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OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Master Servicer
and
XXXXX FARGO BANK MINNESOTA, National Association,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2002
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Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates, Series 2002-2
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................................................4
SECTION 1.02. Accounting.....................................................................................45
SECTION 1.03. Allocation of Certain Interest Shortfalls......................................................46
SECTION 1.04. Rights of the NIMS Insurer.....................................................................46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans...................................................................47
SECTION 2.02. Acceptance by Trustee..........................................................................50
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originator.................................51
SECTION 2.04. Intentionally Omitted..........................................................................54
SECTION 2.05. Representations, Warranties and Covenants of the Master Servicer...............................54
SECTION 2.06. Representations and Warranties of the Depositor................................................56
SECTION 2.07. Issuance of Certificates.......................................................................58
SECTION 2.08. Conveyance of the Subsequent Mortgage Loans....................................................58
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance of REMIC 2
and REMIC 3 by the Trustee; Issuance of Certificates...........................................61
SECTION 2.10. Negative Covenants of the Trustee and the Master Servicer......................................62
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer......................................................63
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers..................................................................................65
SECTION 3.03. Successor Sub-Servicers........................................................................66
SECTION 3.04. Liability of the Master Servicer...............................................................66
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the NIMS
Insurer, the Trustee or Certificateholders.....................................................67
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee...............................67
SECTION 3.07. Collection of Certain Mortgage Loan Payments...................................................67
SECTION 3.08. Sub-Servicing Accounts.........................................................................68
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.......................................................................................69
SECTION 3.10. Collection Account, Initial Deposit Account and Distribution
i
Account........................................................................................70
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account...............................72
SECTION 3.12. Investment of Funds in the Interest Coverage Account, Collection
Account, Initial Deposit Account and the Distribution Account..................................75
SECTION 3.13. [Reserved].....................................................................................76
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage..............................................................................76
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................77
SECTION 3.16. Realization Upon Defaulted Mortgage Loans......................................................78
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files................................................81
SECTION 3.18. Servicing Compensation.........................................................................82
SECTION 3.19. Reports to the Trustee; Collection Account Statements..........................................83
SECTION 3.20. Statement as to Compliance.....................................................................83
SECTION 3.21. Independent Public Accountants' Servicing Report...............................................83
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee..................................84
SECTION 3.23. Title, Management and Disposition of REO Property..............................................84
SECTION 3.24. Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls............................................................................88
SECTION 3.25. [Reserved].....................................................................................88
SECTION 3.26. Obligations of the Master Servicer in Respect of Mortgage Rates
and Monthly Payments...........................................................................88
SECTION 3.27. Solicitations..................................................................................88
SECTION 3.28. Reserve Fund...................................................................................89
SECTION 3.29. Advance Facility...............................................................................90
SECTION 3.30. PMI Policy; Claims Under the PMI Policy........................................................91
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions..................................................................................92
SECTION 4.02. [Reserved].....................................................................................95
SECTION 4.03. Statements.....................................................................................95
SECTION 4.04. Remittance Reports; Advances...................................................................98
SECTION 4.05. Pre-Funding Account...........................................................................100
SECTION 4.06. Interest Coverage Account.....................................................................101
SECTION 4.07. Distributions on the REMIC Regular Interests..................................................102
SECTION 4.08. Allocation of Realized Losses.................................................................104
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates..............................................................................106
SECTION 5.02. Registration of Transfer and Exchange of Certificates.........................................106
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................111
SECTION 5.04. Persons Deemed Owners.........................................................................111
SECTION 5.05. Appointment of Paying Agent...................................................................112
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Master Servicer and the Depositor............................................113
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Master Servicer or the Depositor..............................................................113
SECTION 6.03. Limitation on Liability of the Master Servicer and Others.....................................113
SECTION 6.04. Master Servicer Not to Resign.................................................................114
SECTION 6.05. Delegation of Duties..........................................................................115
SECTION 6.06. [Reserved]....................................................................................115
SECTION 6.07. Inspection....................................................................................115
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Termination.........................................................116
SECTION 7.02. Trustee to Act; Appointment of Successor......................................................118
SECTION 7.03. Waiver of Defaults............................................................................119
SECTION 7.04. Notification to Certificateholders............................................................119
SECTION 7.05. Survivability of Master Servicer Liabilities..................................................119
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.............................................................................120
SECTION 8.02. Certain Matters Affecting the Trustee.........................................................121
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................122
SECTION 8.04. Trustee May Own Certificates..................................................................123
SECTION 8.05. Trustee Fee and Expenses......................................................................123
SECTION 8.06. Eligibility Requirements for Trustee..........................................................124
SECTION 8.07. Resignation or Removal of Trustee.............................................................124
SECTION 8.08. Successor Trustee.............................................................................125
SECTION 8.09. Merger or Consolidation of Trustee............................................................125
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SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.................................................126
SECTION 8.11. Limitation of Liability.......................................................................127
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.................................127
SECTION 8.13. Suits for Enforcement.........................................................................128
SECTION 8.14. Waiver of Bond Requirement....................................................................128
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.....................................128
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration..........................................................................129
SECTION 9.02. Prohibited Transactions and Activities........................................................131
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC
Status........................................................................................131
ARTICLE X
TERMINATION
SECTION 10.01. Termination..........................................................................133
SECTION 10.02. Additional Termination Requirements..................................................134
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment............................................................................136
SECTION 11.02. Recordation of Agreement; Counterparts...............................................137
SECTION 11.03. Limitation on Rights of Certificateholders...........................................137
SECTION 11.04. Governing Law; Jurisdiction..........................................................138
SECTION 11.05. Notices..............................................................................138
SECTION 11.06. Severability of Provisions...........................................................139
SECTION 11.07. Article and Section References.......................................................139
SECTION 11.08. Notice to the Rating Agencies and the NIMS Insurer...................................139
SECTION 11.09. Further Assurances...................................................................140
SECTION 11.10. Third Party Rights...................................................................140
SECTION 11.11. Benefits of Agreement................................................................140
SECTION 11.12. Acts of Certificateholders...........................................................140
SECTION 11.13 No Petition..........................................................................141
EXHIBITS:
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Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class S Certificates
Exhibit A-3 Form of Class M-1 Certificates
Exhibit A-4 Form of Class M-2 Certificates
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Exhibit A-5 Form of Class M-3 Certificates
Exhibit A-6 Form of Class C Certificates
Exhibit A-7 Form of Class P Certificates
Exhibit A-8 Form of Class R 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 [Reserved]
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of Liquidation Report
Exhibit N Form of Subsequent Transfer Instrument
Exhibit O Form of Addition Notice
Schedule I Prepayment Charge Schedule
Schedule II PMI Mortgage Loans
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This Pooling and Servicing Agreement is dated as of March 1,
2002 (the "Agreement"), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as
depositor (the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as master servicer
(the "Master Servicer") and XXXXX FARGO BANK MINNESOTA, National Association, 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 eight classes
of certificates, designated as (i) the Class A Certificates, (ii) the Class S
Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2 Certificates,
(v) the Class M-3 Certificates, (vi) the Class P Certificates, (vii) the Class C
Certificates and (viii) the Class R Certificates.
REMIC 1
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As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Pre-Funding
Account, the Interest Coverage Account, the Initial Deposit Account, the Net WAC
Rate Carryover Reserve Account, the Master Servicer Prepayment Charge Payment
Amounts and any Subsequent Mortgage Loan Interest) 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 solely 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.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LT1A Variable(2) $248,608,569.00 June 25, 2032
LT1B Variable(2) $ 37,500,000.00 June 25, 2032
LT1C Variable(2) $ 88,891,331.00 June 25, 2032
LT1P Variable(2) $ 100.00 June 25, 2032
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date following the maturity date for the
Mortgage Loan with the latest possible maturity date has been
designated as the "latest possible maturity date" for each
Uncertificated REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through 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 (as
defined herein) 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 solely 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 2 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LT2A Variable(2) $367,499,900.00 June 25, 2032
LT2B Variable(2) $ 3,337,500.00 June 25, 2032
LT2C Variable(2) $ 155,630.00 June 25, 2032
LT2D Variable(2) $ 131,250.00 June 25, 2032
LT2E Variable(2) $ 97,500.00 June 25, 2032
LT2F Variable(2) $ 3,778,120.00 June 25, 2032
LT2S Variable(2)) N/A(3) June 25, 2032
LT2P Variable(2) $ 100.00 June 25, 2032
-------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the 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 LT2S will not have Uncertificated Principal
Balances, but will accrue interest on its respective Uncertificated
Notional Amount outstanding from time to time which shall equal the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B.
2
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...................... Variable(2) $333,750,000.00 June 25, 2032
Class S...................... N/A(3) N/A(3) June 25, 2032
Class M-1.................... Variable(2) $ 15,563,000.00 June 25, 2032
Class M-2.................... Variable(2) $ 13,125,000.00 June 25, 2032
Class M-3.................... Variable(2) $ 9,750,000.00 June 25, 2032
Class C...................... Variable(2) $ 2,811,900.00(4) June 25, 2032
Class P...................... N/A(5) $ 100.00 June 25, 2032
------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the 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 S Certificates will receive all amounts distributed to REMIC
2 Regular Interest LT2S.
(4) The Class C Certificates will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Certificates
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
Class C Certificates will not accrue interest on their Class
Certificate Principal Balance. The Class C Certificates will also be
entitled to the Subsequent Mortgage Loan Interest, as a right with
respect to a component of the Class C Certificates that will not be
treated as a REMIC regular interest but rather as separate interest
strips from the Subsequent Mortgage Loans for a specified period of
time.
(5) The Class P Certificates will not accrue interest.
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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 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 Class R
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 and 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 S Certificates and the
Class C Certificates and each Distribution Date, the calendar month prior to the
month of such Distribution Date.
"Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.08, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit O.
"Adjustable Rate Mortgage Loan": A 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
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate 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, (ii) the
Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if applicable.
"Adjusted 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 applicable
4
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, (ii) the Servicing Fee Rate and (iii) the PMI Insurer Fee
Rate, if applicable.
"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 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 any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on any Distribution Date
and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.
"Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes, rules and regulations applicable
thereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect 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, (b)
Liquidation Proceeds, Insurance Proceeds, Principal Prepayments and other
unscheduled recoveries of principal and interest in respect of the Mortgage
Loans received
5
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) with
respect to the first Distribution Date, the Initial Deposit, (h) with respect to
the Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre- Funding Account (exclusive of investment income) after
giving effect to any purchase of Subsequent Mortgage Loans, (i) with respect to
each Distribution Date during and the Distribution Date immediately following
the Funding Period, any amounts withdrawn by the Trustee from the Interest
Coverage Account for distribution on the Certificates 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)
the PMI Insurer Fee payable from the Distribution Account and (f) any
indemnification payments or expense reimbursements made by the Trust Fund
pursuant to Section 8.05.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
"Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Overcollateralization Release Amount, if any,
for such Distribution Date.
"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 Offered Certificates shall be Book-Entry Certificates.
6
"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 State of
Minnesota or in the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
"Certificate": Any Regular Certificate or Class R 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 Class R 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 the Class A Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
0.27% per annum and (B) after the Optional Termination Date, 0.54% per annum.
With respect to the Class M-1 Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 0.65% per annum and (B) after the
Optional Termination Date, 0.975% per annum. With respect to the Class M-2
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 1.15% per annum and (B) after the Optional Termination Date,
1.1725% per annum. With respect to the Class M-3 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 1.85% per
annum and (B) after the Optional Termination Date, 2.775% per annum.
"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 S Certificates and the Class C
Certificates) immediately prior to any Distribution Date, will be equal to the
Initial Certificate Principal Balance thereof reduced by the sum of all amounts
actually distributed in respect of principal of such Class and, in the case of a
Mezzanine Certificate, 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 Balances of the REMIC 2 Regular Interests (other than
REMIC 2 Regular Interest LT2S) over (B) the then aggregate Certificate Principal
Balances of the Class A Certificates, the Mezzanine Certificates and the Class P
Certificates then outstanding.
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"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 Certificate": Any one of the Class A Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class A Certificateholder": Any Holder of a Class A
Certificate.
"Class A Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 78.00% 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 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 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-6, representing
the right to distributions as set forth herein and therein and 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-3, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-1 Principal Distribution Amount": The excess of (x)
the sum of (i) the 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) 86.30% 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 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
8
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-4, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the 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) 93.30% 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 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-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-3 Principal Distribution Amount": The excess of (x)
the sum of (i) the 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) 98.50% 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 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.
9
"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-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"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-8 and evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
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 S Certificate": Any one of the Class S Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class S Rate": With respect to REMIC 2 Regular Interest LT2S
and the Class S Certificates;
(A) in the case of the 1st Distribution Date through the 10th
Distribution Date, a per annum rate equal to the excess of (i) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (y) 6.00% per annum;
(B) in the case of the 11th Distribution Date through the 20th
Distribution Date, a per annum rate equal to the excess of (i) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (y) 4.50% per annum;
(C) in the case of the 21st Distribution Date through the 30th
Distribution Date, a per annum rate equal to the excess of (i) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1B over (y) 2.50% per annum;
(D) in the case of each Distribution Date thereafter, 0.00%
per annum.
"Close of Business": As used herein, with respect to any
Business Day, 5:00 p.m. (New York time).
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"Closing Date": March 13, 2002.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Xxxxx Fargo Bank Minnesota, National Association, as Trustee, in trust
for registered Holders of Option One Mortgage Loan Trust 2002-2, Asset-Backed
Certificates, Series 2002-2," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"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,
Minneapolis, Minnesota 55479-0113, Attention: Option One Series 2002-2, 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 (i) REMIC 2
Regular Interest LT2B, (ii) REMIC 2 Regular Interest LT2C, (iii) REMIC 2 Regular
Interest LT2D, (iv) REMIC 2 Regular Interest LT2E and (v) REMIC 0 Xxxxxxx
Xxxxxxxx XX0X, (x) the Class A Certificates, (ii) Class M-1 Certificates, (iii)
Class M-2 Certificates, (iv) Class M-3 Certificates and (v) Class P
Certificates, respectively.
"Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and any amounts remaining in the
Pre-Funding Account, calculated prior to taking into account payments of
principal on the Mortgage Loans and distribution of the Principal Distribution
Amount to the Holders of the Certificates then entitled to distributions of
principal on such Distribution Date.
"Custodian": Xxxxx Fargo Bank Minnesota, National Association,
as custodian of the Mortgage Files, and any successor thereto.
"Cut-off Date": With respect to each Initial Mortgage Loan,
the later of (i) the date of origination of such Mortgage Loan or (ii) March 1,
2002.
"Cut-off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off Date or Subsequent
Cut-off Date, as applicable (or as of the applicable date of substitution with
respect to a Qualified Substitute Mortgage Loan).
"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.
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"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 18.00%.
"Delinquency Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the aggregate Principal Balance of Mortgage
Loans Delinquent 60 days or more by (y) the aggregate 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, 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
12
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 a cooperative 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 Class R 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 Class R 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 trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered Certificateholders of
Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates, Series 2002-2"
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 April 2002.
"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
13
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 or A-1 by S&P (or
comparable ratings if Xxxxx'x 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 100% 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
14
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.
"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.
"Foreclosure Price": The amount reasonably expected to be
received from the sale of the related Mortgaged Property net of any expenses
associated with foreclosure proceedings.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Maximum Cap Rate.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or
any successor thereto.
"Funding Period": The period beginning on the Closing Date and
ending on the earlier to occur of the date upon which (a) the amount on deposit
in the Pre-Funding Account (exclusive of investment income) has been reduced to
zero or (b) June 12, 2002.
"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.
"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 1% 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, 35% 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
15
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
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.
"Initial Deposit": $0.00 in cash to be deposited by the
Depositor with the Trustee for deposit into the Initial Deposit Account on or
before the Closing Date, relating to Initial Mortgage Loans having a first Due
Date in the Due Period relating to the Distribution Date in May 2002.
"Initial Deposit Account": The Initial Deposit Account
established in accordance with Section 3.10(b) hereof and maintained by the
Trustee, which shall be entitled "Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of Option One Mortgage
Loan Trust 2002-2, Asset-Backed Certificates, Series 2002-2 Initial Deposit
Account," which must be an Eligible Account.
"Initial Mortgage Loan": Any of the Mortgage Loans included in
the Trust Fund as of the Closing Date. The aggregate principal balance of the
Initial Mortgage Loans as of the Cut-off Date is equal to $286,108,669.12.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan (including the PMI
Policy), 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 Coverage Account": The account established and
maintained pursuant to Section 4.06 , as defined therein.
"Interest Coverage Amount": The amount to be paid by the
Depositor to the Trustee for deposit in the Interest Coverage Account on the
Closing Date pursuant to Section 4.06, which amount is $713,265.33.
16
"Interest Determination Date": With respect to the Class A
Certificates and the Mezzanine Certificates and each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
"Interest Remittance Amount": With respect to any Distribution
Date, that portion of the Available Funds for such Distribution Date allocable
to interest.
"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 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, 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 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.
"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
17
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.
"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 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass- Through Rates for REMIC 2 Regular
Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest LT2D,
REMIC 2 Regular Interest LT2E and REMIC 2 Regular Interest LT2F, with the rate
on REMIC 2 Regular Interest LT2B subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class A Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation; with the rate on REMIC 2
Regular Interest LT2C subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-1 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; with the rate on REMIC 2 Regular Interest
LT2D subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-2 Certificates and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 2 Regular Interest LT2E
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-3 Certificates and (ii) the Maximum Cap Rate for the purpose of this
18
calculation and with the rate on REMIC 2 Regular Interest LT2F 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 Uncertificated REMIC 2 Regular Interest LT2B,
Uncertificated REMIC 2 Regular Interest LT2C, Uncertificated REMIC 2 Regular
Interest LT2D and Uncertificated REMIC 2 Regular Interest LT2E 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 50%
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 75.00% of the
Credit Enhancement Percentage.
"Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived 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 and the Class A
Certificates and the Mezzanine Certificates, a per annum rate equal to the
product of (x) the weighted average of the Adjusted Net Maximum Mortgage Rates
of the Mortgage Loans, weighted on the basis of the outstanding Principal
Balances of the Mortgage Loans as of the first day of the month preceding the
month of such Distribution Date less the Pass-Through Rate for the Class S
Certificates for such Distribution Date multiplied by a fraction, the numerator
of which is the Notional Amount of the Class S Certificates immediately prior to
such Distribution Date and the denominator of which is the sum of the
outstanding Principal Balances of the Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date and any amount remaining in
the Pre-Funding Account (exclusive of any investment income therein) 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.
"Maximum LT2F Uncertificated Accrued Interest Deferral
Amount": With respect to any Distribution Date, the excess of (a) accrued
interest at the Uncertificated REMIC 2 Pass- Through Rate applicable to REMIC 2
Regular Interest LT2F for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2F minus the
REMIC 2 Overcollateralized Amount, in each case for such Distribution Date, over
(b) Uncertificated
19
Accrued Interest on REMIC 2 Regular Interest LT2B with the rate on REMIC 2
Regular Interest LT2B subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A Certificates and (ii) the Maximum Cap Rate for
the purpose of this calculation, Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2C with the rate on REMIC 2 Regular Interest LT2C subject to
a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class
M-1 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation, Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2D
with the rate on REMIC 2 Regular Interest LT2D subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-2 Certificates
and (ii) the Maximum Cap Rate for the purpose of this calculation and
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2E with the rate
on REMIC 2 Regular Interest LT2E subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-3 Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation for such Distribution Date;
provided, however, that for this purpose, calculations of the Uncertificated
REMIC 2 Pass- Through Rate and the related caps with respect to Uncertificated
REMIC 2 Regular Interest LT2B, Uncertificated REMIC 2 Regular Interest LT2C,
Uncertificated REMIC 2 Regular Interest LT2D and Uncertificated REMIC 2 Regular
Interest LT2E 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 or Class M-3 Certificate.
