Prepayment Charge Summary attached thereto) is
complete, true and correct in all material respects on the date or
dates when such information is furnished and each Prepayment Charge is
permissible and enforceable in accordance with its terms (except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws affecting
creditor's rights generally or the collectibility thereof may be
limited due to acceleration in connection with a foreclosure) under
applicable federal, state and local law;
(xi) The Master Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in
Section 3.01; and
(xii) The Master Servicer has accurately and fully reported,
and will continue to accurately and fully report, its borrower credit
files to each of the credit repositories in a timely manner.
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 NIMS Insurer, the Master Servicer, the Originator 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, Prepayment
Charge 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 Master Servicer, the Originator,
the NIMS Insurer and the Trustee. Notwithstanding the foregoing, within 90 days
of the earlier of discovery by the Master Servicer or receipt of notice by the
Master Servicer of the breach of the representation or covenant of the Master
Servicer (in its capacity as Originator) set forth in Sections 2.05(x) or
2.05(xi) above which materially and adversely affects the interests of the
Holders of the Class P Certificates in any Prepayment Charge, the Master
Servicer shall remedy such breach as follows: (a) if the representation made by
the Master Servicer (in its capacity as Originator) in Section 2.05(x) above is
breached and a Principal Prepayment has occurred in the applicable Prepayment
Period or if a change of law subsequent to the Closing Date limits the
enforceability of a Prepayment Charge (other than in the circumstances provided
in Section 2.05(x) above), the Master Servicer (in its capacity as Originator)
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 Master
Servicer and paid by the Master Servicer, for the benefit of the Holders of the
Class P Certificates, in respect of such Prepayment Charge; and (b) if any of
the covenants made by the Master Servicer in Section 2.05(xi) above is breached,
the Master Servicer must 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. The foregoing shall not, however, limit any
remedies available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders, pursuant to the Mortgage Loan Purchase
Agreement signed by the Master Servicer in its capacity as Originator,
respecting a breach of the representations, warranties and covenants of the
Master Servicer in its capacity as Originator contained in the Mortgage Loan
Purchase Agreement.
SECTION 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles
of incorporation or by-laws of the Depositor or, to the best of the
Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or
assets (except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue
Sky laws, (b) have been previously obtained or (c) the failure of which
to obtain would not have a material adverse effect on the performance
by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement.
SECTION 2.07. Issuance of Certificates.
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 Sections
2.01 and 2.02, together with the assignment to it of all other assets included
in the Trust Fund, 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 Certificates in authorized denominations. The interests evidenced by the
Certificates, constitute the entire beneficial ownership interest in the Trust
Fund.
SECTION 2.08. Reserved.
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance of
REMIC 2, REMIC 3, REMIC 4, REMIC 5 and REMIC 6 by the Trustee; Issuance of
Certificates.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the assets described in the definition of REMIC 1 for the benefit of the
holders of the REMIC 1 Regular Interests (which are uncertificated) and the
Class R Certificates (in respect of the Class R-1 Interest). The Trustee
acknowledges receipt of the assets described in the definition of REMIC 1 and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the REMIC 1 Regular Interests and the Class R
Certificates (in respect of the Class R-1 Interest). The interests evidenced by
the Class R-1 Interest, together with the REMIC 1 Regular Interests, constitute
the entire beneficial ownership interest in REMIC 1.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests for the benefit of the holders of the REMIC
2 Regular Interests (which are uncertificated) and the Class R Certificates (in
respect of the Class R-2 Interest). The Trustee acknowledges receipt of the
REMIC 1 Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC 2 Regular
Interests and the Class R Certificates (in respect of the Class R-2 Interest).
The interests evidenced by the Class R-2 Interest, together with the REMIC 2
Regular Interests, constitute the entire beneficial ownership interest in REMIC
2.
(c) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 2 Regular Interests (which are uncertificated) for the benefit
of the Holders of the REMIC 3 Regular Interests and the Class R Certificates (in
respect of the Class R-3 Interest). The Trustee acknowledges receipt of the
REMIC 2 Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of the REMIC 3 Regular
Certificates, the Class C Interest, Class P Interest and Class SWAP-IO Interest
and the Class R Certificates (in respect of the Class R-3 Interest). The
interests evidenced by the Class R-3 Interest, together with the REMIC 3 Regular
Certificates, the Class C Interest, Class P Interest and Class SWAP-IO Interest,
constitute the entire beneficial ownership interest in REMIC 3.
(d) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class C Interest (which is uncertificated) for the benefit of the
Holders of the Class C Certificates and the Class R-X Certificates (in respect
of the Class R-4 Interest). The Trustee acknowledges receipt of the Class C
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class C Certificates and the
Class R-X Certificates (in respect of the Class R-4 Interest). The interests
evidenced by the Class R-4 Interest, together with the Class C Certificates,
constitute the entire beneficial ownership interest in REMIC 4.
(e) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class P Interest (which is uncertificated) for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-5 Interest). The Trustee acknowledges receipt of the Class P
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class P Certificates and the
Class R-X Certificates (in respect of the Class R-5 Interest). The interests
evidenced by the Class R-5 Interest, together with the Class P Certificates,
constitute the entire beneficial ownership interest in REMIC 5.
(f) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Class SWAP-IO Interest (which is uncertificated) for the benefit of
the Holders of REMIC 6 Regular Interest SWAP-IO and the Class R-X Certificates
(in respect of the Class R-6 Interest). The Trustee acknowledges receipt of the
Class SWAP-IO Interest and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of REMIC 6 Regular
Interest SWAP-IO and the Class R-X Certificates (in respect of the Class R-6
Interest). The interests evidenced by the Class R-6 Interest, together with
REMIC 6 Regular Interest SWAP-IO, constitute the entire beneficial ownership
interest in REMIC 6.
(g) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01 and
Section 2.02, (ii) the assignment and delivery to the Trustee of REMIC 2
(including the Residual Interest therein represented by the Class R-2 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.07 and (iii)
the assignment and delivery to the Trustee of REMIC 3 (including the Residual
Interest therein represented by the Class R-3 Interest), and the acceptance by
the Trustee thereof, pursuant to Section 2.07(c), (iv) the assignment and
delivery to the Trustee of REMIC 4 (including the Residual Interest therein
represented by the Class R-4 Interest) and the acceptance by the Trustee
thereof, pursuant to Section 2.07(d), (v) the assignment and delivery to the
Trustee of REMIC 5 (including the Residual Interest therein represented by the
Class R-5 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.07(e) and (vi) the assignment and delivery to the Trustee of REMIC 6
(including the Residual Interest therein represented by the Class R-6 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.07(f), 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, (A) the Class R Certificates in authorized denominations
evidencing the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest and (B) the Class R-X Certificates in authorized denominations
evidencing the Class R-4 Interest, the Class R-5 Interest and the Class R-6
Interest.
SECTION 2.10. Negative Covenants of the Trustee and the Master
Servicer.
Except as otherwise expressly permitted by this Agreement, the Trustee
and the Master Servicer shall not cause the Trust Fund to:
(i) sell, transfer, exchange or otherwise dispose of any of the assets
of the Trust Fund;
(ii) dissolve or liquidate the Trust Fund in whole or in part;
(iii) engage, directly or indirectly, in any business other than that
arising out of the issue of the Certificates, and the actions contemplated or
required to be performed under this Agreement;
(iv) incur, create or assume any indebtedness for borrowed money;
(v) voluntarily file a petition for bankruptcy, reorganization,
assignment for the benefit of creditors or similar proceeding; or
(vi) merge, convert or consolidate with any other Person.
SECTION 2.11. Puposes and Powers of the Trust.
The purpose of the common law trust, as created hereunder, is to engage
in the following activities:
(a) acquire and hold the Mortgage Loans and the other assets of the
Trust Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for the
Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities.
The Trustee shall not cause the Trust to engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement while any Certificate is outstanding, and this Section
2.11 may not be amended, without the consent of the Certificateholders
evidencing 51% or more of the aggregate Voting Rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trust and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the Mortgage Loans
and, to the extent consistent with such terms, 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:
(A) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(B) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(C) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(D) the Master 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 Master Servicer (a)
shall seek 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 relates to a default or a reasonably foreseeable default and would,
in the reasonable judgement of the Master Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Mortgage Loan 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 Master Servicer or an
applicable Sub-Servicer an intention to refinance the related Mortgage Loan and
(y) the Master Servicer has concluded in its reasonable judgement that the
waiver of such Prepayment Charge would induce such mortgagor to refinance with
the Master Servicer; provided, however, that the Master Servicer shall waive no
more than [____]% of the Prepayment Charges (by number of Prepayment Charges)
set forth on the Prepayment Charge Schedule in accordance with clause (ii)(B)
above. If a Prepayment Charge is waived as permitted by meeting the standards
described in clauses (i) and (ii)(B) above, then the Master 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
Master Servicer in respect of any waived Prepayment Charges pursuant to clauses
(i) and (ii)(B) above 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 Mortgage Loans, the Master 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 Master Servicer in its own name or
in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee
when the Master 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 Certificateholders and the Trustee, and upon 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 Master 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 Master 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,
within 15 days of the Closing Date, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer any special or limited powers of attorney for each county in which
a Mortgaged Property is located and other documents necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder; PROVIDED, such limited powers of attorney or
other documents shall be prepared by the Master Servicer and submitted to the
Trustee for execution. The Trustee shall not be liable for the actions of the
Master 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 Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the payment of taxes and
assessments on the Mortgaged Properties, 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 Master Servicer or by Sub-Servicers in effecting the
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 Master
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.04) and the Master 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 Master 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 Code
(or Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder 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.
Within 180 days of the Closing Date, with respect to each Mortgage Loan
set forth on Schedule X of the Mortgage Loan Purchase Agreement, the Master
Servicer shall deliver to the Trustee a written field report from the Master
Servicer or from an independent contractor (which, in either case, need not be a
qualified appraiser but who cannot be the related Mortgagor) certifying that,
based on a visual exterior inspection conducted by such person, such related
Mortgaged Property appears not to have been damaged materially by the recent
Hurricane Xxxxxxx or Xxxx or their after effects.
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
PROVIDED, HOWEVER, that (i) such agreements would not result in a withdrawal or
a downgrading by any Rating Agency of the rating on any Class of Certificates
and (ii) the NIMS Insurer shall have consented to such Sub-Servicing Agreement.
The Trustee is hereby authorized to acknowledge, at the request of the Master
Servicer, any Sub-Servicing Agreement that 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 Xxxxxxx Mac or Xxxxxx 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 Master 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 Master 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 [___]% of the Voting
Rights; PROVIDED, FURTHER, that the consent of the Holders of Certificates
entitled to at least [___]% 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 [___]% 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 Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the NIMS Insurer and the Trustee copies of all Sub-Servicing Agreements, and
any amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account
of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). 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 Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement 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.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee in accordance with the foregoing provisions of this
paragraph.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer, with the consent of the NIMS Insurer, 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 Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master 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 Master Servicer or the Trustee
(if the Trustee is acting as Master Servicer) without fee, in accordance with
the terms of this Agreement, in the event that the Master Servicer (or the
Trustee, if such party is then acting as Master Servicer) shall, for any reason,
no longer be the Master Servicer (including termination due to a Master Servicer
Event of Termination).
SECTION 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master 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 Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-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 and the
NIMS Insurer, the Trustee or 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
Master Servicer alone, and the NIMS Insurer, the Trustee or 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 Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee.
In the event the Master Servicer shall for any reason no longer be the
servicer (including by reason of the occurrence of a Master Servicer Event of
Termination), the Trustee shall thereupon assume all of the rights and
obligations of the Master Servicer under each Sub-Servicing Agreement that the
Master Servicer may have entered into, unless the Trustee elects to terminate
any Sub-Servicing Agreement in accordance with its terms as provided in Section
3.03. Upon such assumption, the Trustee (or the successor servicer appointed
pursuant to Section 7.02) shall be deemed, subject to Section 3.03, to have
assumed all of the departing Master Servicer's interest therein and to have
replaced the departing Master 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 departing Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) neither the Trustee nor any successor Master Servicer shall be deemed
to have assumed any liability or obligation of the Master Servicer that arose
before it ceased to be the Master Servicer.
The Master Servicer at its expense shall, upon request of 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. All Servicing Transfer Costs
shall be paid by the predecessor Master Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Master Servicer defaults in
its obligation to pay such costs, such costs shall be paid by the successor
Master Servicer or the Trustee (in which case the successor Master Servicer or
the Trustee, as applicable, shall be entitled to reimbursement therefor from the
assets of the Trust).
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Master 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 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 Master 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 Master Servicer shall
make timely Advances on such Mortgage Loan during such extension pursuant to
Section 4.04 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 Master Servicer, such default is
reasonably foreseeable, the Master 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, capitalize the interest portion of past due
Monthly Payments and outstanding Servicing Advances, 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, or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor (any and all such
waivers, modifications, variances, forgiveness of principal or interest,
postponements, or indulgences collectively referred to herein as "forbearance"),
PROVIDED, HOWEVER, that in no event shall the Master Servicer grant any such
forbearance (other than as permitted by the second sentence of this Section)
with respect to any one Mortgage Loan more than once in any 12 month period or
more than three times over the life of such Mortgage Loan, PROVIDED, FURTHER,
that in determining which course of action permitted by this sentence it shall
pursue, the Master Servicer shall adhere to the Loss Mitigation Procedures and
PROVIDED, FURTHER, that the NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
[____]% of the number of Mortgage Loans as of the Cut-off Date. The Master
Servicer's analysis supporting any forbearance and the conclusion that any
forbearance meets the standards of Section 3.01 and the Loss Mitigation
Procedures shall be reflected in writing in the Mortgage File.
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 Master 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 Master 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 Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master 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 Master
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 timely 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 Master Servicer (or a Sub-Servicer to the extent
provided in the related Sub-Servicing Agreement) out of related collections for
any Servicing 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 to
the Master Servicer or, 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 Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. In the event the Master Servicer deposits in a
Servicing Account any amount not required to be deposited therein, it may at any
time withdraw such amount from such Servicing Account, any provision herein to
the contrary notwithstanding. The Master Servicer will be responsible for the
administration of the Servicing Accounts and will be obligated to make Servicing
Advances to such accounts when and as necessary to avoid the lapse of insurance
coverage on the Mortgaged Property, or which the Master Servicer knows, or in
the exercise of the required standard of care of the Master Servicer hereunder
should know, is necessary to avoid the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien. If any such payment has
not been made and the Master Servicer receives notice of a tax lien with respect
to the Mortgage being imposed, the Master Servicer shall, within 10 business
days of such notice, advance or cause to be advanced funds necessary to
discharge such lien on the Mortgaged Property. As part of its servicing duties,
the Master 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. The Master Servicer may pay to itself any excess interest on funds in
the Servicing Accounts, to the extent such action is in conformity with the
Servicing Standard, is permitted by law and such amounts are not required to be
paid to Mortgagors or used for any of the other purposes set forth above.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master 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 Master 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 Master Servicer's
receipt thereof, and shall thereafter deposit in the Collection Account, in no
event more than two Business Days after the Master 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 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 (but not Prepayment Charges), on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and condemnation 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 10.01);
(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 Master
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 or Section 10.01;
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03; and
(viii) all Prepayment Charges collected by the Master Servicer
and any Master Servicer Prepayment Charge Payment Amounts 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 Servicing Fees, late
payment charges, assumption fees, insufficient funds charges and ancillary
income (other than Prepayment Charges) need not be deposited by the Master
Servicer in the Collection Account and may be retained by the Master Servicer as
additional compensation. In the event the Master 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 and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 1:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Available Funds (calculated
without regard to the references in 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, the amount of all Prepayment Charges
collected during the applicable Prepayment Period by the Master Servicer and
Master Servicer Prepayment Charge Payment Amounts 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 3.29, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
[$________________] 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 [$________________] as of the commencement of business on any Business
Day and the Collection Account constitutes an Eligible Account solely pursuant
to clause (ii) of the definition of "Eligible Account," the Master Servicer
shall, on or before 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 Master
Servicer, the Trustee, the Originator 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 Master Servicer shall give notice to the NIMS Insurer and 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 NIMS Insurer, the Master 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 Master 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; PROVIDED,
HOWEVER, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Master 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 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 addition, the
Master Servicer, with respect to items (i) through (iv) below, shall deliver to
the Trustee from time to time for deposit, and the Trustee, with respect to
items (i) through (iv) below, shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(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 10.01;
(iv) any Compensating Interest to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest Shortfall; and
(v) any amounts required to be paid to the Trustee pursuant to
the Agreement, including, but not limited to Section 3.06, Section 3.26
and Section 7.02.
