Common use of Optional Termination of the Bonds Clause in Contracts

Optional Termination of the Bonds. (a) Pursuant to Section 8.07 of the Indenture, the Servicer shall have the option of purchasing 100% of the Mortgage Loans, causing the redemption of the Bonds in whole, but not in part, on any Payment Date on or after the Payment Date on which the aggregate Principal Balance of the Mortgage Loans in all four Groups is reduced to less than 10% of the Maximum Collateral Amount. The purchase price for Mortgage Loans in each Group will be an amount sufficient to pay 100% of the outstanding Bond Principal Balance of each Class of Class A Bonds and of each of the B Components as of the Payment Date on which the proposed purchase will take place in accordance with the foregoing, together with accrued and unpaid interest thereon (and on the Class IO Bonds) at the related Bond Interest Rate through such Payment Date (including any related Carry-Forward Amount), plus an amount sufficient to pay in full all amounts owing to the Bond Insurer, the Bond Administrator and the Indenture Trustee under the Indenture and the Insurance Agreement and the Servicer under the Servicing Agreement (which amounts shall be specified in writing upon request of the Issuer by the Indenture Trustee, the Bond Administrator and the Bond Insurer). Such termination must constitute a "qualified liquidation" of the REMIC established by the Issuer under Section 860F of the Code, including without limitation, the requirement that the qualified liquidation takes place over a period not to exceed 90 days. (b) In order to exercise the foregoing option, the Servicer shall, not less than 30 days prior to the proposed Payment Date on which such termination is to be made, provide written notice of its exercise of such option to the Bond Administrator, the Indenture Trustee, the Bond Insurer, the Owner Trustee and the Issuer. Following receipt of the notice, pursuant to the foregoing, the Bond Administrator, on behalf of the Indenture Trustee, shall provide notice to the Bondholders of the final payment on the Bonds, conduct a qualified liquidation of the Trust Estate and will remit funds from such liquidation to the Indenture Trustee to be applied to make final payments of principal and interest on the Bonds.