"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 Class S 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 S
Certificates and the Class C Certificates) of such Class immediately prior to
such Distribution Date, in each case, reduced by any Net Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls and in the case of the Class C
Certificates, amounts payable to the PMI Insurer pursuant to Section 4.01(d)(ix)
(allocated to such Certificate based on its respective entitlements to interest
irrespective of any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls for such Distribution Date). Notwithstanding the foregoing, for
federal income tax purposes and under the REMIC Provisions, the Monthly Interest
Distributable Amount for the Class S Certificates and any Distribution Date will
be deemed to be the Uncertificated Accrued Interest for REMIC 2 Regular Interest
LT2S 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;
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(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 Seller 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, attached hereto as Exhibit D, as
supplemented by each schedule of Subsequent Mortgage Loans attached to a
Subsequent Transfer Instrument. 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) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the
state and zip code;
(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 (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) based on the original amortization schedule;
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(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent
Mortgage Loan);
(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 (or Subsequent Cut-off Date, with respect
to a Subsequent Mortgage Loan);
(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 (or Subsequent Cut-off Date,
with respect to a Subsequent Mortgage Loan);
(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 (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan);
(24) the type and term of the related Prepayment Charge;
(25) the rounding code;
(26) the program code;
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(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) whether such Mortgage Loan is covered under the PMI
Policy; and
(34) the credit score ("FICO") of such Mortgage Loan.
The Mortgage Loan Schedule shall set forth the following
information, with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan): (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 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
and as supplemented by any Subsequent Mortgage Loans identified on each schedule
of Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument.
"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 (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan) shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) and (B) as of any date of determination thereafter shall be
23
the rate as adjusted on the most recent Adjustment Date, to equal the sum,
rounded to the next highest or nearest 0.125% (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 Offered Certificates, (B) the Unpaid
Interest Shortfall Amounts for the Class A Certificates and the Class S
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 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
Class A Certificates and the Mezzanine Certificates, a per annum rate equal to
the product of (i) the weighted average of the Adjusted Net Mortgage Rates of
the Mortgage Loans, weighted on the basis of the outstanding Principal Balances
of the Mortgage Loans as of the first day of the month preceding the month of
such Distribution Date less the Pass-Through Rate for the Class S Certificates
for such Distribution Date multiplied by a fraction, the numerator of which is
the Notional Amount of the Class S Certificates immediately prior to such
Distribution Date and the denominator of which is the sum of the outstanding
Principal Balances of the Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date and any amount remaining in the
Pre-Funding Account (exclusive of any investment income therein) and (ii) 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. For federal income
tax purposes, the economic equivalent of such rate shall be expressed as the
24
Uncertificated REMIC 2 Pass-Through Rate of the REMIC 2 Regular Interest for
which such Class of Certificates is the Corresponding Certificate.
The Net WAC Rate for any Distribution Date and the Class S
Certificates shall be a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the
outstanding Principal Balances of the Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates, the Mezzanine Certificates and the Class S Certificates and any
Distribution Date, the sum of (A) the positive excess of (i) the amount of
interest payable to such Class of Certificates on such Distribution Date
calculated at the related Formula Rate, in the case of the Class A Certificates
and the Mezzanine Certificates, or the applicable fixed rate set forth in the
second paragraph of the definition of Pass-Through Rate in the case of the Class
S Certificates, over (ii) the amount of interest payable on such Class of
Certificates at the 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
for the Class A Certificates and the Mezzanine Certificates or the applicable
rate for the Class S Certificates, as the case may be, in each case for such
Distribution Date and for such Accrual Period.
"Net WAC Rate Carryover Reserve Account": The reserve fund
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 issued by a trust, the principal assets of which include
the Class C Certificates, the Class P Certificates and the Class R 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 S Certificates, an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1B immediately prior to such
Distribution Date. Immediately prior to any Distribution Date, with respect to
the Class C Certificates, the aggregate of the Uncertificated Principal Balances
of REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LT2S).
"Offered Certificates": The Class A Certificates, the Class S
Certificates and the Mezzanine Certificates offered to the public pursuant to
the Prospectus Supplement.
25
"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
Certificates and the Class P Certificates, the corresponding amounts set forth
opposite such Class above in the Preliminary Statement.
"Original Notional Amount": With respect to the Class C
Certificates, $375,000,000. With respect to the Class S Certificates,
$37,500,000.
"Original Pre-Funded Amount": The amount deposited by the
Depositor in the Pre- Funding Account on the Closing Date, which amount is
$88,891,331.
"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 Basic Principal Distribution
Amount on such Distribution Date).
"Overcollateralization Floor": $1,875,000.
"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, (i) prior to the Stepdown Date, $2,812,500, (ii) on or after
the Stepdown Date, provided a Trigger Event is not in effect, the greater of (x)
1.50% of the aggregate 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 any amount on deposit in the Pre- Funding Account and (y) the
Overcollateralization Floor and (iii) on or after the Stepdown Date, if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date
26
"Overcollateralized Amount": For any Distribution Date, is the
amount, equal to (i) the sum of the aggregate 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 any funds on deposit in the Pre-Funding
Account on the related Determination Date 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 the Class A Certificates and the Mezzanine
Certificates and any Distribution Date, the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the related Net WAC Rate for such
Distribution Date.
With respect to the Class S Certificates, a per annum rate
equal to the lesser of (A) 6.00% for the 1st Distribution Date through the 10th
Distribution Date, 4.50% for the 11th Distribution Date through the 20th
Distribution Date, 2.50% for the 21st Distribution Date through the 30th
Distribution Date and 0.00% thereafter and (B) the related Net WAC Rate for such
Class for such Distribution Date; provided, however, for federal income tax
purposes and under the REMIC Provisions, (A) the Class S Certificates will not
have a Pass-Through Rate and (B) the Monthly Interest Distributable Amount for
the Class S Certificates and any Distribution Date will be deemed to be 100% of
the amount distributed on REMIC 2 Regular Interest LT2S for such Distribution
Date.
With respect to the Class C Certificates and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (G) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A, REMIC 2
Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest
LT2D, REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest LT2F and REMIC 2
Regular Interest LT2P. For purposes of calculating the Pass-Through Rate for the
Class C Certificates, the numerator is equal to the sum of the following
components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2B;
27
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2C minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2D minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2D;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2E minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2E;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2F minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2F; and
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2P minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2P.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Class R 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 Class R 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 100%.
"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;
28
(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 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+ or higher by S&P and rated A2 or higher by
Xxxxx'x, 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 105% 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 "AAA" by
S&P 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
29
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 120% 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 and Section 4975 of the Code.
"PMI Insurer": Mortgage Guaranty Insurance Corporation, a
Wisconsin stock insurance corporation, or its successors in interest.
"PMI Insurer Fee": The amount payable to the PMI Insurer on
each Distribution Date, which amount shall equal one twelfth of the product of
(i) the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Principal Balance
of the PMI Mortgage Loans and any related REO Properties as of the first day of
the related Due Period (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).
"PMI Insurer Fee Rate": 1.48% per annum.
"PMI Mortgage Loans": The list of Mortgage Loans insured by
the PMI Insurer attached hereto as Schedule II.
"PMI Policy": The Mortgage Guaranty Master Policy
(#71-70163(10/01)) with respect to the PMI Mortgage Loans, including all
endorsements thereto dated the Closing Date, issued by the PMI Insurer and the
Terms Letter, dated March 11, 2002, among the PMI Insurer, the Servicer and the
Trustee.
"Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans as of such date.
30
"Pre-Funding Account": The account established and maintained
pursuant to Section 4.05, as defined herein.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the
charges 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 (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan).
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 interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the
31
number of days commencing on the date on which the prepayment is applied and
ending on the last day of the calendar month preceding the month in which such
Distribution Date occurs. 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 March 1, 2002) 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 Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of the Basic Principal
Distribution Amount plus the Extra Principal Distribution Amount.
"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) each scheduled payment of principal collected
or advanced on the 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 Mortgage Loans applied by the Master Servicer
during the related Prepayment Period, (iii) the principal portion of all related
Net Liquidation Proceeds and Insurance Proceeds received during such Prepayment
Period, (iv) that portion of the Purchase Price, representing principal of any
repurchased 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,
(vi) in the case of the Distribution Date immediately following the end of the
Funding Period, any amount remaining in the Pre-Funding Account not used by the
Trustee to purchase Subsequent Mortgage Loans and (vii) 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.
"Prospectus Supplement": That certain Prospectus Supplement
dated March 11, 2002 relating to the public offering of the Offered
Certificates.
32
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, and as confirmed by an Officers' Certificate from the Master Servicer to
the Trustee, an amount equal to the sum of (i) 100% of the Principal Balance
thereof as of the date of purchase (or such other price as provided in Section
10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
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 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.
"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 5% 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
33
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) be covered by the PMI Policy if the Deleted Mortgage Loan
was covered by the PMI Policy, (xiii) have a Prepayment Charge provision at
least equal to the Prepayment Charge provision of the Deleted Mortgage Loan,
(xiv) conform to each representation and warranty set forth in Section 3.01 of
the Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan and
(xv) have the same Due Date as the Deleted Mortgage Loan. In the event that one
or more mortgage loans are substituted for one or more Deleted Mortgage Loans,
the amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in 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": 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 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 S Certificates,
the Class P Certificates, the Class C Certificates and the Class R 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.
34
"Regular Certificate": Any of the Class A Certificates, Class
S Certificates, Mezzanine Certificates, Class C Certificates or Class P
Certificates.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"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, 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 Principal Balance of such Mortgage
Loan at the Loan 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, including the PMI Policy, 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 Interest Coverage Account, Pre-Funding
Account, the Net WAC Rate Carryover Reserve Account or any Subsequent Mortgage
Loan Interest.
"REMIC 1 Regular Interest LT1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A 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 1 Regular Interest LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B 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 1 Regular Interest LT1C": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC
35
1. REMIC 1 Regular Interest LT1C 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 1 Regular Interest LT1P": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to any Prepayment Charges
collected by the Master Servicer and to a distribution of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A,
REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1P.
"REMIC 2": The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests and conveyed in trust to the Trustee, for the
benefit of REMIC 3, as holder of the REMIC 2 Regular Interests, and the Class R
Certificateholders, as Holders 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 Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre-Funding Account and (ii)
the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2A
minus the Marker Rate, divided by (b) 12.
"REMIC 2 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.
"REMIC 2 Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC 2 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest
LT2C, REMIC 2 Regular Interest LT2D and REMIC 2 Regular Interest LT2E, 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 Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre- Funding Account 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 LT2B, REMIC 2
Regular Interest LT2C, REMIC 2 Regular Interest LT2D and REMIC 2 Regular
Interest LT2E and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2B, REMIC 2
Regular Interest LT2C, REMIC 2 Regular Interest LT2D, REMIC 2 Regular Interest
LT2E and REMIC 2 Regular Interest LT2F.
36
"REMIC 2 Regular Interest LT2A": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A 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,
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 Regular Interest LT2B": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2B 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,
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 Regular Interest LT2C": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2C 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,
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 Regular Interest LT2D": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2D 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,
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 Regular Interest LT2E": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2E 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,
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 Regular Interest LT2F": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2F 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,
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 Regular Interest LT2P": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2P shall
accrue interest at the related Uncertificated REMIC 2 Pass-
37
Through Rate in effect from time to time, and shall be entitled to any amounts
distributed to REMIC 2 Regular Interest LT2P.
"REMIC 2 Regular Interest LT2S": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S shall
accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate on its
Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2A,
REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular
Interest LT2D, REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest LT2F,
REMIC 2 Regular Interest LT2P, REMIC 2 Regular Interest LT2S.
"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 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 and
REMIC 2 Regular Interests.
"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 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
38
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 co-operative or mobile home.
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
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.
39
"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 and Option One Owner Trust 2001-2, each a
Delaware business trust.
"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": 0.25% per annum for the first 10
Distribution Dates, 0.30% per annum for the 11th through 20th Distribution
Dates, 0.40% per annum for the 21st through 30th Distribution Dates, 0.65% for
the 31st through 48th Distribution Dates and 0.80% per annum for all
Distribution Dates thereafter.
"Servicing Officer": Any 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": Shall mean the standards set forth in
Section 3.01.
"Servicing Transfer Costs": Shall mean all reasonable costs
and expenses incurred by the Trustee in connection with the transfer of
servicing from a predecessor servicer, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Trustee to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Trustee to service the Mortgage
Loans properly and effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
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"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date (or Subsequent Cut-off Date, as
applicable), 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 (or Subsequent Cut-off Date, as applicable), 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 (or Subsequent Cut-off Date, as
applicable), 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 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 April 2005 and (ii) the first Distribution Date on which the Credit
Enhancement Percentage (calculated for this purpose only after taking into
account payments of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 22.00%.
"Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the later of (i) first day of the month in which the related
Subsequent Transfer Date occurs or (ii) the date of origination of such Mortgage
Loan.
"Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.08, such Mortgage Loan being
identified on the Mortgage Loan Schedule attached to a Subsequent Transfer
Instrument.
"Subsequent Mortgage Loan Interest": Any amount constituting a
monthly payment of interest received or advanced at the Net Mortgage Rate (less
the Trustee Fee Rate) with respect to a Subsequent Mortgage Loan during the Due
Periods relating to the first three Distribution Dates
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in excess of 2.8518% per annum. The Subsequent Mortgage Loan Interest shall be
distributable to the Class C Certificates. The Subsequent Mortgage Loan Interest
shall not be an asset of any Trust REMIC.
"Subsequent Mortgage Loan Purchase Agreement": The agreement
among the Depositor, the Originator and the Seller, regarding the transfer of
the Subsequent Mortgage Loans by the Seller to the Depositor.
"Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.
"Subsequent Transfer Instrument": Each Subsequent Transfer
Instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form attached hereto as Exhibit N, by which
Subsequent Mortgage Loans are transferred to the Trust Fund.
"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.
"Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.
"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.
"Three Month Rolling Delinquency Percentage": With respect to
the Mortgage Loans and any Distribution Date, the fraction, expressed as a
percentage, the numerator of which is (x) the sum (without duplication) of the
aggregate of the 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
41
is (y) the sum of the 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 if:
(a) the percentage obtained by dividing (x) the principal
amount of Mortgage Loans Delinquent 60 days or more by (y) the aggregate
principal balance of the Mortgage Loans, in each case, as of the last day of the
previous calendar month, exceeds 80.00% of the Credit Enhancement Percentage or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by the
aggregate principal balance of the Initial Mortgage Loans as of the Cut-off Date
plus the Original Pre-Funded Amount exceeds the applicable percentages set forth
below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
----------------------------------- ------------------
April 2005 through March 2006 3.50%
April 2006 through March 2007 4.25%
April 2007 through March 2008 5.00%
April 2008 through March 2009 5.25%
April 2009 and thereafter 5.50%
"Trust": Option One Mortgage Loan Trust 2002-2, the trust
created hereunder.
"Trust Fund": All of the assets of the Trust, which is the
trust created hereunder consisting of REMIC 1, REMIC 2 and REMIC 3, the Interest
Coverage Account, the Pre-Funding Account, the Net WAC Rate Carryover Reserve
Account and the Initial Deposit Account.
"Trustee": Xxxxx Fargo Bank Minnesota, National Association, 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 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) and any amount in the Pre-Funding Account 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": 0.0065% per annum.
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"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 or Uncertificated Notional Amount 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 any date of
determination, the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B for such Distribution Date.
"Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate and Uncertificated REMIC 2 Pass-Through Rate.
"Uncertificated Principal Balance": With respect to each REMIC
Regular Interest (other than REMIC 2 Regular Interest LT2S), 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 LT2S) 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 LT2F shall be increased by interest deferrals as provided in Section
4.08. The Uncertificated Principal Balance of each REMIC Regular Interest that
has an Uncertificated Principal Balance shall never be less than zero. REMIC 2
Regular Interest LT2S will not have an Uncertificated Principal Balance.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to
REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular
Interest LT1C and REMIC 1 Regular Interest LT1P, the weighted average of the
Adjusted Net Mortgage Rates for such Distribution Date; provided, however, with
respect to REMIC 1 Regular Interest LT1C, (i) for the first three Distribution
Dates, 2.8518% and (ii) for each Distribution Date thereafter, the weighted
average of the Adjusted Net Mortgage Rates for such Distribution Date.
"Uncertificated REMIC 2 Pass-Through Rate": With respect to
each REMIC 2 Regular Interest (other than REMIC 2 Regular Interest LT2S) and
each Distribution Date, a per annum rate equal to the weighted average of (x)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT1A, REMIC 1 Regular Interest LT1C and REMIC 1 Regular Interest LT1P
for such Distribution Date and (y) the excess, if any, of (i) the Uncertificated
REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular Interest LT1B for such
Distribution Date over (ii) the applicable Class S Rate, weighted on the basis
of the Uncertificated Principal Balance of (x) REMIC 1 Regular Interest LT1A,
REMIC 1 Regular Interest LT1C and REMIC 1 Regular Interest LT1P and (y) REMIC 1
Regular Interest LT1B, respectively. With respect to REMIC 2 Regular Interest
LT2S, the Class S Rate.
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"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 Class R Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the
Offered 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 10% lower
than the value thereof, in the case of a Mortgaged Loan with a
Loan- to-Value Ratio less than or equal to 80%, or more than
5% lower than the value thereof, in the case of a Mortgage
Loan with a Loan-to-Value Ratio greater than 80%, 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
45
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
97% 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 S Certificates shall have 1% of the Voting
Rights, the Class P Certificates shall have 1% of the Voting Rights and the
Class R Certificates shall have 1% of the Voting Rights. The Voting Rights
allocated to any Class of Certificates (other than the Class P Certificates and
the Class R 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 Class R 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, 100% of the Voting Rights shall be allocated among Holders of the
Class R 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 Class S
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 Offered 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 or Notional Amount 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.
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 Net Prepayment
46
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 Interest LT1A and REMIC 1 Regular Interest LT1C and then to
REMIC 1 Regular Interest LT1B, in each case to the extent of one month's
interest at the then applicable respective Uncertificated REMIC 1 Pass-Through
Rate on the respective Uncertificated Principal Balance of each such
Uncertificated REMIC 1 Interest; provided however, with respect to the first
three Distribution Dates, such amounts relating to the Initial Mortgage Loans
shall be allocated first to REMIC 1 Regular Interest LT1A and then to REMIC 1
Regular Interest LT1B, and such amounts relating to the Subsequent Mortgage
Loans shall be allocated to REMIC 1 Regular Interest LT1C.
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 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, to Uncertificated Accrued Interest
payable to REMIC 2 Regular Interest LT2A and REMIC 2 Regular Interest LT2F up to
an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 2 Regular Interest LT2A, REMIC
2 Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest
LT2D, REMIC 2 Regular Interest LT2E and REMIC 2 Regular Interest LT2F 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 Uncertificated 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 the Indenture and (ii)
the notes issued pursuant to the Indenture 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 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. If a NIMS Insurer is appointed following the Closing Date, the
Trustee shall give written notice thereof to the Guarantor within five (5)
Business Days after such appointment.
47
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 (including the PMI Policy) 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) the Initial Deposit 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
Initial Mortgage Loan so transferred and assigned and the Originator, on behalf
of the Depositor, shall, in accordance with Section 2.08, deliver or caused to
be delivered to the Trustee with respect to each Subsequent Mortgage Loan, the
following documents or instruments (with respect to each Mortgage Loan, a
"Mortgage File") :
(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 Xxxxx Fargo Bank Minnesota,
National Association, 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 or Subsequent Cut-off Date Principal Balance, as
applicable, of which is less than or equal to 1.00% of the Pool Balance as
of the Cut-off Date or Subsequent Cut-off Date, as applicable;
(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 or, if
such Mortgage or power of attorney has been submitted for recording but
has not been returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such Mortgage or power
of attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
48
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(iv) an original copy 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 (or Subsequent Transfer Date, with respect
to Subsequent Mortgage Loans) 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 (or Subsequent Closing Date, with respect to Subsequent Mortgage
Loans), 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.
49
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 (or Subsequent Transfer Date, with
respect to a Subsequent Mortgage Loan). Notwithstanding the foregoing, the
Depositor need not cause to be recorded any Assignment which relates to a
Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an
Opinion of Counsel delivered by the Depositor to the NIMS Insurer, the Trustee
and the Rating Agencies on or before the Closing Date, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of
Counsel, 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 25% 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 and (vi) any Mortgage Loan that is 90 days or more Delinquent.