(e) [Reserved].
(f) The Master 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. SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes or as described in
Section 4.04:
(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 Master
Servicer for (a) any unreimbursed Advances to the extent of amounts
received which represent Late Collections (net of the related Servicing
Fees) of Monthly Payments or Liquidation Proceeds and Insurance
Proceeds on Mortgage Loans with respect to which such Advances were
made in accordance with the provisions of Section 4.04; (b) any
unreimbursed Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the extent
that Late Collections, including, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient
to reimburse the Master Servicer for such unreimbursed Advances; or (c)
subject to Section 4.04(b), any unreimbursed Advances to the extent of
funds held in the Collection Account for future distribution that were
not included in Available Funds for the preceding Distribution Date;
(iii) subject to Section 3.16(d), to pay the Master Servicer
or any Sub-Servicer (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, including, Liquidation Proceeds,
Insurance Proceeds and condemnation proceeds received with respect to
such Mortgage Loan, and (c) any Servicing Advances with respect to the
final liquidation of a Mortgage Loan that are Nonrecoverable Advances,
but only to the extent that Late Collections, including, Liquidation
Proceeds and Insurance Proceeds received with respect to such Mortgage
Loan are insufficient to reimburse the Master Servicer or any
Sub-Servicer for Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation
(in addition to the Servicing Fee) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited in the
Collection Account;
(v) to pay to the Originator, 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 Master Servicer for any Advance or
Servicing Advance previously made which the Master Servicer has
determined to be a Nonrecoverable Advance in accordance with the
provisions of Section 4.04;
(vii) to pay, or to reimburse the Master Servicer for
Servicing Advances in respect of, expenses incurred in connection with
any Mortgage Loan pursuant to Section 3.16(b);
(viii) to reimburse the Master Servicer for expenses incurred
by or reimbursable to the Master Servicer pursuant to Section 6.03;
(ix) to reimburse the NIMS Insurer, the Master Servicer (if
the Master Servicer is not an Affiliate of the Originator) or the
Trustee, as the case may be, for enforcement expenses reasonably
incurred in respect of the breach or defect giving rise to the purchase
obligation under Section 2.03 of this Agreement that were included in
the Purchase Price of the Mortgage Loan, including any expenses arising
out of the enforcement of the purchase obligation;
(x) to pay itself any Prepayment Interest Excess; and
(xi) to clear and terminate the Collection Account pursuant to
Section 10.01.
The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. In the event the Master 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.
The Master 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), (v), (vi), (ix) and (x) above. The
Master Servicer shall provide written notification to the NIMS Insurer and the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(vi) above; PROVIDED that an Officers' Certificate in the form described under
Section 4.04(d) shall suffice for such written notification to the Trustee in
respect hereof. Reconciliations will be prepared by the Master Servicer for the
Collection Account within 30 calendar days after the bank statement cut-off
date. All items requiring reconciliation will be resolved within 90 calendar
days of their original identification.
(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 the Swap Account in accordance
with Section 4.05;
(ii) to make distributions in accordance with Section 4.01;
(iii) to pay itself the Trustee Fee and any other amounts owed
to it pursuant to Section 8.05;
(iv) to pay any amounts in respect of taxes pursuant to
Section 9.01(g);
(v) to clear and terminate the Distribution Account pursuant
to Section 10.01;
(vi) to pay any amounts required to be paid to the Trustee
pursuant to this Agreement, including but not limited to funds required
to be paid pursuant to Section 3.06 and Section 7.02;
(vii) to pay to the Trustee, any interest or investment income
earned on funds deposited in the Distribution Account; and
(viii) to pay to an Advancing Person reimbursements for
Advances and/or Servicing Advances pursuant to Section 3.29;
SECTION 3.12. Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account to invest the funds on deposit in such
accounts, and the Trustee may invest the funds on deposit in the Distribution
Account (each such account, for the purposes of this Section 3.12 an "Investment
Account"). All investments pursuant to this Section 3.12 shall be 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 or if such investment is managed or advised by a Person other
than the Trustee or an Affiliate of the Trustee, 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 or if such investment is
managed or advised by the Trustee or any Affiliate. 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 (in
its capacity as such), or in the name of a nominee of the Trustee. The Trustee
shall be entitled to 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 Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds deposited
in the Collection Account and any REO Account held by or on behalf of the Master
Servicer shall be for the benefit of the Master Servicer and shall be subject to
its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable.
The Master Servicer shall deposit in the Collection Account or any REO Account,
as applicable, the amount of any loss of principal incurred in respect of any
such Permitted Investment made with funds in such account immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds deposited
in the Distribution Account shall be for the benefit of the Trustee. The Trustee
shall deposit in the Distribution Account the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the NIMS Insurer or the Holders of Certificates representing
more than [___]% of the Voting Rights allocated to any Class of Certificates,
shall take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings.
SECTION 3.13. [Reserved].
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan hazard insurance with extended coverage on the Mortgaged Property in an
amount which is at least equal to the lesser of (i) the current Principal
Balance of such Mortgage Loan and (ii) the amount necessary to fully compensate
for any damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Master Servicer shall also cause to be
maintained hazard insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value
of the improvements which are a part of such property and (ii) the outstanding
Principal Balance of the related Mortgage Loan at the time it became an REO
Property. The Master Servicer will comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Master Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance 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. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid Principal
Balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of B:III or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall provide
the Trustee and the NIMS Insurer, upon request, with copies of such insurance
policies and fidelity bond. The Master Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Xxx or
Xxxxxxx Mac, unless the Master Servicer has obtained a waiver of such
requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee and the NIMS Insurer. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; PROVIDED, HOWEVER,
that the Master Servicer shall not be required to take such action if in its
sole business judgment the Master Servicer believes it is not in the best
interests of the Trust Fund and shall not exercise any such rights if prohibited
by law from doing so. If the Master Servicer reasonably believes it is unable
under applicable law to enforce such "due-on-sale" clause, or if any of the
other conditions set forth in the proviso to the preceding sentence apply, the
Master Servicer will enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Master Servicer in respect of an assumption, modification or substitution of
liability agreement shall be retained by the Master Servicer as additional
servicing compensation. In connection with any such assumption, no material term
of the Mortgage Note (including but not limited to the related Mortgage Rate and
the amount of the Monthly Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Master Servicer shall
notify the Trustee that any such substitution, modification or assumption
agreement has been completed by forwarding to the Trustee the executed original
of such substitution, modification or assumption agreement, which document shall
be added to the related Mortgage File and shall, for all purposes, be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use its best efforts, in as practical a
time frame as possible and consistent with Servicing Standard, to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; PROVIDED, HOWEVER, that
such costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is
subject to the provision that, in any case in which a Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Master Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Master Servicer shall not, on behalf of the Trustee, either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Master Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Trust Fund to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
Notwithstanding the foregoing, if such environmental audit reveals, or
if the Master Servicer has actual knowledge or notice, that such Mortgaged
Property contains such wastes or substances, the Master Servicer shall not
foreclose or accept a deed in lieu of foreclosure without the prior written
consent of the NIMS Insurer.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; PROVIDED that any amounts disbursed by the
Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.04(d). The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (a)(vii), such right
of reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) (i) The NIMS Insurer may, at its option, purchase a Mortgage Loan
which has become 90 or more days delinquent or for which the Master Servicer has
accepted a deed in lieu of foreclosure. Prior to purchase pursuant to this
Section 3.16(c)(i), the Master Servicer shall be required to continue to make
Advances pursuant to Section 4.04. The NIMS Insurer shall not use any procedure
in selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The NIMS Insurer shall purchase such
delinquent Mortgage Loan at a price equal to the Purchase Price of such Mortgage
Loan. Any such purchase of a Mortgage Loan pursuant to this Section 3.16(c)(i)
shall be accomplished by remittance to the Master Servicer for deposit in the
Collection Account of the amount of the Purchase Price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan to the
NIMS Insurer to the extent necessary, including the prompt delivery of all
documentation to the NIMS Insurer.
(ii) If the Master Servicer Optional Purchase Delinquency
Trigger has been met, the Master Servicer may, at its option, purchase
a Mortgage Loan which has become 90 or more days delinquent or for
which the Master Servicer has accepted a deed in lieu of foreclosure.
Prior to purchase pursuant to this Section 3.16(c)(ii), the Master
Servicer shall be required to continue to make Advances pursuant to
Section 4.04. The Master Servicer shall purchase such delinquent
Mortgage Loan at a price equal to the Purchase Price of such Mortgage
Loan. Any such purchase of a Mortgage Loan pursuant to this Section
3.16(c)(ii) shall be accomplished by deposit in the Collection Account
of the amount of the Purchase Price. The Trustee shall immediately
effectuate the conveyance of such delinquent Mortgage Loan to the
Master Servicer to the extent necessary, including the prompt delivery
of all documentation to the Master Servicer.
Notwithstanding the foregoing: (A) the Master Servicer shall have the
option to purchase pursuant to this Section 3.16(c)(ii) only such delinquent
Mortgage Loans having an aggregate Stated Principal Balance such that, if such
delinquent Mortgage Loans were not in the Trust, the Master Servicer Optional
Purchase Delinquency Trigger would not be met; (B) if the Master Servicer
purchases any delinquent Mortgage Loans pursuant to this Section 3.16(c)(ii), it
must purchase Mortgage Loans that are delinquent the greatest number of days
before it may purchase any that are delinquent any fewer number of days; (C) if
the Master Servicer purchases some but not all Mortgage Loans that are
delinquent any given number of days, it must purchase Mortgage Loans having the
same delinquency status in the order of lowest Stated Principal Balance to
highest Stated Principal Balance; (D) the Master Servicer may at any time
relinquish its rights to purchase delinquent Mortgage Loans pursuant to this
Section 3.16(C)(ii) in writing delivered to the Trustee, and from and after the
taking of such action by the Master Servicer, the provisions of this Section
3.16(c)(ii) shall no longer be of any force or effect.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: FIRST, to
unpaid Servicing Fees; SECOND, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances pursuant to Section
3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); THIRD, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and FOURTH, as a recovery of principal of the Mortgage Loan. The
portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full shall be escrowed in
a manner customary for such purposes, the Master Servicer shall deliver to the
Trustee, in written (with two executed copies) or electronic format, a Request
for Release in the form of Exhibit E (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Master Servicer, the
related Mortgage File to the Master Servicer. The Trustee agrees to indemnify
the Master Servicer, out of its own funds, for any loss, liability or expense
(other than special, indirect, punitive or consequential damages which will not
be paid by the Trustee) incurred by the Master Servicer as a proximate result of
the Trustee's breach of its obligations pursuant to this Section 3.17. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee,
in written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File to the
Master Servicer within three Business Days, and the Trustee shall, at the
direction of the Master Servicer, execute such documents as shall be necessary
to the prosecution of any such proceedings. Such Request for Release shall
obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trustee when the need therefor by the
Master Servicer no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered, or caused to be
delivered, to the Trustee an additional Request for Release certifying as to
such liquidation or action or proceedings. Upon the request of the Trustee, the
Master Servicer shall provide notice to the Trustee of the name and address of
the Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release, in
written (with two executed copies) or electronic format, from a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, such Mortgage Loan shall be released
by the Trustee to the Master Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer or the Sub-Servicer, as the
case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Insurance Proceeds,
Liquidation Proceeds or condemnation proceeds to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Section
3.29, the right to receive the Servicing Fee may not be transferred in whole or
in part except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Agreement; PROVIDED, HOWEVER, that
the Master Servicer may pay from the Servicing Fee any amounts due to a
Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under Section
3.02.
Additional servicing compensation in the form of assumption fees, late
payment charges, insufficient funds charges, ancillary income or otherwise
(other than Prepayment Charges) shall be retained by the Master Servicer only to
the extent such fees or charges are received by the Master Servicer. The Master
Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw from
the Collection Account and pursuant to Section 3.23(b) to withdraw from any REO
Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including premiums for the insurance
required by Section 3.14, to the extent such premiums are not paid by the
related Mortgagors or by a Sub-Servicer and servicing compensation of each
Sub-Servicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
The Master Servicer shall be entitled to any Prepayment Interest
Excess, which it may withdraw from the Collection Account pursuant to Section
3.11(a)(ix).
SECTION 3.19. Reports to the Trustee; Collection Account Statements.
Not later than twenty days after each Distribution Date, the Master
Servicer shall forward to the NIMS Insurer and, upon request, to the Trustee and
the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Trustee.
SECTION 3.20. Statement as to Compliance.
The Master Servicer will deliver to the Trustee, the NIMS Insurer and
the Depositor not later than March 15th, commencing in 2007, an Officers'
Certificate (an "Annual Statement of Compliance") substantially in the form of
Exhibit S attached hereto stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding calendar
year and of performance under this Agreement or other applicable servicing
agreement has been made under such officers' supervision and (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement or other applicable
servicing agreement in all material respects throughout such calendar year, or,
if there has been a failure to fulfill any such obligation in any material
respectx, specifying each such failure known to such officer and the nature and
status of cure provisions thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trustee. Such Annual Statement of Compliance shall
contain no restrictions or limitations on its use. In the event that the Master
Servicer has delegated any servicing responsibilities with respect to the
Mortgage Loans serviced by it to a Sub-Servicer, the Master Servicer shall
deliver an officer's certificate of the Sub-Servicer as described above as to
each Sub-Servicer as and when required with respect to the Master Servicer.
If the Master Servicer cannot deliver the Annual Statement of
Compliance by March 15th of such year, the Trustee, at its sole option, may
permit a cure period for the related Servicer to deliver such Annual Statement
of Compliance, but in no event later than March 30th of such year.
Failure of the Master Servicer to timely comply with this Section 3.20
shall be deemed an Master Servicer Event of Termination, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Masteer
Servicer for the same. This paragraph shall supercede any other provision in
this Agreement or any other agreement to the contrary.
SECTION 3.21. Assessments of Compliance and Attestation Reports.
On and after January 1, 2006, each of the Master Servicer and the
Trustee shall service and administer the Mortgage Loans in accordance with all
applicable requirements of the Servicing Criteria (as set forth in Exhibit
[__]). Each of the Master Servicer and the Trustee shall deliver to the
Depositor (and, in the case of the Master Servicer, the Trustee) on or before
March 15th of each calendar year beginning in 2007, a report (an "Assessment of
Compliance") reasonably satisfactory to the Depositor regarding the Master
Servicer's and Trustee's assessment of compliance with the applicable Servicing
Criteria during the preceding calendar year as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB, which as of the date
hereof, require a report by an authorized officer of the Master Servicer or the
Trustee that contains the following:
(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Master Servicer or the
Trustee;
(b) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to the
Master Servicer or the Trustee;
(c) An assessment by such officer of the Master Servicer's or Trustee's
compliance with the applicable Servicing Criteria for the period consisting of
the preceding calendar year, including disclosure of any material instance of
noncompliance with respect thereto during such period, which assessment shall be
based on the activities it performs with respect to asset-backed securities
transactions taken as a whole involving the Master Servicer or the Trustee, as
applicable, that are backed by the same asset type as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an
attestation report on the Master Servicer's or Trustee's Assessment of
Compliance for the period consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Master Servicer or Trustee, which statement shall be based on
the activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Master Servicer or Trustee, that are backed by
the same asset type as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit [___] hereto
delivered to the Depositor (and, in the case of the Master Servicer, the
Trustee) concurrently with the execution of this Agreement.
On or before March 15th of each calendar year beginning in 2007, each
of the Master Servicer and the Trustee shall furnish to the Depositor (and, in
the case of the Master Servicer, the Trustee) a report (an "Attestation Report")
by a registered public accounting firm that attests to, and reports on, the
Assessment of Compliance made by the Master Servicer or the Trustee, as
applicable, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122(b) of Regulation AB, which Attestation Report must be made in accordance
with standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board.