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
(vi) above) set forth in the preceding sentence or (b) upon the occurrence of
condition (vi) in the preceding sentence, the Depositor shall be required to
deliver such Assignments 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. The Depositor shall
be required to deliver such Assignments for recording within 45 days of the
Closing Date (or Subsequent Transfer Date, with respect to Subsequent Mortgage
Loans). 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. In the event that any Mortgage Note is endorsed in blank as of
the Closing Date (or Subsequent Transfer Date, with respect to Subsequent
Mortgage Loans), within ninety (90) days of the Closing Date (or Subsequent
Transfer Date, with respect to Subsequent Mortgage Loans) the Depositor shall
cause to be completed such endorsements "Pay to the order of Xxxxx Fargo Bank
Minnesota, National Association, as Trustee, without recourse."
The Depositor herewith delivers to the Trustee an executed copy of
the Mortgage Loan Purchase Agreement and the PMI Policy.
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
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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.
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 Initial
Mortgage Loan or the Subsequent Transfer Date, with respect to each Subsequent
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 Initial
Mortgage Loan and the Subsequent Transfer Date, with respect to each Subsequent
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.
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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)); PROVIDED that, in connection with any such breach
that could not reasonably have been cured within such 120 day period, if the
Originator shall have commenced to cure such breach within such 120 day period,
the Originator shall be permitted to proceed thereafter
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diligently and expeditiously to cure the same within the additional period
provided under the Mortgage Loan Purchase Agreement. 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
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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.
(e) 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
54
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:
(A) 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;
(B) 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;
55
(C) 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;
(D) 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;
(E) [Reserved];
(F) 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;
(G) 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;
(H) 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;
(I) 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;
(J) 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 state law;
and
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(K) The Master Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section 3.01.
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);
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(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
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(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. Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the conditions set forth in paragraph (b) below in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the order of the Depositor of all or a portion of the balance of funds in
the Pre-Funding Account, the Depositor shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Depositor in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Depositor on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Depositor reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee for deposit in the Mortgage Pool by
the Depositor of the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule shall be absolute and is intended by the Depositor, the Master
Servicer, the Trustee and the Certificateholders to constitute and to be treated
as a sale of the Subsequent Mortgage Loans by the Depositor to the Trust Fund.
The related Mortgage File for each Subsequent Mortgage Loan shall be delivered
to the Trustee at least three Business Days prior to the related Subsequent
Transfer Date.
The purchase price paid by the Trustee from amounts released from
the Pre-Funding Account shall be one-hundred percent (100%) of the aggregate
Stated Principal Balance of the
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Subsequent Mortgage Loans so transferred (as identified on the Mortgage Loan
Schedule provided by the Depositor). This Agreement shall constitute a
fixed-price purchase contract in accordance with Section 860G(a)(3)(A)(ii) of
the Code.
(b) The Depositor shall transfer to the Trustee for deposit in the
Mortgage Pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in paragraph (a) above, and the Trustee shall
release funds from the Pre-Funding Account, only upon the satisfaction of each
of the following conditions on or prior to the related Subsequent Transfer Date:
(i) the Depositor shall have provided the Trustee, the NIMS Insurer
and the Rating Agencies with a timely Addition Notice and shall have
provided any information reasonably requested by the Trustee with respect
to the Subsequent Mortgage Loans;
(ii) the Depositor shall have delivered to the Trustee and the NIMS
Insurer a duly executed Subsequent Transfer Instrument, which shall
include a Mortgage Loan Schedule listing the Subsequent Mortgage Loans,
and the Master Servicer, in its capacity as Originator, shall have
delivered a computer file containing such Mortgage Loan Schedule to the
Trustee at least three Business Days prior to the related Subsequent
Transfer Date;
(iii) as of each Subsequent Transfer Date, as evidenced by delivery
of the Subsequent Transfer Instrument, substantially in the form of
Exhibit N, the Depositor shall not be insolvent nor shall it have been
rendered insolvent by such transfer nor shall it be aware of any pending
insolvency;
(iv) such sale and transfer shall not result in a material adverse
tax consequence to the Trust Fund or the Certificateholders;
(v) the Funding Period shall not have terminated;
(vi) the Depositor shall not have selected the Subsequent Mortgage
Loans in a manner that it believed to be adverse to the interests of the
Certificateholders;
(vii) the Depositor shall have delivered to the Trustee and the NIMS
Insurer a Subsequent Transfer Instrument confirming the satisfaction of
the conditions precedent specified in this Section 2.08 and, pursuant to
the Subsequent Transfer Instrument, assigned to the Trustee without
recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage
Loan Purchase Agreement, to the extent of the Subsequent Mortgage Loans;
(viii) with respect to the last Subsequent Transfer Date, the
Depositor shall have delivered to the Trustee and the NIMS Insurer a
letter from an Independent accountant (with copies provided to each Rating
Agency) stating that the characteristics of the Subsequent Mortgage Loans
conform to the characteristics set forth in paragraphs (c) and (d) below;
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(ix) the Depositor shall have delivered to the Trustee and the NIMS
Insurer an Opinion of Counsel addressed to the Trustee and the Rating
Agencies with respect to the transfer of the Subsequent Mortgage Loans
substantially in the form of the Opinion of Counsel delivered to the
Trustee on the Closing Date regarding the true sale of the Subsequent
Mortgage Loans; and
(x) the Depositor shall have received the consent of the NIMS
Insurer to the transfer of such Subsequent Mortgage Loans.
(c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 360 months; (vi) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than 5.50% per annum or greater than 16.00% per annum;
(vii) such Subsequent Mortgage Loan shall have been serviced by the Master
Servicer since origination or the date of purchase; (viii) such Subsequent
Mortgage Loan must have a first payment date occurring on or before July 1,
2002; (ix) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Subsequent Mortgage Loan will have a Gross Margin not less than 2.00% per
annum; (x) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Subsequent Mortgage Loan will have a Maximum Mortgage Rate not less than
11.00% per annum; (xi) if the Subsequent Mortgage Loan is an Adjustable Rate
Mortgage Loan, the Subsequent Mortgage Loan will have a Minimum Mortgage Rate
not less than 5.00% per annum and (xii) such Subsequent Mortgage Loan shall have
been underwritten in accordance with the criteria set forth under "Option One
Mortgage Corporation--Underwriting Standards" in the Prospectus Supplement.
(d) In addition, following the purchase of any Subsequent Mortgage
Loan by the Trust, the Mortgage Loans (including such Subsequent Mortgage Loans)
will as of the Subsequent Cut-off Date: (i) have a weighted average original
term to stated maturity of not more than 360 months; (ii) have a weighted
average Mortgage Rate of not less than 8.20% per annum and not more than 8.60%
per annum; (iii) have a weighted average Loan-to-Value Ratio of not more than
78.00%; (iv) have no Mortgage Loan with a principal balance in excess of
$1,000,000; (v) will consist of Mortgage Loans covered by the PMI Policy
representing no less than 58.00% of the Pool Balance; (v) will consist of
Mortgage Loans with Prepayment Charges representing no less than 79.00% of the
Pool Balance and (vi) have no more than 20.50% of Fixed Rate Mortgage Loans by
aggregate principal balance of the Mortgage Loans as of the Subsequent Cut-off
Date. In addition, the Adjustable Rate Mortgage Loans will as of the Subsequent
Cut-off Date have a weighted average Gross Margin not less than 5.50% by
aggregate principal balance of the Adjustable Rate Mortgage Loans as of the
Subsequent Cut-off Date.
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(e) Notwithstanding the foregoing, any Subsequent Mortgage Loan may
be rejected by (i) the NIMS Insurer or (ii) either Rating Agency if the
inclusion of any such Subsequent Mortgage Loan would adversely affect the
ratings of any Class of Certificates. At least one Business Day prior to the
Subsequent Transfer Date, each Rating Agency shall notify the Trustee as to
which Subsequent Mortgage Loans, if any, shall not be included in the transfer
on the Subsequent Transfer Date; provided, however, that the Master Servicer, in
its capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
acceptable to each Rating Agency describing the characteristics specified in
paragraphs (c) and (d) above.
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance
of REMIC 2 and REMIC 3 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 1for 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 Regular Certificates 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 Regular
Certificates 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
Regular Certificates, constitute the entire beneficial ownership interest in
REMIC 3.
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(d) 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, (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), the Trustee, pursuant to the
written request of the Depositor executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the Depositor, the
Class R Certificates in authorized denominations evidencing the Class R-1
Interest, the Class R-2 Interest and the Class R-3 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.
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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 5.00% 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
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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 timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11. Any cost incurred by the Master Servicer or by Sub-Servicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not,
for the purpose of calculating distributions to Certificateholders, be added to
the unpaid Principal Balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
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
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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.
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 66% of the Voting
Rights; PROVIDED, FURTHER, that the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the 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
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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.
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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
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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; provided further that the NIMS
Insurer's prior written consent shall be required for any modification, waiver
or amendment if the amendment if the aggregate number of outstanding Mortgage
Loans which have been modified, waived or amended exceeds 5% of the number of
Mortgage Loans as of the Cut-off Date and any Subsequent Cut-off Date. 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 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, and 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. 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
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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,
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 shall deposit 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 will, 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.
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SECTION 3.10. Collection Account, Initial Deposit 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 or
Subsequent Cut-off Date, as applicable, (other than in respect of principal or
interest on the Mortgage Loans due on or before the Cut-off Date or Subsequent
Cut-off Date, as applicable) or payments (other than Principal Prepayments)
received by it on or prior to the Cut-off Date or Subsequent Cut-off Date, as
applicable, 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 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;
(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; and
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(ix) without duplication, all payments of claims under the PMI
Policy.
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
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of 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.
On behalf of the Trust Fund, the Trustee shall establish and
maintain the Initial Deposit Account, held in trust for the benefit of
Certificateholders. On the Closing Date, the Depositor shall remit or cause to
be remitted to the Trustee, for deposit in the Initial Deposit Account, and the
Trustee shall deposit the Initial Deposit, to the extent received by it, into
the Initial Deposit Account. The Initial Deposit Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of any REMIC. Any investment earnings on funds in the Initial Deposit
Account shall be treated as owned by the Depositor and will be taxable to the
Depositor. The Trustee shall be required to withdraw such earnings from the
Initial Deposit Account and remit the same to the Depositor on the first
Distribution Date (or as soon as received if such funds are not available on
such Distribution Date), and shall thereupon terminate such account.
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(c) Funds in the Collection Account, the Initial Deposit 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 and the Initial Deposit
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 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:
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(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, 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, 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, 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, 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;
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(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;
(ix) to pay itself any Prepayment Interest Excess; and
(x) 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), (iv), (v), (vi) and (vii) 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.
(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 in accordance with Section 4.01;
(ii) to pay itself the Trustee Fee pursuant to Section 8.05;
(iii) to pay any amounts in respect of taxes pursuant to Section
9.01(g);
(iv) to clear and terminate the Distribution Account pursuant to
Section 10.01;
(v) 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;
(vi) to pay to the Trustee, any interest or investment income earned
on funds deposited in the Distribution Account;
(vii) to pay to an Advancing Person reimbursements for Advances
and/or Servicing Advances pursuant to Section 3.29; and
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(viii) to pay the PMI Insurer the PMI Insurer Fee.
SECTION 3.12. Investment of Funds in the Interest Coverage Account,
Collection Account, Initial Deposit Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Interest Coverage Account, the Collection Account or the Initial
Deposit 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 Interest Coverage
Account, the Initial Deposit Account and 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 Interest Coverage Account, 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 Interest Coverage Account, 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.
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(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. All income and gain
realized from the investment of funds deposited in the Initial Deposit Account
shall be for the benefit of the Depositor. The Depositor shall remit from its
own funds to the Trustee for deposit in the Initial Deposit 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 50% 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
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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
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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.
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).
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
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the ownership of properties securing such of the Mortgage Loans (including, if
such is the action to be taken that results from adherence to the Loss
Mitigation Procedures, selling any such Mortgage Loans other than converting the
ownership of the related properties as provided in Section 3.16(e) below) 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
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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 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
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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 Principal Balance to highest 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
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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.
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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 90 days following the end of the fiscal year of
the Master Servicer (which, as of the Closing Date, ends on the last day of
April), commencing in 2003, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Master Servicer
during the preceding year and of performance under this Agreement has been made
under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status 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.
SECTION 3.21. Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year of the
Master Servicer, commencing in 2003, the Master Servicer, at its expense, shall
cause a nationally recognized firm of independent certified public accountants
to furnish to the Master Servicer a report stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Master Servicer which includes an assertion that the Master Servicer has
complied with certain
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minimum residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those Sub-Servicers. Immediately upon receipt of
such report, the Master Servicer shall furnish a copy of such report to the
Trustee, the NIMS Insurer and each Rating Agency. Copies of such statement shall
be provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided that such statement is delivered by the Master
Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation; Filing of Reports by
Trustee.
(a) 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,
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. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, 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.
(b) Within 15 days after each Distribution Date, the Trustee shall
file with the Securities and Exchange Commission via the Electronic Data
Gathering Analysis and Retrieval System (XXXXX), a Form 8-K with a copy of the
statement to Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2003, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust Fund, if applicable. Prior to March 30,
2003, the Trustee shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. The Depositor hereby grants to the
Trustee a limited power of attorney to execute 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 Fund. 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 and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Securities and
Exchange Commission. The Trustee shall have no responsibility to file any items
with the Securities and Exchange Commission other than those specified in this
Section.
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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, 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;
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(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
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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 prior calendar month, 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).
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(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 received in the related Due Period, any interest or
investment income earned on funds deposited in the Collection Account 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. [Reserved].
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
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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, Xxxxx Fargo Bank Minnesota, National Association, as
Trustee, in trust for registered Holders of Option One Mortgage Loan Trust
2002-2, Asset-Backed Certificates, Series 0000-0." Xx the Closing Date, the
Depositor will deposit, or cause to be deposited, into the Net WAC Rate
Carryover Reserve Account $1,000.
On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates, the Mezzanine Certificates
and/or the Class S 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)(viii), 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, the Mezzanine Certificates and the
Class S Certificates, and will distribute such amounts to the Holders of the
Class A Certificates, the Mezzanine Certificates and/or the Class S Certificates
in the amounts and priorities set forth in Section 4.01(d). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Net WAC Rate Carryover Reserve Account on behalf of the Class C
Certificateholders, from amounts otherwise distributable to the Class C
Certificateholders, an amount such that when added to other amounts already on
deposit in the Net WAC Rate Carryover Reserve Account, the aggregate amount on
deposit therein is equal to $1,000.
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 (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC 3 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, the
Mezzanine
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Certificates or the Class S 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 right of the
Class A Certificateholders, the Mezzanine Certificateholders and the Class S
Certificateholders to receive payments from the Net WAC Rate Carryover Reserve
Account in respect of any Net Wac Rate Carryover Amount shall be assigned a
value of zero.
SECTION 3.29. Advance Facility.
(a) The Trustee on behalf of the Trust Fund, with the consent of the
Master Servicer and the NIMS Insurer, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may make all or a portion of the 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. To the extent that an Advancing Person makes all or a portion of any
Advance or any Servicing Advance and provides the Trustee with notice
acknowledged by the 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 and must specify which Section of this Agreement permits the
applicable Advance or Servicing Advance to be reimbursed. The Trustee shall be
entitled to rely without independent investigation on the Advancing Person's
statement with respect to the amount of any reimbursement pursuant to this
Section 3.29 and with respect to the Advancing Person's statement with respect
to the Section of this
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Agreement that permits the applicable Advance or Servicing Advance to be
reimbursed. An Advancing Person whose obligations are limited to the making 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(ii), Section 3.11(iii), Section 3.11(v), Section 3.11(vi) Section 3.11(vii)
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(ii), Section 3.11(iii), Section 3.11(v), Section
3.11(vi), Section 3.11(vii) 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.
SECTION 3.30. PMI Policy; Claims Under the PMI Policy.
Notwithstanding anything to the contrary elsewhere in this Article
III, the Master Servicer shall not agree to any modification or assumption of a
PMI Mortgage Loan or take any other action with respect to a PMI Mortgage Loan
that could result in denial of coverage under the PMI Policy. The Master
Servicer shall notify the PMI Insurer that the Trustee, on behalf of the
Certificateholders, is the Insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. Consistent with all rights and obligations hereunder, the
Master Servicer shall take all actions required under the PMI Policy as a
condition to the payment of any such claim. Any amount received from the PMI
Insurer with respect to any such PMI Mortgage Loan shall be deposited by the
Master Servicer, no later than two Business Days following receipt thereof, into
the Collection Account.
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ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.
(a) On the first Distribution Date, the Initial Deposit will be
transferred from the Initial Deposit Account to the Distribution Account for
inclusion in the Available Funds for such Distribution Date. On each
Distribution Date, the Trustee shall withdraw from the Distribution Account that
portion of Available Funds for such Distribution Date consisting of the 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 Interest Remittance Amount remaining for such
Distribution Date:
(i) concurrently, to the Holders of the Class A Certificates and the
Class S Certificates, the related Monthly Interest Distributable Amount
and the Unpaid Interest Shortfall Amount, if any, for each such class for
such Distribution Date, on a PRO RATA basis based on the entitlement of
each such class pursuant to this clause (i);
(ii) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(iii) to the Holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(iv) to the Holders of the Class M-3 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates.
(b) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the Principal Distribution Amount
and distribute to the Holders of the Class A Certificates and the
Mezzanine Certificates the following amounts, in the following order of
priority, in each case to the extent of the Principal Distribution Amount
remaining for such Distribution Date:
(i) to the Holders of the Class A Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(ii) to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(iii) to the Holders of the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(iv) to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
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(c) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, the Trustee shall withdraw from
the Distribution Account an amount equal to the Principal Distribution Amount
and distribute to the Holders of the Class A Certificates and the Mezzanine
Certificates the following amounts, in the following order of priority, in each
case to the extent of the Principal Distribution Amount remaining for such
Distribution Date:
(i) to the Holders of the Class A Certificates, the Class A
Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) 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;
(iii) 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; and
(iv) 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.
(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, payable to such Holders
as part of the Principal Distribution Amount as described under Section
4.01(b) and Section 4.01(c) above;
(ii) to the Holders of the Class M-1 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount equal
to the Allocated Realized Loss Amount allocable to such Certificates;
(vi) to the Holders of the Class M-3 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(vii) to the Holders of the Class M-3 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
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(viii) to the Net WAC Rate Carryover Reserve Account, the amount of
any Net WAC Rate Carryover Amount and any other amounts required by
Section 3.28;
(ix) [reserved];
(x) to the Holders of the Class C Certificates, the Monthly Interest
Distributable Amount for such Class and any remaining
Overcollateralization Release Amount for such Distribution Date;
(xi) 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
(xii) 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 FIRST, concurrently to the Class A Certificates
and the Class S Certificates on a pro rata basis based on the Net WAC Rate
Carryover Amount of each such class, until each such amount has been paid in
full; SECOND, to the Class M-1 Certificates; THIRD, to the Class M-2
Certificates and FOURTH, to the Class M-3 Certificates, in each case to the
extent the Net WAC Carryover Amount is allocable to each such Class.
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) 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.
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(f) 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.
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 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 (other than the Class S
Certificates), separately identified, allocable to principal and 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;
(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 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;
(vi) the Pool Balance at the Close of Business at the end of the
related Due Period;
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(vii) 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 and the number and
aggregate principal balance of all Subsequent Mortgage Loans added during
the preceding Prepayment Period;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans that were (A) Delinquent (exclusive of Mortgage Loans in bankruptcy
or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to 89 days
and (3) 90 or more days, (B) as to which foreclosure proceedings have been
commenced and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90
or more days, (C) in bankruptcy and Delinquent (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, in each case as of the Close of
Business on the last day of the calendar month preceding such Distribution
Date and (D) REO Properties;
(ix) [reserved];
(x) 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;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;
(xiii) the aggregate amount of extraordinary Trust Fund expenses
withdrawn from the Collection Account for such Distribution Date;
(xiv) the Certificate Principal Balance of the Class A Certificates,
the Mezzanine Certificates and the Class C Certificates and the Notional
Amount of the Class S Certificates, after giving effect to the
distributions made on such Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect of the
Class A Certificates, the Class S Certificates, the 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 Class S Certificates, the Mezzanine Certificates and the
Class C Certificates for such Distribution Date;
(xvi) 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;
(xvii) the Credit Enhancement Percentage for such Distribution Date;
(xviii) the Net WAC Rate Carryover Amount for the Class A
Certificates, the Class S Certificates and the Mezzanine Certificates, if
any, for such Distribution Date and the amount remaining unpaid after
reimbursements therefor on such Distribution Date;
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(xix) any Overcollateralization Target Amount, Overcollateralized
Amount and Overcollateralization Deficiency Amount after giving effect to
the distribution of principal on such Distribution Date;
(xx) when the Stepdown Date or a Trigger Event has occurred;
(xxi) the Available Funds;
(xxii) the respective Pass-Through Rates applicable to the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates for
such Distribution Date and the Pass- Through Rate applicable to the Class
A Certificates and the Mezzanine Certificates for the immediately
succeeding Distribution Date;
(xxiii) (A) the amount of payments received related to claims under
the PMI Policy during the related Prepayment Period (and the number of
Mortgage Loans to which such payments related) and (B) the cumulative
amount of payments received related to claims under the PMI Policy since
the Closing Date (and the number of Mortgage Loans to which such payments
related);
(xxiv) (A) the dollar amount of claims made under the PMI Policy
that were denied during the Prepayment Period (and the number of Mortgage
Loans to which such denials related) and (B) the dollar amount of the
cumulative claims made under the PMI Policy that were denied since the
Closing Date (and the number of Mortgage Loans to which such denials
related);
(xxv) the amount on deposit in the Pre-Funding Account, the Interest
Coverage Account and the Net WAC Rate Carryover Reserve Account; and
(xxvi) for the distribution occurring on the Distribution Date
immediately following the end of the Funding Period, the balance on
deposit in the Pre-Funding Account that has not been used to purchase
Subsequent Mortgage Loans and that is being distributed to the Class A
Certificates as a mandatory prepayment of principal, if any, on such
Distribution Date.
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.
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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 $1,000 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 Class R 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 Class R 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 Class R
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 and the NIMS Insurer 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; provided, however, that the Remittance Report will
not contain information concerning the PMI Mortgage Loans until such time as the
PMI Insurer has provided the Master Servicer with complete information
concerning the PMI Mortgage Loans as set
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forth in the side letter between the Master Servicer and the PMI Insurer. 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. For purposes of the
preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a
delinquent Balloon Payment is equal to the assumed monthly payment that would
have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan.
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.
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(c) 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.
(d) 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. Pre-Funding Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Pre-Funding Account, Xxxxx Fargo Bank Minnesota, National Association,
as trustee for the registered holders of Option One Mortgage Loan Trust 2002-2,
Asset-Backed Certificates, Series 2002-2" (the "Pre-Funding Account"). The
Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account and
retain therein the Original Pre-Funded Amount remitted on the Closing Date to
the Trustee by the Depositor. Funds deposited in the Pre-Funding Account shall
be held in trust by the Trustee for the Certificateholders for the uses and
purposes set forth herein.
(b) The Trustee will invest funds deposited in the Pre-Funding
Account as directed by the Master Servicer in Permitted Investments with a
maturity date (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, (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 or (iii) within one
Business Day of the Trustee's receipt thereof. For federal income tax purposes,
the Master Servicer shall be the owner of the Pre-Funding Account and shall
report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Pre-Funding
Account shall be transferred to the Interest Coverage Account at the following
times: (i) on the Business Day immediately preceding each Distribution Date, if
a Person other than the Trustee or an Affiliate of the Trustee manages or
advises such investment, or on each Distribution Date, if the Trustee or an
Affiliate of the Trustee manages or advises such investment, (ii) on the
Business Day immediately preceding each Subsequent Transfer Date, if a Person
other than the Trustee or an Affiliate of the Trustee manages or advises such
investment, or on each Subsequent Transfer Date, if the Trustee or an Affiliate
of the Trustee manages or advises such investment or (iii) within one Business
Day of the Trustee's receipt thereof. The Master Servicer shall deposit in the
Pre-Funding Account the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor. At no time will the Pre-Funding Account be an asset
of any REMIC created hereunder.
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(c) Amounts on deposit in the Pre-Funding Account shall be withdrawn
by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre- Funding Account an amount equal to 100% of the Stated Principal
Balances of the Subsequent Mortgage Loans transferred and assigned to the
Trustee for deposit in the Mortgage Pool on such Subsequent Transfer Date
and pay such amount to or upon the order of the Depositor upon
satisfaction of the conditions set forth in Section 2.08 with respect to
such transfer and assignment;
(ii) If the amount on deposit in the Pre-Funding Account (exclusive
of investment income) has not been reduced to zero during the Funding
Period, on the day immediately following the termination of the Funding
Period, the Trustee shall deposit into the Distribution Account any
amounts remaining in the Pre-Funding Account (exclusive of investment
income) for distribution in accordance with the terms hereof;
(iii) To withdraw any amount not required to be deposited in the
Pre-Funding Account or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Account upon the earlier
to occur of (A) the Distribution Date immediately following the end of the
Funding Period and (B) the termination of this Agreement, with any amounts
remaining on deposit therein being paid to the Holders of the Certificates
then entitled to distributions in respect of principal.
Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated
as contributions of cash to REMIC 1 on the date of withdrawal.
SECTION 4.06. Interest Coverage Account.
(a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Interest Coverage Account, Xxxxx Fargo Bank Minnesota, National
Association, as trustee for the registered holders of Option One Mortgage Loan
Trust 2002-2, Asset-Backed Certificates, Series 2002-2" (the "Interest Coverage
Account"). The Trustee shall, promptly upon receipt, deposit in the Interest
Coverage Account and retain therein the Interest Coverage Amount remitted on the
Closing Date to the Trustee by the Depositor. Funds deposited in the Interest
Coverage Account shall be held in trust by the Trustee for the
Certificateholders for the uses and purposes set forth herein.
(b) For federal income tax purposes, the Master Servicer shall be
the owner of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any REMIC created hereunder. All income and gain realized
from investment of funds deposited in the Interest Coverage Account shall be for
the sole and exclusive benefit of the Master Servicer and shall be remitted by
the Trustee to the Master Servicer no later than the first Business Day
following receipt of such income and gain by the Trustee. The Master Servicer
shall deposit in the Interest Coverage Account
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the amount of any net loss incurred in respect of any such Permitted Investment
immediately upon realization of such loss.
(c) On each Distribution Date during the Funding Period and on the
Distribution Date immediately following the end of the Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Distribution Account an amount equal to 30 days' interest on the excess, if any,
of the Original Pre-Funded Amount over the aggregate Principal Balance of
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date and (ii) had a Subsequent Cut-off Date prior
to the first day of the month in which such Distribution Date occurs, at a per
annum rate equal to the Pass-Through Rate of the Offered Certificates for such
Distribution Date, with the Pass-Through Rate on the Class A Certificates and
the Mezzanine Certificates, solely for the purposes of the foregoing
calculation, each being multiplied by a fraction, the numerator of which is the
actual number of days in the Accrual Period for such Class for such Distribution
Date, and the denominator of which is 30. Such withdrawal and deposit shall be
treated as a contribution of cash by the Master Servicer to REMIC 1, REMIC 2 and
REMIC 3 on the date thereof with REMIC 3 receiving that portion of the
contribution, if any, to the extent that the rate of LIBOR used to calculate the
Pass-Through Rate on the Class A Certificates and the Mezzanine Certificates for
such Distribution Date exceeds 1.90% per annum. Immediately following any such
withdrawal and deposit, and immediately following the conveyance of any
Subsequent Mortgage Loans to the Trust on any Subsequent Transfer Date, the
Trustee shall withdraw from the Interest Coverage Account and remit to the
Master Servicer or its designee an amount equal to the excess, if any, of the
amount remaining in such Interest Coverage Account over the amount that would be
required to be withdrawn therefrom (assuming sufficient funds therein) pursuant
to the preceding sentence on each subsequent Distribution Date, if any, that
will occur during the Funding Period or that will be the Distribution Date
immediately following the end of the Funding Period, if no Subsequent Mortgage
Loans were acquired by the Trust Fund after the end of the Prepayment Period
relating to the current Distribution Date (assuming that LIBOR remains constant
at the level of LIBOR applicable to the calculation of the Pass-Through Rate for
the Class A Certificates and the Mezzanine Certificates for the current
Distribution Date).
(d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balances of the Certificates to zero or (iii) the termination of this
Agreement in accordance with Section 10.01, any amount remaining on deposit in
the Interest Coverage Account after distributions pursuant to paragraph (c)
above shall be withdrawn by the Trustee and paid to the Master Servicer or its
designee.
SECTION 4.07. Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause the Available
Funds from the Distribution Account to make the following disbursements and
transfers, in the following order of priority, to be distributed by REMIC 1 to
REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(1)(i) first, to the Holders of REMIC 1 Regular Interest LT1B, in an
amount equal to (A) the Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts
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in respect thereof remaining unpaid from previous Distribution Dates and
second, to Holders of REMIC 1 Regular Interest LT1A, REMIC 1 Regular
Interest LT1C and REMIC 1 Regular Interest LT1P 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; and
(ii) to the Holders of REMIC 1 Regular Interest LT1P, on the
Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to
this clause;
(2) second, to the Holders of REMIC 1 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (1) above, allocated
as follows:
(a) to the Holders of REMIC 1 Regular Interest LT1A, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A is
reduced to zero;
(b) to the Holders of REMIC 1 Regular Interest LT1C, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C is
reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT1B, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B is
reduced to zero; provided, however, for the first three Distribution
Dates, such amounts relating to the Initial Mortgage Loans shall be
allocated to REMIC 1 Regular Interest LT1A and REMIC 1 Regular
Interest LT1B in the order and priority described above and such
amounts relating to the Subsequent Mortgage Loans shall be allocated
to REMIC 1 Regular Interest LT1C;
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
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 1 to the Holders of REMIC 1 Regular Interest
LT1P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1P shall not reduce the Uncertificated Principal Balance thereof.
(b) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 2
to REMIC 3 on account of the REMIC 2 Regular Interests 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:
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(i) first, to the Holders of REMIC 2 Regular Interest LT2S, 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 and then to the extent of
Available Funds, to Holders of REMIC 2 Regular Interest LT2A, REMIC 2
Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular
Interest LT2D, REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest
LT2F and REMIC 2 Regular Interest LT2P, 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 LT2F 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 LT2F Uncertificated Accrued Interest
Deferral Amount; and
(ii) second, to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (i) above, allocated
as follows:
(a) to the Holders of REMIC 2 Regular Interest LT2A and REMIC 2
Regular Interest LT2P, 98.00% of such remainder, until the
Uncertificated Principal Balance of such Uncertificated REMIC 2
Regular Interest is reduced to zero; provided, however, that REMIC 2
Regular Interest LT2P 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 $100 has been
distributed pursuant to this clause;
(b) to the Holders of REMIC 2 Regular Interest LT2B, REMIC 2
Regular Interest LT2C, REMIC 2 Regular Interest LT2D and REMIC 2
Regular Interest LT2E, 1.00% of such remainder, 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;
(c) to the Holders of REMIC 2 Regular Interest LT2F, 1.00% of
such remainder, until the Uncertificated Principal Balance of such
REMIC 2 Regular Interest is reduced to zero; then
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 2 Regular Interest LT2A and REMIC 2 Regular Interest
LT2P, in that order and (ii) REMIC 2 Regular Interest LT2F, respectively;
provided that REMIC 2 Regular Interest LT2P 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
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shall be distributed to REMIC 2 Regular Interest LT2P, until $100 has been
distributed pursuant to this clause.
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
LT2P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2P shall not reduce the Uncertificated Principal Balance thereof.
SECTION 4.08. 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, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
fifth, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been 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)(x). 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) All Realized Losses on the Mortgage Loans shall be deemed to
have been allocated by the Trustee on each Distribution Date to REMIC 1 Regular
Interest LT1A until the Uncertificated Principal Balance has been reduced to
zero and then to REMIC 1 Regular Interest LT1B until the Uncertificated
Principal Balance has been reduced to zero
(c) All Realized Losses on the Mortgage Loans shall be deemed to
have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LT2A and
REMIC 2 Regular Interest LT2F up to an aggregate amount equal to the REMIC 2
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A and REMIC 2
Regular Interest LT2F up to an aggregate amount equal to the REMIC 2 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A, REMIC 2 Regular Interest
LT2E and REMIC 2 Regular Interest LT2F, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2E has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest
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LT2A, REMIC 2 Regular Interest LT2D and REMIC 2 Regular Interest LT2F, 98%, 1%
and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2
Regular Interest LT2D has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A, REMIC 2 Regular Interest
LT2C and REMIC 2 Regular Interest LT2F, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C has been
reduced to zero.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
Each of the Class A Certificates, the Class S Certificates, the
Mezzanine Certificates, the Class P Certificates, the Class C Certificates and
the Class R 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 Offered Certificates shall
be initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $50,000 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 Class R
Certificates are issuable in any Percentage Interests; PROVIDED, HOWEVER, that
the sum of all such percentages for each such Class totals 100% 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 Offered 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 Class R 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.
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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, 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.
(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
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(y) the Trustee or the Depositor is unable to locate a qualified successor, (ii)
the Depositor, at its sole option, with the consent of the Trustee, elects to
terminate the book-entry system through the Depository or (iii) 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 51% 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) and (iii) 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 C
Certificate, Class P Certificate or Class R Certificate 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, except with respect to the initial transfer of any Class C
Certificate, Class P Certificate or Class R Certificates by the Depositor (i)
unless such transfer is 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, the Trustee and the Depositor shall
require a written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trustee and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the 1933 Act or is being
made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense
of the Trustee or the Depositor 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 Class R 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.
Each Transferee of a Mezzanine Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 96-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000) (the "Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower
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than "BBB-" (or its equivalent) by a Rating Agency or (c) the following
conditions are satisfied: (i) such Transferee is an insurance company, (ii) the
source of funds used to purchase or hold such Certificate (or interest therein)
is an "insurance company general account" (as defined in U.S. Department of
Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.
No transfer of a Class C Certificate, Class P Certificate or Class R
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") unless the Depositor,
the Trustee and the Master Servicer are provided with an Opinion of Counsel
which establishes to the satisfaction of the Depositor, the Trustee and the
Master Servicer that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will 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 Trustee or
the Trust Fund. An Opinion of Counsel will not be required in connection with
the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing 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.
If any Class C Certificate, Class P Certificate or Class R
Certificate or any interest therein is acquired or held in violation of the
provisions of the second preceding paragraph, the next preceding permitted
beneficial owner will 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 NIMS Insurer, the Trustee and the Trust 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
Class R 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 Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R 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.
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(ii) No Person shall acquire an Ownership Interest in a Class R
Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R 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 Class R 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 Class R Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a Class R 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 Class R Certificate,
then the prior Holder of such Class R Certificate that is a Permitted
Transferee shall, upon discovery that the registration of transfer of such
Class R 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 Class R Certificate. The Trustee shall be under no
liability to any Person for any registration of transfer of a Class R
Certificate that is in fact not permitted by this Section or for making
any distributions due on such Class R 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 Class R Certificate that was in fact not a Permitted Transferee at
the time such distributions were made all distributions made on such Class
R Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R 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 Class R
Certificate or any other Person having an Ownership Interest therein, to
notify the Depositor to arrange for the sale of such Class R 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 Class R Certificate that is a
Permitted Transferee, except that in the event that the Trustee determines
that the Holder of such Class R 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
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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 Class R 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 Class R 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.
(e) 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.
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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.
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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 nor any of the directors or officers or
employees or agents of the Master Servicer 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 in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer 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 by reason
of its reckless disregard of its obligations and duties of the Master Servicer
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 any
director or officer or employee or agent of the Master Servicer 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
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Master Servicer 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 51% 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.
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
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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.
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ARTICLE VIII
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) 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 25% 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 25% 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
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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;
(b) 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 5:00 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 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 51%, 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.
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(c) 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) Within 90 days of 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. 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 $50,000,000 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
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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.
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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
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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:
(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;
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(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.
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
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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.
The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee and, to the extent that the
funds therein are at anytime insufficient for such purpose, the Master Servicer
shall pay such fees. The Master Servicer (or the Depositor, if the Trustee
becomes the Master Servicer) will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ and any amounts paid by the
Trustee for the recording of Assignments of Mortgage pursuant to Section 2.01)
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 Master
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Servicer (or the Depositor, if the Trustee becomes the Master Servicer)
covenants and agrees to indemnify the Trustee and its officers, directors,
employees and agents from, and hold it harmless against, any and all losses,
liabilities, damages, claims or expenses incurred in connection with any legal
action relating to this Agreement or the Certificates, other than 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.
This section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder. If the Master Servicer (or the Depositor, if
the Trustee becomes the Master Servicer) defaults in its obligations to pay or
reimburse the Trustee any amount as required under this Section 8.05, the
Trustee shall be entitled to be paid or reimbursed such amount at any time from
the assets of the Trust Fund consisting of any amounts on deposit at such time
in the Collection Account or the Distribution Account.
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 $50,000,000 and a minimum long-term
debt rating of "Baa3" by Xxxxx'x, 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
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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
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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.
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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 Certificateholder 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
Certificateholder with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Originator the Master Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Originator, the Master Servicer, the Depositor, the NIMS Insurer
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and such Certificateholder 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
Certificateholders 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.
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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.
(e) The Holder of the Class R 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 each 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 in 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 in relation to any tax
matter involving the Trust.
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(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 incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Master Servicer, 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 Class R
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.
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(k) On or before April 15 of each calendar year beginning in 2003,
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.
(j) 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 Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R 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 Class R
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).
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(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
Class R Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R 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 Class R 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).
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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 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 fails to exercise
such option, the NIMS Insurer) may, at its option, terminate this Agreement on
any date on which the aggregate of the 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 10% of the sum of the aggregate Principal Balances of the
Initial Mortgage Loans on the Cut-off Date plus the Original Pre-Funded Amount,
by purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of the
Principal Balance of the Mortgage Loans and REO Properties (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) or the market value of the Mortgage Loans
and REO Properties, in each case 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 and any accrued and unpaid Net WAC Rate Carryover Amount (the
"Termination Price").
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
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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 Class R Certificates, the Holders of the
Class R 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
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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.
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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 or (iii) 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,
however, that any such action listed in clause (i) through (iii) above shall be
deemed not to adversely affect in any respect the interests of any
Certificateholder, if evidenced by (i) 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 or (ii) an Opinion
of Counsel delivered to the Master Servicer and the Trustee.
In addition, 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 the Majority Certificateholders 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 Holders of
Certificates; provided, however, that no such amendment or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates or distributions which are required to be made on any Certificate
without the consent of the Holder of such Certificate, (y) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
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.
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.
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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 25% 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
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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, 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, Xxxxx Fargo Bank Minnesota, National
Association, 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Option One Mortgage Loan Trust Series 2002-2, with a copy to Xxxxx Fargo Bank
Minnesota, National Association, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Option One Series 2002-2, 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
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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;
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(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/Option One Mortgage Loan Trust 2002-2 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 shall 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.
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(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.