Each of the Master Servicer and the Trustee shall cause any servicer,
and each subcontractor determined by the Master Servicer or the Trustee, as
applicable, to be "participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, to deliver to the Depositor (and, in the case of
the Master Servicer, the Trustee) an assessment of compliance and accountants'
attestation.
If the Master Servicer or the Trustee cannot deliver the related
Assessment of Compliance or Attestation Report by March 15th of such year, the
Depositor, at its sole option, may permit a cure period for the Master Servicer
or the Trustee, as applicable, to deliver such Assessment of Compliance or
Attestation Report, but in no event later than March 30th of such year.
Failure of the Master Servicer to timely comply with this Section 3.21
shall be deemed a Master Servicer Event of Termination, automatically, without
notice and without any cure period, and the Trustee may, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, terminate all the
rights and obligations of the Master Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof without compensating the Maseter
Servicer for the same. This paragraph shall supercede any other provision in
this Agreement or any other agreement to the contrary.
SECTION 3.22. Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder or Certificate
Owner, access to the documentation regarding the Mortgage Loans required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it. Payments on the Mortgage Loans,
including any Principal Prepayments in full, made in accordance with the related
Mortgage File will be entered into the Master Servicer's set of records no more
than two Business Days after receipt, and allocated to principal or interest as
specified in the related Mortgage File. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder or
Certificate Owner, the Trustee, the NIMS Insurer and to any Person identified to
the Master Servicer as a prospective transferee of a Certificate, upon
reasonable request during normal business hours at the offices of the Master
Servicer designated by it at the expense of the Person requesting such access.
SECTION 3.23. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of REMIC 1, shall sell any
REO Property as soon as practical and in any event no later than the end of the
third full taxable year after the taxable year in which such REMIC acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal Revenue Service, no later than 60 days before the day
on which the three-year grace period would otherwise expire, an extension of
such three-year period, unless the Master Servicer shall have delivered to the
Trustee and the NIMS Insurer an Opinion of Counsel acceptable to the NIMS
Insurer and addressed to the Trustee, the NIMS Insurer and the Depositor, to the
effect that the holding by the REMIC of such REO Property subsequent to three
years after its acquisition will not result in the imposition on the REMIC of
taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.
(b) The Master Servicer shall separately account for all funds
collected and received in connection with the operation of any REO Property and
shall establish and maintain, or cause to be established and maintained, with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Master Servicer manages and operates similar property owned
by the Master Servicer or any of its Affiliates, all on such terms and for such
period (subject to the requirement of prompt disposition set forth in Section
3.23(a)) as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master 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 Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Master Servicer's receipt thereof, all revenues received by it with
respect to an REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property including,
without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect
to an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Master Servicer would make such advances if the Master Servicer
owned the REO Property and if in the Master Servicer's judgment, the payment of
such amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:
(A) authorize the Trust Fund to enter into, renew or extend
any New Lease with respect to any REO Property, if the New Lease by its
terms will give rise to any income that does not constitute Rents from
Real Property;
(B) authorize any amount to be received or accrued under any
New Lease other than amounts that will constitute Rents from Real
Property;
(C) authorize any construction on any REO Property, other than
the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage
Loan became imminent, all within the meaning of Section 856(e)(4)(B) of
the Code; or
(D) authorize any Person to Directly Operate any REO Property
on any date more than 90 days after its date of acquisition by the
Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMS Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by the REMIC, in which case the Master Servicer may take such actions
as are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(1) the terms and conditions of any such contract shall not be
inconsistent herewith;
(2) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues
(net of such costs and expenses) to the Master Servicer as soon as
practicable, but in no event later than thirty days following the
receipt thereof by such Independent Contractor;
(3) none of the provisions of this Section 3.23(c) relating to
any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its
duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of any
such REO Property; and
(4) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of such
REO Property.
The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees; PROVIDED, HOWEVER, that to the extent that any payments made by such
Independent Contractor would constitute Servicing Advances if made by the Master
Servicer, such amounts shall be reimbursable as Servicing Advances made by the
Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c), the
Master Servicer may from time to time make withdrawals from the REO Account for
any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the related Prepayment Period, net of any withdrawals made pursuant to
Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), each
REO Disposition shall be carried out by the Master Servicer in a manner, at such
price and upon such terms and conditions as shall be in conformity with the
requirements of the Loss Mitigation Procedures and as shall be normal and usual
in its Servicing Standard.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).
(g) The Master Servicer shall file information returns with respect to
the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
SECTION 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
Not later than 1:00 p.m. New York time on each Master Servicer
Remittance Date, the Master Servicer shall remit to the Distribution Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) its
aggregate Servicing Fee for the related Due Period and any Prepayment Interest
Excess earned during the related Prepayment Period. The Master Servicer shall
not have the right to reimbursement for any amounts remitted to the Trustee in
respect of Compensating Interest. Such amounts so remitted shall be included in
the Available Funds and distributed therewith on the next Distribution Date. The
Master Servicer shall not be obligated to pay Compensating Interest with respect
to Relief Act Interest Shortfalls.
SECTION 3.25. Commission Reporting.
(a) (i) Within 15 days after each Distribution Date, the Trustee shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("XXXXX"), a Distribution Report
on Form 10-D (which shall, if applicable, provide the information required by
each of the items set forth in Part II thereof) with a copy of the monthly
statement to be furnished by the Trustee to the Certificateholders for such
Distribution Date and detailing all data elements specified in Item 1121(a) of
Regulation AB as an exhibit thereto; provided that the Trustee shall have
received no later than 10 days prior to the date such Distribution Report on
Form 10-D is required to be filed, the following information:
(A) Notice of any material modifications, extensions or
waivers to Mortgage Loan terms, fees, penalties or payments during the
distribution period or that have cumulatively become material over time
from the Master Servicer;
(B) Notice of any new issuance of asset-backed securities
backed by the same asset pool, any pool asset changes, such as Mortgage
Loan substitutions and repurchases, and cash flows available for future
purchases, if applicable, from the Depositor, the Seller or Master
Servicer;
(C) A brief description of any legal proceedings pending,
including proceedings known to be contemplated by governmental
authorities, against the Depositor, the Seller and the Master Servicer
or of which any property of the foregoing is the subject, that is
material to Certificateholders from each of the Depositor, the Seller
and the Master Servicer if applicable;
(D) The information required by Item 2 of Part II of Form 10-Q
regarding any sale of securities that are either backed by the same
asset pool or are otherwise issued by the issuer, regardless of whether
the transaction was registered under the Securities Act of 1933 during
the period covered by the report from the Depositor;
(E) The information required by Item 3 of Part II of Form 10-Q
with respect to defaults upon the senior securities during the period
covered by the report, from the Depositor;
(F) Any information required to be disclosed in a report on
Form 8-K during the period covered by the report on the Form 10-D, but
not reported, whether or not otherwise required by the Form 10-D from
the Depositor and the Master Servicer; and
(G) Any exhibits to the Form 10-D from the Depositor.
(ii) The Trustee will prepare and file Current Reports on Form
8-K in respect of the Trust at the direction and expense of the
Depositor, provided, that, the Depositor, the Seller or the Master
Servicer shall have timely notified the Trustee of an item reportable
on a Current Report on Form 8-K and shall have delivered to the Trustee
no later than two Business Days prior to the filing deadline for such
Current Report, all information, data, and exhibits required to be
provided or filed with such Current Report with respect to:
(A) Any entry into a material definitive agreement, any
termination of a material definitive agreement and any bankruptcy or
receivership of the Depositor, the Seller or the Master Servicer
(including any servicer that does not sign this Agrement and any
Sub-Servicer that signs a Sub-Servicing agreement) from the Depositor,
the Seller or the Master Servicers as applicable;
(B) Any material modification to the rights of
Certificateholders, amendments of the articles of incorporation or
bylaws or a change of the fiscal year of any transaction party from
each of the Depositor, the Seller or the Master Servicer as applicable;
and
(C) Any Securities Act update provided by the Depositor.
(iii) Prior to January 30th in each year commencing in 2007,
the Trustee shall, in accordance with industry standards, file a Form
15 Suspension Notice with respect to the Trust Fund, if applicable.
Prior to (x) March 15, 2007 and (y) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15th of each
year thereafter, the Master Servicer shall provide the Trustee with an
Annual Compliance Statement, together with a copy of the Assessment of
Compliance and Attestation Report to be delivered by the Master
Servicer pursuant to Sections 3.20 and 3.21. Prior to (x) March 31,
2007 and (y) unless and until a Form 15 Suspension Notice shall have
been filed, March 31st of each year thereafter, the Trustee shall,
subject to subsection (d) below, file a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. Such
Form 10-K shall include the Assessment of Compliance, Attestation
Report, Annual Compliance Statements and other documentation provided
by the Master Servicer pursuant to Sections 3.20 and 3.21 and a
certification in the form attached hereto as Exhibit R-1 (the
"Depositor Certification"), which shall be signed by the senior officer
of the Depositor in charge of securitization. The Depositor, the Seller
and the Master Servicers shall provide the Trustee with the following
information, as applicable, no later than March 15th of each calendar
year prior to the filing deadline for the Form 10-K:
(A) Any exhibits or financial statement schedules required by
Item 15 of Form 10-K from each of the Depositor, the Seller and the
Masteer Servicer;
(B) A description of any legal proceedings pending, including
proceedings known to be contemplated by governmental authorities,
against the Depositor, the Seller and the Master Servicer or of which
any property of the foregoing is the subject, that is material to
Certificateholders from each of the Depositor, the Seller and the
Master Servicer, if applicable;
(C) A description of any affiliations between the transaction
parties pursuant to Item 1119 of Regulation AB from the Depositor; and
(D) The Assessment of Compliance, Attestation Report, Annual
Compliance Statements and other documentation provided by the Master
Servicer pursuant to Sections 3.20 and 3.21.
(b) The Depositor hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Depositor. Such power of attorney shall continue until the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. The Depositor agrees to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement, the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Trustee shall
have no responsibility to file any items other than those specified in this
Section 3.25; provided, however, the Trustee will cooperate with the Depositor
in connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Copies of all reports filed by the Trustee under the
Exchange Act shall be sent to the Depositor electronically or at the addressed
set forth in Section 11.05. Fees and expenses incurred by the Trustee in
connection with this Section 3.25 shall not be reimbursable from the Trust Fund.
(c) The Trustee shall sign a certification (in the form attached hereto
as Exhibit R-2) for the benefit of the Depositor and its officers, directors and
Affiliates regarding certain aspects of items 1 through 3 of the Depositor
Certification (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K).
The Trustee's certification shall be delivered to the Depositor by no later than
March 18th of each year (or if such day is not a Business Day, the immediately
preceding Business Day) and the Depositor shall deliver the Depositor
Certification to the Trustee for filing no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).
The Trustee shall subject to the provisions of Sections 8.01 and 8.02
hereof, indemnify and hold harmless the Depositor and its officers, directors
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon third party claims
relating to information included in any Form 10-K provided by the Trustee other
than any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs arising out of third party claims
relating to information contained in the Depositor Certification, the Assessment
of Compliance, Attestation Report, Annual Compliance Statements and other
documentation provided by the Master Servicer pursuant to Sections 3.20 and
3.21. In addition, the Trustee shall indemnify and hold harmless the Depositor
and its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 3.25 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Trustee, in connection with a breach of the
Trustee's obligations under this Section 3.25 or the Trustee's negligence, bad
faith or willful misconduct in connection therewith, agrees that it shall
contribute to the amount paid or payable by the Depositor as a result of the
losses, claims, damages or liabilities of the Depositor in such proportion as is
appropriate to reflect the relative fault of the Depositor on the one hand and
the Trustee on the other.
(d) Nothing shall be construed from the foregoing subsections (a), (b)
and (c) to require the Trustee or any officer, director or Affiliate thereof to
sign any Form 10-K or any certification contained therein. Furthermore, the
inability of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 3.25(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.
(e) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any executed report,
statement or information.
(f) Prior to January 30 of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
(g) To the extent that, following the Closing Date, the Depositor
certifies that reports and certifications differing from those required under
this Section 3.22(b) comply with the reporting requirements under the Exchange
Act, the Trustee hereby agrees that it will reasonably cooperate to amend the
provisions of this Section 3.22(b) in order to comply with such amended
reporting requirements and such amendment of this Section 3.22(b). Any such
amendment may result in the reduction of the reports filed by the Depositor
under the Exchange Act. Notwithstanding the foregoing, the Trustee shall not be
obligated to enter into any amendment pursuant to this Section that adversely
affects its obligations and immunities under this Agreement.
(h) Each of the parties acknowledges and agrees that the purpose of
Sections 3.20, 3.21 and this Section 3.25 of this Agreement is to facilitate
compliance by the Depositor with the provisions of Regulation AB promulgated by
the Commission under the 1934 Act (17 C.F.R. xx.xx. 229.1100 - 229.1123), as
such may be amended from time to time and subject to clarification and
interpretive advice as may be issued by the staff of the Commission from time to
time. Therefore, each of the parties agrees that (a) the obligations of the
parties hereunder shall be interpreted in such a manner as to accomplish that
purpose, (b) the parties' obligations hereunder will be supplemented and
modified as necessary to be consistent with any such amendments, interpretive
advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of
the requirements of Regulation AB, (c) the parties shall comply with requests
made by the Depositor for delivery of additional or different information as the
Depositor may determine in good faith is necessary to comply with the provisions
of Regulation AB, and (d) no amendment of this Agreement shall be required to
effect any such changes in the parties' obligations as are necessary to
accommodate evolving interpretations of the provisions of Regulation AB.
SECTION 3.26. Obligations of the Master Servicer in Respect of Mortgage
Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deposit in the
Collection Account from its own funds the amount of any such shortfall and shall
indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and any
successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.26 shall not limit the ability of the Master Servicer
to seek recovery of any such amounts from the related Mortgagor under the terms
of the related Mortgage Note, as permitted by law.
SECTION 3.27. Solicitations.
From and after the Closing Date, the Master Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Master Servicer's behalf, to personally, by
telephone, mail or electronic mail, solicit the Mortgagor under any Mortgage
Loan for the purpose of refinancing such Mortgage Loan; PROVIDED, that the
Master Servicer may solicit any Mortgagor for whom the Master Servicer has
received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, another mortgage company has pulled
a credit report on the mortgagor or the mortgagor initiates a title search;
provided further, it is understood and agreed that promotions undertaken by the
Master Servicer or any of its Affiliates which (i) concern optional insurance
products or other additional products or (ii) are directed to the general public
at large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section, nor is the Master Servicer
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer shall be
permitted to include in its monthly statements to borrowers or otherwise,
statements regarding the availability of the Master Servicer's counseling
services with respect to refinancing mortgage loans.
SECTION 3.28. Net WAC Rate Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Net WAC Rate
Carryover Reserve Account, [____________________], as Trustee, in trust for
registered Holders of [________________ _________________________]" which shall
be an Eligible Account.
On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to the Class A Certificates and/or the Mezzanine Certificates,
the Trustee has been directed by the Class C Certificateholders to, and
therefore will, deposit into the Net WAC Rate Carryover Reserve Account the
amounts described in Section 4.01(d)(iv), rather than distributing such amounts
to the Class C Certificateholders. On each such Distribution Date, the Trustee
shall hold all such amounts for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates, and will distribute such amounts to
the Holders of the Class A Certificates and/or the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(d).
On or after any Distribution Date following the reduction of the
aggregate Certificate Principal Balance of the Class A and Mezzanine
Certificates to zero, any amounts remaining in the Net WAC Rate Carryover
Reserve Account after the payment of any Net WAC Rate Carryover Amounts on the
Class A Certificates and the Mezzanine Certificates for such Distribution Date,
shall be payable to the Trustee.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account shall be treated as amounts distributed by REMIC 3 to the Holder
of the Class C Interest and by REMIC 4 to the Holders of the Class C
Certificates. Upon the termination of the Trust, or the payment in full of the
Class A Certificates and the Mezzanine Certificates, all amounts remaining on
deposit in the Net WAC Rate Carryover Reserve Account will be released by the
Trust and distributed to the Class C Certificateholders or their designees. The
Net WAC Rate Carryover Reserve Account will be part of the Trust but not part of
any REMIC and any payments to the Holders of the Class A Certificates or the
Mezzanine Certificates of Net WAC Rate Carryover Amounts will not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860(G)(a)(1).