143
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: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Secretary
OPTION ONE MORTGAGE CORPORATION,
as Master Servicer
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Secretary
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: Vice President
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of March, 2002 before me, a notary public in and for said
State, personally appeared _______________ known to me to be a ______________ 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 )
) ss.:
COUNTY OF )
On the ___th day of March, 2002 before me, a notary public in and for said
State, personally appeared _______________ known to me to be a _______________
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 )
) ss.:
COUNTY OF )
On the ___th day of March, 2002 before me, a notary public in and for said
State, personally appeared _______________, known to me to be a
____________________ of Xxxxx Fargo Bank Minnesota, National Association, 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
EXHIBIT A-1
FORM OF CLASS A CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $333,750,000.00
Original Class Certificate
Principal Balance of this
Class : $333,750,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 68400X AE 0
Class : A
Assumed Maturity Date : June 2032
A-1-1
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class A
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class A
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class A Certificate (obtained by dividing
the Denomination of this Class A Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of March 1, 2002 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Xxxxx Fargo Bank Minnesota, National Association, a
national banking association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class A Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class A Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-1-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class A Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-1-3
[Reverse of Class A Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-1-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS S CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Notional Amount of
this Certificate
("Denomination") : $37,500,000.00
Original Notional Amount
of this Class : $37,500,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 68400X AF 7
Class : S
Assumed Maturity Date : September 2004
A-2-1
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class S
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
This Class S Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Master Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class S Certificate (obtained by dividing
the Denomination of this Class S Certificate by the Original Notional Amount) in
certain monthly distributions with respect to a Trust consisting primarily of
the Mortgage Loans deposited by Option One Mortgage Acceptance Corporation (the
"Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of March 1, 2002 (the "Agreement") among the Depositor,
Option One Mortgage Corporation, as master servicer (the "Master Servicer"), and
Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class S Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class S
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class S
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class S Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class S Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-2-3
[Reverse of Class S Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS S
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-3-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $15,563,000.00
Original Class Certificate
Principal Balance of this
Class : $15,563,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 68400X AG 5
Class : M-1
Assumed Maturity Date : June 2032
A-3-2
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class M-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of March 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-1 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-1 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Each Transferee of this Certificate will be deemed to have represented
by virtue of its purchase or holding of such Certificate (or interest therein)
that either (a) such Transferee is not a Plan or purchasing such Certificate
with Plan Assets, (b) it has acquired and is holding such Certificate in
reliance on Prohibited Transaction Exemption ("PTE") 91-14, 56 F.R.7413
(February 22, 1991), as amended by PTE 97-34, 62 F.R.39021 (July 21,1997), and
further amended by PTE 2000-58, 65 F.R. 67765 (November 13, 2000) (the
"Exemption") and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.
A-3-3
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3-4
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By_____________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement
By
---------------------------------------------------
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-3-5
[Reverse of Class M-1 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any, and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-3-6
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-3-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-3-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS M-1
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-4-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $13,125,000.00
Original Class Certificate
Principal Balance of this
Class : $13,125,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 68400X AH 3
Class : M-2
Assumed Maturity Date : June 2032
A-4-2
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class M-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of March 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-2 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-2 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Each Transferee of this Certificate will be deemed to have represented
by virtue of its purchase or holding of such Certificate (or interest therein)
that either (a) such Transferee is not a Plan or purchasing such Certificate
with Plan Assets, (b) it has acquired and is holding such Certificate in
reliance on Prohibited Transaction Exemption ("PTE") 91-14, 56 F.R.7413
(February 22, 1991), as amended by PTE 97-34, 62 F.R.39021 (July 21,1997), and
further amended by PTE 2000-58, 65 F.R. 67765 (November 13, 2000) (the
"Exemption") and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.
A-4-3
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-4-4
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-4-5
[Reverse of Class M-2 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-4-6
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-4-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES , THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-5-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $9,750,000.00
Original Class Certificate
Principal Balance of this
Class : $9,750,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 68400X AJ 9
Class : M-3
Assumed Maturity Date : June 2032
A-5-2
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class M-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-3 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of March 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-3 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-3 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Each Transferee of this Certificate will be deemed to have represented
by virtue of its purchase or holding of such Certificate (or interest therein)
that either (a) such Transferee is not a Plan or purchasing such Certificate
with Plan Assets, (b) it has acquired and is holding such Certificate in
reliance on Prohibited Transaction Exemption ("PTE") 91-14, 56 F.R.7413
(February 22, 1991), as amended by PTE 97-34, 62 F.R.39021 (July 21,1997), and
further amended by PTE 2000-58, 65 F.R. 67765 (November 13, 2000) (the
"Exemption") and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.
A-5-3
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-5-4
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-5-5
[Reverse of Class M-3 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-5-6
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-5-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
A-6-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $2,811,900.00
Original Class Certificate
Principal Balance of this
Class : $2,811,900.00
Initial Notional Amount of
this Certificate : $375,000,000.00
Percentage Interest : 100.00%
Class : C
A-6-2
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Class C
Certificate (obtained by dividing the Denomination of this Class C Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Option One Mortgage Acceptance Corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of March 1, 2002
(the "Agreement") among the Depositor, Option One Mortgage Corporation, as
master servicer (the "Master Servicer"), and Xxxxx Fargo Bank Minnesota,
National Association, a national banking association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class C Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class C Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof 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.
A-6-3
No transfer of this Certificate to a 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 using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-6-4
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class C Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-6-5
[Reverse of Class C Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-6-6
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-6-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-3-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
A-7-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $100.00
Original Class Certificate
Principal Balance of this
Class : $100.00
Percentage Interest : 100.00%
Class : P
A-7-2
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Class P
Certificate (obtained by dividing the Denomination of this Class P Certificate
by the Original Class Certificate Principal Balance) in certain distributions
with respect to a Trust consisting primarily of the Mortgage Loans deposited by
Option One Mortgage Acceptance Corporation (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of March 1, 2002
(the "Agreement") among the Depositor, Option One Mortgage Corporation, as
master servicer (the "Master Servicer"), and Xxxxx Fargo Bank Minnesota,
National Association, a national banking association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Class P Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Class P Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled
to distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof desiring to effect such
transfer shall, and
A-7-3
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.
No transfer of this Certificate to a 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 using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-7-4
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class P Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-7-5
[Reverse of Class P Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-7-6
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-7-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, the later of (i) the date
of origination of such Mortgage Loan or (ii) March 1, 2002
First Distribution Date : April 25, 2002
Percentage Interest : 100.00%
Class : R
A-8-1
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates,
Series 2002-2
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien, adjustable and fixed rate
mortgage loans (the "Mortgage Loans")
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer or the Trustee
referred to below or any of their respective affiliates.
This certifies that Option One Mortgage Securities Corp. is the
registered owner of the Percentage Interest evidenced by this Certificate
specified above in the interest represented by all Certificates of the Class to
which this Certificate belongs in a Trust consisting primarily of the Mortgage
Loans deposited by Option One Mortgage Acceptance Corporation (the "Depositor").
The Trust was created pursuant to a Pooling and Servicing Agreement dated as of
March 1, 2002 (the "Agreement") among the Depositor, Option One Mortgage
Corporation, as master servicer (the 'Master Servicer") and Xxxxx Fargo Bank
Minnesota, National Association, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof desiring to effect such
transfer shall, and
A-8-2
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.
No transfer of this Certificate to a 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 using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, the Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Class R
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-8-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: March __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-2
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By:
-----------------------------------------
This is one of the Class R Certificates
referenced in the within-mentioned Agreement
By_________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota,
National Association,
as Trustee
A-8-4
[Reverse of Class R Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-2
Asset-Backed Certificates,
Series 2002-2
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-2, Asset-Backed Certificates,
Series 2002-2 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.
A-8-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if
any, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, 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 hereof for
all purposes, 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.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amount, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
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, (iii) the Distribution Date in [month/year].
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:
---------------------
_____________________________________
Signature by or on behalf of assignor
A-8-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
________________________________________________________________________________
________________________________________________________________________________
for the account of ___________________________________________________________ ,
________________________________________________________________________________
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-8-8
EXHIBIT B
[RESERVED]
B-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
C-1
================================================================================
OPTION ONE MORTGAGE CORPORATION,
as Seller
and
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 11, 2002
Fixed Rate and Adjustable Rate Mortgage Loans
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates, Series 2002-2
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS............................................................................1
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.................................................................2
Section 2.02 OBLIGATIONS OF SELLER UPON SALE........................................................2
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS.........................................................................6
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER..........................12
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................14
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER. .............................................................15
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.......................................................................16
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................19
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................19
Section 7.02 GOVERNING LAW.........................................................................19
Section 7.03 NOTICES...............................................................................19
Section 7.04 SEVERABILITY OF PROVISIONS............................................................19
Section 7.05 COUNTERPARTS..........................................................................20
i
Section 7.06 FURTHER AGREEMENTS....................................................................20
Section 7.07 INTENTION OF THE PARTIES..............................................................20
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................20
Section 7.09 SURVIVAL..............................................................................21
ii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 11, 2002
(the "Agreement"), between Option One Mortgage Corporation (the "Seller") and
Option One Mortgage Acceptance Corporation (the "Purchaser").
W I T N E S S E T H
-------------------
WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of March 1, 2002 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Seller as master servicer and Xxxxx Fargo
Bank Minnesota, National Association as trustee (the "Trustee"), the Purchaser
will convey the Mortgage Loans to Option One Mortgage Loan Trust 2002-2 (the
"Trust");
WHEREAS, the Seller is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself and the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
"SELLER INFORMATION": The information in the Prospectus Supplement as
follows: under "SUMMARY OF TERMS--Mortgage Loans," "SUMMARY OF
TERMS--Primary Mortgage Insurance," the first sentence under the fourth
bullet point under "RISK FACTORS--Unpredictability of Prepayments and
Effect on Yields," "RISK FACTORS--Delinquent Mortgage Loan Risk," the
third sentence under "RISK FACTORS--Balloon Loan Risks," the first
sentence under "RISK
1
FACTORS--Second Lien Loan Risk," the first sentence of the third
paragraph under "RISK FACTORS--Potential Inadequacy of Credit
Enhancement for the Offered Certificates," the second sentence under
the fourth bullet point under "RISK FACTORS--Interest Generated by the
Mortgage Loans May Be Insufficient to Maintain Overcollateralization,"
the second sentence under "RISK FACTORS--High Loan-to-Value Ratios
Increase Risk of Loss," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE
CORPORATION," the first sentence under "DESCRIPTION OF THE
CERTIFICATES--The PMI Policy," and the first sentence of the fifth
paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.
(a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, and in connection therewith hereby assigns
to the Purchaser, effective as of the Closing Date, without recourse, (i) all of
its right, title and interest in and to each Mortgage Loan, 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 on or after the Cut-off Date; (ii) property which secured such Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii)
its interest in any insurance policies (including the PMI Policy) in respect of
the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) [Reserved].
Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense on or prior to the Closing Date, (a) to cause its books and records to
indicate that the Mortgage Loans have been sold to the Purchaser pursuant to
this Agreement, (b) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all such Mortgage Loans specifying for
each such Mortgage Loan, as of the Cut-off Date, (i) its account number and (ii)
the Cut-off Date Principal Balance. Such file, which forms a part of Exhibit D
to the Pooling and Servicing Agreement, shall also be marked as Schedule I to
this Agreement and is hereby incorporated into and made a part of this Agreement
and (c) to deliver to the Purchaser and the Trustee the ETT (as defined in the
PMI Policy) with respect to the Mortgage Loans.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan:
(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
2
the order of Xxxxx Fargo Bank Minnesota, National Association, 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 of which is less than or equal to 1.00% 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 or,
if such Mortgage or power of attorney has been submitted for recording but has
not been returned from the applicable public recording office, has been lost or
is not otherwise available, a copy of such Mortgage or power of attorney, as the
case may be, certified to be a true and complete copy of the original submitted
for recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, without recourse";
(iv) an original copy 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 Seller hereby confirms to the Purchaser and the Trustee that it has
made the appropriate entries in its general accounting records to indicate that
such Mortgage Loans have been transferred to the Trustee and constitute part of
the Trust in accordance with the terms of the Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(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 Seller 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 Seller 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 Seller, 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 2.02(v) above, the Seller 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, with the original or a certified copy thereof to be delivered to
the Trustee or the Custodian, promptly upon receipt thereof. The Seller shall
deliver or cause to
3
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 Seller
shall have 120 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller,
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
The Seller shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Seller shall be required to deliver such Assignments for recording within 90
days of the Closing Date. Notwithstanding the foregoing, the Seller need not
cause to be recorded any Assignment which relates to a Mortgage Loan in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
delivered by the Seller to the NIMS Insurer, the Trustee and the Rating Agencies
on or before the Closing Date, the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan;
PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of Counsel, each
Assignment shall be submitted for recording by the Seller 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 25% 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 of the Pooling and Servicing Agreement, (v) if the
Seller 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 and (vi) any Mortgage Loan that is 90 days or more
Delinquent. 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 (vi) above) set forth in the preceding sentence or (b) upon the
occurrence of condition (vi) in the preceding sentence, the Seller shall be
required to deliver such Assignments within 30 days following receipt of such
notice. Notwithstanding the foregoing, if the Seller 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. The Seller shall be
required to deliver such Assignments for recording within 45 days of the Closing
Date. The Seller shall furnish
4
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 Seller 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. In the event that
any Mortgage Note is endorsed in blank as of the Closing Date, within ninety
(90) days of the Closing Date the Seller shall cause to be completed such
endorsements "Pay to the order of Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, without recourse."
The Seller shall forward to the Purchaser original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Seller shall provide the
Purchaser 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 Seller cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Seller shall deliver to the
Purchaser, within such 365 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser 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 Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Seller shall immediately deliver such document to the Purchaser. In the event
the appropriate public recording office will not certify as to the accuracy of
such document, the Seller shall deliver a copy of such document certified by an
officer of the Seller to be a true and complete copy of the original to the
Purchaser.
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
------------------------------------------------
In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $18,162,326.61 and (ii) a 6.35% percentage interest
in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Securities
Corp. The Seller shall pay, and be billed directly for, all expenses incurred by
the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the Rating Agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.
5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Seller hereby represents and warrants with respect to the
Mortgage Loans to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:
(a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;
(b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;
(c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;
(d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;
(e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Seller and any affiliate of the Seller in
compliance with all applicable federal, state and local laws and regulations and
the terms of the related Mortgage Note and Mortgage;
(f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage and (iv) the first lien on the Mortgaged Property, in the case
of the Mortgages that are second liens;
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(h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;
(i) As of the last calendar day of February 2002 and with
respect to any Mortgage Loan that had a payment due on or before February 1,
2002, except with respect to 55.08% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on February 1, 2002 has been received. In addition, 10.75% of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months and
6.05% of the Mortgage Loans have been 30 or more days delinquent for two payment
periods in the last 12 months;
(j) The Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan;
(k) The Seller has not impaired, waived, altered or modified
the related Mortgage or Mortgage Note in any material respect, or satisfied,
canceled, rescinded or subordinated such Mortgage or Mortgage Note in whole or
in part or released all or any material portion of the Mortgaged Property from
the lien of the Mortgage, or executed any instrument of release, cancellation,
rescission or satisfaction of the Mortgage Note or Mortgage;
(l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;
(m) No Mortgage Loan is subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or the Mortgage
unenforceable in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(n) To the Seller's knowledge, there is no proceeding pending
for the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;
(o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Seller's rights under such policies, opinions or other instruments shall be
transferred and assigned to Purchaser upon sale and assignment of the Mortgage
Loans hereunder. The title insurance policy has been issued by a title
7
insurer licensed to do business in the jurisdiction where the Mortgaged Property
is located, insuring the original lender, its successor and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject to the exceptions contained in such policy. The
Seller is the sole insured of such mortgagee title insurance policy, and such
mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. Neither the Seller nor any affiliate of the Seller has made, and the
Seller has no knowledge of, any claims under such mortgagee title insurance
policy. The Seller is not aware of any action by a prior holder and neither the
Seller nor any affiliate of the Seller has done, by act or omission, anything
which could impair the coverage or enforceability of such mortgagee title
insurance policy or the accuracy of such attorney's opinion of title;
(p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Seller nor any
affiliate of the Seller has waived any default, breach, violation or event of
acceleration;
(q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;
(r) To the Seller's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments or
other outstanding charges, affecting the related Mortgaged Property;
(s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Seller's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;
(t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance, and, if applicable, flood insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. The Mortgaged Property is covered by Hazard Insurance;
8
(u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;
(v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Seller or any affiliate of the Seller and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940;
(w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;
(x) To the Seller's knowledge, there was no fraud involved in
the origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;
(y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(z) To the best of the Seller's knowledge, all parties which
have had any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and disposed
of such interest, were) in compliance with any and all applicable "doing
business" and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements
9
are within the project with respect to that unit), and no improvements on
adjoining properties encroach upon the Mortgaged Property unless there exists in
the Mortgage File a title Policy with endorsements which insure against losses
sustained by the insured as a result of such encroachments;
(bb) Each Mortgage Loan was originated or acquired by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Seller's underwriting
criteria, which are at least as stringent as the underwriting criteria set forth
in the Prospectus Supplement. Each Mortgage Loan is currently being serviced by
the Seller and has been serviced by the Seller since the date of origination of
such Mortgage Loan;
(cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;
(dd) Other than with respect to not more than 2.76% of the
Mortgage Loans (by aggregate principal balance of the Mortgage Loans as of the
Cut-off Date), which are "balloon payment" mortgage loans, each Mortgage Loan is
fully amortizing;
(ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;
(ff) With respect to escrow deposits, if any, all such
payments are in the possession of, or under the control of, the Master Servicer
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
escrow advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;
(gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor; or (ii) paid by any source other than the Mortgagor or
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;
(ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note;
10
(jj) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(kk) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the, Mortgagee pursuant to the Mortgage
Note or Mortgage;
(ll) There are no mechanics' or similar liens or claims that
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;
(nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;
(oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;
(qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;
(rr) The Mortgage Loans have original terms to maturity
ranging from 10 to 30 years;
(ss) With respect to the Mortgage Loans, no more than 14.67%;
13.59%; 8.17% and 8.02% of the Mortgage Loans, by Cut-off Date Principal Balance
will be secured by Mortgaged Properties located in California, New York,
Massachusetts and New Jersey, respectively; and 74.52% of the Mortgage Loans, by
Cut-off Date Principal Balance will be secured by real property with a single
family residence erected thereon and approximately 5.13% of the Mortgage Loans,
by the Cut-off Date Principal Balance are secured by condominiums;
(tt) As of the Cut-off Date, each Mortgage Loan had a
Loan-to-Value-Ratio that was less than or equal to 100.00%;
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(uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;
(vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $150,101.87;
(ww) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan
is in violation of any state law or ordinance similar to HOEPA;
(xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;
(yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and
(zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-102(a)(65) of the UCC.
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Seller represents, warrants and covenants to the Purchaser as of the
Closing Date or as of such other date specifically provided herein or in the
applicable Assignment and Conveyance:
(i) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of California and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(ii) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Seller, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization. At the time
of the sale of each Mortgage Loan by the Seller, the Seller had the full power
and authority to hold each Mortgage Loan and to sell each Mortgage Loan;
(iii) The execution and delivery of this Agreement by the
Seller and the performance of and compliance with the terms of this Agreement
will not violate the Seller's articles of incorporation or by-laws or constitute
a default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
12
(iv) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(v) The Seller is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Seller unable to comply with HUD eligibility requirements or which would
require notification to HUD;
(vi) The Seller 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 are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity of enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans was in the ordinary course of business of the Seller and the
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or any similar statutory provisions;
(x) The information delivered by the Seller to the Purchaser
with respect to the Seller's loan loss, foreclosure and delinquency experience
on mortgage loans underwritten to similar standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects as of the date of such report;
(xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and
13
furnished by the Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby taken in the aggregate do not contain any
untrue statement of material fact or omit to state a material fact necessary to
make the statements contained therein not misleading; and
(xii) The Seller has not transferred the Mortgage Loans with
any intent to hinder, delay or defraud any of its creditors.
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Seller or as to which the Seller has no knowledge,
if it is discovered that the substance of any such representation and warranty
is inaccurate and the inaccuracy materially and adversely affects the value of
the related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty being inaccurate at the time the representation and warranty was made,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty and the Seller shall take such action described in the following
paragraphs of this Section 3.03 in respect of such Mortgage Loan. Upon discovery
by either the Seller, the Master Servicer or the Purchaser of a breach of any of
the foregoing representations and warranties that materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party discovering such breach shall give prompt
written notice to the others.
Within 120 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty made by the Seller that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest therein of the Purchaser, the Seller shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Purchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.02 and such breach
cannot be cured within 120 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Purchase Price. The
Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase a deficient Mortgage
Loan as provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If the Seller does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.03 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in accordance with Section 2.03
of the Pooling and Servicing Agreement. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.
14
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller and the delivery to the
Seller of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Seller shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Seller shall deposit in the Collection Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution will
be retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Sections 3.01 and 3.02.
It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in Section 3.03 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01 or 3.02.
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loan, or any interest therein; the Seller will notify
the Trustee, as assignee of the Purchaser, of the existence of any Lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend the
right, title and interest of the Trust, as assignee of the Purchaser, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Seller or the Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Mortgage Loans any Liens for municipal or other local
taxes and other governmental
15
charges if such taxes or governmental charges shall not at the time be due and
payable or if the Seller shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.
---------------
(a) The Seller agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission relates to the Seller Information contained in the Prospectus
Supplement, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the information on any computer tape furnished to the
Purchaser or an affiliate thereof by or on behalf of the Seller containing
information regarding the assets of the Trust or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any information
provided by the Seller to the Purchaser or any affiliate thereof, or any
material omission from the information purported to be provided hereby, and
disseminated to KPMG L.L.P. or prospective investors (directly or indirectly
through available information systems) in connection with the issuance,
marketing or offering of the Certificates. This indemnity agreement will be in
addition to any liability which the Seller may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the
Seller, its officers, directors and each person or entity who controls the
Seller, or any such person, against any and all losses, claims, damages or
liabilities, joint and several, to which the Seller or any such person or entity
may become subject, under the Securities Act or otherwise, and will reimburse
the Seller for any legal or other expenses incurred by the Seller, each officer
and director and controlling person in connection with investigating or
defending any such losses, claims, damages or liabilities insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement or the
16
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is not
contained in the Seller Information in the Prospectus Supplement. This indemnity
agreement will be in addition to any liability which the Purchaser may otherwise
have.
(c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser or by the Seller, if the
indemnified parties in this Article V consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense
17
of any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to consent to a settlement of
any action, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and the indemnifying party has not previously
provided the indemnified party with written notice of its objection to such
settlement. No indemnifying party shall effect any settlement of any pending or
threatened proceeding in respect of which an indemnified party is or could have
been a party and indemnity is or could have been sought hereunder, without the
written consent of such indemnified party, unless settlement includes an
unconditional release of such indemnified party from all liability and claims
that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans such that the Purchaser is
responsible for the lesser of (i) 0.25% thereof and (ii) 0.25% of the aggregate
proceeds to the Seller from the sale of the Mortgage Loans and the Seller shall
be responsible for the balance; PROVIDED, HOWEVER, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
officer and director of the Purchaser and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Purchaser and each director of the Seller,
each officer of the Seller, and each person, if any, who controls the Seller
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Seller.
(e) The Seller agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Seller to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Seller of its representations and warranties
in Section 3.01 or 3.02 of this Agreement or (iii) related to the origination or
prior servicing of the Mortgage Loans by reason of any acts, omissions, or
alleged acts or omissions of the Seller or any servicer. The Seller shall
immediately notify the Purchaser, the Trustee and each Certificateholder if a
claim is made by a third party with respect to this Agreement. The Seller shall
assume 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
18
against the Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the Seller's indemnity obligations as provided herein upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Seller and the Purchaser, by written agreement signed by the Seller and
the Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:
if to the Seller:
Option One Mortgage Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
if to the Purchaser:
Option One Mortgage Acceptance Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
19
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Trustee and the NIMs Insurer, if any. The NIMs
Insurer, if any, shall be a third party beneficiary hereof and may enforce the
terms hereof as if a party hereto. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will
20
issue a series of Certificates representing undivided interests in such Mortgage
Loans. As an inducement to the Purchaser to purchase the Mortgage Loans, the
Seller acknowledges and consents to the assignment by the Purchaser to the
Trustee of all of the Purchaser's rights against the Seller pursuant to this
Agreement insofar as such rights relate to Mortgage Loans transferred to the
Trustee and to the enforcement or exercise of any right or remedy against the
Seller pursuant to this Agreement by the Trustee. Such enforcement of a right or
remedy by the Trustee shall have the same force and effect as if the right or
remedy had been enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01 and 3.02 and the provisions of Article V hereof shall survive the
purchase of the Mortgage Loans hereunder.
21
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed to this Mortgage Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year fist above
written.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION,
as Purchaser
By_____________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION,
as Seller
By:_____________________________
Name:
Title:
22
SCHEDULE I
MORTGAGE LOANS
FILED BY PAPER
I-1
================================================================================
OPTION ONE MORTGAGE CORPORATION,
as Originator
OPTION ONE OWNER TRUST 2001-2,
as Seller
and
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 11, 2002
Fixed Rate and Adjustable Rate Mortgage Loans
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates, Series 2002-2
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS............................................................................1
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.................................................................2
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE....................................................2
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO
THE MORTGAGE LOANS.....................................................................6
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO
THE ORIGINATOR........................................................................12
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER......................14
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................15
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR...........................................................17
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.......................................................................18
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................21
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................21
Section 7.02 GOVERNING LAW.........................................................................21
ii
Section 7.03 NOTICES...............................................................................21
Section 7.04 SEVERABILITY OF PROVISIONS............................................................22
Section 7.05 COUNTERPARTS..........................................................................22
Section 7.06 FURTHER AGREEMENTS....................................................................22
Section 7.07 INTENTION OF THE PARTIES..............................................................22
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................23
Section 7.09 SURVIVAL..............................................................................23
Section 7.10 OWNER TRUSTEE.........................................................................23
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 11, 2002
(the "Agreement"), among Option One Mortgage Corporation (the "Originator"),
Option One Owner Trust 2001-2 (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").
W I T N E S S E T H
-------------------
WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, the Seller is an indirect subsidiary of the
Originator and the Originator is the administrator of the Seller; and
WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of March 1, 2002 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Originator as master servicer and Xxxxx
Fargo Bank Minnesota, National Association as trustee (the "Trustee"), the
Purchaser will convey the Mortgage Loans to Option One Mortgage Loan Trust
2002-2 (the "Trust");
WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
1
"ORIGINATOR INFORMATION": The information in the Prospectus Supplement
as follows: under "SUMMARY OF TERMS--Mortgage Loans," "SUMMARY OF
TERMS--Primary Mortgage Insurance," the first sentence under the fourth
bullet point under "RISK FACTORS--Unpredictability of Prepayments and
Effect on Yields," "RISK FACTORS--Delinquent Mortgage Loan Risk," the
third sentence under "RISK FACTORS--Balloon Loan Risks," the first
sentence under "RISK FACTORS--Second Lien Loan Risk," the first
sentence of the third paragraph under "RISK FACTORS--Potential
Inadequacy of Credit Enhancement for the Offered Certificates," the
second sentence under the fourth bullet point under "RISK
FACTORS--Interest Generated by the Mortgage Loans May Be Insufficient
to Maintain Overcollateralization," the second sentence under "RISK
FACTORS--High Loan-to-Value Ratios Increase Risk of Loss," "THE
MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the first sentence
under "DESCRIPTION OF THE CERTIFICATES--The PMI Policy," and the first
sentence of the fifth paragraph under "YIELD, PREPAYMENT AND MATURITY
CONSIDERATIONS."
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.
(a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, and in connection therewith hereby assigns
to the Purchaser, effective as of the Closing Date, without recourse, (i) all of
its right, title and interest in and to each Mortgage Loan, 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 on or after the Cut-off Date; (ii) property which secured such Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii)
its interest in any insurance policies (including the PMI Policy) in respect of
the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) [Reserved].
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator further agrees, at
its own expense on or prior to the Closing Date, (a) to cause the books and
records of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement and (c) to deliver to the Purchaser and the Trustee the
ETT (as defined in the PMI Policy) with respect to the Mortgage Loans.
2
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan:
(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 Xxxxx Fargo Bank Minnesota,
National Association, 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 of which is less than or
equal to 1.00% 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 or, if such
Mortgage or power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of attorney, as the case
may be, certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, without recourse";
(iv) an original copy 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 Originator hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in the general accounting records
of the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(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 Seller 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 Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the
3
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 2.02(v) above, the Seller 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, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller 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 Seller
shall have 120 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
The Originator shall cause the Assignments which were delivered in
blank to be completed and shall cause all Assignments referred to in Section
2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv) hereof to be
recorded. The Originator shall be required to deliver such Assignments for
recording within 90 days of the Closing Date. Notwithstanding the foregoing, the
Originator need not cause to be recorded any Assignment which relates to a
Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an
Opinion of Counsel delivered by the Originator to the NIMS Insurer, the Trustee
and the Rating Agencies on or before the Closing Date, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of
Counsel, each Assignment shall be submitted for recording by the Originator 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 25% 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 of the Pooling and Servicing
Agreement, (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 and (vi) any Mortgage Loan
that is 90 days or
4
more Delinquent. 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 (vi) above) set forth in the preceding sentence or (b)
upon the occurrence of condition (vi) in the preceding sentence, the Originator
shall be required to deliver such Assignments 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. The
Originator shall be required to deliver such Assignments for recording within 45
days of the Closing Date. The Originator 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 Originator 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. In the event that any Mortgage Note is
endorsed in blank as of the Closing Date, within ninety (90) days of the Closing
Date the Originator shall cause to be completed such endorsements "Pay to the
order of Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse."
The Originator shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Pooling and Servicing
Agreement within two weeks of their execution; PROVIDED, HOWEVER, that the
Originator shall provide the Purchaser 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 Originator cannot provide a copy of such document
certified by the public recording office within such 365 day period, the
Originator shall deliver to the Purchaser, within such 365 day period, an
Officer's Certificate of the Master Servicer which shall (A) identify the
recorded document, (B) state that the recorded document has not been delivered
to the Purchaser 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 Purchaser, and, upon receipt of a copy of such document
certified by the public recording office, the Originator shall immediately
deliver such document to the Purchaser. In the event the appropriate public
recording office will not certify as to the accuracy of such document, the
Originator shall deliver a copy of such document certified by an officer of the
Originator to be a true and complete copy of the original to the Purchaser.
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $120,995,290.70 and (ii) a 42.29% percentage
interest in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Securities
Corp. The Originator shall pay, and be billed directly for, all expenses
incurred by the Purchaser in connection with the issuance of the Certificates,
including, without limitation, printing fees incurred in connection with the
prospectus
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relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the Rating Agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:
(a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;
(b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;
(c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;
(d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;
(e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Originator and any affiliate of the Originator
in compliance with all applicable federal, state and local laws and regulations
and the terms of the related Mortgage Note and Mortgage;
(f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like
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properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (iv) the
first lien on the Mortgaged Property, in the case of the Mortgages that are
second liens;
(h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;
(i) As of the last calendar day of February 2002 and with
respect to any Mortgage Loan that had a payment due on or before February 1,
2002, except with respect to 11.41% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on March 1, 2002 has been received. In addition, 0.19% of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months and
none of the Mortgage Loans have been 30 or more days delinquent for two payment
periods in the last 12 months;
(j) Neither the Originator nor the Seller has advanced funds,
or induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan;
(k) Neither the Originator nor the Seller has impaired,
waived, altered or modified the related Mortgage or Mortgage Note in any
material respect, or satisfied, canceled, rescinded or subordinated such
Mortgage or Mortgage Note in whole or in part or released all or any material
portion of the Mortgaged Property from the lien of the Mortgage, or executed any
instrument of release, cancellation, rescission or satisfaction of the Mortgage
Note or Mortgage;
(l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;
(m) No Mortgage Loan is subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or Mortgage
unenforceable in whole or in part, or subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of recission, set-off, counterclaim or defense has been asserted with
respect thereto;
(n) To the Originator's knowledge, there is no proceeding
pending for the total or partial condemnation and no eminent domain proceedings
pending affecting any Mortgaged Property;
(o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged
7
Property is located, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property is
located. All of the Originator's rights under such policies, opinions or other
instruments shall be transferred and assigned to Purchaser upon sale and
assignment of the Mortgage Loans hereunder. The title insurance policy has been
issued by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located, insuring the original lender, its successor and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject to the exceptions contained in
such policy. The Originator is the sole insured of such mortgagee title
insurance policy, and such mortgagee title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Originator nor any affiliate of the
Originator has made, and the Originator has no knowledge of, any claims under
such mortgagee title insurance policy. The Originator is not aware of any action
by a prior holder and neither the Originator nor any affiliate of the Originator
has done, by act or omission, anything which could impair the coverage or
enforceability of such mortgagee title insurance policy or the accuracy of such
attorney's opinion of title;
(p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;
(q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;
(r) To the Originator's knowledge, there are no delinquent
taxes, ground rents, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges, affecting the related Mortgaged
Property;
(s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Originator's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;
(t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance,
8
and, if applicable, flood insurance policy at the Mortgagor's cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense, and
to seek reimbursement therefor from the Mortgagor. The Mortgaged Property is
covered by Hazard Insurance;
(u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;
(v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;
(w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;
(x) To the Originator's knowledge, there was no fraud involved
in the origination of the Mortgage Loan by the mortgagee or by the Mortgagor,
any appraiser or any other party involved in the origination of the Mortgage
Loan;
(y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(z) To the best of the Originator's knowledge, all parties
which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all
9
applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;
(bb) Each Mortgage Loan was originated or acquired by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Originator's
underwriting criteria, which are at least as stringent as the underwriting
criteria set forth in the Prospectus Supplement. Each Mortgage Loan is currently
being serviced by the Originator and has been serviced by the Originator since
the date of origination of such Mortgage Loan;
(cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;
(dd) Other than with respect to not more than 4.01% of the
Mortgage Loans (by aggregate principal balance of the Mortgage Loans as of the
Cut-off Date), which are "balloon payment" mortgage loans, each Mortgage Loan is
fully amortizing;
(ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;
(ff) With respect to escrow deposits, if any, all such
payments are in the possession of, or under the control of, the Master Servicer
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
escrow advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;
(gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Originator, the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor; or (ii) paid by any source other than the
Mortgagor or contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;
10
(ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.
(jj) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(kk) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the, Mortgagee pursuant to the Mortgage
Note or Mortgage;
(ll) There are no mechanics' or similar liens or claims that
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;
(nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;
(oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;
(qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;
(rr) The Mortgage Loans have original terms to maturity
ranging from 10 to 30 years;
(ss) With respect to the Mortgage Loans, no more than
38.01%;12.68%; 6.20% and 5.24% of the Mortgage Loans, by Cut-off Date Principal
Balance will be secured by Mortgaged Properties located in California, New York,
Texas and Florida, respectively; and 77.67% of the Mortgage Loans, by Cut-off
Date Principal Balance will be secured by real property with a single
11
family residence erected thereon and 5.13% of the Mortgage Loans, by the Cut-off
Date Principal Balance are secured by condominiums;
(tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 100.00%;
(uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;
(vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $264,759.94;
(ww) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan
is in violation of any state law or ordinance similar to HOEPA;
(xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;
(yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and
(zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-102(a)(65) of the UCC.
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:
(i) The Originator is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
California and is and will remain in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of this
Agreement;
(ii) The Originator has the full power and authority to
execute, deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;
12
(iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;
(iv) The Originator is not in violation of, and the execution
and delivery of this Agreement by the Originator and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;
(v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;
(vi) The Originator 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 are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained;
(ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;
(x) The information delivered by the Originator to the
Purchaser with respect to the Originator's loan loss, foreclosure and
delinquency experience on mortgage loans underwritten to similar standards as
the Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects as of the date of such
report;
13
(xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and
(xii) The Originator has not transferred the Mortgage Loans
with any intent to hinder, delay or defraud any of its creditors.
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Originator, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's certificate of trust or constitute a default under or
result in a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;
(d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder; and
14
(e) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;
(f) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(g) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;
(h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and
(j) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated, the Seller shall have transferred
all of its right, title and interest in and to each Mortgage Loan and the
Trustee will hold good, marketable and indefeasible title to, and be the sole
owner of, each Mortgage Loan subject to no Liens.
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and
15
warranties contained herein that are made to the knowledge or the best knowledge
of the Originator or as to which the Originator has no knowledge, if it is
discovered that the substance of any such representation and warranty is
inaccurate and the inaccuracy materially and adversely affects the value of the
related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.
Within 120 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Section 3.02 or 3.03
and such breach cannot be cured within 120 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Originator at the
Purchase Price. The Originator may, at the request of the Purchaser and assuming
the Originator has a Qualified Substitute Mortgage Loan, rather than repurchase
a deficient Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Originator does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Originator shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling
16
and Servicing Agreement, with the Mortgage Note endorsed as required therein.
The Originator shall deposit in the Collection Account the Monthly Payment less
the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Originator. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Originator shall thereafter be entitled to
retain all amounts subsequently received by the Originator in respect of such
Deleted Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage
Loans shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Sections 3.01, 3.02 and 3.03.
It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Originator set
forth in Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02 or 3.03.
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby
covenants that except for the transfer hereunder, neither the Originator nor the
Seller will sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Mortgage Loan, or any
interest therein; the Originator will notify the Trustee, as assignee of the
Purchaser, of the existence of any Lien on any Mortgage Loan immediately upon
discovery thereof, and the Originator will defend the right, title and interest
of the Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
17
Section 5.01 INDEMNIFICATION.
(a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
information provided by the Originator to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be provided
hereby, and disseminated to KPMG L.L.P. or prospective investors (directly or
indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Originator may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the
Seller and the Originator, each of their respective officers, directors and each
person or entity who controls the Seller, the Originator or any such person,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Seller, the Originator or any such person or entity may become
subject, under the Securities Act or otherwise, and will reimburse the Seller
and/or the Originator for any legal or other expenses incurred by the Seller,
the Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is not
contained in the Originator Information in the Prospectus Supplement. This
indemnity agreement will be in addition to any liability which the Purchaser may
otherwise have.
18
(c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent
19
to a settlement of any action, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and the indemnifying party has not
previously provided the indemnified party with written notice of its objection
to such settlement. No indemnifying party shall effect any settlement of any
pending or threatened proceeding in respect of which an indemnified party is or
could have been a party and indemnity is or could have been sought hereunder,
without the written consent of such indemnified party, unless settlement
includes an unconditional release of such indemnified party from all liability
and claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each officer and
director of the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Purchaser, each director of the Originator, each
officer of the Originator, and each person, if any, who controls the Originator
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Originator and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Seller.
(e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Originator, the Seller or any
servicer. The Originator shall immediately notify the Purchaser, the Trustee and
each Certificateholder if a claim is made by a third party with respect to this
Agreement. The Originator shall assume 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 Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.
20
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate, except for the Originator's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:
if to the Originator:
Option One Mortgage Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.
if to the Purchaser:
Option One Mortgage Acceptance Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.
21
if to the Seller:
Option One Owner Trust 2001-2
c/o Wilmington Trust Company
One Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any series of Certificates representing interests in the
Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, the Originator will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request and
will provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
22
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer, if any.
The NIMs Insurer, if any, shall be a third party beneficiary hereof and may
enforce the terms hereof as if a party hereto. The obligations of the Seller and
the Originator under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser which consent shall be at the
Purchaser's sole discretion, except that the Purchaser acknowledges and agrees
that the Seller or the Originator may assign its obligations hereunder to any
Person into which the Seller or the Originator is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller or
the Originator is a party or any Person succeeding to the business of the Seller
or the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Seller and the Originator each acknowledge and consent to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Seller and the Originator pursuant to this Agreement insofar as such
rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller or the
Originator pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.
Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by
the parties to this Agreement that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Seller under this Agreement or any other document.
23
IN WITNESS WHEREOF, the Seller, the Originator and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION,
as Purchaser
By: ____________________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION,
as Originator
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2001-2,
as Seller
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee.
By: ____________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
--------------
FILED BY PAPER
I-1
================================================================================
OPTION ONE MORTGAGE CORPORATION,
as Originator
OPTION ONE OWNER TRUST 2001-1B,
as Seller
and
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 11, 2002
Fixed Rate and Adjustable Rate Mortgage Loans
Option One Mortgage Loan Trust 2002-2
Asset-Backed Certificates, Series 2002-2
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS............................................................................1
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.................................................................2
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE....................................................2
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO
THE MORTGAGE LOANS.....................................................................6
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO
THE ORIGINATOR........................................................................12
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER......................14
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES.................................15
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR...........................................................17
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.......................................................................18
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................21
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................21
Section 7.02 GOVERNING LAW.........................................................................21
ii
Section 7.03 NOTICES...............................................................................21
Section 7.04 SEVERABILITY OF PROVISIONS............................................................22
Section 7.05 COUNTERPARTS..........................................................................22
Section 7.06 FURTHER AGREEMENTS....................................................................22
Section 7.07 INTENTION OF THE PARTIES..............................................................22
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT..............................23
Section 7.09 SURVIVAL..............................................................................23
Section 7.10 OWNER TRUSTEE.........................................................................23
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 11, 2002
(the "Agreement"), among Option One Mortgage Corporation (the "Originator"),
Option One Owner Trust 2001-1B (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").