By accepting a Class C Certificate, each Class C Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Rate Carryover Reserve Account the amounts described
above on each Distribution Date as to which there is any Net WAC Rate Carryover
Amount rather than distributing such amounts to the Class C Certificateholders.
By accepting a Class C Certificate, each Class C Certificateholder further
agrees that such direction is given for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by such acceptance.
At the direction of the Holders of a majority in Percentage Interest in
the Class C Certificates, the Trustee shall direct any depository institution
maintaining the Net WAC Rate Carryover Reserve Account to invest the funds in
such 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 or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in Permitted Investments managed by the Trustee
or an Affiliate of the kind described in clause (vi) of the definition of
Permitted Investments.
For federal tax return and information reporting, the value of the
right of the Holders of the Class A and the Mezzanine Certificates to receive
payments from the Net WAC Rate Carryover Reserve Account in respect of any Net
WAC Rate Carryover Amount shall be DE MINIMIS.
SECTION 3.29. Advancing Facility.
(a) The Master Servicer and/or the Trustee on behalf of the Trust Fund,
in either case, with the consent of the NIMS Insurer and the Master Servicer in
the case of the Trustee, is hereby authorized to enter into a facility (the
"Advancing Facility") with any Person which provides that such Person (an
"Advancing Person") may fund Advances and/or Servicing Advances to the Trust
Fund under this Agreement, although no such facility shall reduce or otherwise
affect the Master Servicer's obligation to fund such Advances and/or Servicing
Advances. If the Master Servicer enters into such an Advancing Facility pursuant
to this Section 3.29, upon reasonable request of the Advancing Person, the
Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advancing Facility. To the extent that an
Advancing Person funds any Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the Master Servicer that such Advancing
Person is entitled to reimbursement, such Advancing Person shall be entitled to
receive reimbursement pursuant to this Agreement for such amount to the extent
provided in Section 3.29(b). Such notice from the Advancing Person must specify
the amount of the reimbursement, the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed and the section(s) of
the Advancing Facility that entitle the Advancing Person to request
reimbursement from the Trustee, rather than the Master Servicer, and include the
Master Servicer's acknowledgment thereto or proof of an Event of Default under
the Advancing Facility. The Trustee shall have no duty or liability with respect
to any calculation of any reimbursement to be paid to an Advancing Person and
shall be entitled to rely without independent investigation on the Advancing
Person's notice provided pursuant to this Section 3.29. An Advancing Person
whose obligations hereunder are limited to the funding of Advances and/or
Servicing Advances shall not be required to meet the qualifications of a Master
Servicer or a Sub-Servicer pursuant to Section 6.06 hereof and will not be
deemed to be a Sub-Servicer under this Agreement. If the terms of a facility
proposed to be entered into with an Advancing Person by the Trust Fund would not
materially and adversely affect the interests of any Certificateholder, then the
NIMS Insurer shall not withhold its consent to the Trust Fund's entering such
facility.
(b) If an Advancing Facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 3.11(a)(ii),
Section 3.11(a)(iii), Section 3.11(a)(vi), Section 3.11(a)(vii) Section
3.11(a)(viii) and Section 4.04(b) prior to the remittance to the Trust Fund, but
instead the Master Servicer shall include such amounts in the applicable
remittance to the Trustee made pursuant to Section 3.10(a). The Trustee is
hereby authorized to pay to the Advancing Person, reimbursements for Advances
and Servicing Advances from the Distribution Account to the same extent the
Master Servicer would have been permitted to reimburse itself for such Advances
and/or Servicing Advances in accordance with Section 3.11(a)(ii), Section
3.11(a)(iii), Section 3.11(a)(vi), Section 3.11(a)(vii), Section 3.11(a)(viii)
or Section 4.04(b), as the case may be, had the Master Servicer itself funded
such Advance or Servicing Advance. The Trustee is hereby authorized to pay
directly to the Advancing Person such portion of the Servicing Fee as the
parties to any advancing facility agree.
(c) All Advances and Servicing Advances made pursuant to the terms of
this Agreement shall be deemed made and shall be reimbursed on a "first in-first
out" (FIFO) basis.
(d) Any amendment to this Section 3.29 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advancing Facility as described generally in this Section 3.29, including
amendments to add provisions relating to a successor master servicer, may be
entered into by the Trustee and the Master Servicer without the consent of any
Certificateholder but with the consent of the NIMS Insurer, notwithstanding
anything to the contrary in this Agreement.
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.
(a) (I) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group I Interest Remittance Amount for such Distribution Date,
and make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Group I Interest Remittance
Amount remaining for such Distribution Date:
(i) to the Holders of the Class A-1 Certificates, the Monthly
Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
if any, for the Class A-1 Certificates for such Distribution Date; and
(ii) concurrently, to the Holders of each Class of Group II
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, an amount equal to the excess, if any, of (x) the amount
required to be distributed pursuant to Section 4.01(a)(II)(i) below for
such Distribution Date over (y) the amount actually distributed
pursuant to such section from the Group II Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date:
(i) concurrently, to the Holders of each Class of Group II
Certificates, on a PRO RATA basis based on the entitlement of each such
Class, the Monthly Interest Distributable Amount and the Unpaid
Interest Shortfall Amount, if any, allocable to such Certificates for
such Distribution Date; and
(ii) to the Holders of the Class A-1 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(a)(I)(i) above for such
Distribution Date over (y) the amount actually distributed pursuant to
such section from the Group I Interest Remittance Amount.
(III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(I) and (II) above, the sum of the Group I Interest
Remittance Amount and the Group II Interest Remittance Amount remaining
undistributed for such Distribution Date, will be distributed sequentially to
the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class M-10 and Class M-11 Certificates, in that order, in
an amount equal to the Monthly Interest Distributable Amount allocable to each
such Class of Certificates.
(b) (I) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal to
the extent of the Group I Principal Distribution Amount shall be made in the
following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates until
the Certificate Principal Balance thereof has been reduced to zero;
(ii) second, after taking into account the amount distributed
to the Holders of the Group II Certificates pursuant to Section
4.01(b)(II)(i) below on such Distribution Date, to the Holders of the
Group II Certificates (allocated as described below), until the
Certificate Principal Balances thereof have been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, distributions in respect of principal to the
extent of the Group II Principal Distribution Amount shall be made in the
following amounts and order of priority:
(i) first, to the Holders of the Group II Certificates
(allocated as described below), until the Certificate Principal
Balances thereof have been reduced to zero;
(ii) second, after taking into account the amount distributed
to the Holders of the Class A-1 Certificates pursuant to Section
4.01(b)(I)(i) above on such Distribution Date, to the Holders of the
Class A-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal to
the extent of the sum of the Group I Principal Distribution Amount and the Group
II Principal Distribution Amount remaining undistributed for such Distribution
Date shall be made sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class
M-11 Certificates, in that order, in each case, until the Certificate Principal
Balance of each such Class has been reduced to zero.
(c) (I) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates, the
Group I Senior Principal Distribution Amount until the Certificate
Principal Balances thereof have been reduced to zero;
(ii) second, to the Holders of the Group II Certificates
(allocated as described below), an amount equal to the excess, if any,
of (x) the amount required to be distributed pursuant to Section
4.01(c)(II)(i) below for such Distribution Date over (y) the amount
actually distributed pursuant to Section 4.01(c)(II)(i) below from the
Group II Principal Distribution Amount on such Distribution Date.
(II) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Group II Certificates
(allocated as described below), the Group II Senior Principal
Distribution Amount until the Certificate Principal Balances thereof
have been reduced to zero;
(ii) second, to the Holders of the Class A-1 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(c)(I)(i) above for such
Distribution Date over (y) the amount actually distributed pursuant to
Section 4.01(c)(I)(i) above from the Group I Principal Distribution
Amount on such Distribution Date.
(III) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates, the
Class M-3 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) fourth, to the Holders of the Class M-4 Certificates, the
Class M-4 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(v) fifth, to the Holders of the Class M-5 Certificates, the
Class M-5 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(vi) sixth, to the Holders of the Class M-6 Certificates, the
Class M-6 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(vii) seventh, to the Holders of the Class M-7 Certificates,
the Class M-7 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(viii) eighth, to the Holders of the Class M-8 Certificates,
the Class M-8 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero;
(ix) ninth, to the Holders of the Class M-9 Certificates, the
Class M-9 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(x) tenth, to the Holders of the Class M-10 Certificates, the
Class M-10 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero; and
(xi) eleventh, to the Holders of the Class M-11 Certificates,
the Class M-11 Principal Distribution Amount until the Certificate
Principal Balance thereof has been reduced to zero.
With respect to the Group II Certificates, all principal distributions
will be distributed sequentially to the Class A-2, Class A-3 and Class A-4
Certificates, in that order, until the Certificate Principal Balance of each
such Class of Certificates has been reduced to zero; provided, however, on any
Distribution Date on which the aggregate Certificate Principal Balance of the
Subordinate Certificates has been reduced to zero, all principal distributions
will be distributed concurrently to each Class of the Group II Certificates PRO
RATA based on the Certificate Principal Balance of each such Class.
(d) On each Distribution Date, the Net Monthly Excess Cashflow shall be
distributed as follows:
(i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an
amount equal to any Extra Principal Distribution Amount, distributable
to such Holders as part of the Group I Principal Distribution Amount
and/or the Group II Principal Distribution Amount as described under
Section 4.01(b) and Section 4.01(c) above;
(ii) sequentially, to the Holders of the 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 M-10 and Class M-11 Certificates, in that order, in each
case, first up to the Unpaid Interest Shortfall Amount for each such
Class and second up to the Allocated Realized Loss Amount, for each
such Class;
(iii) to the Net WAC Rate Carryover Reserve Account, the
amount of any Net WAC Rate Carryover Amounts on the Class A and
Mezzanine Certificates for such Distribution Date;
(iv) to the Swap Provider, any Swap Termination Payments
resulting from a Swap Provider Trigger Event;
(v) to the Holders of the Class C Certificates, (a) the
Monthly Interest Distributable Amount and any remaining
Overcollateralization Release Amount for such Distribution Date and (b)
on any Distribution Date on which the Certificate Principal Balances of
the Class A Certificates and the Mezzanine Certificates have been
reduced to zero, any remaining amounts in reduction of the Certificate
Principal Balance of the Class C Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(vi) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be
required to be paid in respect of any Mortgage Loans, to the Holders of
the Class P Certificates, in reduction of the Certificate Principal
Balance thereof, until the Certificate Principal Balance thereof is
reduced to zero; and
(vii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the appropriate Class R Interest).
On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee will FIRST, withdraw from the
Net WAC Rate Carryover Reserve Account all income from the investment of funds
in the Net WAC Rate Carryover Reserve Account and distribute such amount to the
Holders of the Class C Certificates, and SECOND, withdraw from the Net WAC Rate
Carryover Reserve Account, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date and distribute such amount in the following order of priority:
(i) concurrently, to each Class of Class A Certificates, PRO
RATA based on the related Net WAC Rate Carryover Amount for each such
Class; and
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10 and Class M-11 Certificates, in that order, the related Net WAC
Rate Carryover Amount.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Master Servicer Prepayment Charge Amounts paid by the Master Servicer
during the related Prepayment Period will be withdrawn from the Distribution
Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.
(e) On each Distribution Date, after making the distributions of the
Available Funds, Net Monthly Excess Cashflow and amounts on deposit in the Net
WAC Rate Carryover Reserve Account as set forth above, the Trustee, in its
capacity as Supplemental Interest Trust Trustee, shall distribute the amount on
deposit in the Swap Account as follows:
(i) to the Swap Provider, any Net Swap Payment owed to the
Swap Provider pursuant to the Interest Rate Swap Agreement for such
Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment owed
to the Swap Provider not due to a Swap Provider Trigger Event pursuant
to the Interest Rate Swap Agreement;
(iii) concurrently, to each Class of Class A Certificates, the
related Monthly Interest Distributable Amount and Unpaid Interest
Shortfall Amount remaining undistributed after the distributions of the
Group I Interest Remittance Amount and the Group II Interest Remittance
Amount, on a PRO RATA basis based on such respective remaining Monthly
Interest Distributable Amount;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10 and Class M-11 Certificates, in that order, the related Monthly
Interest Distributable Amount and Unpaid Interest Shortfall Amount, to
the extent remaining undistributed after the distributions of the Group
I Interest Remittance Amount, the Group II Interest Remittance Amount
and the Net Monthly Excess Cashflow;
(v) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an
amount equal to the difference between (x) the Overcollateralization
Deficiency Amount, if any, and (y) the amount distributed pursuant to
Section 4.01(d)(i) of this Agreement;
(vi) sequentially to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10 and Class M-11 Certificates, in that order, in each case up to the
related Allocated Realized Loss Amount related to such Certificates for
such Distribution Date remaining undistributed after distribution of
the Net Monthly Excess Cashflow;
(vii) concurrently, to each Class of Class A Certificates, the
related Net WAC Rate Carryover Amount remaining unpaid after
distributions from the Net WAC Rate Carryover Reserve Account, on a PRO
RATA basis based on such respective remaining Net WAC Rate Carryover
Amounts; and
(viii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10 and Class M-11 Certificates, in that order, the related Net WAC
Rate Carryover Amount remaining unpaid after distributions from the Net
WAC Rate Carryover Reserve Account;
(f) METHOD OF DISTRIBUTION. The Trustee shall make distributions in
respect of a Distribution Date to each Certificateholder of record on the
related Record Date (other than as provided in Section 10.01 respecting the
final distribution), in the case of Certificateholders of the Regular
Certificates, by check or money order mailed to such Certificateholder at the
address appearing in the Certificate Register, or by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
(g) DISTRIBUTIONS ON BOOK-ENTRY CERTIFICATES. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which shall
credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor, the Master Servicer or the
Originator shall have any responsibility therefor except as otherwise provided
by applicable law.
(h) SUBSEQUENT RECOVERIES. On each Distribution Date, following all
distributions on the Certificates pursuant to Section 4.01, an amount equal to
the amount of Subsequent Recoveries deposited into the Collection Account
pursuant to Section 3.10 and included in the Available Funds for such
Distribution Date will be applied to increase the Certificate Principal Balance
of the Class of Certificates with the Highest Priority up to the extent of such
Realized Losses previously allocated to that Class of Certificates pursuant to
Section 4.08. An amount equal to the amount of any remaining Subsequent
Recoveries will be applied to increase the Certificate Principal Balance of the
Class of Certificates with the next Highest Priority, up to the amount of such
Realized Losses previously allocated to that Class of Certificates pursuant to
Section 4.08, and so on. Holders of such Certificates will not be entitled to
any distribution in respect of interest on the amount of such increases for any
Accrual Period preceding the Distribution Date on which such increase occurs.
Any such increases shall be applied to the Certificate Principal Balance of each
Certificate of such Class in accordance with its respective Percentage Interest.
(i) It is the intention of all of the parties hereto that the Class C
Certificates receive all principal and interest received by the Trust on the
Mortgage Loans that is not otherwise distributable to any other Class of Regular
Certificates or REMIC Regular Interests. If the Trustee determines that the
Residual Certificates are entitled to any distributions, the Trustee, prior to
any such distribution to any Residual Certificate, shall notify the Depositor of
such impending distribution. Upon such notification, the Depositor will request
an amendment to the Pooling and Servicing Agreement to revise such mistake in
the distribution provisions. The Residual Certificate Holders, by acceptance of
their Certificates, and the Master Servicer hereby agree and no further consent
shall be necessary, notwithstanding anything to the contrary in Section 11.01 of
the Pooling and Servicing Agreement.
SECTION 4.02. [Reserved].
SECTION 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available to each Holder of the Regular Certificates, the Swap Provider and the
NIMS Insurer, the Master Servicer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates allocable to
principal, the amount of the distribution made to the Holders of the
Class P Certificates allocable to Prepayment Charges and Master
Servicer Prepayment Charge Payment Amounts and the Certificate
Principal Balances of the Regular Certificates before and after any
distributions of principal;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than
the Class P Certificates) allocable to interest, separately identified;
(iii) the Net Monthly Excess Cashflow, the Overcollateralized
Amount, the Overcollateralization Release Amount, the
Overcollateralization Deficiency Amount and the Overcollateralization
Target Amount as of such Distribution Date and the Excess
Overcollateralized Amount for the Mortgage Pool for such Distribution
Date;
(iv) the aggregate amount of servicing compensation received
by the Master Servicer with respect to the related Due Period and such
other customary information as the Trustee deems necessary or
desirable, or which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(v) the aggregate amount of Advances for the related Due
Period (including the general purpose of such Advances);
(vi) the aggregate amount of interest and scheduled principal
received or advanced by the Master Servicer with respect to the related
Due Period;
(vii) with respect to each Loan Group, the related group
balance at the Close of Business at the end of the related Due Period;
(viii) the number, aggregate principal balance, weighted
average remaining term to maturity and weighted average Mortgage Rate
of the Mortgage Loans as of the related Determination Date;
(ix) the number and aggregate unpaid principal balance of
Mortgage Loans in respect of which (1) one Monthly Payment is
Delinquent, (2) two Monthly Payments are Delinquent, (3) three Monthly
Payments are Delinquent and (4) foreclosure proceedings have begun;
(x) the total number and cumulative principal balance of all
Liquidated Mortgage Loans as of the Close of Business of the last day
of the preceding Prepayment Period, prior to the reduction of each
principal balance to zero;
(xi) the total number and cumulative principal balance of all
REO Properties as of the Close of Business of the last day of the
preceding Prepayment Period;
(xii) the aggregate amount of Principal Prepayments in full,
the aggregate amount of Principal Prepayments in part and Net
Liquidation Proceeds made during the related Prepayment Period;
(xiii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized
Losses;
(xiv) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Collection Account for such Distribution
Date;
(xv) the Certificate Principal Balance of each Class of Class
A Certificates, each class of Mezzanine Certificates and the Class C
Certificates, after giving effect to the distributions made on such
Distribution Date;
(xvi) the Monthly Interest Distributable Amount in respect of
each Class of Class A Certificates, each class of Mezzanine
Certificates and the Class C Certificates for such Distribution Date
and the Unpaid Interest Shortfall Amount, if any, with respect to the
Class A Certificates, the Mezzanine Certificates and the Class C
Certificates for such Distribution Date;
(xvii) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by
payments by the Master Servicer pursuant to Section 3.26;
(xviii) the Senior Credit Enhancement Percentage for such
Distribution Date;
(xix) the Net WAC Rate Carryover Amount for each class of
Class A Certificates and each class of Mezzanine Certificates, if any,
for such Distribution Date and the amount remaining unpaid after
reimbursements therefor on such Distribution Date;
(xx) the amount of any Net Swap Payments or Swap Termination
Payments (a) due from the Trust and (b) due from the Swap Provider;
(xxi) if the Stepdown Date is in effect (and if not, the
months remaining until the Stepdown Date);
(xxii) (a) the Delinquency Percentage, the numerator and the
denominator used to calculate the Delinquency Percentage and whether
the Delinquency Percentage exceeds the level set forth in clause (a) of
the definition of Trigger Event, (b) the Cumulative Realized Loss
Percentage, the numerator and the denominator used to calculate the
Cumulative Realized Loss Percentage and whether the Cumultaive Realized
Loss Percentage exceeds the level set forth in clause (b) of the
definition of Trigger Event;
(xxiii) the total cashflows received and the general sources
thereof;
(xxiv) the respective Pass-Through Rates applicable to each
Class of Class A Certificates, each Class of Mezzanine Certificates and
the Class C Certificates for such Distribution Date (and whether such
Pass-Through Rate was limited by the Net WAC Rate) and the Pass-Through
Rate applicable to each Class of Class A Certificates and each class of
Mezzanine Certificates for the immediately succeeding Distribution
Date;
(xxv) the amount on deposit Net WAC Rate Carryover Reserve
Account;
(xxvi) if applicable, material modifications, extensions or
waivers to Mortgage Loan terms, fees, penalties or payments during the
preceding calendar month or that have become material over time;
(xxvii) the applicable Record Dates, Accrual Periods and
Determination Dates for calculating distributions for such Distribution
Date;
(xxviii) the fees and expenses accrued and paid on such
Distribution Date and to whom such fees and expenses were paid;
(xxix) material breaches of representations and warranties
regarding the Mortgage Loans.
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMS Insurer and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at "xxx.xxxxxxx.xxx". Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement. The Trustee shall also be entitled to rely on
but shall not be responsible for the content or accuracy of any information
provided by third parties for purposes of preparing the distribution date
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party thereto).
In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each [$________________] original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to the NIMS Insurer and
each Person who at any time during the calendar year was a Certificateholder of
a Regular Certificate, if requested in writing by such Person, such information
as is reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to the NIMS
Insurer and the Residual Certificateholders a copy of the reports forwarded to
the Regular Certificateholders in respect of such Distribution Date with such
other information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall deliver to the NIMS Insurer and each Person who at any
time during the calendar year was a Residual Certificateholder, if requested in
writing by such Person, such information as is reasonably necessary to provide
to such Person a statement containing the information provided pursuant to the
previous paragraph aggregated for such calendar year or applicable portion
thereof during which such Person was a Residual Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished to
Certificateholders by the Trustee pursuant to any requirements of the Code as
from time to time in force.
SECTION 4.04. Remittance Reports; Advances.
(a) On the second Business Day following each Determination Date but in
no event later than the earlier of (i) such date which would allow the indenture
trustee to submit a claim to the NIMS Insurer under the Indenture so as to allow
a timely payment by the NIMS Insurer under the insurance policy related to the
notes insured by the NIMS Insurer and (ii) the 20th day of each month (or if
such 20th day is not a Business Day, the preceding Business Day), the Master
Servicer shall deliver to the Trustee by telecopy or electronic mail (or by such
other means as the Master Servicer and the Trustee may agree from time to time)
a Remittance Report with respect to the related Distribution Date. Not later
than the 20th day of each month (or if such 20th day is not a Business Day, the
preceding Business Day), the Master Servicer shall deliver or cause to be
delivered to the Trustee in addition to the information provided on the
Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and to prepare the statements to Certificateholders contemplated by Section
4.03. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the Close of Business on
the related Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Due Period and as to
which REO Property an REO Disposition did not occur during the related Due
Period, an amount equal to the excess, if any, of the REO Imputed Interest on
such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date.
(c) On or before 1:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.04, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make an
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.11(a)(ii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances or reimburse for
previously made Advances. The Trustee will provide notice to the NIMS Insurer
and the Master Servicer by telecopy by the Close of Business on any Master
Servicer Remittance Date in the event that the amount remitted by the Master
Servicer to the Trustee on such date is less than the Advances required to be
made by the Master Servicer for the related Distribution Date, as set forth in
the related Remittance Report.
(d) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon.
(e) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the NIMS Insurer, the
Depositor and the Trustee.
SECTION 4.05. Swap Account.
(a) On the Closing Date, there is hereby established a separate trust
(the "Supplemental Interest Trust"), into which the Depositor shall deposit: (i)
the Interest Rate Swap Agreement, (ii) the Swap Administration Agreement and
(iii) [$________________]. The Supplemental Interest Trust shall be maintained
by the Supplemental Interest Trust Trustee, who initially, shall be the Trustee.
No later than the Closing Date, the Supplemental Interest Trust Trustee shall
establish and maintain a separate, segregated trust account to be held in the
Supplemental Interest Trust, titled, "Swap Account, [____________________], as
Supplemental Interest Trust Trustee, in trust for the Swap Provider and the
registered holders of [_______________________________]" Such account shall be
an Eligible Account and funds on deposit therein shall be held separate and
apart from, and shall not be commingled with, any other moneys, including,
without limitation, other moneys of the Trustee, in its capacity as Supplemental
Interest Trust Trustee, held pursuant to this Agreement. Amounts therein shall
be held uninvested.
(b) On each Distribution Date, prior to any distribution to any
Certificate, the Trustee shall deliver to the Supplemental Interest Trust
Trustee for deposit into the Swap Account: (i) the amount of any Net Swap
Payment or Swap Termination Payment (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event) owed to the Swap Provider (after
taking into account any upfront payment received from the counterparty to a
replacement swap agreement) from funds collected and received with respect to
the Mortgage Loans prior to the determination of Available Funds and (ii)
amounts received by the Supplemental Interest Trust Trustee from the Swap
Administrator, for distribution in accordance with Section 4.01(e) above,
pursuant to the Swap Administration Agreement, dated as of the Closing Date (the
"Swap Administration Agreement"), among [____________________] in its capacity
as Supplemental Interest Trustee, Trustee and Swap Administrator and Option One
Mortgage Corporation (in substantially the form attached hereto as Exhibit N).
For federal income tax purposes, any amounts paid to the Swap Provider on each
Distribution Date shall first be deemed paid to the Swap Provider in respect of
the Class SWAP-IO Interest to the extent of the amount distributable on such
Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall
be deemed paid to the Swap Provider in respect of a Class IO Distribution Amount
(as defined below).
(c) For federal income tax purposes, the Swap Account shall be owned by
the majority Holder of the Class C Certificates.
(d) To the extent that the Supplemental Interest Trust is determined to
be a separate legal entity from the Supplemental Interest Trust Trustee, any
obligation of the Supplemental Interest Trust Trustee under the Interest Rate
Swap Agreement shall be deemed to be an obligation of the Supplemental Interest
Trust.
(e) The Trustee shall treat the Holders of Certificates (other than the
Class P, Class C and Class R Certificates) as having entered into a notional
principal contract with respect to the Holders of the Class C Certificates.
Pursuant to each such notional principal contract, all Holders of Certificates
(other than the Class P, Class C and Class R Certificates) shall be treated as
having agreed to pay, on each Distribution Date, to the Holder of the Class C
Certificates an aggregate amount equal to the excess, if any, of (i) the amount
payable on such Distribution Date on the REMIC 3 Regular Interest corresponding
to such Class of Certificates over (ii) the amount payable on such Class of
Certificates on such Distribution Date (such excess, a "Class IO Distribution
Amount"). A Class IO Distribution Amount payable from interest collections shall
be allocated PRO RATA among such Certificates based on the amount of interest
otherwise payable to such Certificates, and a Class IO Distribution Amount
payable from principal collections shall be allocated to the most subordinate
Class of Certificates with an outstanding principal balance to the extent of
such balance. In addition, pursuant to such notional principal contract, the
Holder of the Class C Certificates shall be treated as having agreed to pay Net
WAC Rate Carryover Amounts to the Holders of the Certificates (other than the
Class C, Class P and Class R Certificates) in accordance with the terms of this
Agreement. Any payments to the Certificates from amounts deemed received in
respect of this notional principal contract shall not be payments with respect
to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1).
However, any payment from the Certificates (other than the Class C, Class P and
Class R Certificates) of a Class IO Distribution Amount shall be treated for tax
purposes as having been received by the Holders of such Certificates in respect
of their interests in REMIC 3 and as having been paid by such Holders to the
Swap Administrator pursuant to the notional principal contract. Thus, each
Certificate (other than the Class P and Class R Certificates) shall be treated
as representing not only ownership of Regular Interests in REMIC 3, but also
ownership of an interest in, and obligations with respect to, a notional
principal contract.
SECTION 4.06. Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed to REMIC 1 on account
of the Mortgage Loans or withdrawn from the Distribution Account and distributed
to the Holders of the Class R Certificates (in respect of the Class R-2
Interest), as the case may be:
(i) to Holders of REMIC 1 Regular Interest I and each of REMIC 1
Regular Interest I-1-A through I-45-B, pro rata, in an amount
equal to (A) Uncertificated Accrued Interest for such REMIC 1
Regular Interests for such Distribution Date, plus (B) any
amounts payable in respect thereof remaining unpaid from
previous Distribution Dates;
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (A) above, payments of principal shall
be allocated as follows: first, to REMIC 1 Regular Interst I,
then to REMIC 1 Regular interests I-1-A through I-45-B
starting with the lowest numerical denomination until the
Uncertificated Principal Balance of each such REMIC 1 Regular
Interest is reduced to zero, provided that, for REMIC 1
Regular Interests with the same numerical denomination, such
payments of principal shall be allocated pro rata between such
REMIC 1 Regular Interests; and
(iii) to the Holders of REMIC 1 Regular Interest P, on each
Distribution Date, [____]% of the amount paid in respect of
Prepayment Charges.
(b) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed to REMIC 2 on account
of the Mortgage Loans or withdrawn from the Distribution Account and distributed
to the Holders of the Class R Certificates (in respect of the Class R-2
Interest), as the case may be:
(i) to the Holders of REMIC 2 Regular Interest LT-IO, in an
amount equal to (A) Uncertificated Accrued Interest for such REMIC 2
Regular Interest for such Distribution Date, plus (B) any amounts in
respect thereof remaining unpaid from previous Distribution Dates
(ii) first, to Holders of REMIC 2 Regular Interest LTAA, REMIC
2 Regular Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular
Interest LTA3, REMIC 2 Regular Interest LTA4, REMIC 2 Regular Interest
LTM1, REMIC 2 Regular Interest LTM2, REMIC 2 Regular Interest LTM3,
REMIC 2 Regular Interest LTM4, REMIC 2 Regular Interest LTM5, REMIC 2
Regular Interest LTM6, REMIC 2 Regular Interest LTM7, REMIC 2 Regular
Interest LTM8, REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest
LTM10, REMIC 2 Regular Interest LTM11, REMIC 2 Regular Interest LTZZ
and REMIC 2 Regular Interest LTP, PRO rata, in an amount equal to (A)
the Uncertificated Accrued Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued Interest
in respect of REMIC 2 Regular Interest LTZZ shall be reduced and
deferred when the REMIC 2 Overcollateralized Amount is less than the
REMIC 2 Overcollateralization Target Amount, by the lesser of (x) the
amount of such difference and (y) the Maximum LTZZ Uncertificated
Interest Deferral Amount and such amount shall be payable to the
Holders of REMIC 2 Regular Interest LTA1, REMIC 2 Regular Interest
LTA2, REMIC 2 Regular Interest LTA3, REMIC 2 Regular Interest LTA4,
REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest LTM2, REMIC 2
Regular Interest LTM3, REMIC 2 Regular Interest LTM4, REMIC 2 Regular
Interest LTM5, REMIC 2 Regular Interest LTM6, REMIC 2 Regular Interest
LTM7, REMIC 2 Regular Interest LTM8, REMIC 2 Regular Interest LTM9,
REMIC 2 Regular Interest LTM10 and REMIC 2 Regular Interest LTM11 in
the same proportion as the Overcollateralization Increase Amount is
allocated to the Corresponding Certificates and the Uncertificated
Principal Balance of REMIC 2 Regular Interest LTZZ shall be increased
by such amount;
(iii) to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the REMIC 2 Marker Allocation
Percentage of Available Funds for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows:
(a) [____]% of such remainder (other than amounts
payable under clause (c) below), to the Holders of REMIC 2
Regular Interest LTAA and REMIC 2 Regular Interest LTP, until
the Uncertificated Principal Balance of such REMIC 2 Regular
Interest is reduced to zero, provided, however, that REMIC 2
Regular Interest LTP shall not be reduced until the
Distribution Date immediately following the expiration of the
latest Prepayment Charge as identified on the Prepayment
Charge Schedule or any Distribution Date thereafter, at which
point such amount shall be distributed to REMIC 2 Regular
Interest LT2P, until [$________________] has been distributed
pursuant to this clause;
(b) [____]% of such remainder (other than amounts
payable under clause (c) below), first, to the Holders of
REMIC 2 Regular Interest LTA1, REMIC 2 Regular Interest LTA2,
REMIC 2 Regular Interest LTA3, REMIC 2 Regular Interest LTA4,
REMIC 2 Regular Interest LTM1, REMIC 2 Regular Interest LTM2,
REMIC 2 Regular Interest LTM3, REMIC 2 Regular Interest LTM4,
REMIC 2 Regular Interest LTM5, REMIC 2 Regular Interest LTM6,
REMIC 2 Regular Interest LTM7, REMIC 2 Regular Interest LTM8,
REMIC 2 Regular Interest LTM9, REMIC 2 Regular Interest LTM10
and REMIC 2 Regular Interest LTM11, [____]% of and, in the
same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal
Balances of such REMIC 2 Regular Interests are reduced to zero
and second, to the Holders of REMIC 2 Regular Interest LTZZ,
[____]% of such remainder, until the Uncertificated Balance of
such REMIC 2 Regular Interest is reduced to zero; and
(c) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-2 Interest);
provided, however, that (i) [____]% and (ii) [____]% of any principal
payments that are attributable to an Overcollateralization Reduction
Amount shall be allocated to Holders of (i) REMIC 2 Regular Interest
LTAA and REMIC 2 Regular Interest LTP, in that order and (ii) REMIC 2
Regular Interest LTZZ, respectively; provided that REMIC 2 Regular
Interest LTP shall not be reduced until the Distribution Date
immediately following the expiration of the latest Prepayment Charge as
identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 2
Regular Interest LTP, until [$________________] has been distributed
pursuant to this clause; and
(iv) Notwithstanding the distributions described in this
Section 4.07, distribution of funds shall be made only in accordance
with Section 4.01.