W I T N E S S E T H
-------------------
WHEREAS, the Seller is the owner of (a) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below and (b) the other documents or instruments constituting
the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the "Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, the Seller is an indirect subsidiary of the
Originator and the Originator is the administrator of the Seller; and
WHEREAS, the Originator originated the Mortgage Loans and
previously sold the Mortgage Loans; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement dated as of March 1, 2002 (the "Pooling and Servicing Agreement")
among the Purchaser as depositor, the Originator as master servicer and Xxxxx
Fargo Bank Minnesota, National Association as trustee (the "Trustee"), the
Purchaser will convey the Mortgage Loans to Option One Mortgage Loan Trust
2002-2 (the "Trust");
WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
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"ORIGINATOR INFORMATION": The information in the Prospectus Supplement
as follows: under "SUMMARY OF TERMS--Mortgage Loans," "SUMMARY OF
TERMS--Primary Mortgage Insurance," the first sentence under the fourth
bullet point under "RISK FACTORS--Unpredictability of Prepayments and
Effect on Yields," "RISK FACTORS--Delinquent Mortgage Loan Risk," the
third sentence under "RISK FACTORS--Balloon Loan Risks," the first
sentence under "RISK FACTORS--Second Lien Loan Risk," the first
sentence of the third paragraph under "RISK FACTORS--Potential
Inadequacy of Credit Enhancement for the Offered Certificates," the
second sentence under the fourth bullet point under "RISK
FACTORS--Interest Generated by the Mortgage Loans May Be Insufficient
to Maintain Overcollateralization," the second sentence under "RISK
FACTORS--High Loan-to-Value Ratios Increase Risk of Loss," "THE
MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the first sentence
under "DESCRIPTION OF THE CERTIFICATES--The PMI Policy," and the first
sentence of the fifth paragraph under "YIELD, PREPAYMENT AND MATURITY
CONSIDERATIONS."
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.
(a) The Seller, concurrently with the execution and delivery
of this Agreement, does hereby sell, and in connection therewith hereby assigns
to the Purchaser, effective as of the Closing Date, without recourse, (i) all of
its right, title and interest in and to each Mortgage Loan, 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 on or after the Cut-off Date; (ii) property which secured such Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii)
its interest in any insurance policies (including the PMI Policy) in respect of
the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) [Reserved].
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator further agrees, at
its own expense on or prior to the Closing Date, (a) to cause the books and
records of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement and (c) to deliver to the Purchaser and the Trustee the
ETT (as defined in the PMI Policy) with respect to the Mortgage Loans.
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In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan:
(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 Xxxxx Fargo Bank Minnesota,
National Association, 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 of which is less than or
equal to 1.00% 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 or, if such
Mortgage or power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of attorney, as the case
may be, certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank, without recourse or (B) to "Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, without recourse";
(iv) an original copy 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 Originator hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in the general accounting records
of the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.
If any of the documents referred to in Section 2.02(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 Seller 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 Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the
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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 2.02(v) above, the Seller 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, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller 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 Seller
shall have 120 days to cure such defect or deliver such missing document to the
Purchaser. If the Seller does not cure such defect or deliver such missing
document within such time period, the Originator shall either repurchase or
substitute for such Mortgage Loan pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
The Originator shall cause the Assignments which were delivered in
blank to be completed and shall cause all Assignments referred to in Section
2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv) hereof to be
recorded. The Originator shall be required to deliver such Assignments for
recording within 90 days of the Closing Date. Notwithstanding the foregoing, the
Originator need not cause to be recorded any Assignment which relates to a
Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an
Opinion of Counsel delivered by the Originator to the NIMS Insurer, the Trustee
and the Rating Agencies on or before the Closing Date, the recordation of such
assignment is not necessary to protect the Trustee's interest in the related
Mortgage Loan; PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of
Counsel, each Assignment shall be submitted for recording by the Originator 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 25% 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 of the Pooling and Servicing
Agreement, (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 and (vi) any Mortgage Loan
that is 90 days or
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more Delinquent. 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 (vi) above) set forth in the preceding sentence or (b)
upon the occurrence of condition (vi) in the preceding sentence, the Originator
shall be required to deliver such Assignments 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. The
Originator shall be required to deliver such Assignments for recording within 45
days of the Closing Date. The Originator 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 Originator 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. In the event that any Mortgage Note is
endorsed in blank as of the Closing Date, within ninety (90) days of the Closing
Date the Originator shall cause to be completed such endorsements "Pay to the
order of Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse."
The Originator shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Pooling and Servicing
Agreement within two weeks of their execution; PROVIDED, HOWEVER, that the
Originator shall provide the Purchaser 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 Originator cannot provide a copy of such document
certified by the public recording office within such 365 day period, the
Originator shall deliver to the Purchaser, within such 365 day period, an
Officer's Certificate of the Master Servicer which shall (A) identify the
recorded document, (B) state that the recorded document has not been delivered
to the Purchaser 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 Purchaser, and, upon receipt of a copy of such document
certified by the public recording office, the Originator shall immediately
deliver such document to the Purchaser. In the event the appropriate public
recording office will not certify as to the accuracy of such document, the
Originator shall deliver a copy of such document certified by an officer of the
Originator to be a true and complete copy of the original to the Purchaser.
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.
In consideration of the sale of the Mortgage Loans from the Seller to
the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $146,951,051.81 and (ii) a 51.36% percentage
interest in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Securities
Corp. The Originator shall pay, and be billed directly for, all expenses
incurred by the Purchaser in connection with the issuance of the Certificates,
including, without limitation, printing fees incurred in connection with the
prospectus
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relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the Rating Agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:
(a) The Seller has good title to and is the sole owner and
holder of the Mortgage Loan;
(b) Immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage Loan were not subject to an
assignment or pledge, and the Seller has full right and authority to sell and
assign the Mortgage Loan;
(c) The Seller is transferring such Mortgage Loan to the
Purchaser free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering the Mortgage Loans;
(d) The information set forth on Schedule I is true and
correct in all material respects as of the Cut-off Date or such other date as
may be indicated in such schedule;
(e) The Mortgage Loan has been acquired, serviced, collected
and otherwise dealt with by the Originator and any affiliate of the Originator
in compliance with all applicable federal, state and local laws and regulations
and the terms of the related Mortgage Note and Mortgage;
(f) The related Mortgage Note and Mortgage are genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(g) The related Mortgage is a valid and enforceable first or
second lien on the related Mortgaged Property, which Mortgaged Property is free
and clear of all encumbrances and liens (including mechanics liens) having
priority over the first or second lien of the Mortgage except for: (i) liens for
real estate taxes and assessments not yet due and payable; (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
or specifically reflected or considered in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to in the
appraisal made in connection with the origination of the related Mortgage Loan,
(iii) other matters to which like
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properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (iv) the
first lien on the Mortgaged Property, in the case of the Mortgages that are
second liens;
(h) Any security agreement, chattel mortgage or equivalent
document related to such Mortgage Loan establishes and creates a valid and
enforceable first or second lien on the Mortgaged Property;
(i) As of the last calendar day of February 2002 and with
respect to any Mortgage Loan that had a payment due on or before February 1,
2002, except with respect to 20.56% of the Mortgage Loans by the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the related Monthly
Payment due on February 1, 2002 has been received. In addition, 0.33% of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months and
0.24% of the Mortgage Loans have been 30 or more days delinquent for two payment
periods in the last 12 months;
(j) Neither the Originator nor the Seller has advanced funds,
or induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan;
(k) Neither the Originator nor the Seller has impaired,
waived, altered or modified the related Mortgage or Mortgage Note in any
material respect, or satisfied, canceled, rescinded or subordinated such
Mortgage or Mortgage Note in whole or in part or released all or any material
portion of the Mortgaged Property from the lien of the Mortgage, or executed any
instrument of release, cancellation, rescission or satisfaction of the Mortgage
Note or Mortgage;
(l) As of the Cut-off Date, the Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part (except for a release that does not materially impair the security of
the Mortgage Loan or a release the effect of which is reflected in the
Loan-to-Value Ratio for the Mortgage Loan as set forth in the Schedule of
Mortgage Loans), nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;
(m) No Mortgage Loan is subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of any Mortgage Note or Mortgage, or the exercise
of any right thereunder, render either the Mortgage Note or Mortgage
unenforceable in whole or in part, or subject to any right of recission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of recission, set-off, counterclaim or defense has been asserted with
respect thereto;
(n) To the Originator's knowledge, there is no proceeding
pending for the total or partial condemnation and no eminent domain proceedings
pending affecting any Mortgaged Property;
(o) Each Mortgage Loan is covered by either (i) a mortgage
title insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged
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Property is located, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property is
located. All of the Originator's rights under such policies, opinions or other
instruments shall be transferred and assigned to Purchaser upon sale and
assignment of the Mortgage Loans hereunder. The title insurance policy has been
issued by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located, insuring the original lender, its successor and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject to the exceptions contained in
such policy. The Originator is the sole insured of such mortgagee title
insurance policy, and such mortgagee title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Originator nor any affiliate of the
Originator has made, and the Originator has no knowledge of, any claims under
such mortgagee title insurance policy. The Originator is not aware of any action
by a prior holder and neither the Originator nor any affiliate of the Originator
has done, by act or omission, anything which could impair the coverage or
enforceability of such mortgagee title insurance policy or the accuracy of such
attorney's opinion of title;
(p) There is no material default, breach, violation or event
of acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;
(q) With respect to any Mortgage Loan which provides for an
adjustable interest rate, all rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if any;
(r) To the Originator's knowledge, there are no delinquent
taxes, ground rents, water charges, sewer rents, assessments, insurance
premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges, affecting the related Mortgaged
Property;
(s) No foreclosure proceedings are pending against the
Mortgaged Property and the Mortgage Loan is not subject to any pending
bankruptcy or insolvency proceeding, and to the Originator's best knowledge, no
material litigation or lawsuit relating to the Mortgage Loan is pending;
(t) The Mortgage Loan obligates the mortgagor thereunder to
maintain a hazard insurance policy ("Hazard Insurance") in an amount at least
equal to the lesser of (i) the maximum insurable value of such improvements or
(ii) the principal balance of the Mortgage Loan with a standard mortgagee
clause, in either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance,
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and, if applicable, flood insurance policy at the Mortgagor's cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense, and
to seek reimbursement therefor from the Mortgagor. The Mortgaged Property is
covered by Hazard Insurance;
(u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;
(v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;
(w) Except as set forth in the appraisal which forms part of
the related Mortgage File, the Mortgaged Property, normal wear and tear
excepted, is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect materially and adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;
(x) To the Originator's knowledge, there was no fraud involved
in the origination of the Mortgage Loan by the mortgagee or by the Mortgagor,
any appraiser or any other party involved in the origination of the Mortgage
Loan;
(y) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised value identified
for such Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(z) To the best of the Originator's knowledge, all parties
which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all
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applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;
(aa) No improvements on the related Mortgaged Property (upon
which value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;
(bb) Each Mortgage Loan was originated or acquired by a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved by the Secretary of HUD. Each Mortgage
Loan was originated substantially in accordance with the Originator's
underwriting criteria, which are at least as stringent as the underwriting
criteria set forth in the Prospectus Supplement. Each Mortgage Loan is currently
being serviced by the Originator and has been serviced by the Originator since
the date of origination of such Mortgage Loan;
(cc) (i) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed and
(ii) each Mortgage Note is payable on the first day of each month;
(dd) Other than with respect to not more than 0.52% of the
Mortgage Loans (by aggregate principal balance of the Mortgage Loans as of the
Cut-off Date), which are "balloon payment" mortgage loans, each Mortgage Loan is
fully amortizing;
(ee) The Mortgage Loan bears interest at the Mortgage Rate and
the Mortgage Note does not permit negative amortization. No Mortgage Loan
bearing interest at an adjustable rate permits the Mortgagor to convert the
Mortgage Loan to a fixed rate Mortgage Loan;
(ff) With respect to escrow deposits, if any, all such
payments are in the possession of, or under the control of, the Master Servicer
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
escrow advances or other charges or payments due the Master Servicer have been
capitalized under any Mortgage or the related Mortgage Note;
(gg) No Mortgage Loan contains provisions pursuant to which
scheduled payments are: (i) paid or partially paid with funds deposited in any
separate account established by the Originator, the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor; or (ii) paid by any source other than the
Mortgagor or contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(hh) As of the origination date of each Mortgage Loan, the
related Mortgaged Property is lawfully permitted to be occupied under applicable
law;
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(ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.
(jj) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(kk) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the, Mortgagee pursuant to the Mortgage
Note or Mortgage;
(ll) There are no mechanics' or similar liens or claims that
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
that are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(mm) As to each Mortgage Loan, interest is calculated on the
Mortgage Note on the basis of twelve 30-day months and a 360 day year;
(nn) The Mortgaged Property consists of one of the following:
detached or semi-detached one- to four-family dwelling units, townhouses,
individual condominium units and individual units in planned unit developments,
or manufactured homes;
(oo) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(pp) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the Trust;
(qq) The representations, warranties and covenants, set forth
in this Section shall survive the Closing Date;
(rr) The Mortgage Loans have original terms to maturity
ranging from 10 to 30 years;
(ss) With respect to the Mortgage Loans, no more than 38.14%;
11.76%; 7.47% and 6.20% of the Mortgage Loans, by Cut-off Date Principal Balance
will be secured by Mortgaged Properties located in California, New York,
Massachusetts and New Jersey, respectively; and 77.76% of the Mortgage Loans, by
Cut-off Date Principal Balance will be secured by real property
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with a single family residence erected thereon and 3.35% of the Mortgage Loans,
by the Cut-off Date Principal Balance are secured by condominiums;
(tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 97.53%;
(uu) With respect to each Mortgage Loan, the Mortgage Note
related thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which
will be adjusted on each Adjustment Date to equal the Index plus the Gross
Margin, rounded to the nearest or next highest 0.125%, subject to the Periodic
Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate;
(vv) The average Cut-off Date Principal Balance of the
Mortgage Loans is $281,515.42;
(ww) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan
is in violation of any state law or ordinance similar to HOEPA;
(xx) Each Mortgage Loan conforms, and all Mortgage Loans in
the aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;
(yy) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and
(zz) Each Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an "instrument" for
purposes of section 9-102(a)(65) of the UCC.
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:
(i) The Originator is duly organized, validly
existing and in good standing as a corporation under the laws of the State of
California and is and will remain in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of this
Agreement;
(ii) The Originator has the full power and authority
to execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Originator has duly authorized
the execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;
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(iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;
(iv) The Originator is not in violation of, and the execution
and delivery of this Agreement by the Originator and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Originator or its assets, which violation might have consequences that would
materially and adversely affect the condition (financial or otherwise) or the
operation of the Originator or its assets or might have consequences that would
materially and adversely affect the performance of its obligations and duties
hereunder;
(v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;
(vi) The Originator 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 are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained;
(ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;
(x) The information delivered by the Originator to the
Purchaser with respect to the Originator's loan loss, foreclosure and
delinquency experience on mortgage loans underwritten to similar standards as
the Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects as of the date of such
report;
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(xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and
(xii) The Originator has not transferred the Mortgage Loans
with any intent to hinder, delay or defraud any of its creditors.
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Originator, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's certificate of trust or constitute a default under or
result in a breach or acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be applicable to the
Seller or its assets;
(d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder; and
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(e) Immediately prior to the payment of the Purchase Price for
each Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;
(f) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(g) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;
(h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and
(j) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage have
not been assigned or pledged and immediately prior to the transfer and
assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights of
others (collectively, a "Lien"); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the Seller,
subject to no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated, the Seller shall have transferred
all of its right, title and interest in and to each Mortgage Loan and the
Trustee will hold good, marketable and indefeasible title to, and be the sole
owner of, each Mortgage Loan subject to no Liens.
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It
is understood and agreed that the representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and
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warranties contained herein that are made to the knowledge or the best knowledge
of the Originator or as to which the Originator has no knowledge, if it is
discovered that the substance of any such representation and warranty is
inaccurate and the inaccuracy materially and adversely affects the value of the
related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.
Within 120 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Section 3.02 or 3.03
and such breach cannot be cured within 120 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Originator at the
Purchase Price. The Originator may, at the request of the Purchaser and assuming
the Originator has a Qualified Substitute Mortgage Loan, rather than repurchase
a deficient Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Originator does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Originator shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling
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and Servicing Agreement, with the Mortgage Note endorsed as required therein.
The Originator shall deposit in the Collection Account the Monthly Payment less
the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Originator. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Originator shall thereafter be entitled to
retain all amounts subsequently received by the Originator in respect of such
Deleted Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage
Loans shall be subject to the terms of this Agreement in all respects, and the
Originator shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans as of the date of substitution, the covenants,
representations and warranties set forth in Sections 3.01, 3.02 and 3.03.
It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Originator set
forth in Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02 or 3.03.
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby
covenants that except for the transfer hereunder, neither the Originator nor the
Seller will sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Mortgage Loan, or any
interest therein; the Originator will notify the Trustee, as assignee of the
Purchaser, of the existence of any Lien on any Mortgage Loan immediately upon
discovery thereof, and the Originator will defend the right, title and interest
of the Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
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Section 5.01 INDEMNIFICATION.
---------------
(a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
information provided by the Originator to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be provided
hereby, and disseminated to KPMG L.L.P. or prospective investors (directly or
indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Originator may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the
Seller and the Originator, each of their respective officers, directors and each
person or entity who controls the Seller, the Originator or any such person,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Seller, the Originator or any such person or entity may become
subject, under the Securities Act or otherwise, and will reimburse the Seller
and/or the Originator for any legal or other expenses incurred by the Seller,
the Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is not
contained in the Originator Information in the Prospectus Supplement. This
indemnity agreement will be in addition to any liability which the Purchaser may
otherwise have.
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(c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent
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to a settlement of any action, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and the indemnifying party has not
previously provided the indemnified party with written notice of its objection
to such settlement. No indemnifying party shall effect any settlement of any
pending or threatened proceeding in respect of which an indemnified party is or
could have been a party and indemnity is or could have been sought hereunder,
without the written consent of such indemnified party, unless settlement
includes an unconditional release of such indemnified party from all liability
and claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each officer and
director of the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Purchaser, each director of the Originator, each
officer of the Originator, and each person, if any, who controls the Originator
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Originator and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Seller.
(e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Originator, the Seller or any
servicer. The Originator shall immediately notify the Purchaser, the Trustee and
each Certificateholder if a claim is made by a third party with respect to this
Agreement. The Originator shall assume 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 Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.
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ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate, except for the Originator's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to time
by the Originator, the Seller and the Purchaser, by written agreement signed by
the Originator, the Seller and the Purchaser.
Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:
if to the Originator:
Option One Mortgage Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.
if to the Purchaser:
Option One Mortgage Acceptance Corporation
3 Ada
Xxxxxx, XX 00000
Attention: Xxxxxxx X. X'Xxxxx
or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.
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if to the Seller:
Option One Owner Trust 2001-1B
c/o Wilmington Trust Company
One Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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 of
enforceability of the other provisions of this Agreement.
Section 7.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any series of Certificates representing interests in the
Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Originator will cooperate with the Purchaser in connection with the sale of any
of the securities representing interests in the Mortgage Loans. In that
connection, the Originator will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request and
will provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Originator as are reasonably required in
connection with such transactions and the offering of investment grade
securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than pledging the Mortgage Loans to secure a loan by the
Purchaser to the Seller. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes and all other purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser will have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Mortgage Loans and the
22
Seller will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer, if any.