On each Distribution Date, [____]% of the amounts distributed on REMIC
2 Regular Interest LT-IO shall be deemed distributed by REMIC 2 to REMIC 3 in
respect of the Class Swap-IO Interest. Such amounts shall be deemed distributed
by REMIC 3 to REMIC 4 in respect of REMIC 4 Regular Interest Swap IO. Such
amounts shall be deemed distributed by REMIC 4 to the Swap Administrator for
deposit into the Swap Account.
On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest LTP.
The payment of the foregoing amounts to the Holders of REMIC 2 Regular Interest
LTP shall not reduce the Uncertificated Principal Balance thereof.
SECTION 4.07. Allocation of Realized Losses.
(a) All Realized Losses on the Mortgage Loans allocated to any Regular
Certificate shall be allocated by the Trustee on each Distribution Date as
follows: first, as provided in Section 1.03, to the interest accrued on the
Class C Certificates after the allocation thereto of certain interest shortfalls
as provided in Section 1.03; second, to the Net Swap Payment received under the
Interest Rate Swap Agreement after payment of Section 4.01(e)(i) through (iv);
third, to the Class C Certificates (determined for purposes of this section 4.08
as the amount by which (A) the aggregate Uncertificated Balance of the REMIC 1
Regular Interests immediately preceding such Distribution Date exceed (B) the
aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates immediately preceding such
Distribution Date), until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-11 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-10
Certificates, sixth, to the Class M-9 Certificates, seventh, to the Class M-8
Certificates, eighth, to the Class M-7 Certificates, ninth, to the Class M-6
Certificates, tenth, to the Class M-5 Certificates, eleventh, to the Class M-4
Certificates, twelfth, to the Class M-3 Certificates, thirteenth, to the Class
M-2 Certificates and fourteenth, to the Class M-1 Certificates until their
Certificate Principal Balances are reduced to zero. All Realized Losses to be
allocated to the Certificate Principal Balances of all Classes on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
C Certificate shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(v). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class A Certificates
or the Class P Certificates.
(b) With respect to the REMIC 1 Regular Interests, all Realized Losses
on the Mortgage Loans shall be allocated by the Securities Administrator on each
Distribution Date first, to REMIC 1 Regular Interest I until the Uncertificated
Principal Balance of such REMIC 1 Regular Interest has been reduced to zero and
second, to REMIC 1 Regular Interest I-1-A through REMIC 1 Regular Interest
I-45-B, starting with the lowest numerical denomination until such REMIC 1
Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular
Interests with the same numerical denomination, such Realized Losses shall be
allocated pro rata between such REMIC 1 Regular Interests.
(c) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to the following REMIC 2 Regular Interests in
the specified percentages, as follows: first, to Uncertificated Accrued Interest
payable to the REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest LTZZ
up to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount,
[____]% and [____]%, respectively; second, to the Uncertificated Principal
Balances of the REMIC 2 Regular Interest LTAA and REMIC 2 Regular Interest LTZZ
up to an aggregate amount equal to the REMIC 2 Principal Loss Allocation Amount,
[____]% and [____]%, respectively; third, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest LTAA, REMIC 2 Regular Interest LTM11 and
REMIC 2 Regular Interest LTZZ, [____]%, [____]% and [____]%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LTM11 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM10 and REMIC 2 Regular
Interest LTZZ, [____]%,[____]%, and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM10 has been
reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM9 and REMIC 2 Regular
Interest LTZZ, [____]%,[____]%, and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM9 has been
reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM8 and REMIC 2 Regular
Interest LTZZ, [____]%,[____]%, and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM8 has been
reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM7 and REMIC 2 Regular
Interest LTZZ, [____]%,[____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM7 has been
reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM6 and REMIC 2 Regular
Interest LTZZ, [____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM6 has been
reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM5 and REMIC 2 Regular
Interest LTZZ, [____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM5 has been
reduced to zero; tenth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM4 and REMIC 2 Regular
Interest LTZZ, [____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM4 has been
reduced to zero; eleventh, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM3 and REMIC 2 Regular
Interest LTZZ, [____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM3 has been
reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM2 and REMIC 2 Regular
Interest LTZZ, [____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM2 has been
reduced to zero; thirteenth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LTAA, REMIC 2 Regular Interest LTM1 and REMIC 2 Regular
Interest LTZZ[____]%, [____]% and [____]%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LTM1 has been
reduced to zero.
SECTION 4.08. Tax Treatment of Swap Payments and Swap Termination
Payments
For federal income tax purposes, each holder of a Class A or Mezzanine
Certificate is deemed to own an undivided beneficial ownership interest in a
REMIC regular interest and the right to receive payments from either the Basis
Risk Shortfall Reserve Fund or the Supplemental Interest Trust in respect of any
Basis Risk Shortfall Carry-Forward Amounts or the obligation to make payments to
the Supplemental Interest Trust. For federal income tax purposes, the Trustee
will account for payments to each Class A and Mezzanine Certificates as follows:
each Class A and Mezzanine Certificate will be treated as receiving their entire
payment from REMIC 3 (regardless of any Swap Termination Payment or obligation
under the Swap Agreement) and subsequently paying their portion of any Swap
Termination Payment in respect of each such Class' obligation under the Swap
Agreement. In the event that any such Class is resecuritized in a REMIC, the
obligation under the Swap Agreement to pay any such Swap Termination Payment (or
any shortfall in Swap Provider Fee), will be made by one or more of the REMIC
Regular Interests issued by the resecuritization REMIC subsequent to such REMIC
Regular Interest receiving its full payment from any such Class A or Mezzanine
Certificate. Resecuritization of any Class A or Mezzanine Certificate in a REMIC
will be permissible only if the Trustee hereunder is the trustee in such
resecuritization.
The REMIC regular interest corresponding to a Class A or Mezzanine
Certificate will be entitled to receive interest and principal payments at the
times and in the amounts equal to those made on the certificate to which it
corresponds, except that (i) the maximum interest rate of that REMIC regular
interest will equal the Net WAC Rate computed for this purpose by limiting the
Notional Amount of the Swap Agreement to the aggregate principal balance of the
Mortgage Loans and (ii) any Swap Termination Payment will be treated as being
payable solely from Net Monthly Excess Cashflow. As a result of the foregoing,
the amount of distributions and taxable income on the REMIC regular interest
corresponding to a Class A or Mezzanine Certificate may exceed the actual amount
of distributions on the Class A or Mezzanine Certificate.
SECTION 4.09. [Reserved]
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
Each of the Class A Certificates, the Mezzanine Certificates, the Class
P Certificates, the Class C Certificates and the Residual Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the Trustee
of the Trust Fund. The Class A Certificates and the Mezzanine Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of [$________________] and integral
dollar multiples of $1.00 in excess thereof, except that one Certificate of each
such Class of Certificates may be in a different denomination so that the sum of
the denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance or Notional Amount of such Class on the Closing
Date. The Class P Certificates, the Class C Certificates and the Residual
Certificates are issuable in any Percentage Interests; PROVIDED, however, that
the sum of all such percentages for each such Class totals [___]% and no more
than ten Certificates of each Class may be issued and outstanding at any one
time.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Residual Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing. In addition,
(i) with respect to each Class R Certificate, the holder thereof may exchange,
in the manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest in
the Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest,
respectively, in each case that was evidenced by the Class R Certificate being
exchanged and (ii) with respect to each Class R-X Certificate, the holder
thereof may exchange, in the manner described above, such Class R-X Certificate
for three separate certificates, each representing such holder's respective
Percentage Interest in the Class R-4 Interest, the Class R-5 Interest and the
Class R-6 Interest, respectively, in each case that was evidenced by the Class
R-X Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor or (ii) after the occurrence of a Master
Servicer Event of Termination, the Certificate Owners of the Book-Entry
Certificates representing Percentage Interests of such Classes aggregating not
less than [___]% advise the Trustee and Depository through the Financial
Intermediaries and the Depository Participants in writing that the continuation
of a book-entry system through the Depository to the exclusion of definitive,
fully registered certificates (the "Definitive Certificates") to Certificate
Owners is no longer in the best interests of the Certificate Owners. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Depositor's expense, in the case of (ii)
above, or the Master Servicer's expense, in the case of (i) above, execute on
behalf of the Trust and authenticate the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Trustee,
the Certificate Registrar, the Master Servicer, any Paying Agent and the
Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Class M-11
and Class C Certificate, Class P Certificate or Residual Certificate (the
"Private Certificates") shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer (other than in
connection with (i) the initial transfer of any such Certificate by the
Depositor to an Affiliate of the Depositor or, in the case of the Class R-X
Certificates, the first transfer by an Affiliate of the Depositor, (ii) the
transfer of any such Class C, Class P or Residual Certificate to the issuer
under the Indenture or the indenture trustee under the Indenture or (iii) a
transfer of any such Class C, Class P or Residual Certificate from the issuer
under the Indenture or the indenture trustee under the Indenture to the
Depositor or an Affiliate of the Depositor), the Trustee and the Certificate
Registrar shall each require receipt of: (I)(i) if such transfer is purportedly
being made in reliance upon Rule 144A (as evidenced by the investment letter
delivered to the Trustee, in substantially the form attached hereto as Exhibit
J) under the 1933 Act and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration
(which Opinion of Counsel shall not be an expense of the Depositor, the Trustee,
the Master Servicer, in its capacity as such, or the Trust Fund), together with
copies of the written certification(s) of the Certificateholder desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any; or (II) the Trustee shall
require the transferor to execute a transferor certificate (in substantially the
form attached hereto as Exhibit L) and the transferee to execute an investment
letter (in substantially the form attached hereto as Exhibit J) acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Depositor. The Holder of a Class C Certificate, Class P Certificate or Residual
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
Notwithstanding the foregoing, in the event of any such transfer of any
Ownership Interest in any Private Certificate that is a Book-Entry Certificate,
except with respect to the initial transfer of any such Ownership Interest by
the Depositor, such transfer shall be required to be made in reliance upon Rule
144A under the 1933 Act, and the transferor will be deemed to have made each of
the transferor representations and warranties set forth Exhibit L hereto in
respect of such interest as if it was evidenced by a Definitive Certificate and
the transferee will be deemed to have made each of the transferee
representations and warranties set forth Exhibit J hereto in respect of such
interest as if it was evidenced by a Definitive Certificate. The Certificate
Owner of any such Ownership Interest in any such Book-Entry Certificate desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
(e) No transfer of a Residual, Class C or P Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101 ("Plan Assets"), as certified by such transferee in the form of
Exhibit K or M, unless the Trustee is provided with an Opinion of Counsel for
the benefit of the Trust Fund, the Depositor, the Trustee and the Master
Servicer and on which they may rely, which shall be to the effect that the
purchase and holding of such Certificates is permissible under applicable law,
shall not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and shall not subject the Depositor, the
Master Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Master Servicer, the NIMS Insurer,
the Trustee or the Trust Fund. Any transferee of such Book-Entry Certificate
which does not provide such an Opinion of Counsel shall be deemed to represent
that it is not a Plan or acquiring such Certificates with "Plan Assets" of a
Plan. Neither an Opinion of Counsel nor any certification shall be required in
connection with (i) the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor or, in the case of the Class R-X
Certificates, the first transfer by an Affiliate of the Depositor, (ii) the
transfer of any Class C, Class P or Residual Certificate to the issuer under the
Indenture or the indenture trustee under the Indenture or (iii) a transfer of
any Class C, Class P or Residual Certificate from the issuer under the Indenture
or the indenture trustee under the Indenture to the Depositor or an Affiliate of
the Depositor (in which case, the Depositor or any Affiliate thereof shall have
deemed to have represented that it is not purchasing with Plan Assets) and the
Trustee shall be entitled to conclusively rely upon a representation (which,
upon the request of the Trustee, shall be a written representation) from the
Depositor of the status of such transferee as an affiliate of the Depositor.
For so long as the Supplemental Interest Trust is in existence, each
beneficial owner of an Offered Certificate or any interest therein shall be
deemed to have represented, by virtue of its acquisition or holding of the
Offered Certificate, or interest therein, that either (i) it is not a Plan or is
an accredited investor within the meaning of Prohibited Transaction Exemption
2002-41, as amended from time to time (the "Exemption") and (B) the acquisition
and holding of such Certificate and the separate right to receive payments from
the Supplemental Interest Trust are eligible for the exemptive relief available
under Prohibited Transaction Class Exemption ("PTCE") 84-14 (for transactions by
independent "qualified professional asset managers"), 91-38 (for transactions by
bank collective investment funds), 90-1 (for transactions by insurance company
pooled separate accounts), 95-60 (for transactions by insurance company general
accounts) or 96-23 (for transactions effected by "in-house asset managers").
Subsequent to the termination of the Supplemental Interest Trust, each
beneficial owner of a Mezzanine Certificate or any interest therein shall be
deemed to have represented, by virtue of its acquisition or holding of that
certificate or interest therein, that either (i) it is not a Plan or a trustee
or other Person acting on behalf of a Plan or using "plan assets" of a Plan to
effect such acquisition (including any insurance company using funds in its
general or separate accounts that may constitute "plan assets"), (ii) it has
acquired and is holding such certificate in reliance on the Exemption, and that
it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-"(or its equivalent) by S&P, Fitch or Xxxxx'x, and
the certificate is so rated or (iii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in PTCE 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.
If any Certificate or any interest therein is acquired or held in
violation of the provisions of the preceding paragraphs, the next preceding
permitted beneficial owner shall be treated as the beneficial owner of that
Certificate retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any such
Certificate or interest therein was effected in violation of the provisions of
the preceding paragraph shall indemnify and hold harmless the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, and the Trust Fund from and
against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a
Residual Certificate unless such Ownership Interest is a PRO RATA
undivided interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Residual Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
(A) an affidavit in the form of Exhibit K hereto from
the proposed transferee to the effect that such transferee is
a Permitted Transferee and that it is not acquiring its
Ownership Interest in the Residual Certificate that is the
subject of the proposed transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the
effect that the proposed transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the
Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported transferee. If any purported transferee shall, in
violation of the provisions of this Section, become a Holder of a
Residual Certificate, then the prior Holder of such Residual
Certificate that is a Permitted Transferee shall, upon discovery that
the registration of transfer of such Residual Certificate was not in
fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section or for making any
distributions due on such Residual Certificate to the Holder thereof or
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was in fact not
a Permitted Transferee at the time such distributions were made all
distributions made on such Residual Certificate. Any such distributions
so recovered by the Trustee shall be distributed and delivered by the
Trustee to the prior Holder of such Residual Certificate that is a
Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right but
not the obligation, without notice to the Holder of such Residual
Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Residual
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trustee and the NIMS Insurer, in form and substance
satisfactory to the Trustee and the NIMS Insurer, (i) written notification from
each Rating Agency that the removal of the restrictions on transfer set forth in
this Section will not cause such Rating Agency to downgrade its rating of the
Certificates and (ii) an Opinion of Counsel to the effect that such removal will
not cause any REMIC created hereunder to fail to qualify as a REMIC.
(f) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be canceled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor, the NIMS Insurer and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Master Servicer, the Depositor, the Trustee, the NIMS Insurer, the
Certificate Registrar, any Paying Agent and any agent of the Master Servicer,
the Depositor, the Trustee, the NIMS Insurer, the Certificate Registrar, any
Paying Agent or the Trustee may treat the Person, including a Depository, in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and for all
other purposes whatsoever, and none of the Master Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
SECTION 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the NIMS Insurer.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Master Servicer and the Depositor.
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by Master
Servicer herein. The Depositor shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Depositor.
SECTION 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.
Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; PROVIDED, HOWEVER, that the successor Master Servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor Master Servicer.
SECTION 6.03. Limitation on Liability of the Master Servicer and
Others.
Neither the Master Servicer or the Depositor nor any of the directors
or officers or employees or agents of the Master Servicer or the Depositor shall
be under any liability to the Trust or the Certificateholders for any action
taken or for refraining from the taking of any action by the Master Servicer or
the Depositor in good faith pursuant to this Agreement, or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the Master
Servicer, the Depositor or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or
negligence in the performance of duties of the Master Servicer or the Depositor,
as the case may be, or by reason of its reckless disregard of its obligations
and duties of the Master Servicer or the Depositor, as the case may be,
hereunder; PROVIDED, FURTHER, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The preceding sentence shall not limit the obligations of the
Master Servicer pursuant to Section 8.05. The Master Servicer and any director
or officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind PRIMA FACIE properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer and the
Depositor, and any director or officer or employee or agent of the Master
Servicer or the Depositor, shall be indemnified by the Trust and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of its reckless disregard of obligations and
duties hereunder. The Master Servicer or the Depositor may undertake any such
action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least [___]% of the Voting Rights, the reasonable legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The Master
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or 7.01 with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination). This paragraph shall apply
to the Master Servicer solely in its capacity as Master Servicer hereunder and
in no other capacities. Without limiting the foregoing, the Master Servicer
shall undertake to defend any claims against the Trust Fund, the Trustee and/or
itself initiated by a Borrower or otherwise related to the servicing of any
Mortgage Loan.
The Master Servicer (except the Trustee if it is required to succeed
the Master Servicer hereunder) indemnifies and holds the Trustee, the Depositor,
the NIMS Insurer and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor, the NIMS Insurer and any Certificateholder may sustain in any way
related to the failure of the Master Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Master
Servicer shall immediately notify the Trustee, the Depositor, the NIMS Insurer
and each Certificateholder if a claim is made that may result in such claims,
losses, penalties, fines, forfeitures, legal fees or related costs, judgments,
or any other costs, fees and expenses, and the Master Servicer shall assume
(with the consent of the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Master Servicer, the Trustee, the Depositor, the NIMS Insurer and/or
Certificateholder in respect of such claim. The provisions of this paragraph
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
SECTION 6.04. Master Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor servicer to the Trustee and the NIMS Insurer in writing and
such proposed successor servicer is reasonably acceptable to the Trustee and the
NIMS Insurer and (b) each Rating Agency shall have delivered a letter to the
Trustee and the NIMS Insurer prior to the appointment of the successor servicer
stating that the proposed appointment of such successor servicer as Master
Servicer hereunder will not result in the reduction or withdrawal of the then
current rating of the Certificates; PROVIDED, HOWEVER, that no such resignation
by the Master Servicer shall become effective until such successor servicer or,
in the case of (i) above, the Trustee shall have assumed the Master Servicer's
responsibilities and obligations hereunder or the Trustee shall have designated,
with the consent of the NIMS Insurer, a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
Any such determination permitting the resignation of the Master Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMS Insurer. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee and the NIMS Insurer.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. Except as provided in Section 3.02, no such delegation is permitted that
results in the delegee subservicing any Mortgage Loans. The Master Servicer
shall provide the Trustee and the NIMS Insurer with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Master Servicer's Affiliates or their respective successors and assigns.
SECTION 6.06. [Reserved].
SECTION 6.07. Inspection.
The Master Servicer, in its capacity as Originator and Master Servicer,
shall afford the Trustee and the NIMS Insurer, upon reasonable advance notice,
during normal business hours, access to all records maintained by the Master
Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish to the Trustee and the NIMS Insurer its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Termination.
(a) If any one of the following events ("Master Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any
Advance; or (B) any other failure by the Master Servicer to deposit in
the Collection Account or Distribution Account any deposit required to
be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written
notice of such failure shall have been given to the Master Servicer by
the Trustee or to the Trustee by the NIMS Insurer or any Holders of a
Regular Certificate evidencing at least [___]% of the Voting Rights; or
(ii) The failure by the Master Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Master Servicer duly to observe or perform,
in any material respect, any other covenants, obligations or agreements
of the Master Servicer as set forth in this Agreement, which failure
continues unremedied for a period of 30 days, after the date (A) on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee
or to the Trustee by the NIMS Insurer or any Holders of a Regular
Certificate evidencing at least [___]% of the Voting Rights or (B) of
actual knowledge of such failure by a Servicing Officer of the Master
Servicer; or
(iii) The entry against the Master Servicer of a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a trustee, conservator, receiver
or liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) The Master Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(v) A Delinquency Master Servicer Termination Trigger has
occurred and is continuing;
then, and in each and every such case, so long as a Master Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 12:00 P.M., New York time, on the Business Day immediately following the
Master Servicer Remittance Date (provided the Trustee shall give the Master
Servicer notice of such failure to advance by 5:00 P.M. New York time on the
Master Servicer Remittance Date), the Trustee shall, at the direction of the
NIMS Insurer, terminate all of the rights and obligations of the Master Servicer
under this Agreement and the Trustee, or a successor servicer appointed in
accordance with Section 7.02, shall immediately make such Advance and assume,
pursuant to Section 7.02, the duties of a successor Master Servicer, (y) in the
case of (i)(B), (ii), (iii) and (iv) above, the Trustee shall, at the written
direction of the NIMS Insurer or the Holders of each Class of Regular
Certificates evidencing Percentage Interests aggregating not less than [___]%,
by notice then given in writing to the Master Servicer and to the Trustee and
(z) in the case of (v) above, the Trustee shall, at the direction of the NIMS
Insurer, by notice then given in writing to the Master Servicer and to the
Trustee, terminate all of the rights and obligations of the Master Servicer as
servicer under this Agreement. Any such notice to the Master Servicer shall also
be given to each Rating Agency, the Depositor and the Originator. On or after
the receipt by the Master Servicer (and by the Trustee if such notice is given
by the Holders) of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section; and, without limitation, and the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and related
documents or otherwise. The Master Servicer agrees to cooperate with the Trustee
(or the applicable successor Master Servicer) in effecting the termination of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the delivery to the Trustee of all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement within ten Business Days subsequent to such notice, the transfer
within one Business Day subsequent to such notice to the Trustee (or the
applicable successor Master Servicer) for the administration by it of all cash
amounts that shall at the time be held by the Master Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer with
respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Mortgage Files to the successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section shall be paid by the predecessor Master
Servicer (or if the predecessor Master Servicer is the Trustee, the initial
Master Servicer) upon presentation of reasonable documentation of such costs and
expenses and to the extent not paid by the Master Servicer, by the Trust.
(b) In connection with any failure by the Master Servicer to make any
remittance required to be made by the Master Servicer to the Distribution
Account pursuant to this Section 7.01 on the day and by the time such remittance
is required to be made under the terms of this Section 7.01 (without giving
effect to any grace or cure period), the Master Servicer shall pay to the
Trustee for the account of the Trustee interest at the Prime Rate on any amount
not timely remitted from and including the day such remittance was required to
be made to, but not including, the day on which such remittance was actually
made.
SECTION 7.02. Trustee to Act; Appointment of Successor.
(a) From the time the Master Servicer (and the Trustee, if notice is
sent by the Holders) receives a notice of termination pursuant to Section 7.01
or 6.04, the Trustee (or such other successor Master Servicer as is approved in
accordance with this Agreement) shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its
capacity as successor Master Servicer, immediately will assume all of the
obligations of the Master Servicer to make advances. Notwithstanding the
foregoing, the Trustee, in its capacity as successor Master Servicer, shall not
be responsible for the lack of information and/or documents that it cannot
obtain through reasonable efforts. It is understood and acknowledged by the
parties hereto that there will be a period of transition (not to exceed 90 days)
before the transition of servicing obligations is fully effective. As
compensation therefor, the Trustee (or such other successor Master Servicer)
shall be entitled to such compensation as the Master Servicer would have been
entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as successor
Master Servicer or (ii) if the Trustee is legally unable so to act, the Trustee
shall appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than
[$________________] as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder; PROVIDED, that the appointment of any such
successor Master Servicer shall be approved by the NIMS Insurer (such approval
not to be unreasonably withheld), as evidenced by the prior written consent of
the NIMS Insurer, and will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Master Servicer hereunder, unless the Trustee
is prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.14 or to indemnify the Trustee or the NIMS Insurer
pursuant to Section 6.03), nor shall any successor Master Servicer be liable for
any acts or omissions of the predecessor Master Servicer or for any breach by
such Master Servicer of any of its representations or warranties contained
herein or in any related document or agreement. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. All Servicing Transfer Costs shall be paid by
the predecessor Master Servicer upon presentation of reasonable documentation of
such costs, and if such predecessor Master Servicer defaults in its obligation
to pay such costs, such costs shall be paid by the successor Master Servicer or
the Trustee (in which case the successor Master Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).
(b) Any successor to the Master Servicer, including the Trustee, shall
during the term of its service as servicer continue to service and administer
the Mortgage Loans for the benefit of Certificateholders, and maintain in force
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Master Servicer hereunder and a Fidelity Bond
in respect of its officers, employees and agents to the same extent as the
Master Servicer is so required pursuant to Section 3.14.
SECTION 7.03. Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders and with the consent of the NIMS Insurer, waive any events
permitting removal of the Master Servicer as servicer pursuant to this Article
VII, PROVIDED, HOWEVER, that the Majority Certificateholders may not waive a
default in making a required distribution on a Certificate without the consent
of the Holder of such Certificate and the consent of the NIMS Insurer. Upon any
waiver of a past default, such default shall cease to exist and any Master
Servicer Event of Termination arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto except to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to the Rating Agencies and the NIMS Insurer.
SECTION 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the Master
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register, the NIMS Insurer and each
Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Master Servicer Event of Termination for five Business Days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to all Certificateholders and to the NIMS Insurer
notice of such occurrence unless such default or Master Servicer Event of
Termination shall have been waived or cured.
SECTION 7.05. Survivability of Master Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders and the NIMS Insurer.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; PROVIDED, HOWEVER, that:
(i) prior to the occurrence of a Master Servicer Event of
Termination, and after the curing of all such Master Servicer Events of
Termination which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the NIMS Insurer or the
Majority Certificateholders relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising or omitting to exercise any trust or power conferred upon
the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section 7.01(a)
unless a Responsible Officer of the Trustee at the Corporate Trust
Office obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Master Servicer, the NIMS
Insurer or the Majority Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) (i) the Trustee may request and rely upon, and shall be protected
in acting or refraining from acting upon, any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties, and the manner of obtaining consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders or the NIMS Insurer, pursuant to the provisions of
this Agreement, unless such Certificateholders or the NIMS Insurer, as
applicable, shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of
Termination which may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
documents, unless requested in writing to do so by the NIMS Insurer or
the Majority Certificateholder; PROVIDED, HOWEVER, -------- -------
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to such
proceeding. The reasonable expense of every such examination shall be
paid by the Master Servicer or the NIMS Insurer (if requested by the
NIMS Insurer) or, if paid by the Trustee, shall be reimbursed by the
Master Servicer or the NIMS Insurer (if requested by the NIMS Insurer)
upon demand and, if not reimbursed by the Master Servicer or the NIMS
Insurer (if requested by the NIMS Insurer), shall be reimbursed by the
Trust. Nothing in this clause (v) shall derogate from the obligation of
the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as the Trustee may be
required to act as Master Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor
Master Servicer;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian; and
(viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
(b) The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Interest Rate Swap Agreement (in its capacity
as Supplemental Interest Trust Trustee) and to appoint to the Swap
Administrator, pursuant to the Swap Administration Agreement, any rights to
receive payments from the Swap Provider and the Depositor further directs the
Trustee to execute, deliver and perform its obligation under the Swap
Administration Agreement. The Seller, the Depositor, the Master Servicer and the
Holders of the Class A Certificates and the Mezzanine Certificates by their
acceptance of such Certificates acknowledge and agree that the Supplemental
Interest Trust Trustee shall execute, deliver and perform its obligations under
the Interest Rate Swap Agreement and the Swap Administration Agreement and shall
do so solely in its capacity as Trustee of the Supplemental Interest Trust or as
Swap Administrator, as the case may be, and not in its individual capacity.
Every provision of this Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall apply to the
Supplemental Interest Trust Trustee's execution of the Interest Rate Swap
Agreement and the Swap Administration Agreement, and the performance of its
duties and satisfaction of its obligations thereunder.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer. The Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02); the validity of the assignment of
any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02); the compliance by the Depositor, the
Originator, the Seller or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Master Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), any Sub-Servicer or any Mortgagor; any action of the Master Servicer
(other than if the Trustee shall assume the duties of the Master Servicer
pursuant to Section 7.02), or any Sub-Servicer taken in the name of the Trustee;
the failure of the Master Servicer or any Sub-Servicer to act or perform any
duties required of it as agent of the Trustee hereunder; or any action by the
Trustee taken at the instruction of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); PROVIDED, HOWEVER, that the foregoing shall not relieve the Trustee of
its obligation to perform its duties under this Agreement, including, without
limitation, the Trustee's duty to review the Mortgage Files pursuant to Section
2.01. The Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder (unless the Trustee shall have become the successor Master Servicer).
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Master Servicer, the Depositor or their Affiliates.
SECTION 8.05. Trustee Fee and Expenses.
(a) The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee. The Trustee shall be
reimbursed from the Trust Fund for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement (not including expenses, disbursements and advances
incurred or made by the Trustee including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) up to a limit
of [$________________] per calendar year except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of Certificateholders or the Trustee hereunder. In addition, the
Trustee and its officers, directors, employees and agents shall be entitled to
be indemnified for, and held harmless by the Trust Fund against, any and all
losses, liabilities, damages, claims or expenses incurred in connection with any
legal action relating to this Agreement or the Certificates up to a limit of
[$________________] per calendar year, other than (i) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder or (ii)
resulting from a breach of the Master Servicer's obligations and duties under
this Agreement and the Mortgage Loans (for which the Master Servicer shall
indemnify pursuant to Section 8.05(b)). Notwithstanding anything herein to the
contrary, the Trustee shall be reimbursed from the Trust Fund for all Servicing
Transfer Costs not paid by the Master Servicer pursuant to Section 7.02(a) and
any expenses related to "high cost home loans" without regard to any annual
limitations. This section shall survive termination of this Agreement or the
resignation or removal of any Trustee hereunder.
(b) The Master Servicer agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense resulting from a breach of
the Master Servicer's obligations and duties under this Agreement. Such
indemnity shall survive the termination or discharge of this Agreement and the
resignation or removal of the Trustee. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from the Trust Fund therefor.
(c) Any amounts payable to the Trustee, or any director, officer,
employee or agent of the Trustee in respect of the indemnification provided by
this Section 8.05, or pursuant to any other right of reimbursement from the
Trust Fund that the Trustee, or any director, officer, employee or agent of the
Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.