The NIMs Insurer, if any, shall be a third party beneficiary hereof and may
enforce the terms hereof as if a party hereto. The obligations of the Seller and
the Originator under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser which consent shall be at the
Purchaser's sole discretion, except that the Purchaser acknowledges and agrees
that the Seller or the Originator may assign its obligations hereunder to any
Person into which the Seller or the Originator is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller or
the Originator is a party or any Person succeeding to the business of the Seller
or the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Seller and the Originator each acknowledge and consent to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Seller and the Originator pursuant to this Agreement insofar as such
rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller or the
Originator pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.
Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by
the parties to this Agreement that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Seller under this Agreement or any other document.
23
IN WITNESS WHEREOF, the Seller, the Originator and the
Purchaser have caused their names to be signed to this Mortgage Loan Purchase
Agreement by their respective officers thereunto duly authorized as of the day
and year fist above written.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION,
as Purchaser
By: ____________________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION,
as Originator
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2001-1B,
as Seller
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee.
By: ____________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
--------------
FILED BY PAPER
I-1
EXHIBIT D
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank Minnesota, National Association,
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000
Attn: Inventory Control
Re: Pooling and Servicing Agreement dated as of March 1,
2002 among Option One Mortgage Acceptance
Corporation, as Depositor, Option One Mortgage
Corporation, as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee
----------------------------------------------------
In connection with the administration of the Mortgage Loans held by you
as Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name. Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------
_________1. Mortgage Paid in Full
_________2. Foreclosure
_________3. Substitution
_________4. Other Liquidation (Repurchases, etc.)
_________5. Nonliquidation Reason:
Address to which Trustee should deliver the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
By:_____________________________
(authorized signer)
Issuer:_________________________
Address:________________________
E-1
Date:___________________________
Trustee
-------
Xxxxx Fargo Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature
and date below:
_______________________________ __________________________
Signature Date
Documents returned to Trustee:
_______________________________ __________________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
March __, 2002
Option One Mortgage Acceptance Corporation Option One Mortgage Corporation
0 Xxx 0 Xxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of March 1,
2002 among Option One Mortgage Acceptance
Corporation, as Depositor, Option One Mortgage
Corporation, as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report
delivered in accordance with Section 2.02 of the referenced Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause (vi) of Section 2.01 of the Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:_____________________________________
Name:
Title:
F-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
_______________
[Date]
Option One Mortgage Acceptance Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of March 1,
2002 among Option One Mortgage Acceptance
Corporation, as Depositor, Option One Mortgage
Corporation, as Master Servicer and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee
----------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage loan
paid in full or listed on Schedule I hereto) it (or its custodian) has received
the applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause (vi) of Section 2.01 of the Pooling and Servicing Agreement.
F-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Name:
Title:
F-3
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Option One Mortgage Acceptance Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Re: Option One Mortgage Loan Trust 2002-2,
\ Asset-Backed Certificates Series 2002-2
- ---------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of March 1, 2002, among Option One Mortgage Acceptance Corporation as
Depositor, Option One Mortgage Corporation as Master Servicer and Xxxxx Fargo
Bank Minnesota, National Association. as Trustee (the "Trustee"), we hereby
acknowledge the receipt of the original Mortgage Notes (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:_________________________________
Name:
Title:
F-4
EXHIBIT G
LOSS MITIGATION PROCEDURES
FAS 140 P &S RELEVANT PROVISIONS - RECOVERY FOR DEFAULT LOANS
COLLECTIONS DEPARTMENT PRE-FORECLOSURE PROCESS:
-----------------------------------------------
At 33 calendar days delinquent, all borrowers are sent a 30-day pre-foreclosure
demand letter. Borrowers in states that require more than a 30-day period are
given the amount of time specified by state law.
Borrowers who are unable to pay the total amount past due are reviewed for
foreclosure based upon the following criteria:
"Early Indicator" default risk score. Those borrowers with risk scores
that suggest a strong statistical likelihood of continuing default, are approved
for foreclosure as soon as 48 hours after expiration of the demand letter
(approximately 64 calendar days delinquent).
A. Moderate risk with willingness and ability. Those borrowers with
a moderate statistical likelihood of continuing default wh
demonstrate a willingness and ability to pay (as defined above),
are solicited for extended (up to 6 months) repayment plans in
which a portion of all past due payments are divided equally by 6
and a monthly payment schedule is established which consists of a
"good faith" payment of some portion of the past due amount, one
regular monthly installment and 1/6th of the remaining past due
amount.
B. Low risk with willingness and ability. Those borrowers with a low
risk of continuing default are actively solicited for placement
on a repayment plan and/or are granted additional time to resolve
their financial difficulties informally in arrangement with a
loan counselor. Foreclosure is not typically initiated if or
until the loan becomes 90+ days delinquent and the borrower is
unable or unwilling to continue to make reasonable repayment
arrangements.
C. Broken repayment plans. Those borrowers who are placed on
extended repayment plans but fail to make their scheduled
payments are approved for foreclosure as soon as 48 hours after
the payment plan is broken.
All borrowers are given all reasonable opportunities to pay the total amount
past due (including all contractually permitted fees and charges) prior to the
expiration of the 30 day demand letters. Borrowers who fail to contact Option
One collections when past due, who repeatedly break promises to pay, who have a
willingness but no financial ability, or apparent financial ability but no
willingness, may be referred to foreclosure at any time after the expiration of
the 30-day demand letter, without regard to any other factor, but as a general
rule, a loan is referred to foreclosure no later than the 120th day of
delinquency. The guidelines outlined herein presuppose at least some reasonable
degree of willingness and ability.
G-1
PRE-CONVEYANCE OF TITLE:
------------------------
Initial contact is made for discovery of mortgagor's intent and a minimum
requirement of two attempted contacts per month is required. In general, contact
made or attempted within the first 48 hours establishes categories as follows:
Willingness and Ability, No Willingness or Willingness and No Ability. Each
category provides a subset of options for loss mitigation efforts and the
options are ranked within each category as follows:
1. WILLINGNESS AND ABILITY-- Typically the mortgagor(s) reason
for default is temporary and a foreseeable solution is
probable. The standard options negotiated, ranked in priority
are:
A. Full Reinstatement
B. Payoff
C. Standard 6 month payment plan
D. Extension of the payment plan
E. Forbearance
F. Pre-Sale/Pre-Foreclosure Sale
G. Short Payoff
H. Modification
2. NO WILLINGNESS -- Typically the mortgagor(s) is unclear of
options to mitigate default and avoidsall calls or is brief
and discloses little when contact is made. In this category
efforts are made to continue attempts to contact and/or
counsel mortgagor(s). When no contact is made, Skip Tracing,
promotional items and/or letters are mailed in attempts to
stimulate communication.
3. WILLINGNESS AND NO ABILITY -- Mortgagor(s) want to save home
or remedy the default, however do not have resources to do so.
In this scenario, the standard options negotiated, ranked in
priority are:
A. Payoff
B. Assumption
C. Pre-Sale/Pre-Foreclosure Sale
D. Short Payoff
E. Deed In Lieu of Foreclosure
F. Write-Off
G. Modification
Foreclosure process is also running parallel to the Loss Mitigation efforts and
in the event no workout is achieved then the Master Servicer obtains title
through foreclosure sale, from which the REO Department will attempt to seek
complete recovery from the sale of said property.
List of all Loss Mitigation Options used:
----------------------------------------
- Full Reinstatement
G-2
- Payoff
- Six (6) Month Re-Payment Plan
- Extension of Six (6) Month Payment Plan
- Forbearance
- Short Payoff
- Pre sale/Pre-Foreclosure Sale
- Assumption
- Modification
- Deed In Lieu of Foreclosure
- Write-off
CONVEYANCE OF TITLE:
-------------------
Once title is acquired as a result of foreclosure sale, Deed In Lieu of
Foreclosure or otherwise, the property is assigned to an REO Agent for complete
and timely disposition. REO Broker/Agents are selected and retained using the
following criteria:
- Experience
- Possess Error and Omissions Insurance
- Licensed to sell Real Property in the related region
- Adhere to Option One Mortgage Corporation's Standards
Review of the current values obtained on the subject property will determine the
marketing strategy and the strategy will focus on disposing of the property in a
timely and practical manner. An analysis worksheet is completed to establish the
marketing strategy on the property.
G-3
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, who first being duly sworn deposes and says: Deponent is of , successor
by merger to ("Seller") and who has personal knowledge of the facts set out in
this affidavit.
On ________________________, ________________________ did execute and deliver a
promissory note in the principal amount of $_______________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Xxxxx Fargo
Bank Minnesota, National Association, as trustee on behalf of Option One
Mortgage Loan Trust 2002-2, Asset-Backed Certificates Series 2002-2, to accept
the transfer of the above described loan from Seller.
Seller agrees to indemnify Xxxxx Fargo Bank Minnesota, National
Association, Option One Mortgage Acceptance Corporation and Option One Mortgage
Corporation harmless for any losses incurred by such parties resulting from the
above described promissory note has been lost or misplaced.
By:_______________________
_______________________
STATE OF )
) SS:
COUNTY OF )
On this _____ day of , 20__, before me, a Notary Public, in and for
said County and State, appeared , who acknowledged the extension of the
foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this ________________ day of 20__.
_______________________________
_______________________________
My commission expires _________________.
H-1
EXHIBIT I
[RESERVED]
I-1
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Option One Mortgage Acceptance Xxxxx Fargo Bank Minnesota, National
Corporation Association
3 Ada 00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxxxx, XX 00000
Re: Option One Mortgage Loan Trust 2002-2,
Asset-Backed Certificates Series 2002-2
---------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect
J-1
as this certificate, and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Pooling and Servicing
Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________________
Authorized Officer
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Option One Mortgage Acceptance Xxxxx Fargo Bank Minnesota, National
Corporation Association
3 Ada 00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxxxx, XX 00000
Re: Option One Mortgage Loan Trust 2002-2,
Asset-Backed Certificates Series 2002-2
---------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that:
(a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws;
(b) we have had the opportunity to ask questions of and receive answers
from the Depositor concerning the purchase of the Certificates and all matters
relating thereto or any additional information deemed necessary to our decision
to purchase the Certificates;
(c) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such plan;
(d) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates;
(e) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further,
J-3
understand that such Certificates may be resold, pledged or transferred only (i)
to a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Securities Act; and
(f) either (i) we are not an employee benefit or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code
of 1986, as amended ("Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan within the meaning of the Department of Labor ("DOL") regulation at 29
C.F.R. ss.2510.3-101 or (ii) we have provided the Trustee, the Depositor and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to such parties to the effect that the purchase of
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:__________________________________
Authorized Officer
J-4
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_______1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
__________ CORPORATION, ETC. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section
501 (c) (3) of the Internal Revenue Code of 1986, as amended.
____________ BANK. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___________ SAVINGS AND LOAN. The Buyer (a) is a savings and
loan association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_________ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.
__________________________
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
J-5
__________ INSURANCE COMPANY. The Buyer is an insurance
company whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks underwritten
by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of
a State, territory or the District of Columbia.
_________ STATE OR LOCAL PLAN. The Buyer is a plan established
and maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____________ ERISA PLAN. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974.
_____________ INVESTMENT ADVISOR. The Buyer is an investment
advisor registered under the Investment Advisors Act of 1940.
____________ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a
small business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
_____________ BUSINESS DEVELOPMENT COMPANY. Buyer is a
business development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit (v)
loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
J-6
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________
Print Name of Buyer
By:______________________________
Name:
Title:
Date:____________________________
J-7
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyers Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____________ The Buyer owned $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
___________ The Buyer is part of a Family of Investment
Companies which owned in the aggregate $_____________ in
securities (other than the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies"
as used herein means two or more registered investment
companies (or series thereof) that have the same investment
adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does
not include (i) securities of issuers that are affiliated with
the Buyer or are part of the Buyer's Family of Investment
Companies, (ii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv)
J-8
loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and
understands that the parties listed in the Rule 144A
Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made
herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. Until the date of purchase of the
Certificates, the undersigned will notify the parties listed
in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation
of this certification by the undersigned as of the date of
such purchase.
***
Print Name of Buyer or Adviser
By:
-----------------------------------------
Name:
Title
IF AN ADVISER:
Print Name of Buyer
Date:
---------------------------------------
J-9
EXHIBIT K
AFFIDAVIT OF TRANSFER OF R CERTIFICATES
PURSUANT TO SECTION 5.02(d)
OPTION ONE MORTGAGE LOAN TRUST 2002-2,
ASSET-BACKED CERTIFICATES, SERIES 2002-2
STATE OF )
) ss..
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows
1. The undersigned is an officer of, the proposed Transferee
of an Ownership Interest in Class R Certificates (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement (the "Agreement"), relating to
the above-referenced Certificates, among Option One Mortgage Acceptance
Corporation, as Depositor, Option One Mortgage Corporation, as Master Servicer
(the "Master Servicer") and Xxxxx Fargo Bank Minnesota, National Association, as
Trustee (the "Trustee"). Capitalized terms used, but not defined herein shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain
K-1
cooperatives and, except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(d) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(d) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated hereby
null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit L to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is
________________________.
9. The Transferee is a United States Person as defined in the
Agreement.
10. The Transferee is aware that the Certificate may be a
"non-economic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
non-economic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is
subject to ERISA or a plan that is subject to Section 4975 of the Code, nor is
it acting on behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this _______ day of _______, ____.
[NAME OF TRANSFEREE]
By:
-------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of __________, ____.
__________________
NOTARY PUBLIC
My Commission expires the ______________ day of __________,
____.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Option One Mortgage Acceptance
Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Re: Option One Mortgage Loan Trust 2002-2,
Asset-Backed Certificates Series 2002-2
---------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
TRANSFEROR
________________________________________
By:
Name:
Title:
L-1
EXHIBIT M
Form of Liquidation Report
Customer Name:
Account Number:
Original Principal Balance:
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
Date last paid
Date of foreclosure Date of REO
Date of REO Disposition
Property Sale Price/Estimated Market Value at disposition
2. Liquidation Proceeds
Principal Prepayment $ ________
Property Sale Proceeds ________
Insurance Proceeds ________
Other (itemize) ________
Total Proceeds $ ________
3. Liquidation Expenses
Servicing Advances $ ________
Delinquency Advances ________
Monthly Advances ________
Servicing Fees ________
Other Servicing Compensation ________
Total Advances $ ________
4. Net Liquidation Proceeds $ ________
(Item 2 minus Item 3)
5. Principal Balance of Mortgage Loan $ ________
6. Loss, if any (Item 5 minus Item 4) $ ________
M-1
EXHIBIT N
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
Pursuant to this Subsequent Transfer Instrument, dated ________, 2002
(the "Instrument"), between Option One Mortgage Acceptance Corporation as seller
(the "Depositor"), and Xxxxx Fargo Bank Minnesota, National Association as
trustee of the Option One Mortgage Loan Trust 2002-2 Asset-Backed Certificates,
Series 2002-2, as purchaser (the "Trustee"), and pursuant to the Pooling and
Servicing Agreement, dated as of March 1, 2002 (the "Pooling and Servicing
Agreement"), among the Depositor as depositor, Option One Mortgage Corporation
as master servicer and the Trustee as trustee, the Depositor and the Trustee
agree to the sale by the Depositor and the purchase by the Trustee in trust, on
behalf of the Trust, of the Mortgage Loans listed on the attached Schedule of
Mortgage Loans (the "Subsequent Mortgage Loans").
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.
Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
(a) The Depositor does hereby sell, transfer, assign, set over and
convey to the Trustee in trust, on behalf of the Trust, without recourse, all of
its right, title and interest in and to the Subsequent Mortgage Loans, and
including all amounts due on the Subsequent Mortgage Loans after the related
Subsequent Cut-off Date, and all items with respect to the Subsequent Mortgage
Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; provided, however that the Depositor reserves and retains all right,
title and interest in and to amounts due on the Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date. The Depositor, contemporaneously
with the delivery of this Agreement, has delivered or caused to be delivered to
the Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Master Servicer as seller, to the extent of the Subsequent Mortgage
Loans.
(c) Additional terms of the sale are set forth on Attachment A hereto.
Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.
(a) The Depositor hereby confirms that each of the conditions precedent
and the representations and warranties set forth in Section 2.08 of the Pooling
and Servicing Agreement are satisfied as of the date hereof.
(b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.
N-1
Section 3. RECORDATION OF INSTRUMENT.
To the extent permitted by applicable law, this Instrument, or a
memorandum thereof if permitted under applicable law, is subject to recordation
in all appropriate public offices for real property records in all of 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 Certificateholders' expense on direction of the related
Certificateholders, but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders or is necessary for the administration or servicing of
the Mortgage Loans.
Section 4. GOVERNING LAW.
This Instrument shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to principles of conflicts of law.
Section 5. COUNTERPARTS.
This Instrument may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same instrument.
Section 6. SUCCESSORS AND ASSIGNS.
This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.
N-2
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION
By:___________________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee for Option One
Mortgage Loan Trust 2002-2, Asset-Backed
Certificates, Series 2002-2
______________________________________
By:
Name:
Title:
Attachments
-----------
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
C. Schedule of Prepayment Charges.
N-3
ATTACHMENT A
------------
ADDITIONAL TERMS OF SALE
A. General
1. Subsequent Cut-off Date: ______________________, 2002
2. Subsequent Transfer Date: _____________________, 2002
3. Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the Subsequent Cut-off Date:
$_____________
4. Purchase Price: 100.00%
B. The following representations and warranties with respect to
each Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (vi) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than [_____] % or greater than [_____] %; (vii) such
Subsequent Mortgage Loan shall have been serviced by the Master Servicer since
origination or the date of purchase; (viii) such Subsequent Mortgage Loan must
have a first payment date occurring on or before [_____], 2002; (ix) if the
Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Gross Margin not less than [_____] %; (x) if the
Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Maximum Mortgage Rate not less than [_____]%; (xi) if
the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Minimum Mortgage Rate not less than [_____] % and
(xii) such Subsequent Mortgage Loan shall have been underwritten in accordance
with the criteria set forth under "Option One Mortgage Corporation Underwriting
Standards" in the Prospectus Supplement.
C. Following the purchase of any Subsequent Mortgage Loan by the
Trust, the Mortgage Loans (including such Subsequent Mortgage Loans) will as of
the Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than [_____] % and not more than [_____] %; (iii) have a weighted
average Loan-to-Value Ratio of not more than [_____] %; (iv) have no Mortgage
Loan with a principal balance in excess of $[_____]; (v) will consist of
Mortgage Loans covered by the PMI Policy representing no less than [_____] % of
the aggregate Principal Balance thereof; (v) will consist of Mortgage Loans with
Prepayment Charges representing no less than approximately [_____] % of the
aggregate Principal Balance thereof and (vi) have no more than [___] % of Fixed
Rate Mortgage Loans by aggregate principal balance of the Mortgage Loans as of
the Subsequent Cut-off Date. In addition, the Adjustable Rate Mortgage Loans
will as of the Subsequent Cut-off Date have a weighted average Gross Margin not
less than [_____]% by
N-4
aggregate principal balance of the Adjustable Rate Mortgage Loans as of the
Subsequent Cut-off Date.
D. Notwithstanding the foregoing, any Subsequent Mortgage Loan
may be rejected by (i) the NIMs Insurer, if any, or (ii) either Rating Agency if
the inclusion of such Subsequent Mortgage Loan would adversely affect the
ratings on any class of Offered Certificates.
N-5
EXHIBIT O
FORM OF ADDITION NOTICE
[Date]
Xxxxx Fargo Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
Re: Pooling and Servicing Agreement dated as of
March 1, 2002 among Option One Mortgage
Acceptance Corporation, as Depositor, Option
One Mortgage Corporation, as Master Servicer
and Xxxxx Fargo Bank Minnesota, National
Association, as Trustee
Ladies and Gentlemen:
Pursuant to Section 2.08 of the referenced Pooling and Servicing
Agreement, Option One Mortgage Acceptance Corporation has designated Subsequent
Mortgage Loans to be sold to the Trust on __________, 2002, with an aggregate
principal balance of $ . Capitalized terms not otherwise defined herein have the
meaning set forth in the Pooling and Servicing Agreement.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION
By:_______________________________
Name:
Title:
Acknowledged and Agreed:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:____________________________________
Name:
Title:
O-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
(Available Upon Request)
SCHEDULE I
SCHEDULE II
PMI MORTGAGE LOANS
(Available Upon Request)
SCHEDULE II