(d) The limitations on the indemnification provided to the Trustee set
forth in Section 8.05(a) above shall remain in effect for so long as any series
of notes issued pursuant to one or more Indentures, as set forth in Section 1.04
remain outstanding.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least [$________________] and a long-term
debt rating of at least "A-" and a short-term debt rating of at least "A-1" by
S&P, if rated by S&P, and subject to supervision or examination by federal or
state authority. If such entity publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 8.06, the combined
capital and surplus of such entity shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
The principal office of the Trustee (other than the initial Trustee) shall be in
a state with respect to which an Opinion of Counsel has been delivered to such
Trustee and the NIMS Insurer at the time such Trustee is appointed Trustee to
the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the NIMS Insurer, the
Depositor, the Master Servicer and each Rating Agency. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor Trustee
acceptable to the NIMS Insurer by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
having accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or the NIMS Insurer or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor, the Master Servicer or the NIMS Insurer may
remove the Trustee. If the Depositor, the Master Servicer or the NIMS Insurer
removes the Trustee under the authority of the immediately preceding sentence,
the Depositor, with the consent of the NIMS Insurer, shall promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
The Majority Certificateholders (or the NIMS Insurer upon the failure
of the Trustee to perform its obligations hereunder) may at any time remove the
Trustee by written instrument or instruments delivered to the Master Servicer,
the Depositor and the Trustee; the Depositor shall thereupon use its best
efforts to appoint a successor trustee acceptable to the NIMS Insurer in
accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the NIMS Insurer, the Depositor, the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee. The Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee may
consider necessary or desirable. Any such co-trustee or separate trustee shall
be subject to the written approval of the Master Servicer and the NIMS Insurer.
If the Master Servicer and the NIMS Insurer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Master Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The Master Servicer shall be responsible
for the fees of any co-trustee or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly and
with the consent of the NIMS Insurer, may at any time accept the
resignation of or remove any separate trustee or co-trustee except that
following the occurrence of a Master Servicer Event of Termination, the
Trustee acting alone may accept the resignation or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Master Servicer and the NIMS Insurer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
SECTION 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the undertakings
and agreements made on the part of the Trustee in the Certificates is made and
intended not as a personal undertaking or agreement by the Trustee but is made
and intended for the purpose of binding only the Trust.
SECTION 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Originator, the Depositor,
the Master Servicer, the NIMS Insurer and each Certificate Owner upon reasonable
notice during normal business hours, access to all records maintained by the
Trustee in respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. Upon request, the Trustee shall furnish
the Depositor, the Master Servicer, the NIMS Insurer and any requesting
Certificate Owner with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Originator the Master Servicer, the
Depositor and such Certificate Owner and shall make available to the Seller, the
Originator, the Master Servicer, the Depositor, the NIMS Insurer and such
Certificate Owner for review and copying such books, documents or records as may
be requested with respect to the Trustee's duties hereunder. The Seller, the
Originator, the Depositor, the Master Servicer and the Certificate Owners shall
not have any responsibility or liability for any action or failure to act by the
Trustee and are not obligated to supervise the performance of the Trustee under
this Agreement or otherwise.
SECTION 8.13. Suits for Enforcement.
In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee, shall, at the direction of the Majority Certificateholders or the NIMS
Insurer, or may, proceed to protect and enforce its rights and the rights of the
Certificateholders or the NIMS Insurer under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee, the NIMS Insurer and the
Certificateholders.
SECTION 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall be
made by the Trustee on Form 1066 or other appropriate federal tax or information
return for the taxable year ending on the last day of the calendar year in which
the Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Master Servicer in fulfilling its duties hereunder. The Master
Servicer shall be entitled to reimbursement of expenses to the extent provided
in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns as the direct representative each
REMIC created hereunder. The expenses of preparing and filing such returns shall
be borne by the Trustee. The Trustee shall use the Tax Prepayment Assumption for
purposes of computing any tax reporting, including, but not limited to, the
calculation of the original issue discount.
(e) The Holder of the Residual Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the "Tax Matters Person") with respect to the related
REMIC and shall act as Tax Matters Person for each REMIC. The Trustee, as agent
for the Tax Matters Person, shall perform on behalf of each REMIC all reporting
and other tax compliance duties that are the responsibility of such REMIC under
the Code, the REMIC Provisions, or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, if required by the Code, the REMIC Provisions, or other such guidance,
the Trustee, as agent for the Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions. The
Trustee, as agent for the Tax Matters Person, shall represent each REMIC 1n any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC, enter into settlement agreements with any
government taxing agency, extend any statute of limitations relating to any item
of any REMIC and otherwise act on behalf of any REMIC 1n relation to any tax
matter involving the Trust.
(f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause the REMIC to take any action necessary to create
or maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Master Servicer nor the Holder of any Residual Certificate
shall take any action, cause any REMIC created hereunder to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee, the NIMS Insurer and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such a tax. In addition, prior to taking any
action with respect to any REMIC created hereunder or the assets therein, or
causing such REMIC to take any action, which is not expressly permitted under
the terms of this Agreement, any Holder of a Residual Certificate will consult
with the Trustee, the NIMS Insurer and the Master Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any REMIC, and no such Person shall
take any such action or cause any REMIC to take any such action as to which the
Trustee, the NIMS Insurer or the Master Servicer has advised it in writing that
an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC 1ncurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC 1s
domiciled in the State of California or any other state for state tax purposes
by virtue of the location of the Master Servicer or any subservicer, the Master
Servicer agrees to pay on behalf of such REMIC when due, any and all state and
local taxes imposed as a result of such a determination, in the event that the
Holder of the related Residual Certificate fails to pay such taxes, if any, when
imposed.
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
(k) On or before [_____] of each calendar year beginning in [_____],
the Master Servicer shall deliver to the NIMS Insurer, the Trustee and each
Rating Agency an Officers' Certificate stating the Master Servicer's compliance
with the provisions of this Section 9.01.
(l) The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities and shall complete the Form 8811.
SECTION 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to either REMIC after the Closing Date, unless it and the NIMS Insurer have
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of any REMIC created
hereunder as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause any REMIC created hereunder to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
(a) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Master Servicer of its duties and
obligations set forth herein, the Master Servicer shall indemnify the NIMS
Insurer, the Trustee and the Trust Fund against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
PROVIDED, HOWEVER, that the Master Servicer shall not be liable for any such
Losses attributable to the action or inaction of the Trustee, the Depositor or
the Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Master Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Master Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Master Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
(b) In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Trustee of its duties and obligations set
forth herein, the Trustee shall indemnify the NIMS Insurer and the Trust Fund
against any and all Losses resulting from such negligence; PROVIDED, HOWEVER,
that the Trustee shall not be liable for any such Losses attributable to the
action or inaction of the Master Servicer, the Depositor or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Trustee has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Trustee have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Trustee of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the Master
Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust
and (iii) the optional purchase by the Master Servicer or the NIMS Insurer of
the Mortgage Loans as described below. Notwithstanding the foregoing, in no
event shall the trust created hereby continue beyond the earlier of (a) December
2035 or (b) the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States
to the Court of St. James's, living on the date hereof.
The Master Servicer (or if the Master Servicer elects not to exercise
such option, the NIMS Insurer) may, at its option (the party exercising such
right the "Terminator"), terminate this Agreement on any date on which the
aggregate of the Stated Principal Balances of the Mortgage Loans (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) on such date is equal to or less
than [___]% of the sum of the aggregate Stated Principal Balances of the
Mortgage Loans on the Cut-off Date, by purchasing, on the next succeeding
Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a
price equal to the fair market value of the Mortgage Loans and REO Properties
(as determined by the Master Servicer, if it is the Terminator, the NIMS
Insurer, if it is the Terminator and, to the extent that the Class A
Certificates or a Class of Mezzanine Certificates will not receive all amounts
owed to it as a result of the termination, the Trustee, as of the close of
business on the third Business Day next preceding the date upon which notice of
any such termination is furnished to the related Certificateholders pursuant to
Section 10.01(c)), plus accrued and unpaid interest thereon at the weighted
average of the Mortgage Rates through the end of the Due Period preceding the
final Distribution Date plus unreimbursed Servicing Advances, Advances, any
unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties, any
accrued unpaid Net WAC Rate Carryover Amount, any previously unpaid Allocated
Realized Loss Amounts and any Swap Termination Payment to the Swap Provider then
remaining unpaid or which is due to the exercise of such option (the
"Termination Price"); provided, however, such option may only be exercised if
(i) the Termination Price is sufficient to pay all interest accrued on, as well
as amounts necessary to retire the principal balance of, each class of notes
secured by the Class C Certificates and the Class P Certificates and issued
pursuant to the Indenture and any amounts owed to the NIMS Insurer at the time
the option is exercised, and (ii) the fair market value of the Mortgage Loans
and REO Properties determined as provided above is at least equal to the Stated
Principal Balance of the Mortgage Loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and the appraised value of the REO Properties.
Notwithstanding the foregoing, if the condition set forth in clause (i) above is
satisfied but the condition set forth in clause (ii) above is not satisfied,
then if the Terminator is the Master Servicer or the NIMS Insurer, such
Terminator may nevertheless exercise such option by paying a higher Termination
Price equal to the Stated Principal Balance of the Mortgage Loans (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and the appraised value of the
REO Properties plus accrued and unpaid interest thereon at the weighted average
of the Mortgage Rates through the end of the Due Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances, any unpaid
Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued
and unpaid Net WAC Rate Carryover Amount, any previously unpaid Allocated
Realized Loss Amounts, provided that the payment of such higher Termination
Price is not prohibited by any regulatory institution under whose supervision
such Terminator may be conducting its business at such time.
In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer or the NIMS Insurer, as applicable, shall deposit
in the Distribution Account all amounts then on deposit in the Collection
Account, which deposit shall be deemed to have occurred immediately preceding
such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.
(b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Master Servicer
or the NIMS Insurer, by letter to the Certificateholders and the NIMS Insurer
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final distribution specifying (1) the
Distribution Date upon which final distribution of the Certificates will be made
upon presentation and surrender of such Certificates at the office or agency of
the Trustee therein designated, (2) the amount of any such final distribution
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Residual Certificates, the Holders of
the Residual Certificates agree, in connection with any termination hereunder,
to assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate Servicing Account for
the benefit of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans), the NIMS
Insurer (if the NIMS Insurer has exercised its right to purchase the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds, and the Certificateholders shall look to the Class R
Certificateholder for payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Master Servicer or the NIMS Insurer exercises
its purchase option as provided in Section 10.01, each REMIC shall be terminated
in accordance with the following additional requirements, unless the Trustee
shall have been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section will not
(i) result in the imposition of taxes on "prohibited transactions" of the Trust
as defined in Section 860F of the Code or (ii) cause any REMIC constituting part
of the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Master Servicer or the NIMS Insurer shall adopt and the Trustee shall
sign a plan of complete liquidation of each REMIC created hereunder
meeting the requirements of a "Qualified Liquidation" under Section
860F of the Code and any regulations thereunder; and
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust Fund to the
Master Servicer or the NIMS Insurer, as applicable, for cash pursuant
to the terms of the plan of complete liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan
of complete liquidation (and the Certificateholders hereby appoint the Trustee
as their attorney in fact to sign such plan) as appropriate and (ii) to take
such other action in connection therewith as may be reasonably required to carry
out such plan of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the NIMS Insurer and without
the consent of the Certificateholders (i) to cure any ambiguity, (ii) to correct
or supplement any provisions herein which may be defective or inconsistent with
any other provisions herein, (iii) to amend the provisions of Section 3.22(b) or
(iv) to make any other provisions with respect to matters or questions arising
under this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided that such action shall not, as evidenced by either (a) an
Opinion of Counsel delivered to the Trustee or (b) written notice to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
adversely affect in any material respect the interests of any Certificateholder.
Neither an Opinion of Counsel nor confirmation from the Rating Agencies will be
required in connection with an amendment to the provisions of Section 3.22(b).
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel or written notice from the Rating Agencies shall be required
to address the effect of any such amendment on any such consenting
Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the NIMS Insurer and the
Holders of Certificates entitled to at least [___]% of the Voting Rights for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Swap Provider or Holders of Certificates; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Swap Provider or
Holders of any Class of Certificates (as evidenced by either (a) an Opinion of
Counsel delivered to the Trustee or (b) written notice to the Depositor, the
Master Servicer and the Trustee from the Rating Agencies that such action will
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates with respect to which it is a Rating Agency) in a manner, other
than as described in (i), or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment and satisfactory to the NIMS Insurer, to the
effect that such amendment will not result in the imposition of a tax on any
REMIC created hereunder constituting part of the Trust Fund pursuant to the
REMIC Provisions or cause any REMIC created hereunder constituting part of the
Trust to fail to qualify as a REMIC at any time that any Certificates are
outstanding and that the amendment is being made in accordance with the terms
hereof.
Notwithstanding any of the other provisions of this Section 11.01, none
of the Depositor, the Master Servicer or the Trustee shall enter into any
amendment to Section 3.05(c)(i), Section 4.01(e), Section 4.09 or Section 11.10
of this Agreement without the prior written consent of the Swap Provider.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer, the NIMS Insurer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least [___]% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to the conflicts of law provisions thereof,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws. With respect to any claim arising out
of this Agreement, each party irrevocably submits to the exclusive jurisdiction
of the courts of the State of New York and the United States District Court
located in the Borough of Manhattan in The City of New York, and each party
irrevocably waives any objection which it may have at any time to the laying of
venue of any suit, action or proceeding arising out of or relating hereto
brought in any such courts, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, by facsimile or by express delivery service,
to (a) in the case of the Originator and/or Master Servicer, Option One Mortgage
Corporation, 3 Ada, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X'Xxxxx, or
such other address or telecopy number as may hereafter be furnished to the
Depositor, the NIMS Insurer and the Trustee in writing by the Master Servicer,
(b) in the case of the Trustee, [____________________], X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Client Manager--Option One[_____], with a copy to
[____________________], 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000,
Attention: [_________________________], or such other address or telecopy number
as may hereafter be furnished to the Depositor, the NIMS Insurer and the Master
Servicer in writing by the Trustee, (c) in the case of the Depositor, Option One
Mortgage Acceptance Corporation, 3 Ada, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxx X'Xxxxx, or such other address or telecopy number as may be furnished to
the Master Servicer, the NIMS Insurer and the Trustee in writing by the
Depositor and (d) in the case of the NIMS Insurer, such address furnished to the
Depositor, the Master Servicer, the Trustee and the Guarantor in writing by the
NIMS Insurer, or such other address or telecopy number as may hereafter be
furnished to the Depositor, the Master Servicer and the Trustee in writing by
the NIMS Insurer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Master Servicer Default shall be given by telecopy and by certified mail. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08. Notice to the Rating Agencies and the NIMS Insurer.
(a) Each of the Trustee and the Master Servicer shall be obligated to
use its best reasonable efforts promptly to provide notice to the Rating
Agencies and the NIMS Insurer with respect to each of the following of which a
Responsible Officer of the Trustee or Master Servicer, as the case may be, has
actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of
Termination that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or
the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Master Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, the Trustee shall promptly make available to each
Rating Agency copies of each Statement to Certificateholders described in
Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:
(i) each annual statement as to compliance described in
Section 3.20 hereof;
(ii) each annual independent public accountants' servicing
report described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master Servicer has not made an
Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: MBS
Monitoring/[____________________], Fitch Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and Standard & Poor's Ratings Services, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 11.10. Third Party Rights.
The NIMS Insurer and the Swap Provider shall each be deemed a
third-party beneficiary of this Agreement to the same extent as if it were a
party hereto, and shall have the right to enforce the provisions of this
Agreement.
SECTION 11.11. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders, the NIMS Insurer
and the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
SECTION 11.12. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
SECTION 11.13. No Petition.
The Depositor, Master Servicer and the Trustee, by entering into this
Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the Trust
Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations with respect to the Certificates or this
Agreement.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Depositor
By:
----------------------------------------
Name:
Title:
OPTION ONE MORTGAGE CORPORATION,
as Master Servicer
By:
----------------------------------------
Name:
Title:
[________________________________].,
as Trustee
By:
----------------------------------------
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ______ day of [_____________] before me, a notary public in and
for said State, personally appeared __________________ known to me to be a Vice
President of Option One Mortgage Acceptance Corporation, a Delaware corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ______ day of [_____________] before me, a notary public in and
for said State, personally appeared __________________ known to me to be a Vice
President of Option One Mortgage Corporation, a corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ______ day of [_____________] before me, a notary public in and
for said State, personally appeared __________________, known to me to be a
Assistant Vice President of [_____________________________]., a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
--------------------------------
Notary Public
